transformative politics: the future of socialism in western europe

Transformative Politics

The Future of Socialism in WesternEurope

Anthony Butler

TRANSFORMATIVE POLITICS

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Transformative Politics The Future of Socialism in Western Europe

Anthony Butler Fellow, Emmanuel College Cambridge

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© Anthony Butler 1995

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Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

First published in Great Britain 1995 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world

A catalogue record for this book is available from the British Library.

ISBN 0-333-62039-9

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Printed and bound in Great Britain by Antony Rowe Ltd Chippenham, Wiltshire

First published in the United States of America 1995 by Scholarly and Reference Division, ST. MARTIN'S PRESS, INC., 175 Fifth Avenue, New York, N.Y. 10010

ISBN 0-312-12673-5

Library of Congress Cataloging-in-Publication Data Butler, Anthony, 1964-Transformative politics : the future of socialism in Western Europe / Anthony Butler, p. cm. Includes bibliographical references and index. ISBN 0-312-12673-5 1. Socialism—Europe. 2. Post-communism—Europe. I. Title. HX238.5.B88 1995 320.5'3r094-dc20 95-4166

CIP

For my parents

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Contents

Preface viii

Introduction: The End of Socialism? 1

1 Classes in Capitalism 22

2 States in Nations 41

3 The Limits of the Unitary State 61

4 A State in Decline 82

5 Western European Socialism 110

Conclusion: The Future of Socialism 130

Notes 150

Index 171

vn

Preface

The current debate over socialism's future has offered ample proof of its continuing intellectual vitality. Nonetheless, many socialists are unsure what today constitutes their movement's distinctiveness, and wonder whether its generational and doctrinal divides can still be bridged. This book suggests at least one way in which they can. The subtitle should not encourage expectations of a comprehensive overview: such a book is always written with a particular audience in mind, and this one draws heavily on the experiences of the British left. Moreover, any work on socialism must reflect the intricate relations between particular states and their political movements.

I have been helped by many friends and colleagues in researching and writing this book. In particular, I would like to thank Julie Barker, Paul Chilcott, Nigel Dodd, Andrew Gamble, Mike Gross, Geoff Hawthorn, Phil Joyce, and Sean Smith. I would also like to recognise an older debt, to Gabriele Taylor and Tony Judt, for generosity more appreciated than acknowledged. I have benefited at different times from the intellectual guidance of John Dunn and Anne Jellema, each of whom has been unfailingly encouraging and kind.

Parts of Chapter 2 first appeared in Volume 43 of Political Studies.

V l l l

Introduction: The End of Socialism?

Every socialist tradition has its history of crisis and renewal. Today, however, with the left's projects everywhere in disarray, many critics argue that we live in a 'post-socialist' world. The triumphant supporters of liberal capitalism - although still ill-equipped to address social, economic, and environmental challenges - everywhere hold the intellectual initiative. Some socialists have even repudiated their own history in the vain hope this might restore some temporary electoral advantage to their movements.

Socialists have been on the run since the middle of the 1970s. In the advanced industrial societies of Western Europe, the subject of this book, the postwar boom allowed them to evade growing intellectual challenges. Its end stranded them with a bewildering array of unresolved problems. Their basis of support in the working class - belatedly forsaken as a potential agent of successful revolution - was eroded by changes in class structure and political affiliation. Moreover, the familiar assumptions of the collectivism and latent radicalism of all working people came to seem fanciful.

In North-West Europe, labour, workers', and social democratic parties were defeated one by one from 1975. Painful landmarks included the ejection of Sweden's social democrats in 1976, for the first time since 1936; the crushing of Britain's Labour in 1979; and the end of social democratic control of West Germany in 1982. The same story was echoed across Scandinavia and the Low Countries. Trade unions everywhere became ever more conservative representatives of private interests, and awkward new social movements arose to complicate socialists' electoral and political strategies. By the mid-1980s, the ranks of professional socialism - comprising politicians, trade unionists, and academics - had been joined by feminists, anti-war campaigners, and environmentalists. Apt to contest each other's claims to allegiance, these more heterogeneous leftists labelled one another as backward trade unionists, mere social democrats, Stalinists, opportunists, or - worst of all - liberals. Each claimed that their own project represented an all-encompassing system of thought and action, embodying and explaining all apparent competitors. The question of which ideas and strategies

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2 Transformative Politics

might be salvaged from the wreckage of socialism all too easily became a matter of for whom they were to be saved.

Even the apparatus of the planning welfare state, postwar Europe's most distinctive and successful social achievement, came under attack from within and without the left.' Pragmatic political debate exposed the inadequacy of social democrats' traditional economic nostrums -state planning, corporatism and welfare policy - under changed conditions. Moreover, the deeper intellectual foundations of a truly socialist economy had crumbled. At best the costs of 'transition' seemed impossibly high, and the internal irrationalities of real or even hypothetical socialist economies at least equalled those of their capitalist competitors.2 At worst, the very idea of a national economy was rendered meaningless by international economic integration and a new scale of capital and labour movements.3

In southern Europe, socialists were forced by strong Communist competitors to construct distinctive modernising strategies, and achieved widespread support from urban middle classes and the young. Even here, however, socialists mapped out no path to a qualitatively new type of society. The collapse in the early 1980s of Mitterrand's programme - the great hope of Mediterranean socialism - emphasised the dependence of even strong economies on international markets. Spain's persistent unemployment crisis today symbolises the left's retreat from former economic ambitions.

While these southern parties have their own electoral troubles today, their northern cousins have recovered some of their former appeal. The doom-mongers of the 1980s have been proved wrong on this score at least. But the best electoral prognosis for a decade in Germany, Britain and Scandinavia has not lifted a cloud of unease from the left. Today's more jaded politicians and activists seem ambivalent about their socialist heritage. Bygone policies are an embarrassing reminder of failure. But what, detractors ask, is the point of socialist parties without socialism? Will it ever be possible for the left to elucidate a new doctrine, true to its history, but fitting to the conditions of late-twentieth-century Europe?

Many pressing entreaties are woven together in these questions. Some socialists seek an historical logic to explain and justify their change of strategy. Others yearn to uncover an enduring distinctiveness to socialism, to guarantee its relevance in a new world. Still others wonder if the left's history expresses some timeless practical insight or human truth that must not be lost in the stampede of electoralism.

The term socialism plainly does not possess any single unambigu-


ous meaning.4 Socialist movements have quite distinct political and intellectual histories in even the most alike of European states. Each is a creature of history, and not the manifestation of some timeless ideology of moral improvement or flawless logic of causal progression. Within each socialist movement, moreover, reasons for allegiance to the cause may be many and varied - even idiosyncratic or perverse. But, if they are to explore the meaning of socialism today, analysts cannot honestly evade the question of definition. The meaning of socialism must be specified so as to satisfy historical and theoretical analysts, but without sacrificing the intelligibility that makes such a definition useful.5

I argue that socialism's strength and distinctiveness lie in its strong conception of political agency - perhaps the only convincing conception of collective human assertion in modern political theory. This transformative agency has inhabited the division of labour in socialist political thought between objective analysis and political motivation. Socialists have treated society as an objective realm - a set of social structures, the operations of which might be investigated and mapped. Yet, notwithstanding the overwhelming weight of causal structures they posit, they have insisted on the possibility - indeed the moral imperative - of social transformation.

Socialists have combined immense sociological, political, and moral ambition. Sociological, in the sophistication and seriousness of their analyses of modern society through materialist theories of capitalism. Moral, in their insistence that not only can any social order be replaced with a superior one, but that there is a moral obligation on all to accomplish this change. Political, in their willingness to posit agencies of potential transformation. These elements together constitute socialism's characteristic style of political thought.6

HOW NOT TO DEFINE SOCIALISM

Political movements are defined by their heterogeneous members, in part by their disagreements with one another, and usually with little regard to intellectual propriety. Socialism, however, has many self-conscious theorists anxious to define its essence and human significance. Three distinct approaches can be extracted from many practical combinations. These might be called the shopping-list, exclusionary, and fundamentalist approaches.

The shopping-list method assembles items of two kinds: hypothesised


concrete goals which socialism is set to achieve, and values or ideals which socialism should be designed to express. The list of goals has an anachronistic quality today, tracing socialists' historical interests and obsessions in its language. The desire for sovereign creative labour and self-realisation through work - and the primitive abundance that would eliminate the need for it - have a nineteenth-century (or perhaps even a sixteenth-century) ring to them. Likewise, an end to alienation and exploitation: their exact Marxian senses elude those without rigorous training in the history of thought. By contrast, the goal of rational and transparent human control of the economy feels just a little dated. Further down the chronological list come the full utilization of resources (human or otherwise) without waste; recognition of economic externalities; production for use; and autonomy in the workplace. Other claims have included transformed gender relations, equality in global economic development, and harmony between mankind and terrestrial environment. These aims causally relate intuitively undesirable aspects of social life today to the capitalist system of production. The strongest pressure towards socialism 'has always come from the experience of discontent at the character of an existing society'.7 Although practicality suggests that these goals may conflict, or at least that there must be opportunity costs to each,8 socialists are usually loath to drop any of them. If the list is made narrow enough to seem intellectually manageable, then disputes break out about which parts matter. If conflict is accommodated, then the whole assorted jumble looks quite chaotic and over-ambitious.

A second shopping list, of ideals or values, is meant to help us allot priorities and adjudicate in cases of dispute. However, it just seems to make matters worse. Socialists usually pledge concern with social justice, equality, freedom, democracy and community - as indeed do almost all other ideologists. Yet they have created no theory of justice to compare with the efforts of liberal political philosophy. Equality has been a banner more than a guiding principle. Reflection on the internal relations between freedom and equality, for example, rather than bringing socialists some clearer ordering of goals and priorities, has repeatedly brought the reflection that all meaningful freedom (effectively by definition) must be compatible with equality - and vice versa. In practice, socialists have not come up with any indication of what it is exactly that should be made equal - at least not one interestingly distinct from liberals' accounts. That some form of equal consideration is necessary for reasonably uncoerced democratic government, and that equal access to some resources is essential for self-respect, are


claims common to all kinds of socialism and many liberalisms.9

Our second approach, definition by exclusion, is the least attractive and in practice the most common. Speaking in the obscure tongues of the left, exclusionists manifest a desire to appropriate the term 'socialism' for factional uses. Their struggles have been more heated and protracted than debates with the class enemy. They have pitted the self-defined orthodox against deviants of left and right - with accusations of 'Stalinist totalitarianism', the inorganic expression of proletarian interests, or 'liberal opportunism', which may simply refer to the guilty stain of electoral popularity. Exclusionism, more importantly, historically substituted for debate over the fundamental questions facing the left. What is the significance of liberal democracy? Can capitalism be remade by stages? The lines between western Marxism and social democracy - and later between leftist socialism and social democracy - could not have been etched so deeply without socialists' evasion of these questions.10

Fundamentalists have usually been heavy-handed Marxists, defining socialism in terms drawn from the Great Books of the nineteenth century, or from more recent textual exegesis of them. They grimly defended their conceptions of the field and agent of politics - a capitalist mode of production and an industrial proletariat - in the face of social and political change. Inconsistently, they attacked union incrementalism and then defended advances at a later date. Rejecting parliamentarian and revisionist misconceptions, they eventually supported deals struck within constitutional structures, fighting hard for extended bourgeois political rights. Despite complaints about the co-option and force for social control represented by the modern welfare state, they have also fought hard against its detractors. But their theoretical postures - squeezing the world into the category of capitalism and dubbing all human agency as proletarian - have obstructed them in their political struggles.

Most socialists have paid only lip-service to fundamentalists' insistence on these sacred categories. While supporting the 'working class', in the sense of those exploited by the prevailing economic system, or those urban workers who self-consciously organised themselves as such, few have really thought it was a sufficient agency of social transformation. Most understandings of socialism - if they drew on Marxist categories at all - turned not on particular workers but around systematic exploitation itself. More often, they revolved around political rights and concrete social issues. In large part, this reflected not sloppy thinking, as fundamentalists often claimed, but a recognition of the ambiguity and implausibility of the Marxist thesis taken literally. The metaphor


of agency seems ill-suited to the activities of diverse workers with heterogeneous histories, culture, organisational forms and interests. What could it mean for such a mass to act as a piece? What can ten million proletarians, as ten million proletarians, do?

'Class ' , given the disappointingly non-revolutionary working class provided by the historical process, has always been class plus a special ingredient. For Leninists the recipe included the Party, and for Social Democrats the modern state. Labourites have added progressive trade unions. Intellectuals, on reflection, have chosen themselves as a primary agent of history. In less developed countries, where revolutionaries have achieved their most striking successes, theirs has been a peasant rather than proletarian project, and often one conceived in nationalist terms.

The instability of agencies and settings of transformation has caused much acrimony. Yet it inevitably followed the failure of Marx's theory of politics, which had fused class as a sociological phenomenon (the Real working class) with class as the solution to a metaphysical puzzle (the Subject and Object of History). Fundamentalists, over the decades, had to explain not only the failure of that class to grow, radicalise, and become emiserated, but also had to excuse its resolutely non-revolutionary character. Their explanations - in terms of conservative trade-union politics, false consciousness, co-option, hegemony, and social control - rejected incremental gain. Nothing less than an ill-defined overthrow of capitalism was genuine historical agency, and anything else merely delayed the advent of true socialism. Over the past twenty-five years, however, fundamentalists remotely alert to the practice of politics have abandoned the working class. Stranded with a role, but without an actor, they have sought some formally similar synthetic replacement among social movements or the new dispossessed."

SOCIALISM AS A TRANSFORMATIVE POLITICS

The most acute analysts of socialism, by contrast, have sought a multi-faceted explanation for its historical force. Anderson attributes fourfold foundations to classical socialism. It rested on the historical projection that the social nature of the forces of industrial production would ultimately be incompatible with the logic of their private ownership. It posited a social movement for change, in the working class. It outlined as a political objective the collective planning of production. Finally, it advanced an ethic of equality or distribution according to need. Dunn,


likewise, sees the force of socialism as residing in its combination of a schedule of desirable goals, techniques of economic management, and a privileged relation to a social agency. Among the dimensions Marquand attributes to socialism are its economic theory - negatively crit ical of capi ta l ism, and posit ively advancing planning - its communitarian ethic, and its political life as inspirational vehicle of a social interest.12

The relations between a theory of society and economy, a class agency, and a communitarian ethic do indeed seem to explain socialism's historical appeal. Yet, as each of these ruminators glumly suggest, none of these elements can today sustain the left's political ambitions. Historical analyses of the crises of capitalism, socialists' theories of the rational economy, and their posited access to privileged (proletarian) agency have not stood the test of time. On its own, moreover, appeal to a communitarian ethic can get them nowhere. While socialism's 'fundamental insights can survive the demolition of specific practices that have been associated with it',13 it cannot survive the destruction of all such practices. Some kinds of association, moreover, may make its survival anyway undesirable. In order to assess the continuing relevance of socialism, we must approach its political theory abstractly.

The most basic distinction we make when thinking about the world is between that which merely happens and that which is done. Although many of the philosophers have cautioned against it, we cannot help but see human agency as a realm apart from the natural world of causal necessity. We live with a feeling of tension between these two settings within which we imaginatively conceive ourselves to dwell simultaneously.

The significance of the ascription of agency, the faculty of action, is a constantly disputed one. Many common moral arguments hinge on our ability to hold both 'subjective' and 'objective' conceptions of human beings, seeing them as both the origins of actions and as the outcomes of events. While we cannot help but think of action as emanating from the inside of a human mind, we feel able to step back and view human beings as themselves an element in a wider field of causation.14

The relations between our conceptions of individual agency and social life are complex and reciprocal. Any reasonably complex account of an individual's intentions and acts must implicitly refer to social relations - as a source and determinant of actions rather than merely as their context.15 Yet when we try to reflect on the actions of bodies such as classes, states or nations, we draw analogies from our everyday


understandings of individual action. When we refer to social actors -be they based primarily on formal organisation (firms, legal committees) or on identity (nations, classes) - it is often as persons. We use predicates conventionally attributed to individuals and redeploy them in social settings. All action seems to us to originate within human minds, from some centre of activity, even if we are describing the outcomes of complex (and finally unintended) sequences of consequences. Socialists have treated the locus of their collective class actions as if they were individual. Members of a collectivity are taken to act together because they share a common identity. A collectivity is more than an aggregation, socialists have claimed, because of the self-conscious collective identity of its members.16 This identity is constituted by shared experiences and communicated through historical tales in common languages.

In seeming contrast, however, socialism since Marx - like all classical sociology - has been dominated by the attempt to objectify social life, or even to portray it in mechanistic terms. Marx's theory of history (especially as it was interpreted and popularised by Engels) could be viewed as an extension of numerous new theories of the physical universe and its evolution. The natural science of the 1860s cemented a unitary conception of the universe, and promised the extension of its characteristic methods to the social sciences.17 However, although the social structure, organisation, and even consciousness of the working class might in the end be determined by material forces, revolutionary change still had to be acted out by the proletariat. Thus the objectification of the capitalist setting was accompanied by a championing of the powers of collective agency.

It is not the specific agent of the working class, but rather this juxtaposition of viewpoints - heavy causal constraints of structure, with powerful transformative agencies - that has characterised socialism and represented its strength. Conservative politics has presumed that both human nature and the social organism resist externally imposed change. Liberals have fancifully overestimated the impact of ideas on human consciousness and so on social organisation, often lacking even the most basic sociological grasp of human contexts. Socialists, almost uniquely, have combined a near-obsessive belief in the resistant materialness and structured quality of social reality with boundless optimism about humanity's potential to transform this setting.

Marx's theoretical work abstracts exploitation from human experiences of class oppression in industrial society. The capitalist class, given the growing concentration of capital, was to become a numerically minus-


cule group. For Marxists, to blame this social abstraction would be, at best, a ludicrous and unscientific category confusion. Likewise, as the intermediate classes disappeared, the proletariat was effectively to become the entire population - human life as a whole. There were to be virtually no non-proletarians. Hence, the revolutionary upheaval to which Marx sometimes looked forward was nothing like the 'class war' of one segment of society against another that we have come to imagine. Revolution, rather, was the overturning by the proletariat (the imprisoned human species) of the structures which confined it.

