Eric Hobsbawn on Capitalism and Socialism

Socialism Has Failed. Now Capitalism Is Bankrupt. So What Comes Next?

Great article by the venerable 93 year old Marxist historian. I agree with him that no sane person is looking to Soviet-type socialist systems, and he doesn’t even advocate them himself anymore. Yet he argues that the free market capitalism of the past 30 years has failed as badly as socialism, or even worse. The future, of course, must be some kind of a mixed economy. As Thatcher used to say, There Is No Alternative. Those who continue to drink the free market Koolaid against doctors’ orders will experience increasing pain, illness and debilitation.

Hobsbawn points out how badly the British Labour Party, in the form of New Labour, has failed in its attempts to mimic Thatcherism. That agenda is precisely why the global economic crisis is hitting the UK so much harder than much of the rest of Europe. The UK drank the free market Kool Aid a lot more and longer than some others like Germany and France did. For one thing, the UK gladly offshored all of its manufacturing in order to become a world center for global financial shenanigans and gimmickry. Great idea that was.

The Republican Party, unrepentant advocates of free market capitalism in this era when that is increasingly suicidal, has no role to play in the future of the US. To the extent that we keep electing them, we go down the tubes faster and faster. At this point, the Democrats are little more than a weak version of the Republicans. The mixed economy of the future is off the agenda for both parties, so both parties are scrolling our nation’s epitaph with every step they take.

The American people have not figured out the wisdom of Hobsbawn’s words, and possibly they never will. In that case, Americans deserve every future bad thing that will befall them.

Reading the idiotic comments at the end, many of them, appallingly, from British readers no less, who seem just as insane about free market capitalism as the average US teabagger, was very discouraging. I thought that the British were a bit more sane than we are. I guess not. Oh well, in that case, the Hell with the Brits then too. I have little sympathy suicidal idiots.

The future is not going to be good.

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23 thoughts on “Eric Hobsbawn on Capitalism and Socialism”

  1. A large economy can’t make “nothing but money” because eventually it becomes a pyramid on itself . (A small one like Switzerland, Singapore or Delaware can.)

    America used to make things, and people had job security, and you now what — they practiced the kind of moral values the Republicans wish we had because people felt secure enough to put down roots and start families.

    After the current problems sort out and the baby boomers start retiring and all this extra housing is still available cheap, it’s going to seem like the 50s again real fast.

  2. I think another important thing to mention, whenever we have a discussion about which system would work better for the good of society, is to address your understanding of history, Robert.

    The historical sciences just like the physical sciences are limited in their realm of understanding. They deal ONLY with the past.

    Historical phenomena, being one of the most complex realities known to man are subject to the interpretation of the historian. In a historical event, all those present are themselves historians. The all can choose which factors played a role in the incident. These are judgments of value.

    I say free-market Capitalism is not what has hindered our progress, you say it is precisely what has hindered our progress and then proceed to give a multitude of examples.

    Economics, the youngest of all sciences deals before the realm of a interpreted “facts”. It deals with the A PRIORI as apposed to the A POSTERIORI empirical and historical sciences.

    In other words, when you can come to an understanding of proper economic theory, you can see that given the nature of man and the nature of human action, eliminating economic calculation via the destruction of property rights is impossible to sustain.

    Economics proves that Socialism and Marxian thought like the kind that Eric Hobsbawm is an empty proposal BEFORE all the historical “proofs” he puts forth. It’s really quite beautiful in it’s elegance as a science.

  3. Sorry for a long post…

    I liked hsutreal’s comment, below. Like the commenter I was very disappointed with Hobsbawm’s article, in that I felt it lacked historical context.

    There isn’t a socialist mode of production, s/he’s right. Obama isn’t a socialist. Mixed economies have all been on a capitalist foundation, socialism on capitalism’s terms, and sooner or later any gains for the working class are eroded, especially when capitalism goes through one of its cyclical crises. This is happening in France, has happened in the UK and even Sweden’s working class has seen some reverses in recent years. Social democracies didn’t come out of thin air; they were established by imposing the priorities of the working class on capitalism, without threatening the capitalist mode of production; in other words they were established through a process of class struggle. But the ruling class also struggles to re-establish its priorities, and did so in the UK successfully under Margaret Thatcher and Nulabour, a pale copy of Thatcherism. Mrs T said herself that her greatest achievement was the creation of Nulabour.

