Thursday, 24 September 2009

Nick Clegg: Closet Socialist?

It is fair to say we on the far left have little time for the Liberal Democrats. There are good reasons for this - and not just because they're an outright bourgeois party. In councils up and down the country (not least in sunny Stoke) they have been happy to follow the mania for cuts, outsourcing and privatisation. Their activists have an especially bad reputation for dirty tricks in local politics. And of course, just this week at the LibDem conference Nick Clegg has said Britain requires savage cuts and something called "progressive austerity" (whatever that is).

In words and deeds the LibDems appear to be the antithesis of what socialists would consider progressive. It is therefore surprising to find Nick Clegg's new pamphlet, The Liberal Moment is quite radical and thought-provoking. In fact, you could almost say Clegg's social liberalism outflanks Jon Cruddas' reaffirmation of Labour's core values from the left. In this post I'll concentrate on what Clegg has to say about economics - the next will be a more rounded overview.

Clegg has enough nous to realise Labour aren't entirely to blame for our economic woes - an argument accepted by everyone but the hard-of-thinking on the right. But the crisis in Britain was exacerbated by what he sees as Labour's illiberal attitude to economics. Forget Tory moans about Brown selling off the gold reserve at the bottom of the market. Far more damaging was his outright refusal to regulate finance for fear of threatening London's status as one of global capital's main casinos. This concentrated too much power in few corporate hands, which in turn was reinforced by the debt-fuelled boom which primarily benefited the South East and distorted the economy toward property and finance (it's telling Clegg chooses not to examine the underlying reasons for debt-dependent growth, i.e. the near freezing of real wages).

The lop-sided economy with its regional disparities had a corrosive effect on government. The concentration of corporate power proceeded alongside the centralisation of government, resulting in synergies unhealthy for politics and economics. Vested interests in the city exerted influence over government and government favoured certain sectors and companies over others. For a while the incestuous relationship with the city kept tax receipts and large donations to party coffers going, but this meant the government had zero material interest in correcting the imbalance.

For Clegg liberalism stands resolutely opposed to this state of affairs. Returning to John Stuart Mill, he argues liberalism stands for the exercise of power against individuals when (and only when) they are or threaten to cause harm to others. Economically speaking liberalism is against monopolies and want to see the dispersal of economic power. Now, if one wants to be Marxist about it (and I do) this idea represents the experience of/realisation monopolies (as outcomes of capitalist competition) aggregate capital in ever greater concentrations. This reaches a point where its interests are at odds with the anarchy of the marketplace. It demands stability and seeks to bend the market to its will through price fixing, collusion and economic planning. These tendencies threaten the law of value, creates new centres of power, squeezes competitors out and distorts labour markets. For socialists this can be read as an example of how capitalism organically prepares the ground for a socialisation of economic life. To retard the process, the tendency to monopoly has to be periodically checked by anti-monopoly laws and government intervention for the health of capital as a whole. This is what liberalism tries to do.

Therefore Clegg argues for more global financial regulation under the auspices of supranational organisations. He believes if a bank is "too big to fail", then by definition it's too big. He would be for the separation of 'normal' and investment banking the de-merging of Lloyds and HBOS and the latter sold off, along with RBS. He also argues more building societies and credit unions are needed (why not mutualise the banks instead of privatising them, a la Cruddas, or keep them state owned to drive the infrastructural spending he thinks Britain also needs?)

Clegg then parks his tanks on old Labour's lawn. Redistributive taxation can disperse concentrations of economic power. He envisages tax cuts for low and middle income earners funded by more taxes on the rich and green taxes on polluting business. This would shift £16bn/year downwards and make inroads into the inequality gap. He also favours more regulation of supermarket monopolies and, crucially for socialists, a move away from the hegemonic shareholder model of ownership in favour of stakeholder ownership and control. These are businesses owned (and managed) by their employees. He argues this unlocks creativity, drives higher productivity, quality, job satisfaction and lower employee turnover. It's what some of us might once have called market socialism. He argues this should be extended to Royal Mail as an alternative to continued state ownership and the privatisation schemes favoured by Labour and the Tories.

From a socialist point of view and despite Clegg's protestations that stakeholder ownership/control is a supremely liberal idea, the realisation of self-management is a step toward socialist objectives. It does not expropriate the bourgeoisie or immediately threaten the law of value but it does devolve economic power and increase the capacities of workers fortunate enough to be employed in these firms. It can weaken the hold a tiny number of super rich individual and institutional shareholders have over the economy and strengthen our class relative to the bourgeoisie. Like the necessity for increased planning by monopoly capital, this can be taken as evidence of socialist forms of organisation incubating in capitalism's womb.