Such an interpretation of exploitation - the relationship between the structural framework of social life and the human beings who inhabit it - licenses more abstract conceptions of socialism. These can be distinct from any particular empirical working class, or indeed from any other specified agency, and need not necessarily depend on the specific logic of a mode of production. Of course, they must be structures of something. (We do not want to reduce oppression to mass delusion, with psychoanalysis as the agency of redemption.) But the force of Marx's analysis did not come from the specific material, law-governed structures he posited.

Contemporary political theory tends to approach human reasons for acting from two directions. For some, politics should be seen from the viewpoint of agency, as purposive action and the struggle for power. For others, it should be seen from an external perspective, as a causal historical process shaping human life. Classical Marxist theory - in letter if not always in spirit - exemplified this second vision. Socialist practice, however, has most commonly been characterised by transformative politics, taking both external and subjectivist perspectives to their limits and then juxtaposing them. Many recent definitions of socialism have captured this counter-positing of rigorous structuralism with radical voluntarism. Socialism has been described as the action of freedom on necessity, or the search for subjective agencies capable of dislodging objective structures.18 In a less revolutionary spirit, it has been defined as the development of deliberate human control over personal, natural and social environments, or as citizens' collective assertion to control the unintended consequences of individual action.19

Socialism is just one kind of transformative politics. A conception of transformative agency involves at least the following features. Firstly, it requires a deliberate depiction of our present social setting in a detached and distanced manner: it claims 'objectivity' in its portrayal of the social order as a state of affairs or course of events. This objectivity is epistemic - residing in the detachment and certainty of the observer


- but in politics it is manifested in claims that the world itself is causally systematic or exhibits lawfulness. Socialists, for example, depict the systemic qualities of a modern capitalist state. Other transformative movements might identify a perceived national trajectory, such as the 'economic decline of modern Britain'. Still others, in the manner of some environmentalists, describe seemingly inexorable trends captured by the laws of natural science or demography.

Secondly, transformative agency implies acting to change this preexisting state of affairs or course of events. It thereby involves special action to alter the existing conditions within which routine activity occurs. To rigorous Marxists, such routines have been characterised by structurally generated cognitive and instrumental constraints, imaginative presuppositions and concrete practices arising from the requirements of an ontologically prior mode of production. Others might conceive routine existence more voluntaristically - as the habitual practices and imaginative lassitude of a decadent population - or structurally, in terms of institutions and the perverse consequences they generate. The common factor is that routine activity maintains systemic ills or systemic trajectories of degradation with sources invisible to the individuals immersed in them.

This quality of apparent entrapment by overwhelming forces can be achieved by the deployment of a number of styles of social thinking, singly or in combination. Marxists' conception of the inexorable progression of structures is perhaps the most comprehensive. Socialists dependent on political efficacy (rather than academic tenure) have combined analyses of the structures of capitalism with more appealing historical stories.

Socialists' insistent claim that the world exhibits causal systematicity or lawfulness is crucial to their political strength. A world confessed to be characterised by contingency, poorly captured by our theories of it, cannot be reliably transformed. (Or, perhaps it can only be transformed into a world characterised by necessity, about whose workings and contents one might in principle have knowledge.) Only if the contents of the social world seem to be held stably in our portrayals of them can there be a transformation of their workings. A transformation must be directive - and so in some sense objectively anchored -rather than merely a matter of arbitrary manipulation. For this reason, however, agencies of transformation are always posited in apparently unpromising environments. Rather than discovering conditions in which the easy revision of structures might be assumed, these agencies are defined against apparently overwhelming constraints. Yet this projec-


tion of (analytical) invariance on to reality, as causal systematicity, has its own potential political cost in fatalism. If the forces at work are so strong - if the determinism of the portrayal is to be believed -then how can anyone escape from them?

This question has exercised Marxists the most. The working class had to overthrow powerful capitalist structures, while ideologically imprisoned by the hegemonic blandishments of the bourgeoisie. The socialist state, as a planning or welfare-promoting agent, had to exert itself in the same confines, increasingly constrained by the massive forces of international capital. Taking a rather different political idiom for illustration, a parallel problem arises in some feminisms: if women are determined, and must take control of their determinants, how -given the nature and force claimed for these determinants - can they come to do so?20 Shifting to yet another historical setting, Thatcherite agencies of strong personal state and market forces, acting in the name of the nation, had to throw off the immense weight of a century or more of decline, shackled by a collectivist heritage and the myriad logical conundrums posed by a politics of stultifying interests.21

Socialists' heavy weighing of structures, and their juxtaposition of structures with agency, were never unique. Denying the imaginative and creative powers of human individuals, and notwithstanding its fundamental assumption that all social orders are human creations, all classical sociology potentially encouraged political fatalism. It asserted the artefactuality of social orders, only to deny the imaginative and creative powers of the social subjects constituted by those orders. From Marx and Weber onwards, at least, the very demands of survival in modern society seemed to pre-empt potential freedom and to force a purely instrumental pattern of action upon human agents. The cages of capitalism and bureaucracy, in a disenchanted world of means, seemed to suppress agency of purposeful change.

Contemporary social theorists have extended this gloomy prognosis. Most have followed the founders of modern sociology in focusing on the relentless and systematic encroachment of impersonal forces into the spheres of human communication and value. Today's most ambitious theorists of modernity restrict very sharply the potential scope of human agency by analysing social life in terms of interdependent social systems. Increasingly displaced by money and power, the media of economy and bureaucracy, politics is at best a rearguard defence of a diminishing realm of human meaning and action.22

Like such contemporary systems theorists, Marxists mistook their method of scrutiny for the phenomena they wished to study. 'The


phenomena', as Strathern has observed of such metaphors, 'come to appear contained or encompassed by the systematics, and thus themselves systematic.'23 Socialists' moral and political ambition - their insistence that any social order can and must be improved - helped them to escape the cages of sociology. Marx and Engels argued that history itself would solve the problem of agency. The class-conscious proletariat, subject as well as object of History, would emerge from the decaying capitalist system. This formulation skirted the problematic relation of structure to agency. The revolution might be viewed from two angles. From the first, now more familiar, perspective, we can trace the emergence of a revolutionary class to sweep away the (decaying) old order. From the second, those with a more necessitarian inclination might view the same historical process structurally, with proletarians' struggle against the bourgeoisie seen as the routine politics of capitalism. Over time, in this second view, the contradictions and antagonisms inherent in capitalism break down of their own accord - the forces of production outstrip the relations (or organic crisis occurs) - and routine class struggle is escalated by History itself. In the historical materialism of Capital, the second perspective overshadowed the first; but, over time, the perspective of agency came to predominate. As the role of the agent expanded, the nature of purported 'objectivity' underwent a subtle but far-reaching change. Socialists began to animate their objectivist framework with a voluntarist ghost, one which grew stronger decade upon decade as history kept failing to deliver on its promises.

OBJECTIVITY AND COMMUNICATION

In order to leave more room for undetermined human agency, socialists might have openly weakened the claims of causal theory. But admission of indeterminacy would undermine the notion of transformation itself - an idea which is importantly politically motivating. Theories of society typically claim that necessity characterises the workings of the world since a theory's anti-contingency both acts as a self-validating device and provides its readers with an objective framework for transformation. Alternatively, socialists might have emphasised the notion of Progress lurking within Marxists' deterministic theory, so holding out the prospect of presently implausible outcomes.

Socialist political strategists instead usually combined two other tactics. The first was to shift in mid-course to a more interpretative style of


social understanding. Theorists advanced a necessitarian conception of history and a deterministic account of present social structures. Yet they then enjoined activists to imagine agencies that might transcend these causal confines. Here, the term 'consciousness' came to the forefront of Marxist theory. It could be raised, the chosen collectivity develop one, or a given identity - initially the working class - come to enjoy a shared commonality which allowed a new kind of action. Such a conception of agency involves the metaphorical extension of a realm of individual human agency to a wider realm of social agency. Human understandings of the necessitarian social world were to act as analogues to their picture of the natural causality of the physical universe. Activists were told to conceive of a collective unitary agency that was a part of the necessitarian social order - the agents making it up were derived from the imaginative and institutional fields of social structure - and yet one that could escape these ties to act outside them, reshaping the very conditions within which routine action had been fixed. In the view of late-nineteenth-century socialists, the proletariat had been chosen by history to fill this role.

In a second, related, strategy, socialists re-made the materialist theory of history as a morality tale. Causal forces of history, and the structures which entrap proletarians, were respecified as agents to whom responsibility - causal and then moral - could be ascribed. For example, despite fastidious Marxists' insistence to the contrary, the capitalists were to be conceived as wicked - as indeed were other obstructions along the road to freedom (impure intellectuals, class traitors, trade unionists, revisionists, and so on). The forces for good, by contrast, were recast as positive identities of self-conscious revolution - the potential agencies of redemption.

Marxists understood the relations between theory and politics to be fraught with complexity. Where they have been concerned to analyse politics with any determination, their twentieth-century quarrels have turned on the relations between scientific socialism, historical materialism, and human agency.24 Marxist sociologists and political economists have insisted that there is no substitute for objective analysis of the dynamics of the capitalist mode of production. They have refused, in contrast to bourgeois sociologists, to be deflected by appearances. However, the aspiration to objectivity has been a feature of non-Marxist sociology too, and helps explain the focus of that discipline on organisations.25 In each case, externalising objectifications of social life are often thought to indicate the impossibility of bringing about purposeful change. If any individual's consciousness and politics


are determined by their 'objective' social and historical location, for example, it seems immediately implausible that they might be able to take up arms against that setting and transform it. But, in fact, a theory of politics cannot ever take necessity this seriously.

Socialists' objectification has become mostly an aspect of political communication: it is an attempt to offer a viewpoint accessible to the many rather than just the few. As such it is an aid to collective political activity rather than an indication of its hopelessness. This apparent puzzle is less tangled than it at first seems. The purpose of creating and communicating a social theory is often misconceived in scientific theorists' conflation of objectivity with necessity. Necessity is a property we take to inhere in reality, and is most commonly invoked in our accounts of the causal determination of physical events. Historical necessity implies the inexorable progression of events as causes and effects. Even if history were not necessary in this sense, structures might still be sociologically determining. What Marxists have thought of as the superstructural - the realms of politics, law, ideology, even aesthetics - might still be subject to lawlike determination, reflecting the underlying institutional foundations and imaginative preconceptions of a given mode of social organisation.26 In a world of inexorable progression, writing objective Marxist sociology lacks any purpose. In a realm of structural necessity, the contents of our social thinking are in some sense fully explained by social structure.

Objectivity, on the other hand, is best understood as a property of our understanding. The effort to objectify, to acquire a more objective perspective by the application of specialised heuristic techniques, is an attempt to remove our understanding from its dependence on the viewpoints of particular agents - especially our own - by placing ourselves in the world we are viewing and then stepping back from it.27

Objectification, by reducing the dependence of a theory on the beliefs and perspectives of particular human beings, strives to communicate understandings across such perspectives.

Sociological objectifications are always acts of more or less successful communication performing multiple functions. Firstly, socialists' depiction of capitalism and the historical process provides an idiom for dialogue between diverse individuals with heterogeneous personal experiences. Identifying, albeit in comic-strip style, the opportunities and constraints of politics, it allows leaders and intellectuals to view the field of political activity through the same lens as lowly activists and supporters, and to discuss politics in the same terms. Secondly, rather than tracing historical necessity, it provides a way of thinking


about and exploiting political opportunities. Offering insights into the crises of capitalism, for example, it might permit the construction of plausible scenarios for the most effective use of available agents. Thirdly, it provides a means of assembling a conception of the good society (or at least a better one) by stressing the relations between our common discontents and our shared social system.28 Socialists, in just these ways, have turned a materialist and scientistic heritage to their political purposes, creating a powerful politics of agency.

THE DISTINCTIVENESS OF SOCIALISM

The transformative style of thinking about political action - motivated by the belief that human beings can muster collective subjective agency to change the conditions in which they have to live — is most closely identified with socialism. Like all secular theories of emancipation, it rests on the perception that society 'is a human,artifact rather than an expression of an underlying natural order' ,29 The artefactuality of social relations both enables and demands that they be subjected to human responsibility and action, and thus moral obligation.30 But such a political style characterises some other modern political movements: socialism, for example, shares a great deal with particular types of environmental and feminist theory. Perhaps the most striking likeness is between late-nineteenth-century socialism and the futurology of late-twentieth-century global-environmental theorists. The latter, as much as the former, uses practical scientific theories to specify structural patterns and entrenched trends, and to argue that these threaten future catastrophe.

Environmentalists' rhetoric of natural science — with its laws and procedures for relating evidence to identities - provides a purportedly infallible epistemic optic through which human beings are encouraged collectively to consider their future. Environmental futurology is particularly dependent on the science of demography and the scientism of technological development projections.31 Kennedy, one amateur futur-ologist, has suggested that 'global forces for change are bearing down upon humankind in both rich and poor societies alike'. These forces include 'technology driven forces for change' - globalisation of product markets and electronic financial trading - and 'fast-growing demographic imbalances'.32 Kennedy's agencies of change - rather implausibly 'societies' or 'countries' - are ill-prepared to meet these challenges. The objectification of the challenge, just as in the overwhelming majority


of marxisms, is designed to focus the attentions of possible agents rather than to deny their possible efficacy.33

MacKinnon's feminist theory provides a closer parallel to western Marxism, and stresses the social determination of the gendered self.34

Women's collective project of emancipation must begin from recognition of determining forces and their power. As in Marxist theory, recognising the relations between social forces and false consciousness is a precondition for creating new (and presently inconceivable) languages of self-interpretation and political practices of collective assertion.

Some form of consciousness-raising is common to socialist, anti-colonial, environmental, and feminist politics. This comparison does not please most socialists, who feign shock at non-socialist appeals to the will, such as Allott's, which do not have history on their side. 'Consciousness', he argues in voluntarist entreaty, 'by the amazing power of imagination and reason, allows us to stop the endless flood of becoming and call it the present here-and-now, in order that, through our willing and acting, we may be able to take responsibility for our future, to participate in making the future out of the past, the past out of the future.' As Thatcher herself might have put it, '(n)othing more nor less is required than a self-willed change in human consciousness. A revolution, not in the streets but in the mind'.35

Socialism is sharply distinct from other transformative political projects in two ways: its focus on capitalism, and its inclusivity. Socialism's analytical strength has always been its insistence that causal priority in the explanation of the experiences of the human species must be accorded to processes of economic production and exchange. While sometimes blinding socialists to other dehumanising forces - bureaucracy, patriarchy, the corruption of the natural environment - theirs has been an analytically propitious focus. Unlike other emancipatory movements, even the most myopic socialist is forced by the pervasive reach of economic exchange to trace causal processes quite closely. It has also ensured that they remain fascinated by techniques of social control and economic management, and transfixed by the rhythms of the global economy,36

The proletariat's role was in part a creation of this focus on production and exchange, but also an aspect of socialism's distinctive inclusivity. As Dunn has exactly specified this deepest theme of socialist thinking, it is 'the sense that a human society can provide and ought to provide full membership and social recognition for all those who belong to it'.37 All human beings are to be located in the same frame of reference and are to act on the same field of politics.


This inclusivity has counteracted many theorists' efforts to empty socialism of moral content. While so often crassly echoing utilitarian instrumentalism, socialists have remained sensitive to the oppression of minorities - even when absorbed in the ugly detail of electoral ist calculation. The struggle between social democracy and western communism has sometimes been portrayed (with a large measure of flattery to the former) as the selection, when pushed, of human inclusivity over instrumental efficacy. As Marx's misreading of the evolution of class structure became apparent, and the proletariat remained stubbornly in the minority, the left was torn between a yearning to reach the masses - or the people as a whole - and a desire for effective agency in a radicalised vanguard of the proletariat. Social democrats' embrace of the institutions of representative democracy was perhaps as much cause as consequence of inclusive aspirations. (Their hand was forced by the resilience of western democracy in the face of economic crisis and proletarian activism, and by the ideological appeal of representative democracy.) But, in any event, its inclusivist moral coating made the electoralist pill easier to swallow.

Almost all human fancies fall way outside the bounds of political feasibility. The few credible ideologies of modern politics are crowded together by the weight of existing social practice and the narrow ranges of political imagination. Any political movement, moreover, is composed in part of contested viewpoints - of arguments between the more and less radical, and between the realist and Utopian. (Even contemporary conservatism has its Utopians.) Our focus on socialism as a transformative politics can be sharpened by clearly distinguishing it from its closest liberal and conservative competitors.

Liberals and socialists often seem virtually indistinguishable today. The former have accepted social democracy, in which private property coexists with income redistribution and market regulation through the state. Yet socialists feel rightly unhappy to be embraced as comrades (or colleagues) by relatively egalitarian liberals with an interest in-positive freedom and market regulation. In particular, they abhor the individualism which characterises Anglo-American liberal political philosophy. Even those liberal notions most warming to socialist hearts, like Rawls's conception of the choices we might make behind the veil of ignorance, offer a shrivelled conception of the self.38 The left's rediscovery of community, however, should not blind us to socialists' fundamental objection to individualism - its effective abandonment of collective agency, and seeming surrender in the face of overwhelming obstacles to change.


Most forms of liberalism avoid the speculative collective fantasies that have sometimes marred socialist thought, but at the expense of side-stepping the problems of modern political agency altogether. Individuals are shaped by, and trapped within, institutions that they cannot change alone. Their imaginative limits and practical routines support and reflect unchosen institutional patterns. As Barry has argued, individualism generalises the case for capitalism to non-economic matters, and exhibits a marked distaste for politics.39 Individuals are free to act within (and in support of) an existing framework of rules and institutions, but not to act collectively to change that framework. Such limited powers of collective assertion may betray a defensive posture towards an already comfortable habitat, and it is perhaps for this reason that liberal political philosophy is most intuitively attractive to those for whom the good life has already come.40

Recent attempts to bridge the gap between liberalism and socialism by connecting individual to collective have tried to apply individualist methodologies, notably rational choice theory, to the problem of collective political agency.41 However, structures are either concealed in the premises of each situation of choice (so ensuring each individual acts in the same way) or some form of meta-preferences are introduced to make the actors more reasonably human, and here the 'social' aspects of choice will make their presence felt.42

Socialists have sought to conceptualise a form of collective agency that is unitary rather than merely unified. The metaphors of agency that we possess imply an individual agent. The action of an individual requires some form of identity, but a collective socialist agent involves the identity of multiple individual projects. Although stemming from shared objective conditions of working-class experience, it is supported by 'solidarity', collective memory in the tradition of socialist politics, and the common reference points provided by textual exegesis. Strategic alignments for collective benefit do not have the same properties, since changes in contexts, forever occurring in the world, will lead to a fragmentation of agency as different projects are differently revised in their light. Socialists have looked to shape and maintain a unitary agent that survives, with its will intact, over long periods of time and through rapidly changing contexts. Rather than understanding their project as a collective solution to the problems of rational choice, they have attempted to create the conditions within which the apparent paradoxes of rational action do not arise: to create a unitary social agent, not merely a collection of individual agents.