    The Soviet Union and China were both transitional economies, and the revolutions in both countries defeated the rule of feudal landlords, not a dominant capitalist class in a modern capitalist economy. Neither country had ever known liberal democracy, so we can’t expect a socialist democracy to develop in a state which had never known any form of liberal democracy. I’ve been reading William Hinton’s Fanshen, a wonderful book on the Chinese revolution. It’s very clear that China was still feudal. Mao and Stalin created modern economies at breakneck speed and took both countries out of the dark ages (just how dark is evident in Fanshen, and in its early stages the revolution was radically democratic) using tyrannical means, but the material preconditions for a transition to the communist mode of production, and the cultural preconditions for a communist democracy, just did not exist. Hence China is now in a prolonged transition to capitalism, and while at present the majority of the economy and land is still not privately owned, the trend is towards privatisation and integration with the world capitalist economy, which China will destabilise beyond the point of no return, as Maoist economist Minqi Li argues in The Rise of China and the Demise of the World Capitalist Economy. It is quite possible, too, that that Maoist communism will reassert itself in China. Personally I hope so, and then China will lend the Indian Maoists a hand.

    hsutreal
    10 Apr 2009, 8:52AM

    shaunx
    10 Apr 09, 1:06am (about 7 hours ago)

    Could we have some reasonably defined use of the term socialism?

    It could mean anything from Chartists and Bevan to Hitler and Stalin

    Bourgeois ideologists, including Eric Hobsbawm, have done everything in their power to create as much confusion as possible around the three concepts of capitalism, socialism and communism, concepts critical to an understanding of the materialist theory of history.

    As a matter of fact, there is no such thing as a socialist mode of production. There is such a thing as a capitalist mode of production and a communist mode of production (the latter having never yet appeared in actual history). In between these two modes of production there lies a period of transition which is conceptualized as socialism; it follows that a society characterized by such a transition contains elements of both the capitalist mode of production and the communist mode of production, and it continues to be marked by class-struggle. The existence of classes always implies class-struggle despite fairy tale notions of that concept which only apply it to the periods when it appears as ‘open struggle’.

    You may have noticed that the USSR was styled the Union of Soviet Socialist Republics despite the universal insistence of all those who wish to sew confusion that “Russia was Communist.” This is particularly true of the Social Democrats whose very survival depends on their claim to represent ‘socialism’. This has been true since the early days of the workers’ movement. Anyone can verify this by apprising themselves of the history of opportunism and the struggle against it in the workers’ movement.

    Of course Eric Hobsbawm passes over all this as he must. All his platitudes about ‘redistribution’ are nothing more than a replay of Bernstein and the other opportunists of the period of the Second International. These doctrines were instrumental in leading the masses into the bloody slaughter of WW1 under the ‘defense of the fatherland’ slogan which called for a ‘suspension of the class-struggle’ until after the war. No doubt we shall see a re-enactment of this.

    It follows that for Hobsbawm mention of the class-struggle must be avoided at all costs. For him everything is about a “way of thinking about modern industrial economies, or for that matter any economies, in terms of two mutually exclusive opposites: capitalism or socialism.” Likewise in his comments on the collapse of the USSR in which the totality of his analysis is that it “broke down.” But if this ‘breakdown’ is looked at from the point of view of the concept of transition then it becomes clear that the first requirement of knowledge is to ask the question of the state of the class-struggle in the USSR and how it was that the class representing capitalism there was able to turn back the gains made by the working-class there.

    As for the rest, the same tired old prescriptions which all amount to the need to offer sops to the working-class all the better to keep them quiet while ever greater levels of exploitation and repression are being prepared against them.

