Friday, 23 November 2018

The Coming UK General Election

Despite what you may have been led to believe by, strangely, a combination of John McDonnell and the mainstream media, a general election in the UK is not highly unlikely. It is, in fact, very possible.

Under the Fixed Term Parliament Act of 2011, an early election is granted if two-thirds of the House of Commons vote for it. This is what happened in 2017. But that is not the only way. As the Wikipedia entry on the Fixed Term Parliament Act explains:

Section 2 of the Act also provides for two ways in which a general election can be held before the end of this five-year period:
  • If the House of Commons, with the support of two thirds of its total membership (including vacant seats), resolves "That there shall be an early parliamentary general election".

It’s important to differentiate between the aim of the Tory right for a no confidence vote in Theresa May as Tory leader – which would mean she would no longer be Prime Minister but the government would remain in place – and a no confidence vote in the House of Commons which would mean the government falling. In 1990 John Major replaced Margaret Thatcher as Prime Minister after enough Tory MPs didn’t support her, but the government itself just carried on.

Should May’s deal not be supported by the House of Commons, which looks probable, Labour will table a motion of no confidence. This is – lest we forget – a minority government so even if all Tory MPs vote in support it would still lose – theoretically, assuming all opposition MPs vote against. Everything depends on what the DUP does* or whether the odd Lib Dem or Labour MP can be prised away. It’s possible it would stagger over the line. But if May does lose the no confidence vote and no alternative government can be formed in two weeks, a general election is mandatory.

If the right of the Tory party was that cynical – which it is – it would vote against May’s deal, then support the government in the no-confidence vote, hoping it scrapes home. And then replace May in an internal party coup á la Thatcher and Major. With this government unable to negotiate a new deal, it would probably try and extend the transition period, which is not the same as Article 50, for as long as possible. But there would be no election.

However, any opportunity for the Labour party to force a General Election should be taken. We desperately need a radical change of direction on multiple fronts. This is a country where 1 in 200 people are homeless (and that is almost certainly an underestimate). The assumption would be that the EU will agree to extend Article 50 because a new government with an actual mandate (unlike with the current government or anything that can be conjured from existing Parliamentary arithmetic) constitutes an exceptional circumstance.

There is one other slight possibility. That is the May government, which has utterly ruled out a second referendum, changes its mind if it loses the vote on its ‘deal’ in the Commons and calls a referendum. The question would undoubtedly be the May deal or Remain. The government would secretly hope to lose (Remain would win). And there would be no election – the government would continue just as the Conservatives did in 2016 after the original referendum, as if the last few years were just a bad dream. But the possibility of enormous civil unrest is real given that many millions of people would not want either option.

We need an election.

* The DUP has a 'confidence and supply' agreement with the Conservatives. It's widely assumed that they would support Theresa May under any circumstances because the thought of a Corbyn-led Labour government is intolerable. But DUP leader Arlene Foster has said May's Brexit deal is more of threat than a Corbyn government. So whether the DUP would support May in a no-confidence vote is definitely an open question.


Tuesday, 20 November 2018

The Nazis and capitalism: the reign of the unorthodox

If the idea of the Nazis being socialists is crude propaganda that still leaves the question of how to correctly categorize them economically and politically. There is doubtless a brand of deterministic Marxism that will assert that between 1933 and 1945 capitalism had to take the genocidal and apocalyptic form it actually did in Germany in those years. But I don’t think that’s true. Economically, National Socialism was profoundly irrational – nihilistically dedicated to total war against enemies (the US and the Soviet Union) that it had no real chance of defeating. And it was even more manically dedicated towards the extermination of the European Jews. As is well known, deportations of Jewish people to the extermination camps took precedence over military necessities even in the time of looming defeat. If ‘capital’ was secretly in the saddle in the Third Reich years, it evidently had a death wish.

But at the same time, as remarked upon in part one, capital accumulation and profit-making were inserted into the very fibre of the Nazi economy. The death camps were privately insured, Zyklon B was supplied by a subsidiary of I.G. Farben and famous, brand-name firms ran slave labour factories in the vicinity of the death camps.