Contrary to first appearances, socialism has remained more closely


related to its open ideological enemies than to its seductive liberal acquaintances. Unlike the Utopian socialists of the 1830s and 1840s -dismissed by Marx for their lack of systematic analysis of capitalism and for their inattention to agency - twentieth-century socialists have followed a distinctive objectifying strategy. Their concrete analyses of capitalism have been the basis of their politics. Their introduction of human agency always marks a difficult transition: from objective to subjective, theory to practice, structure to agency. Like their realist enemies, they closely analyse the causal mechanics of social change, and carefully observe the structural properties of the capitalist system.

Conservative realists' efforts to construct an objective understanding end in resistance to radical change. Respect for causality leads them to adopt a defensive political strategy quite at odds with that favoured by socialists.43 Realists interrogate socialist political theory in two ways. Firstly, they seek rigorous analysis of socialists' professed political goals, insisting on their logical, or at least practical, compatibility. Moreover, they demand that the proposed socialist society is of demonstrable viability. For example, they examine proposals for a non-exploitative and un-alienating economy sceptical of its practical possibility. Furthermore, they insist that socialists cannot just show that capitalism is unsustainable in the long term - maybe any order is so unsustainable - but they must also demonstrate that socialist alternatives possess comparative superiority of a clear-cut kind.

Secondly, they insist that blueprints for a desirable social order are virtually worthless in themselves. (In this, they follow Marx's ridiculing of the Utopian socialists of the mid-nineteenth century.) Social models can bring benefits. By imagining how a social order might be different to our own, we can gain new insights into our current ways of living. Moreover, Utopian constructions (like Rawls's original position) help us to rethink public morality. The realist, however, contends that a conception of the desirable social order must be historically feasible, and must be accompanied by a strategy for bringing it into being.44

Sharing so much else with the realists, socialists nonetheless reject these criticisms. In part, they balk at apparently insurmountable obstacles to positing viable alternatives to capitalism that might capture popular imagination - let alone ones that might be politically feasible. The feeblest socialists suggest that they are preparing for an unknown future in which - perhaps because of mass unemployment, economic stagnation, or environmental catastrophe - the masses will turn to the store of knowledge represented by socialists' blueprints for a better society. Others, more defensibly, point to the motivational function of


a theory of society. A realist theory, they argue, is a self-fulfilling prophecy of doom. In trying to describe what the world is like, it misses socialists' fundamental commitment to changing rather than just understanding it.

A conception of the desirable society motivates human beings rather than merely describing them. 'Utopian' socialism, for example, may exert continuous moral pressure on the citizens of capitalist democracies by showing them that morally distasteful aspects of their society are not necessary features of any social world. Treating practices as entrenched, socialists may argue, serves merely to embed them further. To show that any society is a historically contingent human creation -albeit a resilient one - may be to loosen its grip on our imagination and action. Likewise with our desired goals. As Elster has argued, 'in terms of broad historical possibility, something being perceived as morally obligatory may contribute to making it historically feasible, (given its physical possibility)'. He concludes that 'ought implies can' only if the 'can' is taken in the sense of 'physical (or biological) feasibility'.45

This might be characterised as a choice between acknowledging causal constraints and agents' dispositions to act, and attempting to operate within the fields of power these constitute; or attempting to reshape existing fields of power and human dispositions so as to open up new (and presently not fully visible) political possibilities.46

It is not just that even an apparently Utopian political theory still has some effects (and that these need not necessarily be bad ones). Utopianism is integrated with objectivity in socialist theory. Objective theories of society, by relating to us the systematically determining character of our social order, help us dimly to perceive the patterns of our oppression, which we ourselves recreate and constitute. By helping us to understand our predicament together, socialists have hoped, political theory might help us to escape it. Social orders, they insist, despite the systemic determination they exhibit, always contain immense historical potential.47 Socialists argue that to understand society in this way is already, in one sense, to change it.

Chapter 1 examines the emergence of the Marxian conception of class agency in a capitalist setting. This attractive analytical framework had rapidly to be rethought in the light of the non-emergence of proletarian revolutionary fervour. While fundamentalist discourses persisted, and a Marxist gloss was given to most leftist theorising, practical politics turned to social democracy in the modern nation-state. Substituting state for class, and nation for capitalism, the left maintained its transformative conception of politics. Chapter 2 describes


the forces driving the Marxist left away from foundational orthodoxies, while at the same time stressing how precarious was the social democratic alternative in the interwar years. Reformism and electoralisrn had a cumulative logic, however, and social democrats were well placed to exploit the opportunities offered by the postwar boom.

Chapter 3 analyses socialists' conception of state agency, explaining its inherent limitations in fields of economic and welfare policy. While corporatist welfare states achieved unprecedented successes - albeit not always under governments of the left - they never promised cumulative social transformation. Neither could they generate economic plenty. Chapter 4 is a case study of the British left, tracing the emergence and collapse of the Bennite socialist project - a characteristic effort to reassert the state-in-nation conception of political agency in the face of a changing context of international integration. In the light of this failure, Chapter 5 examines the European and global environments within which socialism must be rethought today. My conclusion argues against the futile and evasive nostrums of a new socialist internationalism, communitarianism, or environmentalism. The left rather needs to apply its transformative conception of politics to these new challenges, in this way shedding its historical baggage while exploiting its accumulated political wisdom.

1 Classes in Capitalism

Socialism is an inclusive transformative politics: transformative, in that it objectifies human life in a theory of determining social structures, and posits opportunity and agency of fundamental change; inclusive, in that it treats all human beings as a single moral reference group whose interests (and agency) are to be considered collectively. Socialists after Marx understood this structure of thought in terms of Marxian categories. They objectified society through capitalist economic causality, its structures following inexorably from the mode of production according to discoverable laws. Agency of change was sought in the industrial proletariat, and later in its supposed descendants in the broader working class. This class represents the exploited - those morally antagonised in the most direct manner by the capitalist system, and those who could make up the universal class whose interests would be met by transformation.

While the idea still attracts some on the left, theorists no longer credibly argue that an exploited working class is posed to overthrow the structures of capitalism and seize control of the state. No sane political analyst would champion such an account. Today's proponents of Marxism, in Western Europe largely confined to universities, admire the heuristic power of the theory of capitalism rather than the political cogency of its prescriptions.

Yet attempts to rethink socialism are still shaped by Marxian categories: In the first part of this chapter, I interrogate the concepts of capitalism, exploitation, and revolutionary class, and explain why they attracted nineteenth-century socialists. I then trace the powerful relations of mutual reinforcement that these three elements offered each other. In the second section, I show how this relationship - almost before it was first elaborated - had to be constantly rethought, but was never recast in an entirely new form. Socialists struggled to accommodate an increasingly contradictory reality within the terms of their theory of the capitalist setting. The third section focuses on the tangled problem of agency: how could an agent of change be created given the failure of the revolutionary proletariat to shape itself for the task? Marxists still toy with this problem today. Even their more successful non-Marxist descendants carried their historical project into the twentieth century with two heavy pieces of historical baggage: an over-

22

Classes in Capitalism 23

ambitious conception of the knowability of social reality.; and an attachment to the idea of a single, unitary agency of historical transformation.

NINETEENTH-CENTURY SETTING AND AGENT

Marx's theory of capitalism has proven remarkably durable as an instrument of social analysis. Neither of the two most common interpretations of the historical character of his thought - the early Marx's synthesis of Hegelian and Christian traditions and the late Marx-Engels' evolutionist scientism - is at all attractive to modern intellectual tastes. Yet when rephrased in more modern intellectual idioms, the materialist theory of history can still appear powerful and coherent.1

In its most politically influential form, as popularised by Engels and then Kautsky, the theory took to extremes the project of objectifying social life. Identifying the laws of motion of the capitalist mode of production, Marxism offered a seemingly detached account of the inevitable demise of this integrated social structure, and of its supersession by a morally superior order of socialism. Reliance on the notion of social unfolding was understandable in the nineteenth century, as the experience of industrialisation brought otherwise incomprehensible and unprecedented change. Distinctly lacking at the birth of sociology (and very much still lacking today) was any convincing account of western industrialisation and its causes. If the massive changes wrought by the industrial and social revolutions of the eighteenth and nineteenth centuries were not generated by some logic of unfolding social structures, then where exactly did they come from?.2

Capitalist societies were each to follow the same logic of development. The development of the forces of production was to create both the material basis for socialism - the abundance necessary to overcome scarcity - and the working class that was to accomplish the political task of transformation. It was Marx's theory of working-class agency that most clearly differentiated his socialism from that of the Utopians of the 1830s and 1840s. For this class to constitute a credible (let alone necessary) agent of transformation, however, and one that might also be morally applauded, it had to fit a number of demanding criteria. These pertained to its size, its revolutionary potential, and the injustices under which it was to labour.

The first criterion, according to Marx, was to be met by the dynamics of the capitalist mode of production. In his writings, however, he famously fails to elaborate the concept of class in any systematic way.


Classes form the main link between relations of production and the superstructure, but also link Marx's sociological analyses as a whole to his philosophical speculations. The latter connection - the Hegelian infusion of meaning into social change in shocking disregard of modern empiricist proprieties - has interested scholars less than the former. The main tension adduced by theorists here is between Marx's abstract structural analyses - the predicted division of society into two great hostile camps by the law of the capitalist organisation of production -and his historical writings, in which a complex tapestry of half-formed classes, factions, and even state institutions, can be found wrestling in an untidy process of struggle.3 Marx's somewhat limply supported solution was that the 'transitional' classes such as the peasantry and the petty bourgeoisie would disappear, bringing concrete politics into line with abstract theory. Together with a predicted concentration of capital, proletarians would effectively come to be the people as a whole.

This crystallisation of class structure was not merely wishful thinking designed to resolve tensions between philosophical speculation and concrete politics. Towards the end of the nineteenth century, after decades of deepening and widening industrialisation, it seemed that these predictions about class structure might come true. In Britain, the nation reaching maturity earliest, almost half of the labour force was already employed in the industrial sector by 1850. In the next most developed case, Belgium, 45 per cent of the workforce were industrial workers. Marx and Engels, focusing on Britain, assumed that this expansion would continue, and also projected from the trend they saw there a pattern that all other nations would follow. The far smaller proportion of industrial workers in most other European states was read as an index of their relative backwardness, suggesting to Marx that a rapid proletarianisation was sure to follow - an extrapolation based on the assumption that all societies follow the same laws of motion.4

The assumption of the inexorable growth of the proportion of the population selling their labour power was built into the theory of the dynamics of capital accumulation - so offering socialists a range of apparent political opportunities in the late nineteenth century. Bourgeois efforts had established the principle of representative democracy across many western nations, suggesting power might be seized by the ballot box. The electoral success of socialist parties from 1870 seemed to vindicate the Marxian model of ripening conditions for socialism. In Germany, the country with the most effective party organisation (and the most capable theorists) the social democratic party (SPD) saw its vote climb from 125 000 in 1871, to 312 000 in 1881; and then to


1 427 000 by 1890, and to a massive 4 250 000 just before the First World War.5 Likewise, in Finland, social democrats won 37 per cent in 1907 (the first election under universal suffrage). In Austria they gained 1\ per cent in 1907, 25.4 per cent in 1911, and 40.8 per cent by 1919. Elsewhere progress, if less dramatic, seemed equally inexorable.

Together with a belief in the unstoppable expansion of the proletariat, Marxists understood this class to be fundamentally antagonistic towards capitalism, and capable of joining forces to oppose it. Marx believed himself to be transcending the division between description and prescription in his account of working-class consciousness. The working class was to become subject and object of history, its consciousness the self-knowledge of the post-capitalist world. However, one cannot self-consciously organise political activity in an Hegelian manner. While in theory constituted in part by means of the revolutionary act itself, the subject of history in practice had to be assembled according to some political meta-language. Later Marxian theory, working with a more scientistic conception of the nature of social development, treated proletarianisation as an objective property of caplitalism. Structural laws created a working 'class-in-itself which was then, in a non-Hegelian manner, to become activated into a 'class-for-itself. There has been much debate over this formulation and the nature of the transition it posits. As I explained in my account of transformative politics, socialists' strategy in practice was to objectify social structures, including the 'social spaces' of class which were to be filled by what we might be tempted to call 'empirical' workers. 'Class-in-itself represents the working class as it is objectively determined by the system of production. In order to act, this class had to be aware of itself as a class - and so become infused with self-consciousness -a crass but practical formulation which the formidably influential Karl Kautsky turned into Marxist orthodoxy in the 1880s and 1890s.6 The proletariat was generated at the level of the base, and the infusion of consciousness and organisation was characterised as a move from the objective to the subjective.7 As in any transformative politics, the model for this objective:subjective distinction is our understanding of human beings as objective (physical) beings infused with subjectivity (in the form of consciousness).

In the mid-nineteenth century, the movement from objective class self-conscious class seemed a fairly unproblematic one, brought about automatically by the capitalist process. The relations between class structure and class formation seemed direct and transparent to Marx and Engels. The latter could observe modern industrial concentrations,


the new factories and mines, and see in them the dominance of machine over worker, and the foul living and working conditions the proletariat endured.8 The unity of a class, and its historical role, however, cannot be read off from a catalogue of misery. Indeed, human misery inhibits rebellion.9 Marx's Hegelian assumptions shaped his investigation of existing working communities, rather than vice versa. 'For the young Marx', as Gorz has put it, 'it was not the existence of a revolutionary proletariat that justified his theory. Instead his theory enabled him to predict the inevitable emergence of the revolutionary proletariat' -what Gorz describes as a transcendent guarantee that proletarians will ultimately conform to the class line.10 This manifestation of latency has continued to shape discussions of class consciousness and experience up to today. Workers are understood (individually) to experience capitalism in the same way, and hence collectively to generate class consciousness.11

Marxists have considered the most important relevant experiences to be each worker's loss of control over the product of their labour, and the discipline of the machine-factory.12 Though the factory regime initially drew mostly on women and children from workhouses, its extension to independent producers created an antagonism with sovereign labour. Craftsmen could draw on their tradition of independence - kept alive in remaining guilds, and in powerful memories of the guild order - to resist their forced separation from creative work (and then to 'economise' the conflict as a struggle over distribution).13

That collective rejection of social oppression should grow out of individual experience also conveniently fitted the assumptions of bourgeois Kantian morality. In principle, for Marxists, the conventions of bourgeois morality - especially moral and political rights and Kantian moral imperatives - merely mystified the process of capital accumulation.14 However, political success demanded that Marxist analyses should not directly contradict bourgeois morality, and Marxists' concept of exploitation has the same range of reference as the bourgeois concept of injustice. Consequentialist and deontological approaches to the legitimacy of collective action against the modern state can be made compatible under a tight series of conditions.15 This was highlighted recently by the great sigh of moral relief represented by Garton Ash's interpretation of events in Eastern Europe in 1989: 'the large-scale sustained, yet supremely peaceful and self-disciplined manifestation of social unity, the gentle crowd against the party-state, which was both the hallmark and the essential domestic catalyst of change'.16 This paradigm of collective action, acceptable to the most fastidious modern liberal, echoes


the socialist revolutionary mass: the whole population is (it seems) in agreement, sharing identical views developed through individual (if shared) experience, without the distortion of propaganda or party organisation. Each individual desires the (necessarily collective) overthrowing of the existing state; and each can identify with the collectivity's act as if it were her own.17 Lacking hierarchy or a formal political programme, the revolutionary crowd represents horizontal bonds of community. It is this unproblematic fusion of human significance with political power that socialists hoped to find in the capitalist process's generation of the conditions for class consciousness.

THE WEAKNESS OF THE SETTING

As the transitional classes dissolved, the working class would come to represent the overwhelming majority of the population, confronting a minuscule (if structurally powerful) bourgeoisie. This proletariat was inherently profoundly antagonistic towards the capitalist system. Moreover, it was morally in the right, the victim of intense exploitation. These three aspects of the Marxist project - the theory of society, the development of agency, and the moral imperative to transform an unjust social order - formed a tightly integrated whole.

Utopian socialism had offered moral condemnation of the industrialisation of western society. The counterposition of formally free labour, conceived as sovereign individuals, with the living and working conditions of early capitalism could scarcely but generate powerful moral unease. Moral condemnation, however, is counterfactual, resting on the (implicit) claim that the world could be a better place than it now is. Marx provided not just the theory of society needed to understand it, but also an explanation of exploitation better able to condemn it. Most importantly, however, he identified the agent that was to bring about transformation. These elements reinforced each other. Theories of class society without a moral critique and a theory of agency are merely academic oddities.18 A theory of capitalism and its working class offers just a dispassionate window on to historical causality. Critique without a theory of structure and agency is mere wishful thinking. This explains why the flaws in each related element were overlooked in the interests of a wider theoretical unity.

The key integrating element is the theory of capitalism and the objectification of social life. 'Capitalism' designates the setting within which the economic laws of motion of society detailed by Marx were


taken to operate. The development of unprecedented productive power made socialism feasible. Crisis tendencies would usher in capitalism's demise. Society would polarise into a two-class structure, one of the poles of which was to be a vast emiserated proletariat conscious of its own collective interests - making the potential transformation necessary.

Lending explanatory weight only to social forces, Marx's theory permits no place for state or nations, except as epiphenomenal reflections of real structures. In The Communist Manifesto Marx and Engels explicitly argue that nations and the boundaries between them have limited impact on class relations, and insist that even this residual effect will abate over time. The proletariat was an international class - representing human society, not some particular sub-set of humanity divided along arbitrary territorial or cultural lines. As emiseration deepened the divisions between the two classes, so the international economy would continue to reduce the differences between countries.19 Indeed, the international revolution was to transcend all differences between nations and cultures (bringing, inter alia, a global proletarian language).20

A century of interpretation of society through the filter of the nation-state has made Marx's thinking particularly hard to clarify. Today, the term society both suggests a distinct systemic or territorial entity and retains more generic connotations of 'social association'.21 Like other nineteenth-century founders of sociology, Marx usually viewed societies as self-contained units of analysis whose developmental tendencies should be explained in terms of their internal relations. Social change was evolutionary, in the sense that it was directional even where not unambiguously positive. These assumptions about a delimited and evolving society were shaped by a nineteenth-century preference for biological metaphor, depicting societies as developing and changing organisms. Entrenched in sociology from its outset, this notion of society was later generalised from the western nation-states to which it most closely approximated, and treated as the natural form of social entities in any historical and geographical location.