  4. Did Hobsbawm actually say anything here ” some say this, some say that – who knows?” For all his reputation, this is what I have come to expect from him; his magnum opus ” Age of Extremes: the Short Twentieth Century, 1914-91″ goes on in this vein for 600 pages, impartially weighing up this and that, and studiously avoiding imposing any judgment on it all, which makes it about as engaging as reading the telephone directory. He CAN write engagingly though; he crops up in the London Review of Books now and again with some very informed and enjoyable pieces, but they tend to be on some very specific ‘detail’ of history or writing about history; it seems (to me anyway) that it’s when it comes to big pictures, he’s reluctant to paint one, possibly reflecting the ambivalence he’s shown in his life about his communist beliefs. Or possibly, it’s the price to be paid to maintain a career as a mainstream academic while writing history that acknowledges Marxist thought and class struggle; he has to bend over backwards to avoid showing ‘bias’, whereas Schama or Niall Ferguson. for instance, can get away with anything because they tell a story the establishment wants to hear.
    Alternatively, maybe given his age, it’s asking a bit much of him to show us the way.

  5. Niall Ferguson is nothing but a complete bastard and an empire apologist. I hate his TV programmes. Pure propaganda. Ugh! He sucks. Read Newsinger for a corrective. Hobsbawm is at his best in books like Captain Swing. Here he comes across as nothing more than a timid social democrat.

  6. Hobsbawn’s kids are dedicated capitalists. That should tell you something.. Namely, his socialism is merely academic, and encouraged of others, but not of himself.

  7. Correspondence:
    On 10/07/06 23:55, you wrote:

    >[…] The Soviet Union and China were both transitional economies,

    “Transitional” between what and what? I don’t think they were. They were clearly not socialist, nor in “transition” to communism. Nor were they
    capitalist, in my opinion, or in transition from capitalism.

    I think they should be considered sui generis, a mode of production in its own right (albeit unstable and historically short-lived).

    They undertook some of the tasks that elsewhere were performed by capitalism: industrialization and modernization; but did so via a detour
    through a non-capitalist mode of production, under the rule of a new ruling class.

    ATB, Moshé

    Agree with this, and in sympathy with Hillel Ticktin’s analysis generally.

    “Transitional to what?” Transitional to capitalism…a detour if you like.

    Mao and Stalin laid the material basis for the full development of capitalism.

    An irony of history.

    Hobsbawm is hopeless…

    Paul

  8. “…in sympathy with Hillel Ticktin’s analysis generally.”

    Can you understand Ticktin? I’ve noticed his name cropping up in the last few years, and recently I felt motivated to check him out and watched an online video of a speech he gave about the global economic crisis. He seems to be regarded as a great Marxist thinker, and he’s Professor of Marxist Studies (or something like that, which is pretty much a bad sign in my book) at Glasgow Uni. I don’t really think I failed to understand his speech; I think he really didn’t say anything, but just improvised, throwing in some Marxist catch phrases, going off on tangents, forgetting what he was talking about… And the occasional forays of the camera onto the faces of those in the audience and sitting on the stage with him looked to me like people who were thinking about what they had to pick up from the shops on the way home, and hoping he would end soon, sure as they are that they’re listening to a great mind saying something very important. And he constantly fiddles with his tie and actually looks bemused that people will sit and listen to this shit. Just another great jewish gobshite on the gravy train, I feel.

  9. You made me laugh. I never met a Communist who dislikes Jews so much. Jews are not a race right? They’re not a racial continuum like Gilad said. Critique Judaism if you like, it isn’t any less repulsive than other religions, but hate Jews? It’s about as rational as hating Scotsmen or the Irish.
    You’re a Scotsman, right?

    Communists either degenerate into social democrats like Hobsbawm, the great Nina Temple (who? the last CP General Secretary) and the CPUSA, or they cruise the intellectual stratosphere like Slavoj Zizek, who I suspect is a complete intellectual w—-r and up his own arse. I was reading Zizek’s “First as Tragedy…” don’t bother…it’s hardly a clarion call though he calls himself a Communist these days.

    I’ve never seen Ticktin speak. I just read a couple of articles by him on the SU/Russia, and I used to read Critique. A bit above my head but I got the drift I guess. I’m a failed Marxist…I only got three chapters into Das Kapital, but devoured Ernest Mandel’s introduction lol.