The only conclusion, I think, is that capitalism, given the chance, will happily operate under a variety of political cultures – and unapologetically assert its interests – but the nature of those cultures is not something exclusively determined by capitalists or their acolytes. As noted by David Schweickart in After Capitalism, there have been many different kinds of capitalism – Keynesian liberal, state developmental (as practiced by Japan and South Korea), third world “comprador capitalism”, our neoliberal version and, of course, the current Chinese model where the state retains a great deal of control through ‘state owned enterprises’ and rules out any complications resulting from multi-party elections. The original Marxist concept of a capitalist base determining the superstructure of culture is far too simplistic.

So the Nazis – and Hitler in particular – were quite aware of the existing power structure and the social role they had to play in order to get into power – eliminating organised labour and the Marxist threat. But they were not bound by economic orthodoxy – they needed to tap into and channel mass desires and discontents. This can be clearly seen in their rise to power.

Their increase in popularity was astoundingly rapid – the Nazis gained 2.6% of the vote in 1928 but by the summer of 1932 they were the largest party in the German Parliament, gaining close to a 38% vote share. Traditionally, this has been ascribed to the Great Depression and the mass unemployment it generated – nearly 18% of the workforce was without a job in 1932. But this is only a partial explanation.

The response of the German government to the depression was to institute crushing austerity. Under Heinrich Brüning of the Catholic Centre party, who was known as the “hunger Chancellor”, public spending was cut by 15% between 1930 and 1932. The largest falls in were in housing and healthcare spending and there were also significant reductions in unemployment benefit, payments to pensioners and support for the disabled and war veterans.

 Heinrich Brüning, the "Hunger Chancellor"

The Nazis campaigned on an anti-austerity platform, saying they wanted to preserve the social insurance system, demanding “generous expansion of support for the aged” and advocating building highways. Researchers who have analysed the NSDAP’s route to power found a strong correlation between austerity and both increased votes for the Nazis and people joining the party. Conversely, the socialist SPD – though outside government – passively supported austerity, and the Communists benefited mainly from increases in unemployment.

In power, the Nazis similarly went against the economic grain. They instituted massive state funded public work schemes in housing, land reclamation and highway construction (the famous autobahns).Tax reliefs were given to companies that created jobs and increased investment and unemployment was reduced from six million in 1932 to less than a million four years later. Of course, the main reason unemployment so successfully conquered and economic depression warded off was that the economy became wholeheartedly dedicated to rearmament and war (wehrwirtschaft or ‘war economy’ in Nazi parlance). War was not just a result of Nazi foreign policy; the entire economy was geared towards it happening.

Nazi economic policy – cutting taxes, spending money and instituting public works schemes – could in fact be described as Keynesian except that it was before Keynes. He most certainly existed at the time but his most important work – The General Theory of Employment, Interest and Money – wasn’t published until 1936. As economist Joan Robinson put it, “Hitler had already found how to cure unemployment before Keynes had finished explaining why it occurred”.

Except that Hitler didn’t cure anything. He had no interest in economics and outsourced economic policy to a banker called Dr Hjalmar Schacht, who had enthusiastically backed the NSDAP as they neared power but never actually joined the party. Among Schacht’s many departures from orthodox economics was a money printing scheme which created 12 billion marks out of thin air between 1935 and 1938. The money was used to pay armaments manufacturers and didn’t appear in the government’s budget. Any resemblance to quantitative easing is purely coincidental. But let’s just say it didn’t end well.

Why is this relevant, beyond historical debates about what National Socialism actually was? Well, over the past decade the Left has been confronted with an apparently ultra-orthodox and unyielding economic approach that demands cuts in public spending – austerity – to deal with an economic downturn. Past over-indulgence putatively makes this medicine thoroughly deserved – witness the UK general election campaigns in 2010 and 2015.

It has escaped attention that 21st century austerity is only half orthodox. It insisted on massive cuts to public spending – cuts that caused destitution and death – but responded to the threat of private sector bankruptcies with ultra-low interest rates, bail-outs and unconventional money creation schemes (quantitative easing again). Stern, unbending austerity for the public and endless indulgence for the ‘wealth creators’.