Obviously Clegg is not a socialist. For all Liberal Moment's social liberalism, Clegg's take on economics has little to say about low pay or the minimum wage. There is nothing about rights at work or the role trade unionism can (and should) play in stakeholder ownership. This complete lack of a class dimension is ultimately what makes his economic prescriptions liberal policies. But that said there is no reason why social democrats and socialists shouldn't pinch some of them.

In sum, Clegg's liberalism might try and save capitalism from capitalism, but his solutions amount to arresting one socialising tendency by strengthening another.


Boffy said...


Great post. However, as someone who has been banging the drum on this idea of positing worker owned and controlled enterprises as a socialist alternative to State Capitalism, let me add one caveat.

As I said in my blogs on Can Co-operatives Work , although as Marx says they resolve the contradiction between Capital and labour positively by making the worker a Capitalist, there is nothing essentially socialist in this.

The workers could remain dominated by Capital even as they own Capital. Indeed just as is the Capitalist. And as you point out Capitalist Monopolies exploy planning, so there is nothing essentially socialist in that either. What we are dealing with is potentialities, material foudnations upon which socialism CAN be created.

But, the deciding factor here is the extent to which workers use this new set of property relations to transform social relations, to first control, then replace the market, and thereby the manifestation of the law of Value via the dominance of Exchange Value, gradually replacing commodity fetishisation with real human relations.

As Marx, and in particular Ernest Jones set out, a requirement is that Co-ops do not operate as individual businesses ( a similar arguemnt to opposition to Socialism in One Country), but that they operate as part of a national/international federation with clearly stated objectives - to push out private Capital. That will mean increasing Co-operation BETWEEN enterprises/and other organisations, increasing monopolisation, and planning. To organise and lead that will require a Workers Party. Moreover, to provide a political response to the inevitable oppsoition of the bouregosiie to these latter developments will require that party to engage in a political war within the forums of bourgeois democracy.

SamG said...

Centralised government? Wasn’t it New Labour who tried to introduce regional government, wasn’t it New Labour who set up the Scottish and Welsh parliaments?

Anyway, I take slight issue with Arthur Boughs statement, as I think the fact that mainstream politicians are even talking about worker ownership is a positive sign.
The process of worker ownership inevitably starts from individual scattered enterprises eventually forming a 'community' that can be moulded by socialists, and only later do Arthur’s caveats come to the fore. Of course the sooner people on the left are part of this movement the better.

The caveat for me would be the devil in the detail of Clegg’s proposals. I don't really take much notice of the Liberal democrats for obvious reasons but this has definitely raised my interest.
I will, though, prepare to be disappointed.

Boffy said...

When our enemies representatives in the mainstream parties start talking about any idea that workers have considereed, my first reaction is to wonder how they thereby intend to neuter that idea!

Its true that many Co-ops begin as single ventures. But that is why they end up as just Capitalist enterprises owned by workers, and why they adopt Capitalist principles. Its also why many of them fail. Co-operation as an idea can only work on the basis that Marx and the First International proposed a) as being an element of class struggle, and b) following from that as part of a national organisation, today we should say international organisation increasingly.

SamG said...

But surely Co-ops need to develop organically as a desired solution to workers problems and as a superior form of capitalist business, they cannot be forced upon the workers.

Only then can the 'superstructure'
become a reality.

The left's job is to promote this idea.

Boffy said...


I agree that Co-ops have to grow organically. They cannot simply be imposed. But, Marxists do not simply watch history proceed from the sidelines. we actively participate in it, codifying the lessons from previous actions by workers so they do not have to learn those lessons again.

A Marxist in an un-unionised workplace doesn't simply wait for a union to develop organically, but fights with all their might to establish it, and to do so on principles we have learned favour the ordinary members. Similarly, workers do not simply develop Co-ops of he form which offer the bis of changing the worekrs real economic and social position automatically. Marxists have to argue, for example, in the case of Vestas, why establishing a Co-op is their best option, and arguing the case for developing a Workers Plan of production for it that is likely to offer the best hope of success. A look at the Co-ops established in Argentina, shows that the most succesful have been those that have been integrated with the communties in which they reside, and which have formed close links with other Co-ops.

Marxists have to teach workers those lessons. After all a strong tendency within Capitalism would otherwis be for workers to simply see the Co-op as though it were a partnership. In the same way the Co-op itself shows what happens where the wrong kind of ownership and control structure is established. Consumers have no immediate reason to participate in control, whereas workers as producers have to on a daily basis.

I agree that the actual forms of organisation are a matter of experimentation, but we do not have to leave it all to chance.

Phil said...

I agree with you Arthur - Brother S and I often talk favourably about the contributions you've made on cooperatives (and your analysis of the recession).

Boffy said...


Thanks. I shall be around for a few weeks now, before finally disappearing. E-mail me about the next TC. It would be nice to have a pint with comrades before I go.