    The Communist manifesto is on my level. It would be nice if socialism could be summed up in 30 words as you say. Marx took about 4,000 pages if you include Theories of Surplus Value to talk about capitalism, and that was only volume 4 of the planned 6 volumes.

    Something like “control of the State by the workers for the workers”. That’s 10 words. That wasn’t the SU, which was control of the state on behalf of the workers – it was paternalistic – Ticktin pointed out back in ’81 that the Soviet working class was atomised, they weren’t an organised political force running the show. That doesn’t happen in a backward mostly feudal state – a new class takes power on their behalf. Did you hear a peep from the great Soviet working class when the USSR fell? No you didn’t. You’d think they would have fought for “their” state. But they didn’t…they weren’t even organised as a class. same goes for China…look at this…http://www.nlcnet.org/reports?id=0602

    I just read David Harvey’s The Enigma of Capital. Now he’s on my level. 250 pages and it all makes sense. I’d recommend it to Mr Robert Taylor, above, who thinks economics is a science.

    If you read Weekly Worker at http://www.cpgb.org.uk you’ll see the intellectual earnestness of the only British Bolsheviks. Is it popular? Hell, no. But at least the newspaper doesn’t treat you like a monkey like the Morning Star or Socialist Worker.

  10. I don’t know where you’re coming from, Paul – Nina Temple great? The Weekly Worker better than the Morning Star? You seem to favour the MI5 side of the British left – sorry, the more obvious part of it. I don’t know much about Nina Temple’s early history, but she had a suspiciously quick climb from her studies at Imperial College to Gen Sec CP at such a young age, under the ‘eurocommunist regime’ of Martin Jacques et al. How did these public school right-wing silly arses even get into the CP much less get to run it How did this creepy little nerd get away with all the communist party’s money? I’m sort of familiar with her because I joined Democratic Left (supposedly the successor of the original cpgb) for a while before and almost up to the election of Blair – I hadn’t been following things, and I was initially impressed to find socialists talking about the real world instead of you know the usual… but I eventually saw it for what it was, a slick mixture of post-whatsit sociobabble plus consumerism – what you’d expect from people close to Demos and the milieu that gave us New Labour. Dem Left seemed to lose their will to live after Blair’s election – I lost track of them, though I think Temple has something to do with Green Left now. But where’s the CPs money? She went off with the millions the CP’s (jewish of course) accountant used to get from Russia and hide from the members. What happened to it?
    As for the cpgb? Nina Temple got the money, and the cpgb got the name – they are Trotskyists, nothing to do with the CP! Their leader, Jack Conrad (Chamberlain) seems a very strange chap. I have never been clear on how they got the rights to the name, and I can’t really see why they would want it. It’s not without good reason that many of ‘the left’ see them as an MI5 operation, using the Weekly Worker to sow malicious gossip and divisiveness. But, it’s not ALL bad; there are some occasional very interesting pieces amongs the slander and ultra-left posturing, but I wouldn’t take their word for ANYTHING. How is this an improvement on the Morning Star? Sorry, but the CPB ARE the communist party, like it or not ( I had a few arguments with old Max in Housmans about that – if you know the left bookshop in King’s X, a real gem of a shop – he was in one of the other tiny splinter groups from the old CPGB, and had strong feelings about it). The Star, for all its many timid social-democrat faults, is still ‘a daily miracle’ – some kind of daily paper of the left, of the ‘labour movement’ such as it is, rooted in real political and social practice, representing the only forces that can possibly offer resistance to capital. Me, I find that it sometimes reads like an Irish Republican paper, and I really wish they would drop that. This ‘British occupation of Ireland’ bit is such an obvious crock of shit, is supported by no-one in Britain, and next to no-one but a few murderers in Ireland – why do they stick with this? To keep the Labour party catholic bloc on board probably – sorry, THAT is the only political constituency in Britain for that bull, which Galloway also flogs to death. And there’s their constantly giving space to the spiteful spinsters who want to make prostitutes lives even harder by imposing even more criminality on it. But that’s a flaw they share with a lot of the left; and to be fair, the Weekly Worker has been much better than the rest of them on this. And again the Morning Star lot cling to the idea against all the evidence that China is still communist in some meaningful way – their weekly page on China is pretty much straight from the mouth of the Chinese party, who no doubt buy a regular bulk order of the Star, which is the reason for it. I have to admit though that my political sympathies are closest to the CPGB (ML) who are even more extreme in their insistence that China is still communist – I like them because they don’t kow tow to the Cold War anti-Stalin propaganda; they have some balls. But for all that, the Star is the closest thing we have to an ongoing conversation with the meaningful social and political forces on the left – criticise by all means, but support!