Marx and Engels took the unfolding laws of motion of capitalism to be standardised features, even though societies were at different stages of development at the time of writing. Yet they made little effort to theorise the unevenness of global capitalist development, a lacuna not filled until Trotsky conceived his pragmatic formula.22 Moreover, the systemic dynamics of any society - economic, social, political and ideational - seem largely internal. The reductionist understanding that 'base' determines 'superstructure', however it is couched, tends to place discrete economic entities at the centre of historical explanation. On


the other hand, however, Marx was firmly - even dogmatically - internationalist. The proletariat (after a due time-lag) would establish international class organisations to fight the existing order. Capitalism was an integrated global system of production and exchange, whose all-encompassing systemic power would forge self-conscious global political organisation. As differences between nations (or, at least, relevant nations) decreased, emiseration would cause polarisation within nations to dwarf that between them. The global proletariat would fight international capital - indeed it was the latter, not the former, that was to be wrought with division.

The tension between unfolding societies and the international level of analysis was evaded by Marx and Engels through their vague notions of 'historical' and 'non-historical' peoples, and 'progressive' and 'reactionary' nations. These classifications allowed the founders to exclude from consideration and analysis those nations too dissimilar from the western models to be credible. The broadly similar forms of worker protest across the western nations in the nineteenth century allowed this fudge to persist: although each workers' movement operated independently, they faced relevantly similar constraints and opportunities so that their struggles might appear to be one and the same. The Second International, meeting sporadically and with only the weakest of advisory powers, failed to deal conclusively with the 'national question' and lacked even the most rudimentary collective institutions. Only when forced by the problems of the socialists of multinational empires -notably Russian and Austro-Hungarian - did they make efforts to confront the national problem at all.23 The International was to end in the farcical failure to prepare (even imaginatively) for war between western states. The war's dissolution of residual empires, and the victors' imposition of a nation-state model hospitable to 'self-determination', stranded the left without a theoretical guide. Further tragedy followed in the Soviet Union: the revolution in the 'weakest link in the capitalist chain' was justified as precedent and catalyst for wider international revolution in riper states. While heroic theorists keenly looked to the west, however, Stalin exploited the political preconditions for the socialism in one country that Lenin had put in place.

For practical purposes, Marxists already treated each capitalist nation as a distinct arena of politics within which the laws of capitalism would unfold. To this day, the convenience of the blatant assumption of existence of societies has triumphed over theoretical precision. Examining the contemporary Marxist literature, one finds only the most general efforts to theorise the world-system. The dynamics of capitalism almost


always operate within a given society.24 However, this evasion does not allow Marxists to escape with their concept of capitalism untarnished. As Unger has shown, within national settings the concept of capitalism has proven to be too universal or too particular.2^ When defined in a general and abstract way - as a society in which wage labour predominates and a capitalist class (driven by the need for profit) controls the means of production and buys available labour power -the concept captures too many diverse historical examples. These non-European cases, impossible to exclude with general criteria, failed to produce the productive explosion that we wish to explain in the one successful western case. The possible institutional basis (the relations of production) for productive labour is immensely variable. Historical experience, and that of developing and newly industrialised countries in our own time, shows that a huge variety of institutional combinations can provide the same levels of surplus. When defined more concretely, however, in terms of the institutional arrangements characterising western capitalist societies, the claim to be describing universal laws - valid for different societies in different places at different times - is undermined. The necessary level of institutional detail leaves us with a specific descriptive history of Western Europe, rather than the theoretical construct needed by a theory of society. To define the concept precisely enough for it to designate a 'repeatable and indivisible' type of social organisation (and so for it to be applicable in analysis) it must go beyond the description of too specific a state of affairs.26

Marxist objectification has become increasingly a matter of rhetoric, with the concept of capitalism signifying only a vaguely specified social type. Marx can perhaps be excused his missionary tendency to take a local product and imagine it to be equally valid in all places for all time. His accounts, offering rich historical and institutional detail from the nineteenth century, assume that the pattern of life he identified would spread. For the Western Europe he knew, the particularity of his theory was not a handicap. Rather it offered a convincing background to political strategy - an account of opportunities and constraints whose generalisability was largely irrelevant to Marx's audiences. If Marxian and Marxist theory might themselves be the products of a specific historical false consciousness, Marxism would be posthumously validated in the demystified realm of transparent human understanding that was to follow revolution.27 Socialists have rather seen their objective explanations of social causation as a potential strength, blueprinting hidden structures so that they might be broken up or superseded. Objectivity, in practice, has been a method of understanding, identifying


potential opportunities to seize change and the agencies that might be able to bring it about.

However, the concept of capitalism failed to provide the heuristic tool socialists required even in the limited national settings for which it was most appropriate. It did not identify relevant historical trends. Nor did it theorise the relations between global capitalism and a specific national domain. (For this reason, Marxists underestimated the power of nationalism to divide working classes along national lines.) They were prone to reductionist analyses which assumed strongly integrated national economic and social entities. These filtered out otherwise impossibly complex interactions between neighbours, and the threat to the laws of indivisibility and repeatability these brought. Yet, if Skocpol is anywhere near correct in her analysis of revolution, external economic and military pressures are a decisive factor in the development of the conditions within which revolution is possible.28 Unable to fix on states, theorists could not focus on the relations between them. A political theory unable to address the distinctive forms of West European nation-states could not hope reliably to inform revolutionary politics. Indeed, as I shall show in the next chapter, social democracy's greatest strengths followed from the way it (largely unwittingly) accommodated itself to the ideological and institutional fields constituted by late-nineteenth-century states.

The deceptive naturalness of nation-states in part explains their under-theorisation. But the weakness of Marxian state theory - its lack of a substantive account of the nature of the state - was merely one part of a wider laxity in the specification of the capitalist mode of production. Although states might seem to act autonomously - notably in their maintenance and extension of legal and economic infrastructures - this activity was always easily reduced to the ill-specified notion of 'interests of capital'. The purchase of materialist theory is slight here. The sensitivity of the modern political process - its combination of sporadic elections with the freedom of working-class organisations to articulate discontent - facilitated constant adjustment to social grievance.29 The activist state role extended to the economy. Just as states were active in creating the preconditions for a capitalist economy,30 so they continued not merely to redistribute in accordance with social forces but to alleviate the crisis tendencies that Marxists supposed might end capitalism. This threatens the foundations of Marxian politics. If capitalists might repeatedly defer the breakdown of social order, then socialists' attention was bound to turn to agencies of change. (A temporary revisionism might also turn into a permanent one. Workers could


not just engage in routine struggle and wait for capitalism to collapse under the weight of its own contradictions.) Yet, over the twentieth century, states also collaborated more closely with representatives of the working class - through the social democratic effort to secure power through election, and through the mechanisms of the corporatist state and its contracts with elements of organised labour.

Such problems ultimately wreak havoc with the concept of capitalism. Even if the materialist analysis of history does provide a scientific insight into the laws of motion of capitalism, it cannot make those insights available to the agents of political change in particular historical settings. The keen revolutionary looks in vain for theoretical direction. Even if the state's relative autonomy is in principle explicable, the intervention of ad hoc social and political factors through indeterminate stretches of time, and across national settings, keeps theoretical advice provisional and inconclusive. The variation allowed within Marxist concepts is too great to permit them to perform practical service. Since politics is always situated in the present and the future, and in specific locations, the scientific understanding of history proves to be a disappointment: history becomes known to the requisite degree only after it has moved some distance into the past. The potential of objectification must be kept in perspective, even by those who believe that a science of history is (in the end) a possibility and not just an incoherent fantasy.31

THE INADEQUACY OF THE AGENT

The Marxist theory of capitalism proved politically robust despite its intellectual failings. Where it could not provide many answers, it at least offered a shared vocabulary with which to formulate questions, and through which otherwise unrelated human beings might conceptually map their hoped-for common future. The theory:praxis dialectic, however, had been lost. The theory of agency was not recoverable. The revolutionary proletariat that was to be delivered by the capitalist accumulation process - emiserated, swollen, and antagonistic to the prevailing social order - never materialised, even on a nation-by-nation basis. However, once again, reality did not fail to match up to theory sufficiently for the theory to be abandoned or drastically modified. To abandon the theory of agency, after all, was to strand both moral condemnation and the theory of society without meaning. Marx was not so wide of the mark (and so attractive an alternative not yet on


offer) that his tantalising structure of thought could just be jettisoned. Abandoning the internationalist fallacy, Marxists re-focused on nation-

states as fields of analysis. However, the expansion of the proletariat proved intensely disappointing. Indeed, the ramifications of Marx's failure were far more rapidly damaging for his political theory than is usually supposed. Marx, as we have seen, projected a trend on the basis of the leading nation, Britain; and from that nation he extrapolated to other more 'backward' ones. Yet he was wrong in each case. In Britain there was little more proletarianisation to come after 1850, when the proportion of the working population in industry -almost 50 per cent - was scarcely below its all-time peak of 51 per cent in 1910. Moreover, the backward countries did not catch up in employment terms - even if they often engaged in more capital-intensive and larger-scale production. In France and the United States, for example, the greatest proportion of the labour force employed in industrial production was a little over 30 per cent.32

Not only did the peasantry persist, but continental nations experienced state-sponsored development which suppressed the proportional expansion of the proletariat. Longer periods of education, forced retirement, and the maintenance of large standing armies and state bureaucracies, each bore some responsibility. Most states stringently maintained barriers to women's entry to the labour force until the first of the mass industrial wars. Furthermore, wholly new types of work emerged, in the managerial hierarchies of both state and private firms. New expert occupations and professions arose, filling functional niches in the capitalist economy. Differentiation of employment by function increasingly cut across Marx's theorised dichotomous class structure. Twentieth-century states directly influenced class structure by employing more and more of the workforce, thus helping make the new middle classes into an entrenched aspect of class structure.33

The consequences of numerical deficiency have been devastating. Marxists were tempted to shift class boundaries to include unexpected people as members of the proletariat. If defined permissively, almost everyone can be accommodated in this class; or they can be assigned 'contradictory class locations' which make them out to be, at least, not entirely non-proletarian.34 This reintroduces a series of epistemo-logical and moral problems that Marx had banished, and also undermines the classificatory purpose of class categories. Marx's Hegelian architecture loses its internal coherence: inexorable process is replaced by a messy struggle between concrete classes and class segments. The end of history, and mankind's reunification with its species-being,


suddenly seems a less definitive affair. An abstract bourgeoisie, once merely the personification of class oppression, becomes a concrete menace - a collection of real human beings with ambiguous class interests fighting a bloody and desperate battle. If a tightly defined proletariat had grown to include virtually everyone, even the problem of epistemo-logical doubt could have been solved. The widening of the heuristic circle implied by objectification - the portrayal of the world in such a way that it might be grasped from as many human locations as possible - would become a true objective recognition of interests by the class representing humanity as a whole. But if Marxists treat those with vastly different experiences as proletarians, they cannot be expected to create unitary agency. Merely classifying people as proletarians will not do: they must share a common 'social' existence, and hence common consciousness. Only some experiences are relevant - in theory man and woman or black and white can have the same class consciousness - but just which experiences could a heterogeneous working class be said to share?

One Marxist tradition has responded that size does not matter, but rather technique or organisation. Expanding the proletariat beyond some common group of exploited sovereign labourers to the white-collar workers or new middle classes merely exacerbates a problem already present. Widening the working-class catchment area beyond the urban, industrial working class breaks the commonality of experience upon which class consciousness, and so collective agency, depends. The proletariat must be kept small.

However, even within that narrow and select (and ever-shrinking) group, the predicted revolutionary energies never developed. Marx did not directly confront the transformation of economic-based categories into politically organised revolutionary class. He defined neither the extent to which self-organisation would be spontaneous, nor the roles of party and intellectuals.35 The combination of class interest with exploitation was thought sufficient. As Stedman Jones has complained, the reasons for discontent (such as poverty) constitute a different sort of phenomenon to the language of class antagonism. 'Philosophical assumption - explicit or unwitting - has suggested the missing link by interjecting terms like "experience" or "consciousness", tying the two poles together in a way which seems intuitively obvious'.36 Stedman Jones also asks a second relevant question of the consciousness of the working class: 'Was it really the "working class"? Or was it that of a historically more specific group of wage earners - journeymen and outworkers faced with the proletarianisation of their trades, rather than


a proletariat in a more familiar Marxist sense?'37 If antagonism towards capitalism was shaped by the experience of deprivation, the new proletariat becomes integrated more tightly into the capitalist system as its numbers of skilled once-sovereign labourers continues to decline. The achievement of 'social control', then, might require no special explanation - in the usual analyses of the divisive aspirations of the labour aristocracy, embourgeoisement, or hegemony. The threat of working-class mass revolt was just never a real one.

One obstacle to addressing the problem of the non-revolutionary proletariat has been a philosophical one. Marx's materialist theory of history claimed that the logic of development of capitalism made the emergence of a revolutionary proletariat inevitable, and the transition to socialism it was to bring about a necessary one. Unless socialists relied on Hegelian assumptions, they found the role of human agents in bringing about the process was problematic. Following Engels and Kautsky, Marxists relied on the positing of an inexplicable episode between the existence of a class and its acting as one.38

This space invites more practical Marxists to introduce the apparatus of the party. By the second half of the nineteenth century, working-class efforts were no longer directed at the reassertion of control over the process of production - the identified source of antagonism - and were engaged in the recognisably modern struggle over distribution and consumption. Collective organisations fought for a share of the surplus product, rather than for the replacement of the system of production itself. As Bauman has put it, workers had begun to behave as if their labour was a commodity, bargaining for incentives and threatening industrial action if not rewarded according to their potential negative power.39 Lenin bluntly observed that trade unionism was the natural form of undirected working-class politics, and so the correct consciousness had to be introduced from above. The party, intellectuals, and organisation became the new focus for many left intellectuals, threatening the morally unproblematic horizontal legitimacy of collective agency that can be found in the ideal revolutionary mass. No longer did proletarians come together as equals to overthrow oppressing social structures: now they were all different - and some were more different than others, needing the organisation and discipline of the party and intellectuals to prevent them from inadvertently destroying their project of change.

Socialist collective action thus loses the legitimacy conferred by universal participation. The shift in the site of agency (to the party, a vanguard, or the intellectuals) creates fewer strains, however, than the change in its nature. In a telling account of the relations between worker


and party, Trotsky argued that without guiding organisation, 'the energy of the masses would dissipate like steam not enclosed in a piston box. But nevertheless, what moves things is not the piston or the box, but the steam.'40 This captures the insight that the working class, as the working class, can only act in the very crudest of senses. Political action - the organisation of the engine and the piston in Trotsky's metaphor - is characterised by a complex division of labour, and therefore by organisation and hierarchy. But once hierarchy is introduced, everything comes to pieces. Workers can fail to behave as history intended. Different organisational forms can transform party effectiveness. Ends and means come to conflict with each other, and socialists find they have to choose between them. The emergence of social democracy and Leninism after the First World War, already formed, exposed the vastly different ways in which the divorce between individual intention and collective action had become rapidly institutionalised.

A PROBLEM FROZEN IN TIME

Many Marxist political theorists could not despatch these troublesome problems. For them, the magnetic appeal of the three integrated elements - social theory, agency, and moral condemnation - just could not be broken. The history of their theory has been made up of episodes of struggle to escape from, or radically remodel, these elements' relation to one another.

In the next chapter I examine the emergence of social democracy as the cogent successor to the socialism of the Second International. In the remainder of this chapter, however, I focus on those left behind: the 'orthodox', who renounced reformism, rejected all later revisionism, and struggled on through the challenges of the twentieth century without flinching. Faced with too small and non-revolutionary a working class (or a large, but heterogeneous and disinterested, one) they cobbled together strange new theories of agency. They were defeated repeatedly by adaptable defenders of capitalism, who used socialist and social democratic articulations of discontent as diagnostic aids to make the mode of production more tolerable. They then analysed long-term crisis tendencies of the capitalist system in ever more complex ways (and in the ever-lengthier long term). Eventually finding themselves lacking even a resonant moral language, they made spurious moral smugness their hallmark, alienating social democrats they might still have influenced for the sake of theoristic superiority.


Content-fundamentalism - the determination to protect Marxian analysis in some pristine form - eventually demanded tragic powers of self-deception from its proponents. Its parasitical relation to the human and social successes of social democracy generates the greatest pathos. Sharing a common intellectual ancestry, fundamentalists and social democrats continued to communicate. Each remained an inclusive transformative politics. Capitalism modified was still capitalism; the working class had been translated into 'the people', but this modification pre-dated even the demise of the Second International; social democrats were explicitly national, but the natural solidarity of the international proletariat, while in some senses and quarters believed, can never have been a psychologically easy conviction to sustain.41

A second, less direct relation between the cousins of the left, and an unexpected prop for fundamentalism, was the social democratic welfare state. It was not that income support and meals-on-wheels freed Marxist thinkers from a debilitating dependence on the capitalist market economy. Rather, the home of the left in postwar Europe was the university.42 The most conservative orthodox thinkers of the 1880s, transported forward one hundred years, might have been surprised to find their debates about class agency circulating inconclusively in a massively expanded state-educational apparatus. A comparison of British marxisant thinkers Ralph Miliband and E. P. Thompson helpfully illustrates the lack of progress over that century.

Miliband, admitting the unsystematic and fragmentary character of Marxist political theory, laments the absence of any significant theoretical advances in this area since the 1930s. He traces this deficit to a simplistic conception of politics as an activity conditioned, or even determined, by the economic base, and to the understanding that 'mere' political forms are to be transcended by human emancipation. Although the transformation of capitalist social relations is objectively necessary, however, it still requires human agency in the form of the working class to carry it out. The theoretical difficulties this generates are not pursued by Miliband, who offers a comprehensive assessment of the demands of revolutionary action:

The desired transformation must depend largely upon, or at least be linked with, the deepening of the contradictions of capitalism and manifold impact upon the superstructure. But even so, the transformation will have to be brought about by human intervention and practice, and will be the result of growing class conflict and confrontation, in which the working class must play a predominant role.43


Miliband, however, provides no clearly defined role for classes as political agents. This is hardly suprising, at first sight, given his treatment of the category of 'social class'. He claims that changes in British class structure 'have occurred in the composition rather than in the actual existence of two fundamental classes'.44 The increased divisions within the working class 'cannot be taken to undermine the objective character of the working class as a social entity whose being is not dependent on the class perceptions (or absence of class perceptions) of those who constitute that class'. This objectivity of definition imprisons Miliband's politics within the confines of his structural assessment of capitalism: crises must happen, and only the working class can provoke crises of the relevant kind.

