From Communism to Activism?

Last week, to commemorate 170 years since Marx and Engels wrote The Communist Manifesto, the editors of the UK’s Financial Times commissioned two executives of a ‘corporate advisory’ firm to consider what was right and wrong in that seminal work about capitalism and communism.  The two FT writers started by declaring that “as a partner in a corporate advisory firm and a professor of law and finance, we are true believers in free-market capitalism”, but nevertheless, the 1848 manifesto still had some value, especially “in the wake of a calamitous financial crisis and in the midst of whirlwind social change, a popular distaste of financial capitalists, and widespread revolutionary activity”.

But the FT authors wanted to convert the Communist Manifesto into what they call a “Activist Manifesto”.  They threw out the outdated concepts of two classes: capitalists and workers; and replaced them with the ‘haves’ and the ‘have nots’.  You see, classes and crises are out of date as the main critique of capitalism now is rising inequality, which the FT authors claim the Communist Manifesto was really about.  “As in Marx’s and Engels’ time, economic inequality is rising, wages are stagnating, and the owners of productive capital are reaping the benefits of technological advances”.

But the solution to this, the FT authors are at pains to say, is not the confiscation of private property or communism – this only breeds “murderous tyrannies”.  And “we also think Marx and Engels would update their views about private property. While the abolition of private property was their first and most prominent demand, we think they would recognise that Have-Nots have benefited from property rights. Moreover, we argue that state-held property is problematic, leading to waste, inefficiency and the likelihood of being co-opted by the Haves in our societies today. As the role of the state has grown, inequality has also grown. And the Have-Nots have been the ones who have paid for it.”

Instead what we need is ‘shareholder activism’ in companies “shaking up complacent boards and advocating for changes in corporate strategy and capital structure.” This is the way forward, according to our FT authors 170 years after Marx and Engels’ manifesto.  And even the global elite recognise it: “many Haves too are activists already today… Think of the billionaires such as Bill Gates, Warren Buffett and Mark Zuckerberg, who already support philanthropic efforts to alleviate inequality”.  So that’s all right then.

Should the Communist Manifesto be rewritten as a plea for ‘activism’ led by billionaires to reduce inequalities, rather than the abolition of private property in the means of production and the replacement of capitalism with communism?  While the FT was publishing its view on the Communist Manifesto today, I was delivering a talk on social classes today at the Metropolitan University of Mexico in Mexico City (Universidad Autónoma Metropolitana – UAM) as part of my recent visit there.  I too started off with a reminder that it was 170 years since the Communist Manifesto was published.  But I emphasised that the basic division of capitalism between two classes: the owners of the means of production (corporations globally) and those who own nothing and only have their labour power to sell; remains pretty much unchanged from how it was in 1848.

Recent empirical work on the US class division of incomes has been done by Professor Simon Mohun.  Mohun analysed US income tax returns and divided taxpayers into those who could live totally off income from capital (rent, interest and dividends) – the true capitalists, and those who had to work to make a living (wages).  He compared the picture in 1918 with now and found that only 3.8% of taxpayers could be considered capitalists, while 88% were workers in the Marxist definition.  In 2011, only 2% were capitalists and near 84% were workers.  The ‘managerial’ class, ie workers who also had some income from capital (a middle class ?) had grown a little from 8% to 14%, but still not decisive.  Capitalist incomes were 11 times higher on average than workers in 1918, but now they were 22 times larger.  The old slogan of the 1% and the 99% is almost accurate.

The class divide described in the Communist Manifesto is that between those who own and those who do not and Mohun’s ‘class’ stats confirm that.  For Marx and Engels, all previous history has been one of class struggle over the surplus created by labour.  In slave economies, the owners of capital literally owned humans as source of their surplus; in feudal society, they controlled the days of work and obligations of the serfs.

Under capitalism, the surplus was usurped in a hidden ‘invisible’ way.  Workers were paid a wage – a fair wage – but they produced more value in the commodities they made for sale and it was this surplus value realised in the sale of commodities (goods and services) that capitalists accumulated.  The class struggle under capitalism thus took the form of a struggle between the share of value going to wages or profits.  As Marx put it in Capital: “In the class struggle as a finale in which is found the solution of the whole smear! From a struggle over wages, hours and working conditions or relief, it becomes, even as it fights for those things, a struggle for the overthrow of the capitalist system of production – a struggle for proletarian revolution.”