    I don’t hate jews, by the way, just jewish supremacists – which is unfortunately a huge proportion of those who identify as jews. But another time for all that.

  11. I was being ironic about Nina Temple. Just a bit of
    Eurocommunist tail.

    I don’t mind the Morning Star. I was CPGB after all.

  12. Yeah I was in Democratic Left as well. Are you sure the CPGB are trotskyists? They evolved out of a Stalinist group called Straight Left. I’d agree about infighting and divisiveness and I’m not a member. As for MI5 involvement – interesting – but why would MI5 bother with such a tiny group? They don’t take the Socialist Workers party seriously either.

    Who the hell are the CPGB (ML)? Harpal Brar and Emma Rule’s lot?

    I was in Housman’s last week. My favourite London bookshop. Got the card for my mum’s 90th birthday in there.

  13. There’s an entry for Nina Temple on Wikipedia. It doesn’t tell you where the money went…. Agree with you about support for Irish republicanism. Apart from BICO, probably defunct (I only know about them because Peter Tobin was involved with them), there isn’t a Left group in the UK that doesn’t support Irish republicanism. It’s an anachronism. Northern Ireland is the result of Anglo-Scots settlement and wedded to the UK.

  14. http://www.cpgb.org.uk/article.php?article_id=1003999 Here’s an example of a good contribution to Weekly Worker, and why it’s worth reading from time to time. You wouldn’t get this in the Morning Star – or would you? They seem a bit greener these days. It doesn’t surprise me about possible Chinese Communist Party financial support, but it doesn’t make for intellectual independence does it? And when Chinese workers are being hammered, the Star is going to turn a blind eye.

  15. Dear Robert
    A country in which more than 50% of goods and services are produced by privately owned firms can be called capitalist, and a country in which total government expenditure is more than 10% of GDP can be called at least partially socialist. By these criteria nearly all countries in the world today can be called mixed economies. The third way is the most common way and has been for quite some time.
    For all their anti-government rhetoric, the neoliberals haven’t changed the capitalist-socialist mix all that much. When Tatcher became British prime minister, government expenditure in the UK was about 45% of GDP, and when she left office it was still around 40%. The reason is that people in general are satisfied with the welfare state. Ignorant voters may believe some of the anti-government rhetoric spewed forth by the neo-liberals, but they still like their public schools, their old age pensions, their free medical care, their unemployemnt insurance. No Republican administration has yet dared to privatize all schools, eliminate Social Security or Unemployment Insurance, or abolish Medicare, and those aren’t small programs. Both the US and the UK are still lightyears away from a libertarian utopia, or dystopia rather.
    As to the recent economic crisis, it isn’t so much a failure of the capitalist mode of production, but a failure of the financial sector. The financial sector is different in that it doesn’t really produce any goods or services and in that money can be multiplied at negligible cost. Ultimately, however, it is a government department that controls the money supply: the central bank. The Federal Reserve embarked on a massive monetary expansion, which the financial sector than misallocated to the real estate sector. Asset inflation is still inflation.
    Strict controls on the financial sector and regulation of cross-border capital flows are the solution to the problem of economic crises, not a blanket condemnation of the capitalist mode of production.
    Regards. James

  16. Not really James. I always value your contributions but I differ with you here. How does capitalism solve the problem of recurrent overproduction and underconsumption? How does capitalism solve the problem of finite resources as it has to expand to survive? Why are there a billion people on a dollar a day or less and individuals with a larger income than entire countries? Why did mortality rates skyrocket in Russia in the 1990s while the first Russian billionaires appeared? What is the relationship of capitalism and war? There isn’t a “capitalist/socialist mix”: I’m sorry. Ownership and control of the economy is still in private hands. Nationalisations not under workers’ control are simply the State acting like a private capitalist. I’m glad that social democracy exists, and I’m glad I live in a social democracy and not North Korea or China, but it isn’t the last word in how to organise an economy or a society. Nor is it sustainable in the long run. Kunstler’s The Long Emergency points to some of the issues we are up against – peak oil, climate change, scarce copper, scarce rare earths, scarcity of water as climate changes. We can continue to live as we do now in the West, but the time frame is very short. Even my kids, now in their early twenties, will live in a very different world in 2040.

