Anti-Neoliberalism Need Not Be Anti-Capitalist: The Case of the Toronto Radical John Clarke, Part Four: The Welfare State and Neoliberalism, or The Infinite Back and Forth Movement of Capitalism

Introduction

Perhaps it is me, but I am getting a sneaking suspicion that many who talk about being anti-capitalist are really referring to anti-neoliberalism. There is little if any talk about aiming to eliminate exploitation,  oppression and economic coercion or the creation of a socialist society (except in some vague, far-off future that has little relevance for their daily activity.

John Clarke’s Radical Social Democracy as a Case in Point 

John Clarke, a radical social-democratic reformist here in Toronto, is a case in point. We have already seen, in earlier posts, that Mr. Clarke’s aim is primarily an enhanced welfare capitalism and not the abolition of capitalism (see for example Critique of the Limited Aim (Solution)–Decent Wages–of a Radical Social Democrat: The Case of the Toronto Radical, John Clarke: Part One). Despite Mr. Clarke’s references to economic exploitation and economic coercions and his rhetoric of anti-capitalism, Mr. Clarke ultimately assumes that these features of modern social relations are fixed and cannot be abolished–and this despite his apparent recent radical turn due to the pandemic, calling for a radical change in capitalism (see a brief reference in An Inadequate Critique of a Radical Basic Income: The Case of the Toronto Radical John Clarke, Part Three).

Mr. Clarke tried to justify his critique of the proposal of a basic income by referring to the need to take into consideration the fact that economic coercion forms a vital part of a capitalist society–which indeed is the case. Unfortunately, Mr. Clarke failed to integrate this accurate observation with his proposal for an enhanced welfare state (and his belated call for the abolition of capitalist relations). In his daily activities, Mr. Clarke aims, practically, at reforming the class power of employers and not abolishing them; his aim is to abolish neoliberalism but not capitalism.

Mr. Clarke’s Recognition of the Double Movement in a Society Dominated by a Class of Employers (A.K.A. Capitalism)–and His Lack of Aiming for the Abolition of Such a Double Movement 

The nature of capitalism is such that it tends always to erode any temporary peace made between capitalists and workers but also provokes a countermovement (hence the double movement), as Streeck points out in note 14 in his book (2009) . Re-Forming Capitalism Institutional Change in the German Political Economy. Streeck quotes Karl Polanyi (a Hungarian economic historian, anthropologist and sociologist), before expressing his own view:  page 270:

“For a century the dynamics of modern society was governed by a double movement: the market expanded continuously but this movement was met by a countermovement checking the expansion in definite directions. Vital though such a countermovement was for the protection of society, in the last analysis it was incompatible with the self-regulation of the market, and thus with the market system itself” (Polanyi 1957 [1944], 130). In 1944 Polanyi believed that the double movement had come to an end, in line with similar expectations famously held by Schumpeter and others about the secular
 demise of modern capitalism. With the benefit of hindsight, I disregard this prediction and assume that movement and countermovement have continued and will continue until further notice.

Mr. Clarke recognizes that a pure capitalist market system would pose a threat for the existence of a market for workers because it would undermine even the life of workers and would undermine the legitimacy of a society dominated by a class of employers, so it is necessary that the capitalist state provide some limits on it by providing income supports–by preference at a minimal level from the point of view of employers.The following is a more or less partial verbatim report of what Mr. Clarke stated in his YouTube (see Mr. Clarke’s YouTube presentation  https://www.youtube.com/watch?v=r40D6fU760s&t=4s).

But such a system of brutal exploitation can become problematic. Firstly, it can compromise, on a large scale, the health–and hence the job-readiness–of the workforce. Secondly, it can contribute to massive organized protests and even rebellions. Consequently, the capitalist state steps in to save the capitalists from themselves by ensuring a certain level of services; these services form the basis for income-support systems.