The Marxists' abstract 'Working Class' need never have had any kind of identity with an empirical working class. However, the discrepancy, once entrenched, must determine the form of political strategy, if any, that is developed. Since Marxism prescribes a historically correct path for the Working Class to follow, the correct political strategy must be to move the empirical working class on to that path: and hence the stress within Marxist theory on purely organisational capacities (especially of the party), and on intellectuals. Since the working class can be 'objectively' defined wherever one chooses, the weight of the disjunction betwreen abstract and empirical must fall squarely on class consciousness. The notion of ascribed class consciousness (which has no psychological reality), as the consciousness a class would have if it was* aware of its own interests, is likely to make an appearance as soon as abstract and empirical move apart.45 It provides a prerequisite for the proletariat's role as both 'subject and object of history'. If socialist consciousness is what makes the revolution happen from the perspective of agency, and if social conditions make its development possible rather than automatically producing it, then the only political strategy is to realise the possibility of that development. Once the disjunction between abstract and actual is admitted, nothing remains to tie the abstract Working Class down to its empirical referent and it becomes an endlessly manipulable concept. If what it is in theory to be the proletariat is disconnected from the reality of a proletariat, then what is 'proletarian' is no longer subject to any real constraints.

Cohen, however, clearly establishes the basis of an objective definition of class, arguing that

a person's class is established by nothing but his position in the network of ownership relations His consciousness, culture, and


politics do not enter into the definition of his class position. Indeed these exclusions are required to protect the substantive character of the Marxian thesis that class position strongly conditions consciousness, culture and politics.46

Thompson, however, claims that such a fixed definition 'torments, transfixes, and de-historicizes' the category of social class.47 While 'class interests' are tautologously present in a structurally delimited class, such definitions fail to account for the collective cultural generation of shared intentions and self-consciousness - a process that must be explained historically. Structural definitions treat the working class or bourgeoisie as 'the same undivided personality', thus eliding the complex and changing relationships between 'different people with changing traditions' that go into the making of a class. 'A self-defining historical formation, which men and women make out of their own experience of struggle, has been reduced to a static category, or an effect of an ulterior structure, of which men are not the makers but the

, 4 0 vectors.

Anderson reiterates the counter-argument that class formation cannot depend on class consciousness since 'classes have frequently existed whose members did not "identify their antagonistic interests" in any process of common clarification or struggle. . . . for most of historical time this was the rule rather than the exception.' Thompson's definition of class is 'far too voluntarist and subjectivist'. He is keen to stress, with Cohen, that 'the historian's necessary duty of attention to the particular event is not to be discharged by bending or stretching general concepts around them'. Historical concepts will only be concepts at all if they 'fix some structure of invariance, however much internal variation such a structure may allow, in other words, however wide its morphology'.49 Thus, 'internal variation' is left to absorb the disjunction between the conceptual and the actual. And, although an understanding of 'the potential of human agency to shape the collective conditions of life' must be developed, as this is what politics is about, the limits to what human agency can achieve are set by 'the weight of structural necessity in history'. A political strategy must be informed by 'a causal knowledge of historical processes' if it is not to fall foul of the 'negations of self-determination in the kingdom of necessity'.50

For Anderson, the role of the working class is therefore altered: it loses its role as privileged subjective agency, and is no longer to act as 'subject and object of history'. Rather it maintains primarily an abstract form: 'Any insurgent bloc capable of unleashing a transition


to socialism will be various and plural in composition: but it will only be such, something more than a mere collation of dissent, if it possesses a centre of gravity in those who directly produce the material wealth on which the society of capital is founded.'51

Marxism becomes 'the search for subjective agencies capable of effective strategies for the dislodgement of objective structures' and these agencies are to include the peace, ecology, and feminist movements, which are 'in their potential fate, in the long run indissociable from the dynamic of the labour movement'.52 This solves the (theoretical) problem of the lack of identity between the abstract and real, and allows a theory of agency to exist within a materialist theory of history. The empirical working class must be involved in the revolutionary change, simply because of its pivotal position in the processes of production. We need no longer worry about the composition of the empirical working class or its observed consciousness since, by definition, the working class must be involved in any significant change in society because of its position in the network of economic relationships. In this major shift in the conception of the working class, it is still the primary agency but not because it is expected to do most of the acting.

Anderson's heroic theoretical efforts have borne fruit. Marxist political theory, under his formidable intellectual stress, can be pressed into a form compatible with practical politics in a modern western state. Socialists would be unwise to follow the route Anderson maps, however, only to arrive exhausted at the starting-post of contemporary political competition. Under the sway of Marxist theorists, socialists sometimes still imagine that revolutionary proletarian politics has only just slipped beyond the realm of the possible, and so suppose that a vacancy has arisen that needs to be filled by some new agent of history. An investigation of the successes of social democracy shows why this is not so. It can also explain why this is a trap into which the left so easily falls.

2 States in Nations

Despite their under-representation in the left's literature of self-congratulation, social democrats created Western Europe's prevalent mode of working-class organisation, and its only successful one. In this chapter I explore socialism's transition, in the first half of the century, from revolutionary Marxism to postwar social democracy. This form of socialism, which emerged from the prolonged struggle to humanise the operations of the capitalist economic system through bourgeois political mechanisms, was no mere wrong turn.1 But it was carried on in opposition to the left's internationalist theoretical inheritance.

The first half of the chapter sketches, somewhat summarily, social democrats' uncovering of the inadequacy of Marxist orthodoxy. The followers of Trotsky, and left radicals devoted to the mass self-emancipation of the proletariat, declined to the fringes of European politics. The mass communist parties of the Third International were repeatedly defeated or contained by rivals on left and right. By contrast, most socialists fought for suffrage and constitutional reform, eventually placing their hopes in the state as an agent of social transformation. This shift had long historical roots in the development of the modern state. As early as the 1870s, many socialists were (re-)assert-ing the idea of the state as above society and not merely an instrument of class domination. Their arguments were bolstered by the attractive^ ness of a widened suffrage, the presence of working-class nationalism, and the cumulative logic of electoral politics.

The remainder of the chapter shows how social democrats' uncertain interwar accommodation to existing institutions turned unexpectedly to postwar triumph. Having abandoned proletarian revolution by the 1930s, the parliamentary power to which they aspired seemed irrelevant to that decade's economic and social crises. Marxist analyses of the feeble epiphenomenal status of the state seemed suddenly cogent after all. The new world war rescued social democracy from its rudderless drift. Framing the state as a credible agent of direction in managed capitalist economies, postwar settlements - often but not always Keynesian -satisfied the left's aspirations to govern. Socialists took full advantage of the opportunities offered to them by postwar growth, in part because they did not understand them. They helped create the modern welfare states which were the human and political triumph of this period.

41


THE TENDENCY TO SOCIAL DEMOCRACY

Marxist intellectual historians often conceive the emergence of social democracy as a betrayal. An innocuous phrase in the nineteenth century, 'social democracy' referred to that minority of democrats who were also socialists. In 1914, however, its true meaning emerged, as traitors to the Second International preferred solidarity with their national capitalists to the international class solidarity which they had previously professed. Allying with national capital during the war, they destroyed the international proletariat and then turned worker upon worker within each nation through their collaboration. Their postwar commitment to bourgeois representative democracy, these critics long argued, undermined the potential of international revolution which Lenin's Communist International was generously sponsoring.

The social democratic trajectory, however, was set long before the outbreak of hostilities. Przeworski characterises the historical choices that have faced socialists over the past hundred years as:

(1) whether to seek the advancement of socialism within the existing institutions of the capitalist society or outside them; (2) whether to seek the agent of socialist transformation exclusively within the working class or to rely on multi- or even non-class support; and (3) whether to seek reforms, partial improvements, or to dedicate all efforts and energies to the complete abolition of capitalism.2

This formulation fails to acknowledge the context within which each of these supposed selections was to be made - the framework of the modern state. A bounded field of politics naturally complemented electoralism, constitutionalism and reformism. The 'existing institutions of the capitalist society' were national ones, and the classes (except for some of the capitalists) were organised across whole societies. The capitalism that was the target of reform was regulated and legislated by particular states.

As we saw in the previous chapter, Marxist and liberal political theories have lacked adequate theorisation of the modern nation-state, and of the reciprocal relations between state and capitalist economy.3 The embodiment of capitalist interests in the state culminated in the politically purposeless and intellectually evasive notion of its 'relative autonomy'.4 Social and political theorists have recently tried to fill this lacuna.5

Indeed, some analysts of the emergence of the modern state, especially those influenced by the formation of post-colonial states, make a converse error. Treating states as timeless agents of development, they

States in Nations 43

view them as the multi-faceted creators of the modern nation-state: constructors of civil society; builders of the modern economy, through the establishment of taxation and the central coordination of case and property law; masters of their populations through their surveillance and control; and manipulators of subjects' cultural and moral perspectives in order more definitively to secure their allegiance.6

Late-nineteenth-century Marxist theory both offered an unsophisticated account of the relations between states and societies and evaded the national question. Socialists, however, could scarcely ignore the fields of coercive and ideological power of the modern state. At the most obvious level, workers in different parts of Europe faced very different degrees of repression or freedom to organise as socialists and trade unionists. Students of the German working class, for example, have highlighted the boost to its radicalism given by the regime's support for landowners, its creation of a vast standing army and bureaucracy, and its repressive anti-socialist legislation. Socialist resistance, moreover, here engendered panic among a weak bourgeoisie, so creating a vicious cycle of repression.7 If German semi-autocracy permitted an oscillation between reform and revolution, then the more thoroughgoing autocracy of Russia permitted only the latter. By contrast, the relatively liberal British regime, together with her capitalists' willingness to negotiate with unions, deprived non-reformists of ammunition. Hence, before any international proletariat could ever begin to emerge in common struggle, each national working class faced its prior and unique battle to secure the prerequisite of organisation - freedom from repression itself. As Marx and Engels somewhat confusingly argued, 'since the proletariat must first of all acquire political supremacy, must rise to be the leading class of the nation, must constitute itself the nation, it is, so far, itself national, though not in the bourgeois sense of the word'.s But such struggles necessarily took proletarians down organisationally and ideologically distinct national paths.

Divergence followed from states' infrastructural power rather than merely from their coercive methods. Whether liberal or repressive, states were an immensely intrusive presence rather than merely an instrument of violence. Mann sees the emergence of the 'autonomous power' of the state as 'the product of the usefulness of enhanced territorial-centralisation to social life in general'.9 In ceaseless competition between neighbours, only states could accomplish the regular extraction of resources required for success in modern warfare. Moreover, in their internal struggles to overcome existing competitors (such as church, class, and clan) states alone, by virtue of their territorial nature, could


establish the legal and infrastructural frameworks necessary for market regulation and the protection of private property. Their infrastructural power - the ability to control a territory through reliable logistical command over its resources - was magnified by new media of power: literacy, controlled coinage, and expanded communications.10

Viewed as agencies of capitalist development, states promoted strategic military technologies and built industrial and communications infrastructure.11 They integrated national labour markets, and managed the mass population movements that came with growing cities. The emergence of bourgeois parliamentarianism decisively tied the law-making apparatus to an expanding popular franchise. Petitioning parliaments, and later participating in them, brought immediate gains in labour relations and working conditions. While trivial, or even diversionary, from the perspective of socialist intellectuals, legislators' capacity to bring some relief to workers in often desperate circumstances steadily edged the left in a reformist direction.

The hoped-for international proletariat had to follow the unification of each national proletariat. Yet states left an imprint on their societies which divided each proletariat from every other. The communications networks established in modern states, moreover, ensured that subjects' immediate cognitive field - the world to which they had relatively unproblematic cognitive access - was that of a territorially demarcated society. The strength of these fields was so formidable that the rhetoric of class always presupposed a particular national case unless the international proletariat was specified.

The collapse of the Second International was not universally predicted. In principle, socialists saw national attachments as irrational oddities and symptoms of historical retardation. Marx, however, resolved the national question in class terms just as nationalism began to develop new vigour in Europe, and common experiences never looked like bridging these divides. The most striking feature of modern nation-states is the way in which identification with state actions shapes political activity.12 Regardless of the immense scale and complexity of its activity, the modern state remains intimately related with its subjects. 'For a state to do more than administer privilege and defend itself against its own population,' as Geertz has argued, 'its acts must seem continuous with the selves of those whose state it is, its citizens - to be, in some stepped up, amplified sense, their acts.' This is no mere consensus since subjects need not agree with their governments' acts in order to feel embodied in them.13

Oakeshott suggests that the state might be thought of as the 'unre-


solved tension between the two irreconcilable dispositions represented by the words societas and universitas\ The disposition to be self-determined, while acting under the acknowledged authority of rules and conditions in acting, remains in constant tension with a yearning to identify ourselves as a part of a common enterprise, or purposive association - 'a partnership of persons which is itself a Person, or in some respects like a person'.14 By sharing some commitment to common utterances, and treating them as if they were their own, individuals identify strongly with a distant and unknown state.15

Personal states permit a comprehensibility, for subject and ruler alike, which might otherwise be lacking. The vast majority of our evaluations of human activity depend on our being able to identify the sources of action. Since we cannot help but see these sources as lying in the consciousness of human agents, our ascriptions of agency to collectivities involve metaphors drawn from individual action.16 Given the bewildering scale and complexity of contemporary social relations, with their ramified webs of causal interaction and interdependence, we must filter out immense detail to capture the points of greatest significance to us. The subsuming of such webs under personal categories, as in our depictions of the personal state actor, is perhaps not the worst way of coping with complexity.

The capacity of states to facilitate collective action on a large scale, while making that activity meaningful enough to be considered a legitimate expression of the common will, underscores the importance of the idea of the nation 'with which states, as the guarantors of the economy, the guardians of the society, and in many instances the only clear entity in the territory, maintain themselves'.17 Nairn considers nationalism to be 'the idealist motor of the forced march out of backwardness or dependency'.18 The national cohesion created by this looking inwards is needed to organise and sustain the effort of propelling the whole forward; and such a propulsion has been an imperative of all modern states (though less so of the first). Modern nations generally claim to be natural communities of self-assertion, rooted in the remotest antiquity, but their objective novelty makes the sustainability of this illusion itself remarkable. Imbued by a sense of an imagined comradeship, and held together through stories of common histories told in shared languages, the naturalness of this identification makes it a potent political force.19

The personal state is usually a national state. The nation is both the unit and the reason for acting together. If 'throughout the world. . . . men are increasingly drawn to a double goal: to remain themselves


and to keep pace, or more, with the twentieth century', then, in practice, it is national identity that provides both the major focus of identity and the prime source of cohesive force through which the people (or the elites who rule over them) can keep up that pace.20 In modern industrial societies, the state represents the only institutional means of transforming society. But transformative agency requires a form of self-assessment that the category of nation helps to provide. Socialists had hoped that the language of class might achieve this. The proletariat was enslaved by the hegemony of capitalism and yet able to act; made aware of its position, it could achieve self-objectification and collective transformation. In the context of the international division of exploitation, however, it is the sources of national comparative disadvantage that must be understood, seized upon and changed. For the states of nineteenth-century continental Europe nationalism was no epiphenom-enon but a constitutive aspect of industrialisation.

Marxists managed to subsume working-class nationalism and the massive infrastructural intrusiveness of state institutions under their theoretical categories. Indeed, they did so all too easily. While socialist intellectual elites could swim against the tide for a while, however, states' power ensured they could not drag their movements behind them.21

Mass socialist movements were made up of workers who were placed by economic circumstances in competition with one another, and whose allegiance rested on the delivery of tangible gains. Party and union leaders' theoretical promise of a better future could never hold them on its own.

The only intellectual escape was to deny any contradiction between seeking reform and securing revolution, and this became theorists' characteristic evasion in the period of the Second International. On their account, there was indeed a natural tendency towards socialism, driven by technical progress; and, yes, capitalism was incapable of reform. However, political and economic struggle for reform - even involving parliamentary politics and the creation of workers' parties -was nonetheless a good thing, raising the class consciousness of an otherwise stupefied proletariat and enfeebling capitalist sinews through bourgeois democratic reform. Only this theoretical expedient could maintain the unhappy marriage of class struggle and scientific analysis.

THE CUMULATIVE LOGIC OF REFORM

Electoral competition and parliamentary participation generated immense momentum for reform. The former, conferring legitimacy on the practice


of bourgeois democracy, undermined socialists' ability to organise workers in class-based protest. Electoral competition, once embarked upon, tended to monopolise political strategy. Of course this did not surprise everyone. The anarchists and some of the left's radicals had condemned participation in the 1890s, arguing it would confuse the proletariat and defuse class tensions. When the growth of the working class still appeared inexorable this criticism seemed misplaced: if socialists could choose the electoral path then it offered a more humane route to the anticipated future. But as the working class remained in the minority, echoes of these quarrels came back to haunt the social democrats.

Socialists have sometimes found in this dilemma the origins of their tragic disappointment. Participation blunted the moral edge of socialism, and the reforms it engendered undermined class antagonism. Finding themselves far from being a numerical majority of voters, moreover, workers' parties had to seek support outside the working class proper: broadening their appeal to the people or the citizens, social democrats were forced to discard their own trump card - the salience of class as a principle of organisation and protest. All of this served to exacerbate the chronic sickness of the party: from a mass organ of the people it became a hierarchical electoral machine. As it came to cater for diverse groups, its bureaucratic calculations expanded at the expense of hitherto natural expressions of class interest.

These tragic lamentations, of course, lack counterfactual grounding. (For this reason, perhaps, the most skilled analyst of socialist electoral politics, Przeworski, adopts a tone of resigned pessimism rather than one of accusatory anger.)22 'Pure' class organisations lacked proletarian character too. What is more, the notion that electoralism decreases the salience of class hides an unhappy truth: class in itself had no magnetic force to begin with. Rather it was classes-within-states that were salient.

