Who is to Blame? Socialism or Capitalism?

Last week a debate on the Occupy movement took place on Newsnight between former Goldman Sachs partner Richard Sharp and activist/journalist Laurie Penny. It was revealing largely because of the ideological parameters within which the debate was conducted. Only a couple of years ago, it would have been considered inconceivable to have a discussion in the mainstream media over alternatives to capitalism . Thanks in large part to the Occupy movement, such debates are increasingly becoming the norm.

The Newsnight debate was also interesting in that it demonstrated what form the capitalist response to such challenges is taking. Certainly there are reformist positions - witness Vince Cable and Ed Miliband calling for a 'more responsible capitalism' (whatever that actually means). But from more reactionary segments the ideological backlash has quite remarkably involved summoning the spectre of socialism. On Tuesday Tory MP Elizabeth Truss suggested that soaring inequality was a result of too much government regulation of markets. And Richard Sharp (a former partner in a company that received a government bail out to the tune of $1.1 billion) suggested that the Occupy protesters should be protesting against socialism:

According to Sharp, massive government spending (oddly equated with socialism) of the British and US governments (among others) is the reason that we are in are now confronted with austerity, the implication being that 'the markets have nothing to do with it'. And thinking about it, from purely a rhetorical point of view, blaming socialism is an ingenious ideological sally, for it at once deflects attention from the real problem, while also precluding any socialistic imagination of alternatives.

The problem for its proponents is that it such an argument patently nonsense. Even putting aside claims that the crisis was caused by the systemic tendencies of capitalism, it is relatively easy to demonstrate that the markets do have something to do with sovereign debt crisis.

Back in May 2010, just after the UK General Election that had brought the Con-Dem coalition to power, the deficit stood at £145 billion, including financial intervention. The amount George Osborne seeks to save over the course of the parliament is around £83 billion, which, when added to Labour's own brief period of deficit reduction, amounts to a £110 billion austerity programme. The cost of the bailout in simple cash terms was just under £124 billion (excluding guarantees and indemnities, as well as quantitative easing, which if included, would stand at over £1 trillion). Now I've never been that good at maths, but those figures of 145 billion, 110 billion and 124 billion seem pretty close to me.

There is of course, the argument that the £124 billion used to bailout the banks actually cost nothing, because the government now holds assets in the form of loans and shares which will be recouped when the banks are re-privatised. But it is becoming clear that British tax payers are set to make a massive loss from the bailouts. Earlier this month there was public dismay that Northern Rock was sold to Richard Branson's Virgin for £747 million pounds (rising to potentially £1 billion, depending on flotation or resale). The cost of Northern Rock's nationalisation was £1.4 billion.

Taking the further figures from the National Audit Office report, we find that the value of government owned shares is dramatically falling. The state bought 90.6 billion shares in RBS at 50.53p a share representing an outlay of around £45.8 billion. In March this year, the total value of these shares had fallen to £36.97 billion. At the time of writing (November 25th) one RBS share is worth 18.74p, meaning the government's stake is valued at around £17 billion  - a fall of 62%. The state also owns 27.6 billion shares in Lloyds TSB, bought at a cost of 74.4p per share - an outlay of about £20.5 billion. By March this was worth £16 billion. Today one share in Lloyds is worth 22.16p leaving the government's stake valued at around £6 billion - a fall of  over 70 %.

So, despite the fact that financial markets demanded bail outs, plunging Britain into its currently unmanageable level of debt, and despite the fact that state owned shares have fallen in those same financial markets, allowing, in turn, markets to buy back government shares at a fraction of their original cost, the markets are completely innocent (according to the markets)!

Consent, Coercion and Crisis

One of the most striking aspects of the build up to the TUC demonstration in March, and the continuing Occupation of St. Pauls, has been the opposition both inside and outside of the movement to link our local struggles to the Arab Spring. The reasoning goes: we have ‘democracy’ here; we have ‘freedoms’; we have ‘human rights’; we are not ‘repressed’ by the state; we are not fighting ‘despots’. Some have even argued that, by drawing inspiration from Tahrir Square, we are insulting our Egyptian counterparts. Others have suggested that it is all merely an excuse to riot.

The overall tendency of these arguments is to suggest that since that Egyptians live under a system based on political coercion, their struggles are valid and honourable. Because we live within a system based on political consent, our struggles are naïve and indulgent. But this double patronisation of both Arab and Western protestors reveals a latent ruling-class bias which overshadows and skews the definitions of what should and shouldn’t be considered legitimate protest.

Consent

The whole basis for distinguishing between Arab and Western struggles overlooks the interrelation of both coercion and consent as reproductive mechanisms of ruling-class power. One of the greatest of achievements of Antonio Gramsci’s work is to show how rather than a guarantee of freedom, consent acts as the primary mechanism for the maintenance of ruling-class hegemony under capitalism. In the Prison Notebooks Gramsci argues that by ‘manufacturing consent’ through political, ideological and cultural practices – bargaining, concession making, propaganda etc. – dominant class interests are maintained and reproduced without the need for state coercion.