Austerity is now fraying at the edges – the Conservatives in the UK are trying to claim it’s over even though it plainly isn’t. However, this is only partly because it’s gone on so long without achieving its supposed aims – the deficit in the UK was meant to be erased by 2015, remember. It’s also because a new, ‘natavist’ Right has little patience with it. Donald Trump in the US is many things – misogynist, racist, serial liar, idiot – but he’s not a purveyor of austerity. This was former Greek finance minister, Yanis Varoufakis, talking about Trump in the Guardian newspaper in June:

The Trump administration is building up a substantial economic momentum domestically. First, he passed income and corporate tax cuts that the establishment Republicans could not have imagined even in their wildest dreams a few years ago. But this was not all. Behind the scenes, Trump astonished Nancy Pelosi, the Democrat’s leader in the House of Representatives, by approving every single social program that she asked of him. As a result, the federal government is running the largest budget deficit in America’s history when the rate of unemployment is less than 4%.

I’m old enough to remember when record, civilisation-endangering budget deficits were what the Left was bound to bring into being if it got anywhere near power. When way back in 2012 Niall Ferguson evinced that young people should “welcome austerity” and that “if young Americans knew what was good for them, they’d all be in the Tea Party”. But Trump’s record deficit has not put off enthusiastic former Tea Party members in the slightest. His “dedicated supporters”, says one article, “are many of the same folks who made the Tea Party the dominant force in American politics in 2010”. Ferguson meanwhile says Trump’s tax-cut fuelled, deficit building “is not something I can enthusiastically condone”. Maybe we should all join the Tea Party … oh wait.

But it’s not just Trump. The Italian government currently engaged in a face-off with the European Commission over its budget plans to introduce a €780 a month ‘basic income’ for unemployed Italians and to decrease the pension age is not of the Left. It is a coalition between the anti-establishment Five Star Movement and the far-right Lega. The government’s deputy Prime Minister is Matteo Salvini who has promised to deport 500,000 ‘illegal immigrants’ and been compared to Trump. But this is a government that insists it wants to “abolish poverty”.

I’m not suggesting there has been a Damascene conversion of the Right to anti-austerity. There are still many fiscally orthodox right-wingers around, such as the Austrian Freedom Party and Bolsonaro in Brazil. But as patience with never-ending austerity grows thinner and thinner, we can expect a much more flexible attitude towards it on the Right. And as the Nazis showed, there are clear historical precedents.

What means is that policies cannot be judged as being Left or Right merely in terms of whether they alleviate poverty and redistribute resources. To be classed as Left they also have to tilt the balance of power away from capital and the elite in favour organised labour and the citizenry. This is something the nationalist Right will never do.

Friday, 9 November 2018

The Nazis and socialism

Various shades of conservatism on both sides of the Atlantic are reawakening to the dangers of something called ‘socialism’. Last month the Trump White House published an assessment of the ‘Opportunity Costs of Socialism’, sternly warning that a pick-up truck is much more expensive in Scandinavia than the US. Coincidentally, it has become a right-wing trope – erupting somewhere on social media every couple of weeks – to point out that the Nazis were really socialists. So not only will socialism crash the economy and make pick-up trucks prohibitively expensive, it also shares as its intellectual kin the most barbaric, genocidal regime in history. All told, better stick with mass exploitation and craven submission to corporate power.

It’s very easy to type five words on a keyboard, no matter how ignorant. But this particular meme has gone a lot further. Last month, senior Conservative MEP Syed Kamall claimed in the European Parliament that Nazism was “a strain of socialism” and a “left-wing ideology”. So I think now it’s high time to take a considered trawl through the historical evidence and sift fact from fiction.

What’s in a Name?

The case that the Nazis were really socialists usually starts and finishes on the fact that they called themselves ‘National Socialists’. Adolf Hitler was the 11th member of an entity called the German Workers’ Party, which changed its name in 1920 to the National Socialist German Workers’ Party (NSDAP). But its reason for including the word ‘socialist’ was to appeal to working class Germans to whom it had considerable allure – this was only a year after the aborted German Revolution. Still, according to historian, (Samuel W. Mitcham in Why Hitler: The Genesis of the Nazi Reich, p 68), “Hitler did not like the addition of the term ‘Socialist’ but acquiesced because the executive committee thought it might be helpful in attracting workers from the left.”