To the degree that socialists achieved electoral success and participated in legislative politics, they were likewise locked into a cumulative logic of national reform. Trade unionism - the title one might give to the attempt to legislate proletarians out of poverty - had a national as well as a class face, and stressed the former at the expense of the latter. Always dependent on a state's ability to implement authoritative instructions, and its capacity to regulate outcomes through infrastructural and coercive institutions, this strategy moulded itself to existing state powers of control over markets. Modifying labour legislation, most notably, social democrats helped to shape the nationally integrated and differentiated European labour markets of the twentieth century - a process which culminated in the corporatist weaving of unions into


the legal fabric of their states. Pushing further for public education programmes, moreover, parliamentary socialism deepened the processes of national cultural standardisation which enforced the impossibility of an international working class. Furthermore, the extension of the franchise raised bourgeois political equality to the status of an implicit goal.

The triumph of a gradualist conception of national socialism represented not treacherous opportunism but inescapable logic. It was not that capitalism turned out to facilitate easy structural reform (or even that it became clear what might constitute such reform). Rather the Marxian thesis became irrelevant by stages. If local gains, and the small achievements of market regulation, were not theoretically significant, then they were immensely important in practice. As Kolakowski remarks of Germany's practical revisionism in the 1890s, with its concrete demands for better working conditions and programmes for the alleviation of basic suffering, 'its strength lay not in Bernstein's theoretical arguments but in the practical situation of the German working class'.23

The outbreak of the First World War shattered all illusions about the international solidarity of the proletariat. While the Second International's institutional weakness provided a poor foundation for cross-national cohesion, the debates and resolutions of 1907 and 1910 which were to have prepared the working class for the danger of division made little impact. War also exacerbated poor relations between reformers and radicals, and each began to draw up the battle-lines between social democracy and western communism. The entanglement of increasingly hierarchical and bureaucratic union movements in their respective war efforts earned the enmity of many workers, especially where the suffering of war was followed by the humiliation of unexpected defeat. Mass industrial warfare spurred the incorporation of unions into their states, but left many of the new proletarians distrustful of their leaders. War, moreover, brought revolution to Russia - so raising Leninism to unforeseen heights of power and prestige - and brought in its wake the possibility of successors in the west. In these conditions division turned to rupture with the formation of the mass communist parties of France, Germany and Italy. The leaders of social democracy inherited a compromised tradition and an uncertain assembly of organised workers.

Kolakowski has argued that the collapse of the Second International exposed two fundamentally different interpretations of socialism. On the first view, socialism was one further stage in a continuous cultural and technical history of mankind - making reformists' claim that justice and human freedom might be gradually expanded seem natural.


On the second understanding, by contrast, socialism was a complete break with all that had gone before - a great historical apocalypse to sweep away capitalism in its entirety. The latter interpretation was more natural to the inhabitants of those regions - Russia, the Balkans, and later Latin America - in which gradual reform was unthinkable.24

Kolakowski does not explain how such a gulf was bridged for so long, and ignores its echoes in today's western academic socialist theory. Some theorists still see socialism in terms of the achievement of human freedom in circumstances of necessity, or the mustering of subjective agency to overthrow objective structures.25 Others claim that socialism is about control - human collective control over the main features of a society, or conscious control over the social, human, and natural environment.26

Socialism's transformative nature helps explain this duality. The sociological ambition of Marxism - its claim to an extraordinary depth of knowledge of social processes - was mirrored in social democracy's attention to the constitution of legal and social institutions. Each was keenly aware that society was not a natural given but a human creation. Social relations were commonly understood as a densely-woven fabric framed by the pervasiveness of economic exchange. Following from this, each has been committed to viewing society, in their own ways, as an objective realm. The structural and mechanistic metaphors deployed in the service of objectification suggest two different strategies of political change. For revolutionaries, the iron laws of motion driving society necessitated the collapse (or destruction) of the interrelated whole. For the reformist, however, the knowability of social structures was the key to their modification. If their laws could be uncovered, then structures could be grasped and wrenched into new shapes or even dismantled.

Socialists' movement from the agency of the proletariat to that of the state was camouflaged. The medium of this theoretical elision was the party. Since upholding the ideal of the global working class verged on the fantastic, its practical effect was to free socialists for domestic proletarian organisation - something that concrete international collaboration might have undermined. Proletarian social groups, themselves internally complex, had to be organised by the party and its intellectuals. Once a hierarchical party tried to translate heterogeneity into a collective will, wider social diversity itself become less problematic. If heterogeneous proletarians could be processed by the party mechanism, so too could the more diverse categories of 'the masses', 'the people', or even 'the citizenry'. These broader classifications, indeed,


recaptured some of the moral aura that had surrounded the proletariat because of its universal nature: socialism could return to inclusiveness (even if only within a given nation) at the moment its chosen agency had threatened to become a mere subset of humanity.

In this respect, Leninists and social democrats resolved their common predicament - the non-emergence of a revolutionary proletariat -in a similar way. Each conceived of themselves as a transmission device for the will of the subject of history. The former claimed the ability to identify - from the 'international perspective' - the historically correct path for the workers. But their plans were everywhere negated by the resilience of modified capitalism, and by the strength of bourgeois institutions. The latter, more felicitously, constructed a complex and rickety transmission mechanism from the workers (conceived as the people) through the party, to the bourgeois parliament; and thence to the executive branch of the state, the closest thing to a locus of power in the early twentieth-century nation-state. Social democrats did not have to concede - even to themselves - the dubious causal and moral integrity of this mechanism. They accommodated themselves to the fields of power of the nation-state, but without acknowledging a shift in the site of agency: the workers remained the agent of change (and so expressed the interests of humankind) even if it was party apparatchiks in the state who actually fingered the levers of power. These levers, however, were to prove greatly disappointing.

UNCERTAIN TIMES

Social democrats carried over their conception of the unitary agency of the working class in capitalism to the agency of the state in the nation. Despite the complex internal histories of socialist political thought in the twenty years straddling 1900 - ranging from prosaic deal-making in Britain, through French debates over the value of the Republican heritage, to the heroic struggles around the orthodoxies of the German left - the nature of the modern state underlay most debates. My thesis that socialists transferred the site of transformative agency from the proletariat to the state must be initially stated in fairly abstract terms. Transformative politics depicts an objective social setting while positing an agency of transformation that is both a part of this setting and yet able to act upon it. In primitive Marxism the state was an aspect of the setting. It was causally implicated in capitalist social relations -a mere vector of capitalist interests - and lacked autonomy or the ca-


pacity to be its own causes. The working class, by contrast, through its consciousness (or through the scientific knowledge of its party and intellectuals) could be a historical cause - the Subject of History and not merely its object. Social democrats, often unknowingly, re-attributed this autonomy to the state. They construed it as an institutional complex with the capacity to emanate first causes, and so with the ability to express proletarian or human interests.

Participation in elections and the legislative process insinuated this change without the shock of sudden reversal. The elisions between different links in the chain of transmission - workers to electors, to representatives, to party, to parliament, to state - smoothed the way of this new construction. But the mass mobilisation of the Great War -its direction of economic and social practices towards a deliberate goal - starkly exposed states' intense relations with economies. Even Lenin's theory - otherwise relatively impervious to empirical reality -registered this development. His analysis of the causes of the war -competition between states with rapacious resource demands - barely escaped the ascription of ontological weight to states (by the device of stressing national capitalists' control of them).27

West European socialists, in their wartime collaboration with national capitals, took advantage of their bargaining position to accommodate themselves within their states in early forms of corporatism. Collective bargaining structures were instituted.28 While suffrage reforms contained popular protest, confining the principle of democracy to the parliamentary realm and preserving the executive for the exercise of real power, primitive corporatist bargaining promised access to the inner sanctum of state power. Postwar experience, however, was to prove disillusioning. The problem was partly electoral. There were simply too few proletarians, and trends were never to be favourable again. More importantly, as Marxists had predicted, states had the wrong sort of power for socialist advance. Of course, states performed functions that could not be captured by the traditional Marxist formula of class interests. But social democrats' participation burdened them with responsibilities rather more than it conferred powers on them. At best, their influence on legislative reform - in working conditions, education, and pension provision - cast them as the descendants of Gladstone and Bismark rather than of Marx and Engels. The state turned out to be the congested intersection of the many diverse communications networks of modern industrial society. When proximately viewed, any state once again seemed to be an aspect of capitalism and so incapable of precipitating change - so trapping social democratic leaders as the


vectors of social forces. The left lacked not just a strategy for cumulative reform, but any constructive agency. Even nationalisation was a little-understood glimmer on a distant horizon.

The massive economic upheavals of the interwar period seemed to confirm the discrediting of social democracy. More plausibly explained by their communist competitors, these crises also incubated an authoritarianism which savaged social democracy when they met. At no point during the Depression was unemployment at anything less than intolerable levels, provoking yet more despair and anger with the collaborationist left. Yet, within five years of the end of a Second World War from which western states emerged in disarray, social democracy was the blessed politics of its age. What had brought about this rapid transformation?

In their postwar settlements, leftists accepted permanent property rights and the prevalence of a market economy, while the right granted the need for collective bargaining rights and ameliorative welfare programmes.29 Workers' movements were embraced in a settlement which could protect the productivity gains upon which recovery depended. Although parties of the right were often in power, the 1950s and 1960s were the heyday of social democracy. Organised working-class interests were respected, and full employment was proclaimed to be the primary goal of economic policy. The new welfare states inexorably grew, alleviating poverty and providing unprecedented personal economic security. Within the left, battles between social democrats and Communists continued, but the postwar boom saw off Marxism as a potent political challenge.

Weak prewar regimes rapidly acquired legitimacy, and a new aspect as agents of domestic social change. They could be national economic and social modernisers, indicative planners, or agents of national reconstruction. Even imperial or once authoritarian states found a new role as promoters of representative democracy. The core of each conception of the postwar state in Western Europe was combined corporatist planning and public welfare. Keynesianism, and its counterparts in Scandinavia, transformed social democracy's prospects in many nations. Przeworski has argued that Keynesian economics, in the later 1930s, moved quickly to fill a vacuum in socialist thought 'as social democrats everywhere discovered in Keynes's ideas . . . something they desperately needed: a distinct policy for administering capitalist economies'.30 While these economic ideas were in fact far from pervasive, they were often crucial. States were the generators of applied knowledge and of the strategic coordination which could generate national


economic advantage. Yet they were also the protectors of their citizens, avowedly obedient to their will through constitutional mechanisms.

As the power to transform society was attributed to the state, the proletariat was gradually absorbed into the social setting. Socialist conceptions of the good society, as the negation of a series of discontents traceable in origin to the operations of the capitalist economy, found a natural complement in the interventionist state. Socialists' goals - distributive justice, full utilisation of resources, production for use, self-realisation through creative work - were qualities denied by untrammelled capitalist production: the kinds of control offered by the planning, Keynesian welfare state were ideal for their amelioration. Just as earlier struggles, largely through trade unions, had provided citizenship rights and a more equal distribution of power in the workplace, so the new means of control would provide full employment (a good substitute for the elimination of wage slavery when the Weberian manager is seen as unassailable); rationality of production and its increased efficiency; and the provision of more economic equality, so increasing human freedom understood more narrowly as freedom to choose.

One consequence of this was an entirely different imaginative view of the economy and the working class. Socialists, conceiving collective agency as akin to the acts of a sovereign individual, abandoned socialism as the elimination of capitalist ills through the working class as subject of history. The state now occupied the elevated position -above and separate from the national economy and its workers - and strategically identified opportunities for rational resource direction and control.

In turn the triumph of representative democracy was also confirmed. The conception of the state as an agent of change and an autonomous entity rescued representative democracy from executive corporatism. These new states were to be corporatist, capitalist, welfare states: yet they were also to be liberal democratic ones. Democracy was sustained, in unlikely fashion, by the very idea of centralised executive power. Between the paralysed social democrats of the 1930s and their flourishing descendants in the 1950s lay momentous events but no great transformation in state-society relations. How then did this change of fortunes come about? We must defer a full answer to this question to Chapter 5, where we examine the experience of postwar states. The diversity of Depression experiences - with Sweden's social democracy starkly isolated by Soviet planning, Anglo-American stasis, and continental crisis - likewise precludes any compact survey of the interwar years. Instead I analyse changing conceptions of agency in the British case.


While the state remained an elusive concept in British political thought, rarely theorised openly,31 and class retained rhetorical priority, state agency came to supplant that of the working class in the left's political thought. The infiltration of the state can be traced by following the ascription to it of the power to emanate actions and to be the first cause of social change.

STATE AGENCY IN BRITAIN

Britain's state-society relations underwent unprecedented changes between the mid-nineteenth and mid-twentieth centuries. State activity became ever more abstruse, intricate, and expert-dominated. The origins of parliamentary weakness are visible in the political struggles of the second half of the nineteenth century, through which potential working-class protest and middle-class politics were contained and accommodated. By restricting popular power to parliament, harried aristocratic rulers developed effective administrative leadership through a reconstituted civil service.32 By the end of the First World War, political leverage had slipped from parliament to the corridors of Whitehall. However, the House of Commons remained the focus of national politics as the mechanism through which governments were formed and hence the body through which electors could remove them (even if only to replace them with almost identical ones).

Popular and academic perceptions of parliamentary weakness grew over the century. Indeed, two striking features of the twentieth-century capitalist state have everywhere contradicted the ideology of representative democracy, making legislatures unlikely vehicles for democratic politics. The first was the growth of state intervention in the operations of the economy. Emergencies, such as the world wars and the Depression, focused public expectations of leadership on the executive branch and developed state-bureaucratic powers of measurement and intervention. Public ownership and economic planning, the most visible tools of interventionist government, were accompanied by state-created and maintained markets. Corporatist interest mediation spread and deepened. Policies negotiated between, and implemented by, the state and organised interests could often bring about better results for all concerned than might be achieved by non-cooperation. Corporatist deals were struck behind closed doors, or in specially created nongovernmental institutions. Resting on bargaining by interest groups, they notoriously excluded and overrode electors and legislators alike.


A second development in the industrialised democracies, especially in the postwar years, was the relentless growth of public welfare provision and institutional public socialisation. In the early 1950s the social welfare budgets of these nations fell between 10 and 20 per cent of Gross National Product. By the mid-1970s the figure was between 25 and 35 per cent.33 The growth of state provision of public goods such as housing, health and education had been under way for many decades. Understanding any area of the welfare state came to demand an impossible combination of arcane specialist understanding with technical mastery of economics. Whereas in the 1920s complexity was a handicap to debate, by the 1960s it was an effective bar to even the illusion of parliamentary decision-making. Long before the Second World War, the many rationales for any policy had moved beyond the grasp of any one individual or group. The strategic departments - those whose descendants today include Treasury, Environment, Trade and Industry, and Defence - interacted with corporatist interest groups to mesh strategies, plans, interests, and intentions in a way that no one element could even have begun to do on its own. These interdependent, yet mutually opaque, planning mechanisms each approached the future from some slightly different perspective: government finances, spatial planning, or developmental dynamics; trade performance, international affairs, or defence. The central state's main function became to help generate and improve a continuous stream of applied knowledge.34

In these circumstances, it became inappropriate to think of the state as a single agent, or a hierarchical centre, from which actions emanated. Most visibly in the economic sphere,35 but in fact in any field of activity, the state neither acted as a unitary integrated agent, nor did it monopolise concerted agency.

The conception of the state as an agent was primarily a creation of economic and public policy-making in a democratic state. The demolition of traditional views of the economy accomplished by the war was crucial. Not only were Keynesian methods introduced, but fresh faces took up Treasury posts and Labour politicians handled key domestic portfolios. Moreover, sophisticated statistical methods were introduced, and planning under the influence of the 'economic section' took shape; and the deployment of corporatist controls vastly expanded conscious direction of the war effort. The blatant national interest was clear, and mobilization tied the actions of central institutions to those of the nation. A national state was acting within a nation (and empire) to achieve clearly defined ends. There was no longer a sense in which


'the public' could be counterposed to a working class trying to seize the implements of labour's advancement.36

By the end of the war, however, the left still lacked a language of analysis of the state as a sociological phenomenon and a unitary agency. Of course, the massive institutions of the welfare state that were to emerge over the postwar decades were as yet unanticipated. Moreover, what later came to seem the simplest kinds of state activity - planning and nationalisation - seemed complex and profoundly problematic.37

While the metaphor of state agency remained muted in British politics, and in its academic theory, the increasingly widely shared understanding of the power and value of collective agency was imbued with national naturalness. The simple notion that 'we' might act upon society became commonplace within the party, and socialists drew upon and adapted traditions such as Fabianism to new circumstances.

Pivotal was the perceived choice faced in the immediate postwar period between retaining quantitative planning with physical controls (with added nationalisation) and moving to Keynesian financial management. Beer suggests demand management triumphed because of trade union resistance to labour controls.38 However, scepticism about nationalisation - widely seen as a Utopian aspiration until the early 1930s - was also widespread. (This is one reason for the incoherence of industrial policy in the late 1940s, as sponsoring departments, development councils, and autonomous nationalised industry boards pursued conflicting strategies, without either central civil service or trade union support.)39 In practice, despite success in galvanising antiquated structures in war production, the state lacked implements for supply-side intervention. Even more than the extraordinary Soviet war state at this time, the planning of supply for peace - especially of labour, but of other inputs too - was technically overwhelming.40 In the midst of all this confusion, a new conception of the state was emerging, rather than a new set of institutions: the idea of the state as its own causes, as the site of agency.