The general rule of income-support systems within a capitalist system is that they will provide as much as is necessary but also as little as possible. There are two opposite factors working in that regard. The first is the needs of capital: the need to maximize profitability and to remove barriers to exploitation. For the capitalist class, the need is to minimize expenditures for income-support systems. Indeed, if profitability becomes more difficult, there will be intensified pressure to increase exploitation and to minimize expenditures on income-support systems. The second is the needs of the working class and its level of organized power within capitalist society as well as how resistant are poor and unemployed people.

Historically, there has been a class struggle over the amount and form of income support, with the levels and forms not really intended by the authorities but needed to quell working-class tendencies towards rebellion. On the other hand, with changes in the capitalist system, the capitalist class, via the capitalist state, has pushed back and changed the forms and levels of income support over the centuries. The working class, both during the Great Depression but especially after the Second World War, in turn fought back by organizing the unemployed and workers into mass unions, with the result that income supports and standards of living increased substantially. Gains were really made because of working-class resistance.

As a result, there is a need for the capitalist class to engage in a counter-offensive since increased working-class living standards had reduced capitalist profits. This counter-offensive, begun in the 1970s, is known as neoliberalism. In order to increase exploitation, it became essential to gut income-support systems. The adequacy of programs was reduced, and eligibility for the reduced level of income supports became more difficulty in various areas: for single parents, for injured workers, for disabled people, among others.

Mr. Clarke thus recognizes this to and fro movement of capitalism. However, does he aim to end this to and fro movemnt? Not at all. Such an aim at best is to be realized in the vague future rather than being aimed at via policy prescriptions for the present.  

Thus, Mr. Clarke’s immediate aims are, as I pointed out in a previous post: 

There’s a need to fight for increases in the adequacy of healthcare. The pandemic has made that absolutely clear. We need pharmacare, dental care, a unviersal childcare program that is not an empty perennial liberal promise. We need post-secondary education to be free; we need free public transport systems. On all of these fronts, we need to take up a fight.

We do indeed need to engage in fights on all these fronts–but we also need to link up such fights with the need to abolish the class power of employers (see Critique of the Limited Aim (Solution)–Decent Wages–of a Radical Social Democrat: The Case of the Toronto Radical, John Clarke: Part One); there is no evidence that Mr. Clarke sees improves wages, pharmacare, etc. as not only reforms but as also stepping stones to the abolition of the double movement.

If Mr. Clarke’s aims of achieving increases in wages, pharmacare, etc. were realized, some employers would, eventually, try to escape from such limitations as they did increasingly from the 1970s. The movement of seeking to enhance income support systems would, if not immediately then eventually, be met by a countermovement of employers seeking to avoid such restrictions. If they succeeded, then of course many workers, citizens, immigrants and migrants would seek to expand the income support system once again–and this process would have no end.

Aiming for a socialist society, without a class of employers, would seek to put an end to such class struggle–and not perpetuate it. Mr. Clarke’s position, by contrast, is the perpetuation of class struggle for eternity. It sounds radical, but it really is not; its aim is to achieve what cannot be achieved permanently–economic and social security in the context of economic coercion and the class power of employers.

Without any explicit aim for ending the power of the class of employers being used to organize present activities and critiques, this constant to and fro often leads to insecurity, turmoil and suffering among workers, citizens, immigrants and migrants. From Streeck, (2016), How Will Capitalism End: Essays on a Failing System:

The tensions and contradictions within the capitalist political-economic configuration make for an ever-present possibility of structural breakdown and social crisis. Economic and social stability under modern capitalism must be secured on a background of systemic restlessness4 produced by competition and expansion, a difficult balancing act with a constantly uncertain outcome. Its success is contingent on, among other things, the timely appearance of a new technological paradigm or the development of social needs and values complementing changing requirements of continued economic growth. For example, for the vast majority of its members, a capitalist society must manage to convert their ever-present fear of being cut out of the productive process, because of economic or technological restructuring, into acceptance of the highly unequal distribution of wealth and power generated by the capitalist economy and a belief in the legitimacy of capitalism as a social order. For this, highly complicated and inevitably fragile institutional and ideological provisions are necessary. The same holds true for the conversion of insecure workers – kept insecure to make them obedient workers – into confident consumers happily discharging their consumerist social obligations even in the face of the fundamental uncertainty of labour markets and employment. In light of the inherent instability of modern societies founded upon and dynamically shaped by a capitalist economy, it is small wonder that theories of capitalism, from the time the concept was first used in the early 1800s in Germany and the mid-1800s in England, were always also theories of crisis. This holds not just for Marx and Engels but also for writers like Ricardo, Mill, Sombart, Keynes, Hilferding, Polanyi and Schumpeter, all of whom expected one way or other to see the end of capitalism during their lifetime.