  17. Sorry Paul, I didn’t realise you were being sarcastic about Nina Temple.
    Both you and James Schipper have some points. I have no time any more for the ultra-lefts who ‘aren’t interested in tinkering with the system’ – either simultaneous world-wide workers revolution or nothing. None of them of course would admit that’s what they advocate, but that’s the logic of it. I can think of quite a few other ridiculous positions they take, the ultimate logic of which is they think that WASPs have no right to be the dominant group even in WASP majority societies. You can fill in the dots as to the reason for that. But we’re talking about the economic and financial structure here, so yes, I’m with James at least until it gets to the point, where it almost has, that the majority of the people can see plainly that the democratic means doesn’t exist to dislodge the interest groups who pay the politicians to maintain the system of usury, money-laundering, tax-dodging, resource-grabbing militarism etc . And that will mean ultimately the people of the USA coming to see that, which is a problem because of the enormously sophisticated brainwashing system.
    As to overthrowing capitalism completely? Complicated. Marx’s 3 enormous volumes of Capital were about a fifth of what he planned to say about the workings of the capitalist economy – an enormously complicated system of interrelated practices and conventions that has grown organically over hundreds ( arguably thousands, since I’m not entirely convinced by Marx’s argument that capitalism is a complete break from the past) of years. Incredibly intricate and maybe impossible to unravel. So maybe we should do like Alexander did when he cut the Gordian knot – just make a clean break and be done with it? Trouble is that this knot for the time being sustains all human life on the planet. The revolutions in China and Russian took place in much simpler societies, but were still enormously costly in human life, if in the long run they improved matters a bit. Next trouble obviously is that then these revolutions fizzled out.
    So, I come down on the side of reformism, building on the gains we’ve made in terms of democracy, rule of law… Yes, I know they’re laughable. But the first place to start is with something that the people can easily, intuitively understand – insist that the elites obey the law, take the money out of the electoral system, and enforce anti-racism equally – no exemptions for a certain group that springs to mind that the entire self-styled ‘left’ seem to feel are due special privileges.
    But we’ll have to fight for even that, and in the end, Paul is right – a system based on profit that has now become world-wide and is coming up against the limits of the planet. The elites’ solution will be to cull the population and replace capitalism with slavery – have no doubt about it. A system whose every transaction is amplified by the need to take a profit requires more work to be done than CAN be done, or the planet can sustain. It can only continue if we expand to other planets. It would take us about 70 million years at current speeds to get to the next star, so the party’s over.

  18. Jim you’re such a good writer I don’t know why you don’t write an article of your own rather than comment on others. The only stuff of Ticktin I agreed with is how he views the Soviet Union, and I’ve agreed with his view since 1981. I went to Poland in 1980 and I discovered a country in ferment. Later that year Solidarnosc was born. I kind of sussed then that Communism’s days were numbered. I’ve no idea what Ticktin thinks about anything else.

    I chatted to an SWP woman, Julie, this afternoon. She’s a Civil Services Union shop steward. “How long have you been in the SWP?” I said. “Since 1992”, she said. “And is the revolution any closer?” I said. I like teasing the SWP. “No, but people are more pissed off with Labour,” she said. Great, I thought. “So which way did you vote?” I said. “We had a discussion in the branch and we all decided to vote for the Green Party candidate, Adrian Ramsay”, she said. Apparently he spoke at the SWP front the Right to Work Campaign.

    So these sweet little smash the state ultras all voted for a reformist candidate. They had an alternative in Norwich, Gabriel Polley, who stood for the Workers’ Revolutionary Party. A fellow Trot too…Do you know the venerable CPUSA slogan “A Chicken in every pot, and a pick in the head of every Trot”?