British leaders, notably in the 1945-51 Labour government, managed to forge a new public framework for thinking about the relations between the state, the people and the economy. Democratic politics relies on electors' ability to perceive relations of causality between their experiences of social life and governments' actions. Constructing and contesting such relations is a central task of politicians, and of the interest groups, media, and information-brokers which straddle the unstable boundaries between state and society. Citizens, in order to conceptualise a choice between articulated alternatives, require at the


minimum some conception of the field of political action and of the major actors within it. Along with the defining of some issues as out of bounds, this also demands - in the economic sphere especially -some systematic relation of causes to effects. Hall, perhaps overstating the degree of coherence and integration of such intellectual frameworks, has described them as 'policy paradigms', of which he takes Keynesianism and monetarism to be exemplars.41 These paradigms provide political agents - electors, bureaucrats, academics, financial analysts, politicians - with a shared intellectual framework within which to orient themselves in an opaque social world, a world about which communication would otherwise be impossible. As both Hall and Maier have convincingly argued with regard to the interdependence of economics and politics in the postwar period, Keynesianism permitted the transcendence of distributive struggles, but required a major political operation to put it in place.42

Wartime government was particularly propitious for establishing stable conventions by which decision-makers and electors might understand government responsibility for social outcomes. Moreover, the postwar period was particularly suitable for the maintenance of these conventions. In Britain the state was conceptualised through three lenses - as Keynesian state, as directing socialist state, and as welfare state. Through them, political leaders turned the encroachment of executive capacity on to its head, making it seem an enabling condition of centralised power, and so of democratic accountability.43

Keynes, as Skidelsky has shown, recognised British governments' limited ability to escape institutional constraints, and reconceived the state as a nexus of institutions, public or private, working for the common good. For Keynes, 'the distinguishing character of the state was not mechanism or function, but motive'.44 The intellectual framework of Keynesianism, in the context of the postwar boom, made natural the idea that leaders in the central state act upon the economy to achieve desirable results. Clearly defined outcomes - especially low unemployment, low inflation, and high growth - became accepted as natural goals of policy. Moreover, Keynesianism, when organised into a theory of economic management, related these goals to a series of policy instruments in the hands of government - especially fiscal policy, the direction of nationalised industries, and external tariff and exchange rate measures. The sum effect of this way of construing state action, especially as economic decision-makers became increasingly overconfident, was to make common knowledge of a framework for assessing the performance of governments.


Crosland's misreading of Keynes's efforts to conjure ascribable agency out of the institutional stasis of the British state exemplifies this confusion. In a book that influenced a generation of intellectuals, politicians and journalists (even if persuasive only to Gaitskellites in the Labour Party itself) he imagined a fantastical new government freedom, mischievously inverting Marx's analysis by proposing that 'whatever the modes of economic production, economic power will, in fact, belong to the owners of political power'.45

A second prism, which some on the left carried over from the experience of wartime, was that of the central planning state exerting physical control over the distribution of resources. The struggle to establish such a state in Britain was brief, with the planning of supply in peacetime too massive a task for even the bravest to contemplate. But wartime planning and control popularised the notion that citizens might work together effectively through the state.46 Moreover, as Gourevitch has noted, 'the mixed economy and demand management coincided with prosperity [and] public debate attributed causality to the linkage'47 - not because relations of causality between economic managers and economic indicators were transparent, but because this was the best possible fit that political and intellectual leaders could construct.

The third lens was the idea of the modern welfare state. The foundations of the modern British welfare state were laid in the second decade of the twentieth century.48 Although the postwar Labour government made more generous resources available than its predecessors and rationalised the system of welfare provision, the most important achievement of Attlee and Bevin was political. Drawing on Beveridge, they provided a new public framework for thinking about the relations of state and society, one better able to define afresh the rights and responsibilities of government and citizen. Since 1945, political debate over welfare policy has remained strikingly idealised in the UK, turning on the relative merits of activities conceived as social charity, and ignoring the immense socialising force of state institutions and the economic rationale for their financing.49

Hence, in this field also, the otherwise bewildering advance of executive capacity was reforged into an agreed set of relations of causality. The notion that governments might act to provide solutions to social problems in this simple way neatly overlapped the simplifications of 'demand management' and state control - and, what is more, without disturbing Britons' subterranean psychological hierarchies of Crown and Empire.50 Together, moreover, these three frames not only identified the agencies and goals of politics, but defined the field of poli-


tics itself. Even in a relatively open economy, the elaborated theory of Keynesianism after Keynes defined the economy as a national arena with internal and external sides. The welfare state and the public sector provided a range of benefits and services coterminous with the nation-state. National education policy and a national media reiterated the bordered nature of society. Even trivial markers of national unity, like the integrated public telephone and rail networks, served to connect state agency with a national field of social life - for many a distinctively 'British way of life', for the maintenance of which governments might be charged with responsibility.51

Across Western Europe, formerly diverse states were to cement just this conception of politics as a national arena within which a constitutional state could act under the influence of electorates. The development of executive capacity entrenched this understanding of politics, even where international issues had a hold on the national psyche. States that had been discredited in the Second World War - either seen as intrinsically dangerous and liable to conflict, or as too small and exposed to survive continental competition - were given a new lease of life by the international settlements of the Treaty of Rome and Bretton Woods. Serving to increase the viability of nation-states even as it seemingly robbed them of autonomy, the stable international environment allowed rulers to publicise a domestic state-in-nation understanding of politics. The postwar boom, moreover, offered another unparalleled opportunity to politicians of all kinds: they could define their politics by their distribution of surplus - the pool of ready cash into which politicians unexpectedly fell. Electoral battle, for the first time, could turn on discretionary spending - even if this only amounted to a small part of governments' programme of transfers, and a still smaller proportion of economic activity as a whole. The state had come to act on behalf of the people: or so, for a time, it seemed.

Before I go on in the next chapter to examine this state-in-society conception of political agency, it is worth reiterating both how like and how different was this understanding from the Marxist class-in-capitalism conception which it largely displaced. Each was a transformative politics, in which socialists offered an objectified account of their social setting. (Often they did so in Marxian terminology, but postwar socialists sometimes turned instead to social sciences which provided corresponding objectivity.) Each posited a unitary agency which had the ability to act as if it were an individual expression of collective will. Each, moreover, retained the claim to represent the people against the structures which oppressed them. Within this framework


socialist ideals and values could still be confidently advanced. After we have examined the limitations and gradual dissolution of this new conception of agency, we shall return to this capacity of socialism to remould itself in changed conditions without losing its transformative character.

3 The Limits of the Unitary State

Socialists abandoned their framing conception of global capitalism, and retained the proletariat as agency of change in rhetoric alone. Their politics, however, maintained its transformative character. They continued to objectify society as a field of structured causality, within which they tried to deploy their new agency of the state in the hands of the party. While continuing to confer explanatory priority to the economic, social democrats characteristically came to believe that they could exert considerable influence, or even control, over economic causality. At the same time, their moralistic claims to inclusivity were satisfied by the expanded citizenship of the welfare state and the entrenchment of representative democracy. The subterranean elisions and rhetorical evasions of national class politics permitted this shift to occur largely without argument.

Socialists' new political and intellectual framework had severe limitations. Chapters 4 and 5 address the territorial illusion of nation-state socialism, with its denial of interrelations between states, which was to be so savagely exposed by advancing economic and political integration. Before tracing the collapse of the statist illusion in practice, however, I focus in this chapter on some inherent weaknesses of the idea of unitary state agency. Socialists argued that power might be exercised upon society from a central site. Yet in two crucial fields of activity - the provision of cumulative welfare improvements through the welfare state, and the management and control of an advanced capitalist economy — there are tight limitations on what any state might in principle achieve. Moreover, as I show in the third section, a hierarchical and bureaucratic mode of agency can itself generate fresh and explicitly anti-instrumental reactions which threaten to undermine socialists' monopoly on oppositional politics.

Socialists' interpretations of the modern state were always uncertain. As state welfare functions emerged in the late nineteenth century -especially in education, public health, and factory regulation - many Marxists analysed them as functional to capital accumulation. They claimed that the state served to increase the productivity of labour and to discharge the revolutionary energies of the working class. The

61


seemingly benign state was instead the instrument of the bourgeoisie, and merely another aspect of the capitalist mode of production. Postwar social democracy, by contrast, broke decisively from this understanding. Confusions over the role of the state in socialist politics derived in part from this re-conceptualisation. Socialists oscillated between the desire to make economic and social decision-making more decentralised and democratic, and their contrary inclination to use the state as a powerful agency to overcome the obstructions of private interests and the irrational molecular movements of capitalist economy and society. The second, centralising, tendency triumphed because of its importance to a transformative project. Having assumed that progress was possible, and that the world could be consciously moved into line with their conceptions of how it should be, socialists had to create human agency that could bring about this change. Whereas in Marxist political theory the correct political strategy was to move the purported empirical referent of 'proletariat' back on to its historically destined pathway (as revealed to scientific interpreters), so postwar socialists had to build a state that could act as the vehicle of their political ambitions.

Two distinct ideas were at work here. Firstly, the state was acting as a surrogate for the proletariat, the means of expression of socialist politics. This was certainly a cogent shift in thinking. Secondly, however, the state was to be a unitary agent. It was supposed to 'express' - in practice to supplant - the supposed metaphorical personhood of the proletariat. Socialists were tempted to see the state as a mutable site of power which could be occupied and reshaped, and then used to bring about cumulative social improvement. However, there were strict limits to the potential coherence and range of state interventions. This problem had two aspects. Firstly, as residual activist Marxists weakly reiterated, the state was implicated in the systemic character of modern social life. States, more often than not, are either actively functional to a thriving private economy, are intended to be such, or reflect such intentions in the past. Moreover, the interdependence and complexity of social actors makes their selective modification vastly expensive and unpredictable. Secondly, socialists downplayed the complexity of social life. Rather, they conceived this as a problem of 'information' or a correctable deficiency in the science of government. In any area of policy - notably state provision of welfare and control of the economy - information of adequate quality and quantity for controlled manipulation was unobtainable or simply too complex to be centrally managed. Wartime success suggested that the data might be harnessed

The Limits of the Unitary State 63

by the state to achieve unprecedented human gains. Just as socialists overlooked the informational economies offered by market institutions, so they failed to respect government bureaucracies as necessarily complex and flawed institutions whose role in the generation of collective knowledge was irredeemably problematic. At the same time, they underestimated any state's necessary reliance on information-brokers - media, pressure groups, quasi-government organisations - as channels of information, and increasingly as implementers of policy.1

Socialists were vastly over-optimistic about the degree to which a state might act autonomously as a cause of social betterment, and as a coherent vehicle for the expression of socialist intentions on a world outside and independent of it. I first examine the limitations upon the state as a provider of welfare. Rather than analysing the economic constraints upon welfare spending, which feature in the next chapter, I here look at some intrinsic constraints on human socialisation and welfare betterment. I go on to examine socialists' underestimation of the limits of the state as an economic actor. Finally I address the concerns of new social movements, whose active hostility to state agency reiterates the intrinsic limits to states' capacities.

THE LIMITS OF THE WELFARE STATE

The primary focus of state activity in postwar Western Europe has been on the development of extensive welfare provision. The term 'welfare state' is used in a variety of narrower or broader senses. At its greatest extent it is used to cover the 'postwar compromise' between capital and organised workers: the extensive provision of goods and services to those in need or those who have been damaged by the economic risks inherent in a market economy; a formal role for labour unions in bargaining and public policy; the use of Keynesian countercyclical economic management; and the operation of unprofitable but collectively desirable industries. I will be using the term in a narrower sense, to signify a state in which health services, education, unemployment benefits and pensions are provided out of government funds in order to reduce economic risk and - as socialists once argued forcefully - to generate a general improvement in the moral condition of mankind.

I do not want to assess the welfare state in its broader sense. In effect, this would be to evaluate modern industrial society as a whole, and to suggest - quite falsely - that we might choose to dispense with welfare state institutions. Indeed, I will argue later that one achievement


of socialism has been to change the welfare state into the near-inviolable setting of western politics. Rather, I will try to bring together at an abstract level a whole range of perspectives on the failings of modern welfare state provision - of public policy failure, lack of redistribution, and services that strike their clients as being of low quality. My argument is that these widely perceived failings cannot be addressed without rethinking the notion of central state agency they imply.

Neither, I should add, do I dwell on the manifest strengths of the modern welfare state. The provision of education, health care, and insurance against poverty has contributed to economic development even as it has reduced economic risk. It has directly reduced the extremes of material suffering, and ensured that rulers cannot easily dissociate themselves from such suffering among their subjects.2 Nobody can be entirely easy with the rigorous socialisation we receive in our lifelong transit through the institutions of the modern state. Neither, however, given that we are as we are, can we doubt their net counterfactual benevolence. However, in a manner not anticipated, numerous critics complain that the welfare state suffers from chronic ineffectiveness and inefficiency, neither producing substantial redistribution nor providing direct solutions to discontents (rather acting after the event to attack symptoms in a way that often most benefits those not in need). In the Anglo-Saxon nations, in particular, those who need benefits the most have remained most reluctant to claim them, feeling the acceptance of state provision entails moral diminution. Overall, dismay follows comparison of the hoped-for benefits of the welfare state with the levels of real deprivation that remain, even after the expenditure of enormous resources and effort. The roots of the failure of socialist welfarism lie in the extraordinary difficulty of bringing a directive control that is rational from the perspective of the state to bear on human beings to whom that rationality cannot make sense.

Socialists' political reasoning incorporates widely understood and determinate aims, to be achieved whatever the causal complexity of the environment within which intervention must take place. Returning to the abstract requirements for a transformative socialist politics: our objective field of action, identified by the socialist critique of capitalism, presents the socialist government with a series of aims linked to the human as worker. Agency is available in the state: a socialist government must reshape the state so that it can eliminate the recognised discontents, extracting the necessary resources from the private economy.

Determinacy slips away in the process of eliminating distress through the state. Although there is no necessary reason why the discontents


identified by a critique of capitalism should be abolished by the transcendence of this mode of production, a collectively self-conscious working class might plausibly understand and address the problems it collectively shares. Once the party and state become mediators between the intentions of the working class and action, the category 'working class' can be expanded to include people who cannot conceivably share intentions.3 Resulting socialist theory is unlikely to capture workers' woes as they are variously understood by those workers. Addressing their goals from their new home in the state, socialists lose control over the process of change. In order to move from recognising an evil to eliminating it, they separate the social evil to be remedied from the theory that identified it, and place it in the hands of the state bureaucracy. Immediately the requirements of action are changed. The bad which socialists wish to eliminate, or the good they wish to provide, must be construed as part of an object-field which can be identified and manipulated. The language in which this discontent is now described must be tailored to achieving aims within the limited field as effectively as possible: it must be a language of instrumentally rational administration.

Success in terms of a policy field need no longer confer success from the wider perspective of socialist political theory. Likewise, we will have no reliable way of comparing the advantages - on the terms established by the socialist theory - of distributing resources between different priorities. The criteria of success in each chosen object-field will assess only objects we know to be related in the terms of that field - very far from an exhaustive understanding of the implications of action. Bureaucracies' necessary tendency to identify most readily the objects that are most readily identified magnifies this problem. They heavily skew the object-field itself towards the easily measurable, identifiable, and manipulable, and towards the near future. Furthermore, a discontent, when conceived as a policy problem to be eliminated, is defined within a limited language of appraisal that is itself drawn from acknowledged capacities to provide a remedy; whereas the discontent as experienced is formed within a web of context-defined meanings of such complexity that we cannot hope to interpret them adequately for their controlled elimination.

Manipulations of the objects within any given frame of understanding will lead to displacements into others which are not describable within the categorical possibilities of the theory that identified that frame. Discussion of such displaced consequences can be found in a number of academic disciplines: in public policy, as conceived in the


United States as a scientific discipline;4 in neo-conservative critiques of the institutional arrangements of 'welfare state mass democracy', and the 'ungovernability' these arrangements produce;5 and in critiques of 'late capitalist social formations' influenced by the Frankfurt School critique of instrumental reason.6 They are also discussed in anthropological assessments of the legacy of the planned transformation of Third World nations into wholesomely democratic and economically self-sustaining component parts of the international order.7

Public policy is perhaps the least ambitious of these disciplines, and the one over which the shadow of Weber might be expected to hang most heavily. However, its theorists have refused to be intimidated by any ill-conceived claims that the instrumental rationality of bureaucratic administration is encroaching on to an expanding field of human social life. Analogously to the argument that a dependable free will can be guaranteed only by a reliable determinism, public policy scientists claim that if a bureaucratic administration fails to deal with human agonies - and even generates new ones of its own - these can all be resolved by the creation of a more perfect administration. Thus public policy theorists, arguing from conceptions of an ideal administration that allows a perfect implementation, have sought to identify impediments to the achievement of such perfection. These impediments include, for example, the existence of 'irrational' actors external to the agency (these appear to be politicians); a shortage of time to hone the implements of intervention, and a lack of resources; a multiplicity of participants and causal links, making directive action too complex to control; a failure to agree precisely enough upon objectives; communications and coordination failures; and an inability to secure perfect compliance.

This approach favours a democratic centralism amenable to the Lenin characterised by A. J. Polan.8 Public policy scientists have fortunately failed to repeat in practice Lenin's 'fatal conflation of the political and administrative domains and the reduction of the former to the latter'.9

The intellectual movement of policy science in the same direction as the historical movement of Soviet administration has been forestalled by a series of technically construed complaints about the ineffectiveness of 'top-down' administration, focusing on the interdependence of policy-making and policy implementation; the practical limits to the coordination of centrally imposed objectives in the segmented information contexts of organisations; and by the fact that administrators cannot secure perfect obedience and control in the confusing external environment created by a democractic politics.10

From the perspective of the state as agent, the obstacles that society


puts in the way of change can be construed as a series of information and coordination problems. As we shall see, socialist economics relies on a parallel analysis in its attempts to improve on mechanisms of control over the economy. However, although many of the difficulties of policy implementation may helpfully be construed as technical problems," the crucial impediment to the implementation of policy, and the reason why a decentralised administration is more 'effective', is the inability systematically to organise the requisite, theoretically construed understandings of just what any particular intervention is\ just as a discontent, understood in a socialist theory of capitalism, cannot be translated into a theoretical language of instrumental intention, so that theoretical language cannot capture the discontents as experienced by the human beings for whose benefit the policy is supposedly constructed. Failures to agree on objectives, or stably to incorporate the demands of pressure and interest groups into policy aims, are not just technical-informational problems: they are consequences of radically different understandings of that world upon which we are attempting to focus.