What is true is that the NSDAP had a socialist wing – or at least a wing that believed in widespread nationalisation. But this faction – represented by Gregor Strasser and initially Josef Goebbels – was decisively defeated in the mid-1920s, when the Nazis were electorally insignificant and years before they came remotely close to power. The occasion was a referendum* on whether to transfer the landed estates of German royalty and princes to the Weimar Republic (the country was a monarchy until 1918). The Social Democrats and Communists were in favour and Strasser and his followers thought the Nazis should be too. He called a meeting of the Northern German Nazis to make sure the party was behind the expropriation drive and to put in place a new, more radical economic programme. According to William L Shirer in The Rise and Fall of the Third Reich:

Hitler was furious. Several of these former rulers had kicked in with contributions to the party. Moreover, a number of big industrialists were beginning to become financially interested in Hitler’s reborn movement precisely because it promised to be effective in combating the Communists, the Socialists and the trade unions. If Strasser and Goebbels got away with their plans, Hitler’s sources of income would immediately dry up. [160-161]

So in February 1926, Hitler called another conference in Bamberg, Southern Germany, which was packed with his supporters. “And at the Fuehrer’s insistence they [Strasser and Goebbels] were forced to capitulate and abandon their programme”.

So the Nazis decisively ended their dalliance with anything resembling ‘socialism’ in 1926.

Some recalcitrant members remained, however. One such was Gregor Strasser’s brother, Otto, who supported nationalization of industry and some strikes called by socialist-supporting trade unions. But, in May 1930, Hitler insisted he recant, accusing him of indulging in ‘democracy and liberalism’. When he refused, he was expelled from the NSDAP.

Otto Strasser responded by forming a ‘Union of Revolutionary National Socialists’, known as the Black Front, which took part in national elections. Tellingly, however, this ‘left-wing’ Nazi rival to the main Nazi movement failed dent Hitler’s support in any way.

The following year, 1931, Hitler began a concerted attempt to court influential business owners who could provide the movement with vital funds. According to Walther Funk, the intermediary between Hitler and business, “The Fuehrer personally stressed time and again during talks with me and industrial leaders to whom I had introduced him, that he was an enemy of the state economy and of the so-called ‘planned economy’ and that he considered free enterprise and competition as absolutely necessary in order to gain the highest possible production.”   

Supporters included Emil Kirdorf, a “union-hating coal baron” from the Ruhr, to whom the Nazis gave a state funeral when he died in 1938, the steel magnate Fritz Thyssen, directors of pharmaceutical conglomerate, I.G. Farben, and several banks. Among the backers were companies that still prosper today such as Deutsche Bank and insurance giant, Allianz.

However, according to Shirer, the identity of these people was a secret, “kept from all but the inner circle around the Leader. The party had to play both sides of the tracks. It had to allow Strasser, Goebbels and the crank Feder to beguile the masses with the cry that the National Socialists were truly ‘socialists’ and against the money barons. On the other hand, money to keep the party going to had to be wheedled out of those who had an ample supply of it.” (181)

In February 1933 – after he had been appointed Chancellor but before Germany’s last multi-party elections the following month – Hitler called a private meeting of well-known industrialists, telling the invited audience that “private enterprise cannot be maintained in the age of democracy; it is conceivable only if the people have a sound idea of authority and personality” (Shirer, p 238). He promised to “eliminate Marxism”. He collected three million marks in donations.

The lesson is that not only were Nazis not socialists but, had they been socialist in any genuine way, they would have remained a complete irrelevancy. In much the same fashion as its precursor, Italian Fascism, German National Socialism had to expunge its socialist side (or confine it to mere rhetoric) in order to win the support of the powerful and get anywhere near power. All that followed – the creation of totalitarian state, the Second World War, the Holocaust – stemmed from the fact that the Nazis were not socialists.