Mr, Clarke’s political position, despite his rhetoric to the contrary of anti-capitalism this and anti-capitalism that, is not to end the power of the class of employers and the associated economic, social and political relations but their reform in order to leave behind, not class relations, but neoliberalism. Mr. Clarke recognizes that there is a “to and fro movement of capitalism” without taking it into consideration in formulating his anti-neoliberal but not anti-capitalist strategy.

Mr. Clarke’s Reformist Solution of an Enhanced Welfare State Fails to Abolish the Double Movement but Only Temporarily the Neoliberal Variety of Capitalism

Mr. Clarke’s solution of an enhanced welfare state is utopian in that such a solution has not and cannot address the fundamental features of a capitalist society. From George McCarthy (2018), Marx and Social Justice Ethics and Natural Law in the Critique of Political Economy, McCarthy, page 329:

Inquiring even further, Marx unearths the inherent logical flaw and historical tendency toward the overproduction and destruction of capital which makes the long-term prospects and continued viability of capitalist production highly questionable: rising organic composition of capital [rising value of machinery, raw materials, buildings, etc. relative to the amount of labour power employed], tendential falling rate of profit, intensification of labour exploitation, lengthening of the workday and expansion of labour time and constant capital (means of production), increased productivity of the machinery and technology of constant capital, growing disproportionality of capital development and rising surplus population, economic concentration and centralisation, growing disparity between capital accumulation and profit realisation, and, finally, functional stagnation and systems breakdown. Of course Marx … is aware that there is dialectic within the mode of production between logic and history, economic natural law and fundamental economic structures, and that these tendencies also encounter counteracting influences that may blunt for a time the necessary development of the logic of capital.

There is no indication in Mr. Clarke’s writings and presentations that he incorporates the aim of abolishing class relations characteristic of a society dominated by a class of employers into either his theory or his practice.

Mr. Clarke, by failing to address directly the exploitative nature of capitalist society, and by failing to integrate into his critique his recognition of economic coercion, in effect pushes into the far off future (never really ever to be attained) the creation of a movement for the abolition of capitalist relations of production, distribution, exchange and consumption. This is exactly what the social-democratic movements in the past did–and Mr. Clarke fails to recognize that his own solution does the same thing. 

Walter Streeck, by contrast, implies that there is a difference between an anti-neoliberal approach to capitalism and an anti-capitalist approach. An anti-neoliberal approach seeks to “embed” the capitalist economy in a network of social security structures that protect workers and citizens from the viciousness of a mainly capitalist market system. From Streeck (2009), Re-Forming Capitalism, pages 234-235: 

The socialization of capitalism, as it were, and its social-democratic organization were made possible not least by the enormous task of reconstruction after the devastations of the Second World War. For roughly two decades, capitalist accumulation could proceed without the “creative destruction” on which it normally depends, given the massive destructive destruction afflicted on the core capitalist regions by the war. Busy rebuilding the world, capitalism was able for a time to respect the desire of the period for predictably increasing prosperity for all, combined with security and stability. As early as the mid-1960s, however, open-ended demands for political protection and redistribution encouraged by progressive de-commodification of labor markets—in the form, above all, of a political guarantee of full employment—resulted in rising inflation (Fellner et al. 1961) hiding profound distributional conflicts (Hirsch and Goldthorpe 1978) and a widening mismatch between popular expectations and what a capitalist economy was able and willing to deliver. Temporarily strengthened by the worker revolts of the late 1960s, social democracy in the subsequent decade undertook to push to its limits and beyond a policy that regarded capitalism as a shared resource, a common pasture for society as a whole to be administered by expert technicians elected on a promise to provide for eternally growing prosperity-insecurity.