In my presentation to UAM in Mexico, I ambitiously argued that we can gauge the intensity of the class struggle from the balance of forces in the wage-profit battle.  I used statistics of strikes in the UK since 1890 against the profitability of UK capital (for more on this, see my paper, Mapping out the class struggle).  The first long depression of capitalism was at its deepest just as Marx died in 1883. It came to an end in the UK in the early 1890s: profitability recovered and the labour movement strengthened with the advent of new mass unions.  Labour disputes erupted for a while.  The fall back in profitability from 1907 then sparked a new battle over the surplus leading to intense levels of strikes just before the WWI broke out.

After the war, the class struggle resumed with some intensity, but in the UK that ended with the defeat of the general strike in 1926.  On the back of that defeat, UK capital recovered some profitability while the unions were weakened.  Strikes and class struggle were depressed by the Great Depression of the 1930s.

The second world war drove up profitability and the labour movement also made a recovery.  It was the golden age of growth, investment, employment and the ‘welfare state’.  So when the profitability crisis of the late 1960s and 1970s commenced, British workers fought hard to maintain their gains.  Strikes were at a high level and there was talk of revolution.  That struggle came to an end with the defeat of the miners in 1985.  What followed was rising profitability in the neo-liberal period, along with weakened trade unions.  This was a recipe for low levels of class struggle.  With the Great Recession and the subsequent Long Depression, that low intensity continued.

I concluded from this short analysis that the class struggle as described in the Communist Manifesto has not disappeared and neither have the two basic classes, contrary to the amendments advocated in the ‘Activist Manifesto’ of the FT authors.  But the intensity of that struggle depends on the objective conditions of the profitability of capital and the strength of labour.  Class struggle is not always at fever pitch, revolutionary moments are rare.

The most intense periods of struggle appear to be when the labour movement is reasonably strong in incomes and organisation but when the profitability of capital has started to fall, according to Marx’s law of profitability.  Then the battle over the share of the surplus and wages rises.  Historically, in the UK that was from 1910 just before and just after WW1; and in the 1970s.  Such objective conditions have so far not arisen again.  So the spectre of Communism haunting Europe – the phrase that Marx and Engels started with their manifesto in 1848 (in a similar intense period as those above) – is not yet with us again.

16 Responses to “From Communism to Activism?”

  1. Leo Panitch Says:

    I read the FT apiece on the plane on the way down. It’s absurd. But shows how the bourgeoisie more than the proletariat is still paying attention to Marx!


    • michael roberts Says:

      Yes I’ve been kind to it by taking its arguments seriously!

    • jschulman Says:

      This has been a problem for at least 20 years now, no? Since the 150th anniversary of the Manifesto and all the talk about how it predicted “globalization.”

    • Steve Diamond Says:

      It’s absurd but the agenda is a serious one. Activist hedge funds are a very significant force in the US capital markets. So are labor backed pension funds. The latter tend to have a wider social agenda. Some among the former would like to ally with the latter to push their own narrower financial agenda. The labor left should be paying closer attention to this setting because it is possible to use pension fund activism to support wider social change. I have a paper on this if anyone would like to see it. Email: sdiamond at scu dot edu

  2. Eleutério F S Prado Says:

    FT says: “state-held property is problematic”. Marx was not in favour of state property, but comunal organization of labor. He said: “the life-process of society, which is based on the process of material production, does not strip off its mystical veil until it is treated as production by freely associated men”. But many marxists are in favour of state property!!!!!!!!

  3. Arthur Says:

    Was surprised to see table showing from 1918 to 2011 increase in “middle” (“Managers”) of 6.1% at expense of Workers decline 4.3% and capitalists decline 1.8%. Column totals round to about 100%. Even using income instead of wealth and given data inadequacy I would have expected to see middle declining proportion of population and workers increasing (and capitalists decreasing more rapidly).