This is not to say that such processes do not constitute a substantial part of any form of ruling-class reproduction. But consent takes on an especial character under capitalism due to the distinctiveness of its material reproduction. One of the defining elements of capitalism is the supposed freedom of labour. While under slavery and feudalism, labourers were coerced into working for the ruling-class, under capitalism workers formally consent to do so. This in turn obscures the specifically non-political, economic, form of coercion (the unfreedom of having to work in order to buy food, clothes, shelter etc) and exploitation (surplus labour, labour made to work for more than it is paid).

In turn, the ideological legitimation of consent also takes on characteristics specific to capitalism. Because capitalism has, in theory, dispensed itself of political and cultural loci of power, consent is established on the basis of our political freedom – our right to vote, our right to freedom of expression, our right to free assembly, etc. Mechanisms of economic coercion – the commodification of labour-power and the exploitative relation between capital and labour are considered off limits. Equally the material and ideological bases of consent frame the parameters of what is considered legitimate protest – while political repression is considered fair game, economic repression is not. Struggles for democracy: good. Strikes: bad. Taken together, these ideological and material moments serve to both legitimise and disguise ruling-class domination; our political freedom both justifies and veils our economic unfreedom.

The attempted division of the Arab Spring from resistance movements in the West should be seen within this very context of consent generation. Creating a distinction between the two represents an integral part of the ideological reproduction of ruling class power. For it is precisely through such consent generating discourse that the division between the Arab Spring and Western struggles is articulated: the Arab Spring is about their tyrannical system of rule, that is, political coercion. Their challenge to the system or to the ruling-class is therefore legitimate. The struggle in say, Britain, is different. It is simply about public sector cuts, issues of supposed economic necessity. It is therefore not about our system of rule, not about our ruling-class. Why? Because ‘we have democracy, we have freedom of speech, we have a right to protest.’

Coercion

However, for Gramsci, consent constituted only the formal appearance of coercion. Put differently, consent can be better defined as ‘consented coercion’. The true nature of this relation becomes clear in moments of ruling-class crisis, where the ideological mechanisms that underpin consent break down, and the ‘mask of consent’ is removed thus revealing the naked force of coercion. In other words, where consent fails, coercion picks up the pieces and re-asserts ruling-class hegemony through the use of state violence, repression and suppression.

Three hypotheses can be drawn from this observation. Firstly, it gives us a more appropriate basis from which we can distinguish between the Arab Spring and its Western counterparts. In the Arab region ruling-class consent was (for a variety of historical and conjunctural reasons) weaker, and therefore tended to break down quicker and more suddenly than in the West. Consequently, coercion played a much more dominant role in the maintenance of ruling-class hegemony than in the West.

Secondly, consent and coercion are merely two sides of the same coin. The dominance of one form over another should not blind us to the fact that both are expressions of the same ruling-class hegemony. As Richard Seymour points out, the ruling-classes in the West are becoming attuned to and aware of cracks in ruling-class ideology. So, as consent fails as a mechanism for ruling-class reproduction, coercion will increasingly step in and take its place. 

Thirdly, the break down of consent is therefore not confined to Arab nations. Indeed, there is a growing body of evidence that we are witnessing a crisis of consent in the heartlands of global capitalism. From the undemocratic power of finance, to legal restrictions on the occupation of public space, from technocratic coups, to the draconian sentencing of protesters, more people are becoming aware that our supposed political freedoms are often used to mask the coercive hegemony of the ruling-class.

Crisis

To summarise, Gramsci’s analysis of consent and coercion is instructive in that it highlights the interconnection between the two. But it also demonstrates that the two exist in perpetual tension and are prone to crisis. If the whole structure of ruling-class consent is built on supposed political freedoms, what happens when the ruling classes have to resort to the brutal methods of state repression? What happens when the UK government seeks to ban protests during the Olympic games? What happens when the US state does this:

Indeed, what happens when the ruling military junta in Egypt uses Western practices of political coercion as a justification for their own brutal repression of demonstrators in Tahrir Square?

The more the ruling-class depends on coercion to reproduce its power, the more it will undermine and weaken the basis of its own consent. The more it will become like Mubarak’s Egypt, or Ben Ali’s Tunisia, or Assad’s Syria. The more it will become self-evident that there is no fundamental difference between Arab and Western struggles.

As with the Arab Spring, the political coercion of movements such as Occupy Wall Street has the potential to popularise and broaden the movement to sections of society that would have otherwise been opposed or indifferent – liberals, trade union leaders, mainstream media, political parties, religious groups, etc. The embryo of such broad based solidarity has already been witnessed in the Occupy movements either side of the Atlantic. So as we look to build for November 30^th and beyond, establishing and maintaining the unity of various resistance movements should form the bedrock of any political strategy of resistance. 

Mayor Bloomberg Hammered

Best known for his baiting of Fox anchor and arch-twat Bill O'Reilly, as well as his outspoken criticism of the Bush administration, Keith Olbermann recently took on Mayor Bloomberg over the heavy handed suppression of Occupy Wall Street. And thanked him. Deep par...

There is something wonderfully agitational (or should I say showbiz?) about US politics and media. For example, could you imagine our most flamboyant anchor Jeremy Paxman doing something like this? Of course there is a bad side: Fox News; cringey election videos; Nuremberg-style campaign rallies. But at a time when the message of the Occupy movement - and the resistance to capitalism as a whole - needs articulation and popularisation, all manifestations of revolutionary pedagogy and propaganda should be welcomed.