Today, we know that the problem of mainstream social democracy in the 1970s, with its strong belief in the power of democratic legitimacy and the efficacy of the modern state as an instrument of social control, was that it mistook capitalism for a neutral apparatus for the joint production of shared prosperity. Indeed, it did not take long for technocratic fantasies of capitalism as a politically governable “economy” to turn out to have been just that. Capitalist firms and those that own and run them can only for so long be treated as patient cogs in a collectively serviceable machine. Then, their true nature must come to the fore again, revealing them to be the live predators that they are, for which politically imposed social obligations are nothing but bars of a cage bound to become too small for them and for their insatiable desire for the hunt. In fact, by the end-1970s at the latest, capitalism had become determined to break out of the social-democratic stable into which it had been pressed after the war, being no longer willing and able to make do with the sensible but small servings of profit allowed to them by their political masters. Safe as life may have been under social-democratic tutelage, it also was boring, calling forth increasingly resolute efforts by capital to liberate itself and start a new cycle of accumulation, by expanding beyond the narrow confines of the neo-traditionalism of a social-democratic economy dedicated to the supply of fixed social needs.

Against all expectations, capitalism in the 1980s and 1990s recaptured its dynamic and once again became an unwieldy stochastic source of unplanned social and institutional change. As we have seen in the German case, the new dynamism, which for a variety of reasons soon gained the support of the very states and governments that only a short time before had aspired to be capitalism’s keepers, gradually began to undo the Durkheimian institutions that had been set up to tie capitalist accumulation to the discharge of social obligations. Capitalism redux began to absorb the slack that had been tolerated by the protected production regimes of the postwar period; migrated to new markets outside national control, pushed by domestic constraints and pulled by foreign opportunities; and did its utmost to empty the modern village of the welfare state, in its relentless search for new land to be subsumed under capitalist relations of production. Thus capitalism returned even though it had never really been gone.

Although the pandemic may have created some conditions that, to a certain extent parallel the devastating effects of the Second World War (such as the need for governments to intervene in the capitalist economy to a much greater extent–I will leave such an analysis to those more competent)–there are undoubtedly many differences, such as the organizational capacities of the working class immediately after the War and their organizational capacities in the current situation. Furthermore, having emerged from the War, the working class had military skills that could have posed a threat to the capitalist state. 

To expect that the working class could obtain the concessions from the capitalists that organized workers achieved in the aftermath of the Second World War to a certain extent achieved without threatening the foundations of capitalist society in the current situation is itself utopian; the class of employers have been on the offensive for several decades, as Mr. Clarke himself recognizes. From a post on Facebook (May 10, 2021), Mr. Clarke wrote: 

Matgyggatgatco S10p onsanoontetr 8elg:31d hlAM  ·    I spent more than three decades involved in anti-poverty struggles. During that whole time, the agenda of neoliberal austerity kept intensifying. Poverty and homelessness increased in scale. Social cutbacks deepened and had an ever more dreadful impact.

Let us assume, however, that Mr. Clarke and his social-democratic supporters achieve what they set out to achieve–an enhanced welfare state through struggle; let us assume for the moment that Mr. Clark’s aim of obtaining improved wages (not decent wages), improved social housing, pharmacare, dental care and so forth is realized. Employers may well, for a time, be satisfied with such a situation, but eventually they will likely, perhaps in a disorganized and individual fashion, attempt to bypass regulations associated with the welfare state–as they did when neoliberalism was just emerging. Would the welfare state be capable of withstanding such a move? Or perhaps Mr. Clarke believes that social movements and a renewed union movement could prevent such a move? Did they before the emergence of neoliberalism? What makes Mr. Clarke believe that they could do so now? Even if they could for the moment, would there not always be a threat of undermining previous gains?

Firstly, such a strategy has already been tried–during the post-Second World War period. It ended in the reversion to a more capitalist economy via neoliberalism. Unions and the social-democratic left, instead of constantly challenging the legitimacy of the class power of employers, accepted it. Mr. Clarke’s solution creates its own problems and its own negation–the double movement referred to above.