    Ignoring be kind to FT and nostalgia for when one could pretend that strikes reflected class struggle, I took a look at the Mohun paper.

    Only skimmed quickly so far but I think it confirms my suspicion that it was misleading to classify for Michael to present “Managers” as “middle” because they have both worker wages and some income from property.

    The paper clearly distinguishes between two types of “managers”:

    Quasi capitalist “Qc” managers could live comfortably on their property income without working.

    Labour power dependent “Lpd” managers could not.

    Presumably this classification could be varied a lot. But given it was made the table would more accurately reflect the paper it was citing if it added “Lpd” managers to “workers” and “Qc” managers to capitalists. I think that was the point being made by – quite opposite to any suggestion of a growing middle at expense of both capitalists and workers.

    Top row of table 1 in Simon Mohun paper corresponds to table in Michael’s post but with “Qc” managers labelled as “capitalists” and “Lpd” managers labelled as “managers.

    I would read that as a decline in actively functioning magnates of capital (CEOs with large portfolios etc) and an increase proportion of workers jobs labelled with “management” titles (which include “managers” of fast food outlets etc supervising a handful of staff).

    Actual finance capitalist – rentiers/billionaires would be far too tiny a percentage to be visible in tables rounded to .1% (eg top 3 billionaires in US with more wealth than bottom half of population could not be included in table).

    Have not read article carefully enough, let alone checked nature of data sources. But recommend that should be done and expect conclusion would NOT be increase in middle.

  4. belfast plebian Says:

    If the class basis of contemporary capitalism is what you say it is then it begs the question how come class struggle political parties do so mournfully in general elections?

    Furthermore the British statistics office says there are currently 5.7 million small businesses in the UK, employing 250 or less. I presume these 5.7 million small owners are in favour of maintaining the privately owned means of production. If you surmise that most of these 5.7 owners have spouses that kinda believe in capitalism, you get to 11.4 million. The Tories won the last election with 13.6 million votes, a pretty good approximation to the numbers of the small business. This came out as 42 percent of the vote. The Tories in over one hundred years of elections have hovered around this percentage point.

    My guess is that most advanced capitalist societies are not that dissimilar to Britain. In conclusion, at least 40 percent of people living in the advanced capitalist countries have a material interest in maintaining the international economic system as it more or less is.

  5. Socialism In One Bedroom Says:

    I don’t think you can include the middle classes in the movement and I do not think Marx or Engels imagined them in the movement either. They simply said that when the time came the middle classes could be bought off.

    So I refuse to accept the 99% 1% argument and would go for 70% 30% as more reasonable approximation. Of course in Marx’s day in certain places the movement was in a minority and Marx acknowledged the fact but in those cases he simply said sod ‘democracy’!

    As for the idea that Marx and Engels would have seen how private property has benefited the have nots, someone hold me back!!!!!!!!!!!!!

  6. Terry Viney Says:

    Thank you Michael for your consistent responses to nonsense: On this occasion for responding to the FT authors’ links between “communism” and “murderous tyrannies” . Their comment comes just prior to British State condemnation of the “Russian” nerve attack in Salisbury and decades after celebrating the FALL of “communism” and return of capitalism decades ago.

  7. Charles A. Says:

    “The most intense periods of struggle appear to be when the labour movement is reasonably strong in incomes and organisation but when the profitability of capital has started to fall.” But not revolutionary times. These can be a few short months under extreme suffering, for example, the October Revolution of 1917 amidst the carnage of World War One. They can be 25 years of scientifically organized peasant liberation war, for example, China from the mid-1920s to 1949. Both societies had entered the final phase of their mode of production 70 or so years earlier. The U.S. is about 45 years into that phase.

  8. Mad Uro Says:

    “Should the Communist Manifesto be rewritten as a plea for ‘activism’ led by billionaires to reduce inequalities … ”

    no need, the Communist Manifesto has them covered:

    “A part of the bourgeoisie is desirous of redressing social grievances in order to secure the continued existence of bourgeois society.
    To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind.”

  9. ucanbpolitical Says:

    Of the top ten percent of income earners (which includes income from property and capital gains) senior management by number is the biggest component.

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