The day of the Great Betrayal

Scan page 9

London Futures Market: buying ana by clarifying the concepts of the Baran/Frank tradition (in which Wallerstein stands), and showing that they define capitalism itself quite differently from classical Marxism.

Capitalism, for Wallerstein, has never been historically progressive. It does not rest fundamentally on wage labour, but on "semi-proletarian' labour, moreover, its chief economic relation is unequal exchange (unequal because of power relations), not exploitation of labour through formally equal exchange.

Working-class movements and Third World nationalist movements are fundamentally the same sort of movement against the system of unequal exchange and of concentration of riches at the centres of power.

All of this is argued powerfully and boldly. It is in effect populism turned into high theory.

Arrighi proceeds instead by trying to clarify the classical Marxist terms of reference. Starting from a remark by Bob Sutcliffe that "ambiguity" about the very word imperialism' "lies at the root of misunderstandings" on this question, Arrighi sets out to reconstruct exactly what Lenin and his contemporaries understood by the word.

Confusing

He mainly discusses J.A. Hobson, a radical-liberal writer from whom Lenin took a great deal.

Here it gets confusing. Arrighi isolates four variants of 'imperialism': colonisation by settlers; international free trade and free enterprise, a stable world hierarchy dominated by a super-power, selling Eurodollars - the low level of workers' consumption) and the flow of interest and dividends from abroad. This led to a glut of money-capital, interested in new areas to flow to and in military spending (which gave opportunities for profitable loans to the state). Thus the system tended to gravitate to the pole of inter-imperialist rival™v and war.

Savings

But those very inter-imperialist wars produced changes in the system. Modern state spending drains off excess savings. The multinational corporations of today are interested in an international planning of the process of production, rather than just international flows of money. Hence the system gravitates to an imperialism of free enterprise.

Arrighi argues that up to the late '60s the capitalist world system was primarily an institutionalised formal hierarchy led by the US; since then US domination has continued, *but in a more informal, purely economic variant, which is fairly stable.

Much of the attempt to slot all aspects of capitalist world economics and politics into the chosen four variants is necessarily very formalistic, and the argument is often very unconvincing.

Why shouldn't the imperialism of high finance. operate solely through free-market relations, without colonial conquests and inter-imperialist wars?

Couldn't the multinationals produce a system of rival imperialist blocs - each with its own internal internationalisation of production - rather than a relatively unified world system? the 'grid' of tendencies and patterns analysed by Lenin also depends, I think, on something else. His concern with Hobson has led him to focus on one of the weakest aspects of Lenin's pamphlet on imperialism, one borrowed from Hobson.

This is the concept of imperialist expansion as being caused by a glut of capital which lacks domestic investment opportunities.

The idea of a permanent glut of capital arising once capitalism has reached a certain level was a constant theme of bourgeois economists from Adam Smith to Keynes. And it is attractive to socialists because it seems to point to a breakdown of the system Not permanent But it is not tenable. Capitalism can always create scope for more capital investment. A glut of capital is an effect of a periodic crisis, not a permanent cause of crisis.

Capital can be 'excess' or otherwise only relative to the current condition of capitalism, not to any absolute standard Poor countries may well have greater 'excesses' of capital, more often, than richer countries.

Besides, foreign investment is not an overflow. It is not something that happens after all domestic investment opportunities are exhausted.

Now the 'glut of capital' theory can be found in some pages of Lenin's 'Imperialism' "The need • to export capital arises from the fact that in a few countries capitalism has become Colin Foster reviews:

Carl E. Schorske, 'German Social Democracy 1905-1917: The Development of the Great Schism'. Harvard University Press £6.50. MOST socialists who know any dates at all from the history of the labour movement know August 4, 1914.

On that day the Social Democratic representatives in the German Parliament voted for war credits, thus supporting their own capitalist government in World War 1.

It was one of the greatest acts of apostasy and betrayal in human history, a watershed event in shaping the world history of the last seventy years. It opened the 'Great Schism' in the labour movement between reformists and revolutionaries.

ust cne events or tne let lavs before August 4 shed muc light on exactly what happened. Fearing wartime repression, the Social Democratic Party leaders on July 30 had sent two officials to Zurich with the party treasury. But the Social Democratic unions had sought to protect their funds differently.

They went to the government to seek guarantees - and got them, at a price.

On August 2 they called off all strikes pending or in progress. Luxemburg They suspended all strike pay for the duration of the war, and reached an agreement with the employers' associations to ban all strikes and lock-outs for the course of the war.

All this happened before the Social Democratic Party parliamentary representatives had even met to decide their vote.

Schorske's brilliant book long out of print before this reprint - shows how this pattern of events was the logical culmination of many years' development.

The ideology of the Party -a mechanistic form of Marxism - determined a stance of pure but passive opposition. The writings of its most prominent theorist, Karl Kautsky, were "remarkable for the passive role which he assigned to the working class and its party...

"The dynamic element in (the socialist revolution) would be the ruling class which, through its inner contradictions, corruption, and loss of selfassurance, would hurtle the existing order to destruction. The proletariat would be the passive beneficiary of the process thanks to having maintained its oppositional integrity.

•Where Luxemburg (a leader of the revolutionary left wing) viewed the proletariat as an irresistable force, Kautsky seemed to see it as an immovable object. In the revolution itself, Social Democracy would stand as an island of morality in a turbulent sea of iniquity; when Kautsky the storm had exhausted itself, its surviving victims would take refuge on the island."

On the terrain of trade unionism, this outlook determined an ultra-cautious tactic. A structure of trade union officialdom grew up for which ultra-caution was not a tactic but an axiom.

Then the loose, all embracing structure of the Party played its role: the revolutionaries were swamped; the apparatus had great autonomy and independence; whole layers of the amorphous party were ignorant of the normal guiding principles of the party, etc.

for example, the revolutionary left wing called for the use of mass political strikes. The trade union conservatives said no: such action would endanger their carefully-constructed organisations, for no certain tangible result.

Trading on the movement's powerful desire for unity, the Party leadership rallied the majority round a position which supported the use of mass political strikes in principle, but counselled inaction . for the immediate future.

New recruits to the leadership were chosen above all for being good conciliators, closely identified neither with the right nor Through a series of such political conflicts, the Party was ratcheted away from revolutionary politics. The official ideology became more and more empty - more and more a scholastic exercise in reconciling passive accommodation to the system in practice with pure opposition to It in principle. The bureaucratic structures hardened.

With a wealth of detail, Schorske describes the subtle intertwining of these processes in the years 1905-14.

Schorske is a US university professor. Though plainly sympathetic to the revolution. ary leit wing, he is no revolutionary himself. For all that, his book is a fine work of historicalmaterialist analysis, and well-written too. Every socialist concerned to know how and why the labour movement in the advanced capitalist countries got into its present sorry state should read it.