Furthermore, Mr. Clarke’s strategy fails to even address the dangers of a movement that only aims at reforming the class power of employers rather than abolishing that power. The emergence of more extreme far-right movements are always a threat as various classes and fractions of classes experience the ups and downs of the double movement.

Why not aim, from the very beginning, for a socialist society and hence the elimination of both the class of employers and classes in general? Or is that somehow utopian? If so, perhaps Mr. Clarke and his social-democratic brothers and sisters can explain how it is utopian.

Mr. Clarke’s Reformist Solution of an Enhanced Welfare State Fails to Address the Co-Optation of Radical Labour and Social Movements

Secondly, the Norwegian Marxist criminologist Thomas Mathiesen (1980) has this to say about the capacity of the present capitalist state to deal with radical leftist movements, Law, Society and Political Action: Towards a Strategy Under Late Capitalism, page 228 (what Mathiesen calls the “absorbent state” is a state that co-opts others):

The late capitalist social formation is, as we have seen, a distinctly absorbent social formation’. The question of contradiction therefore becomes especially difficult and especially important for revolutionary movements in this, our own social formation. The danger that the absorbent social ‘formation, through the process of defining in, will transform contradiction into accord, is especially great in this very absorbent social formation. The possibilities of yielding or deflecting are legion, and we have already given examples of how they become realities such as European social-democratic movements and eurocommunism. Maintaining contradiction, avoiding contradiction being transformed into accord, is the distinctive problem of the late capitalist social formation.

Frankly, it is naive to suppose that any movement whose aim is to challenge not just neoliberalism but capitalism must not deal with the capacity of the capitalist state to co-opt (absorb) such movements and transform contradiction into accord. Mr. Clarke does not even address this possibility.

I have shown the co-optation of part of the labour movement (especially the union movement) here in Canada, which often refers to “decent wages,” “decent work,” “fair contracts,” “fair wages” and the like (see for example Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE)). Mr. Clarke does not address how we are to prevent such co-optation.

This failure itself contributed to the emergence of neoliberalism.

Mr. Clarke never really engages in any critical inquiry into how the union movement, by accepting collective bargaining as somehow fair, has contributed to defensive actions rather than offensive ones. The defensive status of the union movement was certainly a partial consequence of the acceptance of collective bargaining as fair. Part of the purpose of this blog has been to bring out such limitations of modern unions.

In addition, the union movement has also largely idealized public services, neglecting to engage critically with the often oppressive nature of such services (for an example, see The Expansion of Public Services Versus a Basic Income, Part Two: How the Social-democratic Left Ignore the Oppressive Nature of Public Services: Part One: Oppressive Educational Services). Mr. Clarke does not question the limitation of the labour movement in general and the union movement in particular.

Hence, Mr. Clarke’s own political position would likely feed into a neoliberal reaction since the “leftist” strategy would not directly and immediately begin to challenge the legitimacy of the existence of the class power of employers. Such reformist efforts, if cut off from efforts to abolish economic exploitation, economic coercion and economic oppression will likely be co-opted.

A proposed radical basic income, in conjunction with struggles on several fronts for improved and extended public services, could prevent such co-optation by maintaining an immediate or short-term contradiction or conflict between the interests of workers and employers (and not just a long-term contradiction or conflict of interests). Mr. Clarke’s strategy of an enhanced welfare state simply ignores the problem.

Conclusion

Mr. Clarke’s radicalism is a radicalism rooted in the continued existence of economic exploitation and economic coercion–despite appearances to the contrary. Mr. Clarke, although he recognizes the double movement characteristic of a society dominated by a class of employers, proposes a solution (an enhanced welfare state) that fails to solve the problems that arise from the persistence of such a double movement. Furthermore, his solution of an enhanced welfare state does not come to grips with the problem of how to prevent radical labour and social movements from being co-opted.

It would be better to propose radical solutions that, while incorporating any reforms that we can achieve in the near future (such as greater benefits from the capitalist government), point to a different kind of society, a society where human dignity is real. An enhanced welfare state is hardly an expression of such a kind of society.