    I voted Green, and I go and campaign for them as well. Some of the members make me cringe (the vegan save the planet crowd), and some are socialists. The 2010 UK Green Party election manifesto was identifiably socialist. it was even inspiring to read. They are the only party to mention the siege of Gaza in their manifesto, and to support boycott, disvestment and sanctions.

    I ordered a copy from their London office because I dislike reading things online. I agreed with a lot of it. They want to decriminalise cannibis possession – can’t argue with that as I’m partiual to an occasional smoke. And they’ve actually elected an MP, someone I prefer hugely to Galloway. The Communists haven’t had an MP in the House since 1951! So I am a reformist as well.

    I will also quite happily join in any extra-parliamentary action that will clog up plans to build another London airport, and build barricades of burning car tyres if needed.

  19. Dear Paul Grenville
    I believe that in any country the government is an independent force. In feudal societies, the monarch wasn’t just a foreman for the aristocracy, and in capitalist countries, the government is more than a mere executor of the will of of the propertied classes. Governments are staffed by people who have interests of their own and who have to take popular opinion into account. No government, however authoritarian, can simply ignore public opinion. Since in capitalist countries, the public consits mainly of people with little or no capital, any government must make at least a minimal efforts to keep the masses happy, or least not totally unhappy.
    In a purely capitalist society, the goverment will not alter the income distribution determined by the market. Since in all capitalist countries, there is progressive taxation and there are income transfers designed to benefit the poorest members of society, we should talk of mixed economies. Even under Thatcher and Reagan, the actions of the government made the income distribution less unequal.
    Any type of socialism requires a state which posseses al least a minimum of order, honesty and efficiency. A state which is totally chaotic, corrupt and inefficient can’t be socialist. The reason why life expectancy declined dramatically in Russia after the fall of communism is that the Russian state became much more disorderly, much more corrupt and much more inefficient. Dysfunctional states can’t deliver socialism.
    I quite agree with you that free markets in a monetary economy are inclined to be unstable. That’s why we need Keynesian policies that will smooth out fluctuations. To paraphrase Clemenceau, capitalism is too important to be left to the capitalists.
    Cheers. James

  20. Dear James Schipper
    “I believe that in any country the government is an independent force.”

    I believe you are alluding to the content of democracy here.

    If you have the time over the weekend, please watch this British video on the nature of that democracy, and then we can move the debate onto another level
    http://vimeo.com/moogaloop.swf?clip_id=12209953.

    If you don’t have time, never mind, and I shall return to the problem of growing social inequality in United Kingdom under both Conservative and Labour administrations in the last 30 years, and its negative effects on the political process. I shall be referring to the arguments in “The Spirit Level: Why More Equal Societies Almost Always Do Better” by Richard Wilkinson and Kate Pickett. Are you familiar with their work?

    Cheers, Paul

  21. Dear Paul
    I don’t have time for the video now.
    No, I think that all rulers, not just democratically elected ones, have to take the wishes of the ruled into account at least part of the time. Even on a slave plantation, the owner can’t completely ignore the wishes of the slaves because otherwise there will be too much sabotage and there may be a rebellion. The rulers are few and the ruled are many, and that sets limits on the power of the ruled.
    I agree with you that under neo-liberalism, income inequality rises. However, even under neoliberal governments, the income distribution is less unequal than it would be if income distribution were left entirely to the market. Neoliberals, or conservatives as they are usually called in North America, don’t really favor upward redistribution of income by the state. They favor reduced downward redistribution of income by the state, which isn’t the same thing.
    As long as the rich pay more taxes than the poor in absolute terms but don’t get more benefits, government policy will have an egalitarian impact. Let’s take two couples: Peter and Paula and Jack and Jill. Peter and Paula earn 120,000 a year and Jack and Jill 20,000. Peter and Paula pay 15,000 in taxes and J and J pay 5,000. So, P and P pay 1/8 of their income while J and J pay 1/5. Both couples have 2 children in public school which cost 5,000 each. As a result, J and J become better-off by 5,000 while P and P become worse-off by 5,000, even though taxes are regressive.

    Have a good day. James

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