The Nazis in power

When in power, the National Socialists remained true to their (private) word. Hitler abolished trade unions, collective bargaining and the right to strike. A law, known as the ‘Charter of Labour’, was introduced in 1934. According to Shirer, the charter:

… put the worker in his place and raised the employer to his old position of absolute master – subject, of course, to interference by the all-powerful state. The employer became the ‘leader of the enterprise’, the employees the ‘following’ or Gefolgschaft. Paragraph Two of the law set down that ‘the leader of the enterprise makes the decisions for the employees and labourers in matters concerning the enterprise’. And just as in ancient times the lord was supposed to be responsible for the welfare of his subjects so, under Nazi law, was the employer made ‘responsible for the well-being of the employees and labourers’. In return, the law said ‘employees and labourers owe him faithfulness’ – that is, they were to work hard and long, and no back talk or grumbling, even about wages. (327)

Wages were set by ‘labour trustees’ who were appointed by the Labour Front, the organisation that had replaced trade unions. “In practice,” writes Shirer, “they set the rates according to the wishes of the employer – there was no provision for workers even to be consulted on such matters”. Hitler declared himself against annual increases in wage rates – wages were to rise only if performance did.

Unsurprisingly perhaps, the German worker share in the national income fell from 56.9% in 1932 (before the Nazis took power) to 53.6% in 1938. Simultaneously, the share going to capital and business rose from 17.4% to 26.6% (Shirer 328). Nazi anti-capitalism is a complete fiction:

All the propagandists in the Third Reich from Hitler on down were accustomed to rant in their public speeches against the bourgeois and the capitalist and proclaim their solidarity with the worker. But the sober duty of the official statistics, which perhaps few German bothered to make, revealed that the much maligned capitalists, not the workers, benefited the most from Nazi policies. (329)

As the economy became more directed towards war, labour conscription was introduced and workers who left their job or didn’t turn up for work with good reason were fined or imprisoned.

It should be pointed out that, though capitalism was strengthened not overthrown under the Third Reich, the Nazi stance towards the working class actually mimicked in many respects practices under the Communist totalitarian governments. Under Stalin’s Five Year Plan in the Soviet Union, for example, factories kept records of workers’ absenteeism, lateness and shoddy work. “If the worker’s record was poor,” wrote American journalist Eugene Lyons, “he was accused of trying to sabotage the Five Year Plan and if found guilty could be shot or sent to work as forced labour on the Baltic Sea Canal or the Siberian Railway.”

However, what both had in common was an unwavering hostility to an independent labour movement. In many ways, what Nazism was fixated against was workers’ control or syndicalism, which was still a palpable threat in those days – the Spanish Revolution, with its worker-controlled factories, restaurants and barber shops, happened in 1936 – and industrial democracy was implicit in collective labour action such as general strikes. Robert Ley, head of the Nazi Labour Front, proclaimed, “We are all soldiers of labour, amongst whom some command and the others obey. Obedience and responsibility have to count amongst us again … We can’t all be on the captain’s bridge, because then there would be nobody to raise the sails and pull the ropes.”

Nazism and Capitalism

What is still quite startling about Nazism is the degree to which profit-making and capital accumulation were inserted in the very heart of a state-controlled war economy. Nazi extermination camps were privately insured and, as Hannah Arendt pointed out in Eichmann in Jerusalem, famous firms such as I.G. Farben, Krupp and Siemens-Schuckert had plants in the vicinity of Auschwitz and other death camps in which they ‘employed’ slave workers. “Cooperation between the S.S. and the businessmen was excellent,” Arendt noted … “As for working conditions, the idea was clearly to kill through labor … at least 25,000 of the approximately 35,000 Jews who worked for one of the I.G. Farben plants died.” (p 79)

So entwined was the relationship between the Nazis and business, that the Nazis instituted the first privatisation programme in history (sadly that accolade does not belong to Augusto Pinochet or Margaret Thatcher). They called it ‘reprivatisation’ and sold public ownership in a number of firms in the mid-1930s – in sectors such as banking, steel, mining, ship-building and railways. The motivation was both to raise money and to solidify support among business leaders.

No, the Nazis were not socialists. But they did diverge from today’s liberal-capitalist orthodoxy in significant ways. I will examine how in part two of this post.

*The referendum did take place in June 1926. The NSDAP, purged of left-wing ideas, proposed that Jewish immigrants, rather than the princes, be expropriated. Actually, a very large majority voted in favour of expropriation but because of a boycott and a ruling that 50% of the population had to support the ‘yes’ option for it to be valid, nothing happened.