States can, and do, try to make their theoretical understandings of human distress commensurable with those of the human agents they are supposed to assist. More vigorously, perhaps, they work to bring the citizenry's disparate understandings of their woes more into line with those of the state. Over time government agencies come to rely more and more upon information, consultation, and even implementation by organised pressure groups outside the formal apparatus of the state.12 Transferring strains to the central coordinating mechanisms of the state itself, this reliance on pressure groups makes the state even less able to evaluate aims and results interdepartmentally so as to allow it to allocate resources according to the relative contribution of each area of activity. It also means that the demands of the external world, as understood through the language of administration, increasingly determine priorities. Finally, it prevents those acting on separate policy areas from cooperating in the implementation of ever more complex multi-stage, multi-participant solutions. Thus a politics of societal change has to face this dilemma: the more coherently and independently it attempts to act, the more fleeting and illusory becomes its ability to act upon discontents as experienced; and the more it decentralises and attempts to bring its frames of understanding more into line with those of its citizens, the less it can act as a coherent agent of change according to the directives of a general theory of socialism. Instead, decentralised implementation alienates socialist theory from every policy stage: finally,


it dissolves socialist transformative intentions themselves. Western socialists are not alone in facing this impasse,13 but from

the early 1970s their transformative state politics produced a highly distinctive response. They tried to extend conscious control to ever more areas of social life, especially to the economy as a generator of resources. The neo-conservative alternative helps define this distinctiveness more precisely. Beginning in the mid-1970s, neo-conservative theories of the ungovernability of the modern welfare state rapidly identified the dangers of an overburdened state in a period of contracting economic growth.14 The conditions of party competition after a period of (fortuitous) economic expansion produced an overload of expectations: in order to be elected, parties had to generate expectations they could not meet, thus taking on obligations and responsibilities that overwhelmed the intervention and steering capacities of the state. Interest groups, such as trade unions, had to make unrealistic demands to secure their internal cohesiveness, and to prevent poaching of their memberships by competing groups.15 Confidence in political parties as articulators of the electoral will declined, and disillusion with democratic institutions was accompanied by the growth of unconventional new political movements.

Neo-conservatives recommended relieving overloaded governments by transferring responsibilities to 'the market' (conceived metaphysically rather than institutionally) and promoted self-restraint and discipline as virtues of the good citizen (or at least of the good citizen who wanted to remain in employment). They also suggested the administrative capacity of the state might be technically enhanced, and the supply-side operations of the economy energised. In Britain, a nation abundantly endowed with New Right thinkers, such strategies were reinforced by a combination of monetarist economics and random applications of the rational expectations hypothesis, both of whose appeals relied on radical misconceptions of labour markets.16 In neo-conservative theory, the state supposedly withdraws from responsibilities it should never have shouldered. However, not only have the claims of the shrinking state been found to be fictional even where most loudly proclaimed, but the policy cocktails required have caused unemployment and unjust distributional outcomes that neo-conservatives have found very difficult to justify.

Socialists' response was quite different. As we have seen, they did not try to provide any very comprehensive conception of the good society. They paid little attention to the preservation of desirable social arrangements, instead focusing on the elimination of undesirable ones. This negatory stance made it difficult to register the extent to which


a problem had already been tackled. Socialists were unable to remove discontents from their conception of the not-yet-good society, rather accumulating a shopping list of miseries from, by now, a very long and varied period in European history, and collecting them together in a form in which they, at best, seemed consistent with another. (Whether such a disparate collection of afflictions could ever strongly engage the attentions of those not immersed in any socialist tradition was always doubtful.) Socialist political theory was thus handicapped by having a collection of discontents from different periods with no real account of their significance.

Without such an account, socialists could not revise a conception of the good to suit the practical context in which they wished to put it to use. There was little attention to the causal obstacles that attainment of one aim posed to the attainment of others; and elements of the good society were sometimes treated as valuable in themselves, and at other times recognised as products of now-irrelevant historical circumstances. Socialists freely added to the list of required negations, treating contemporary problems as new and neatly individuated discontents to be handled the same way as any other - even if these new problems were obviously generated by previous socialist actions.17 The transformative style of socialism accommodated this indiscipline, since the burdens of an ever-increasing number of perceived problems could be transferred to an increasingly demanding conception of the agency that socialists had to muster (through an increasingly interventionist state), and the resources that agency could put to use (by placing more demands on the economy).

Socialists were also reluctant to subject the institutions embodying socialist intentions to external appraisal. They often failed to connect trade unions and the welfare state apparatus to the generation of misery, since these were seen as agencies which could not be reshaped without damaging their ability to bring about social improvement.1H Thus, socialists often responded to displacements by developing a new good which was supposed to deal with each problem as a fresh challenge to technical capacity. In consequence, they came to rely increasingly heavily on an unrealistic unitary conception of the state as agent of intervention, and their economic thought turned more exclusively to wealth creation. If the state could not effectively resolve identifiable discontents, it had to provide for itself further resources with which to renew its assault. This emphasis on wealth creation - anyhow deeply embedded in socialism since Marx - became the source of greatest intellectual deformation in the postwar left. Disguised and encouraged by two decades


of boom, the state's actions were suddenly exposed as parasitical upon growth capitalism. The internal structure of socialist thought was suddenly transparent. Socialist accounts of the good society - involving distributive justice, amelioration of externalities, full utilisation of resources, production for use, and self-realisation (to name but a few) -can be organized such that if 'abundance' is understood widely enough, it will of itself resolve or dissolve all obstacles to our attainment of that good. Abundance - the perfect availability of goods and services at zero price - essentially describes the ability to resolve discontents (including displaced discontents) without creating any further insoluble ones. This premise contributes to the internal indiscipline of socialist political theory: in order to do more, more resources are needed. But, since wealth is merely a means of describing the resources available to do things, this proposition merely states that in order to do more we need to be able to do more. In order to do everything (and anything) we wish, we must have abundance understood in an absolute sense. The promise of endless growth created socialists' mirage of approaching abundance. The end of the boom left them stranded.

To the exploited proletarian as a potential recipient of help, the welfare state added its own new middle class operatives and its new transfer clients. The almost endless potential uses for resources made the transcendence of scarcity an unspoken panacea. If socialists believed in the power of transformative state agency as the solution to human ills, then the major stress of socialist political practice had to fall on the generation of the resources needed to act through that state. However, without a conception of the significance of evils, and given socialists' disposition to add to the list of required goods, the only way to leave room for ever-widening objectives was constantly to expand production of resources. Lacking a disciplined conception of what they wanted, socialists' intellectual concentration inexorably moved to how they were going to get it. They conceived of the economy as a generous external' provider of resources, and then tried to bring the reality into correspondence with this conception. Socialists were eventually forced into crass idealism by the need to accommodate unruly ambitions, applying the force of their ideas to shift the operations of their national economies.

THE LIMITS OF UNITARY ECONOMIC ACTION

It is scarcely controversial today to argue that benevolent state agency has limitations in the economic sphere. Lessons, however, must be


cautiously drawn: central planning was sustained over many decades in the Soviet Union - at times with considerable success - and liberal capitalism itself has doubtful long-run viability.19 Even the most tentative analyst, however, can confidently advance some general theses about likely failings of state direction.20 State planners cannot guarantee abundance; managers, even self-managers, are unlikely to eliminate worker alienation; and there are no plausible alternatives to some markets - notably in labour and consumer goods.

Roemer has recently used economic theory's 'principal-agent' analysis to clarify the three main failings of Soviet communism.21 The 'principal' has goals which must be achieved indirectly by employing an agent or agents. He cannot directly control them, and they are assumed to have their own private objectives. Rather he must establish structures of incentive to induce the agents to approach his goal as closely as possible. Investigating the history of communism for lessons, Roemer identifies three main principal-agent problems: manager-worker, public-planner and planner-manager.

The manager-worker problem centres on incentives to high-quality work. In the USSR, this problem steadily worsened. Managers lacked a system of financial incentives, especially since shortages of marketed consumer goods made the accumulation of money wages unappealing. Today's western socialists, while encouraged by the low income differentials in some Scandinavian societies, are unsure how to extend (or even replicate) them. Without abundance, but with substantial markets for consumer goods, it is not clear how to organise the distribution of income, or how to allocate opportunities to satisfy desires, given that income is sometimes treated as a reward for contribution to production. As Nove points out, it often cannot be shown that a particular task is the responsibility of any particular group or individual, but some work is more unpleasant than others. If socialists wish to avoid compulsion, then they must introduce inducements, either material or moral. For theorists such as Miller, who consider interference in markets for goods and services to present intractable problems, moreover, considerable stress must be placed upon income distribution if social justice is to be respected.22

Arguing from the premise of equal rewards, Nove considers the decisive factor to be 'the level of differentials required to elicit voluntary labour effort in the sector where it is needed', but with these differentials also being 'decided in a democratic way'.23 Workers are to be paid for filling unpopular positions, rather than for endowed talents, and a democratic veto is provided to prevent abuse by a self-rewarding bureaucracy.


A first set of difficulties, however, arises with labour mobility. In the case of the allocation of the 'labour power' to, for example, unskilled but demanding manual labour, incentive and reward run together; the extra reward is both justified as desert (by the willing taking-up of an unpleasant task) and allocative (since it persuades someone to take up that same unpopular task). However, this solution relies on the real existence of the category 'labour power'; the connection between desert and efficient allocation breaks down as soon as we need to elicit individuals with certain combinations of natural endowments or learnt skill and training.

Many jobs will require unusual combinations of qualities from employees, necessitating mechanisms of allocation. Planners must induce people to change jobs, from ones where their talents serve no special purpose to ones where they do. The closer this matching of individual to labour, the greater the economic efficiency. This implies a process of comparative inducements between 'employers', and thus the* development of a labour market; thus, to de facto payments for endowed capabilities (not because they are regarded as intrinsically meritorious, but because they are instrumentally useful).

Neo-classical economists suggest that labour market mobility - which they argue is essential to efficiency - requires incentives that match or exceed the perceived costs to the individual of moving. These costs not only vary between people and circumstances, but cannot be measured (except by the degree of mobility they induce). This implies material incentives and hence a market, or some form of moral incentives. This applies not just to unpleasant work, but to work for which a particular bundle of skills is required. Clearly, socialists will not desire an unconstrained labour market, but they must stipulate the kinds of legitimate desert that are to constrain market pricing of labour. Moreover, they must also address the ways in which a piece of work is performed. The prevention of 'laziness', 'inattentiveness', and so on, is likely to require a form of incentive for at least some types of employment. Collective solutions based on whole production facilities will run up against a collective action problem.

Neo-classical analysis famously provides poor explanations of labour markets. Wages are only one of many instruments of labour allocation, and may themselves be decided by conventions of fairness (or simply by inertia). New recruits go to whatever jobs exist, regardless of relative wages; costs of movement are disproportionately high; and vocational aspirations often intrude. Likewise, workers' performance responds to loyalty and irrational structures of status and hierarchy


more than to marginal pay differentials.24 However, none of these factors is any easier overcome by state planners.

The second nexus of principal-agent problems in the USSR was the public-planner relation. The absence of political competition ensured that plans could not easily be modified by public opinion. However, there are more direct reasons why contemporary western consumer good markets cannot be state-managed. Abundance would dissolve these problems. Such impossible plenty - giving states the ability to meet reasonable desires at zero price - is a dangerous illusion. The reasonableness or even sanity of a desire depends on the possibility of providing for its satisfaction. While it may seem unreasonable to desire something that can never be provided, it seems reasonable to desire something that can be provided only at others' cost; and the positional nature of many goods - their attraction being that others lack them -seems unavoidable. Absolute abundance is impossible by definition.

Relative scarcity and the opportunity cost that comes with it, necessitates pricing; and it is 'impossible to control all prices without creating a very large number of unintended irrationalities and anomalies'.25

Centralised allocation appeals only because its supporters radically misconstrue the relationship between choice and provision - in the same way as welfare statists can misconstrue the state-citizen relation. However, in economics, hypothetical constructs for use in analysis -'good', 'service', 'product' - are often taken to identify real entities.26

Yet even the most humble good is a different thing when it is provided when and where it is wanted, and in compliance with a consumer's many desires.

Where prices are bargained, it is easier to see that every transaction is different. Each product is in some way unique. Intensity of desire varies, as do constraints on personal consumption. The surroundings within which the transaction occurs, the distance that has to be travelled to it, the social status of the buyer, regularity of custom, kinship ties, and so on, all vary and may effect the bargained price. A degree of generalisation of prices within limits will be rational for reasons of time, complexity and planning, but the further the price is removed from the circumstances of each individual transaction the less flexible it is, and the less appropriate it will be.27 The abstractions of economic theory's assumptions will be one stage further removed, and this allows a falsely encouraging view of the ways in which the world can be manipulated.

No clear distinction between needs and desires can be drawn for wealthy western states. Indeed it is not clear that defined commodities


can intelligibly perform this role anywhere. For there to be choice, a person must be allowed to forgo satisfaction of 'needs' in order to obtain some desired good not generally available; also she must be allowed to structure the relationship between other areas of her life and her consumption. The privileged status accorded to 'goods' or 'products' that are needs is hard to justify. The price elasticity of a 'good' represents an abstracted summary of the aggregated consumption of a category, about whose subtly differentiated contents there will be more or less shaded differences in preferences, and in individual cases the provision of (which?) elements of that category will conflict with freedom of expression through consumption.

Fixing prices over a whole economy is not just a technical problem, but also alienates individuals from their own desires. Although often construed as an information problem, since it is addressed from the perspective of the state's planning bureaucracy, the problem has deeper roots: it results from the inability of a theoretical understanding of society, as constructed by a state, to capture the understandings of their own 'desires' held by individual actors. (As for the welfare state, so for the consumption state.) Although shifts in preferences usually occur very slowly, and might slow down more with limited advertising,28 even small changes will accumulate rapidly enough to soon stretch consumer desires beyond the grasp of rigid consumer predictions. Individual economic actors do not have to know themselves how much a good is worth to them, or how much they desire it: spending money on a good or service need not result from conscious consideration of its desirability.

The sense of freedom expressed in consumption choices, moreover, is not merely a function of the positional nature of goods. It is also rooted in a consciousness of distance from economic necessity.29 Furthermore, material objects can be 'chains along which social relationships run',30 and thus serve symbolic ends in creating and expressing relationships as well as purely utilitarian ends.

Traditional debates over the relative 'productive superiority' and 'dynamic efficiency' of differently organised economies make the same oversights, viewing matters only from the perspective of the state. The allocative mechanisms of a highly 'productive' and 'efficient' planned economy may still fail to attain distributions of goods that individual consumers desire. By comparison, even were market economies productively inferior, this might result from their continuous, productively costly, struggles to match production to opaque and ever-shifting human desires. Either the visible hand of central control retains its trans-


parency of operation in the face of these desires, or it aims for the same complexity of allocation but loses its transparency.31 Unless it operates in tension with potential desires, planning has no efficacy. It is obvious that a planned economy could produce more objects than a market-based economy, but it is the effective relation of objects to desires that matters.

Since we must allow labour and consumer goods markets, we must inevitably admit a production good market. It is here, however, that scope for planning exists. In the USSR, the principal-agent relation

.between planner and manager gradually mutated into a bargaining relationship. Since unemployment was impossible, plants could not be closed. Managers could not squeeze increased productivity out of their workers. There was no option, then, but to permit debts to accumulate, and budget constraints to soften. With a genuine consumer goods market, such a situation rapidly becomes untenable. Unless firms can buy inputs and invest, increased consumer demand merely pushes up prices and profits. Firms, moreover, lack the incentives to innovation which allow changing preferences to be realised in new production. Furthermore, firms would face the disincentive of waste when they did innovate, since they could not dispose of failed innovations by offering price incentives to purchase.

Private investment, however, is very poorly allocated by markets. Its unintended effects, positive and negative, are ignored by investors. The most important benevolent side-effects are the increased economic capacity and knowledge that follow from investment - capacities that can be put to use again and again in future. For social purposes, private investment is therefore too low. There is also likely to be too little public investment - or, at least, beneficial public investment -in education, infrastructure, and public goods: public spending control can fall on politically vulnerable but economically beneficial programmes. States have other investment roles too. Investment plans rely on future markets, and often the lag between investment and return is many years. Given that most goods are sold to other firms, states can provide frameworks for disseminating information, reducing wasteful duplication and maximising complementary investment programmes. Macro-economic stability, of course, and a predictable demand environment are equally important. Markets to insure investors against slack demand when production comes on-stream do not exist - largely because of transactions costs.32

This facilitator role, improving the efficiency of capitalist institutions, is profoundly uncomfortable for most socialists. A more appealing


area of state activity has been the regulation of the working environment. An early focus of trade union activity, such regulation has been a great success in western nations. Socialists, however, usually want to go beyond amelioration to a more human scale and organisation of production. The usual method is the cooperative organisation of production. As Sabel has argued, the 'fordist' organisation of the modern large-scale factory is not a technical necessity, but rather the result of numerous social (and ultimately political) decisions.33 However, this does not mean that production can be reorganised through determined political action.

Miller suggests that since the numbers employed in any one plant, of even the largest industry, are small, 'it would be possible to contemplate the break-up of corporations into autonomous units, which would no doubt in some cases continue to collaborate closely in their production schedules, etc'. Certainly the disaggregation of units of ownership would allow more people to be involved in deciding: but what they must decide, in order to survive, does not change in consequence. As Miller confesses, either cooperatives behave just like capitalist firms (in which case they serve no purpose beyond implicating the workforce in decisions) or they 'are likely to be driven out of business whenever they face capitalist enterprises following an aggressive investment strategy'.34 The notion that joint-stock companies create externalities for cooperatives,35 and therefore that a once and for all (worldwide?) transformation to a cooperative economy might overcome this difficulty, is wishful thinking. Who is to bring about this transformation, and how? Devolving decision-making, moreover, ignores the strategic benefits - and sometimes personal advantages - of action from a vast distance, such as the ability of strong centres to enforce equality of treatment and impartiality.

Division of labour will continue. Specialisation between firms; specialisation between people as expertise develops; the learning and ability limitations of human beings: all of these ensure the necessity of dividing tasks. Furthermore, it is not clear that specialisation per se is undesirable. Without it, the conceptions of 'skill' and 'creative work', so important to most socialists, are senseless.36

Worse still, hierarchy is also hard to eliminate. Decisions, and responsibility for decisions, will be required: this is simply a function of the need to organise information (in itself a specialist occupation). Authority accompanies responsibility: a person cannot be held responsible for actions by others over whom she has no control. A rational choice solution to the problem of hierarchy might appear relevant to


the vast majority of proposed production facilities, which could be plausibly imagined operating as cooperatives (such as those in sectors in which the demands of scale do not hamper autonomous collective decisions). If it appears rational for me to behave dysfunctionally., this argument runs, it will also appear so to other similarly located rational actors, making us all worse off. Therefore I will not rationally behave so, the 'free-rider' problem will be solved, and a collective responsibility guaranteed. However, this imposes rather strong rationality demands on individuals with wide variations in psychological make-up, few of whom will have studied decision theory to an advanced level. More plausible rational choice models might suggest that the costs to an individual of breaking the solidarity of the collective might outweigh the benefits of behaving irresponsibly or idly. However, such an argument also reintroduces the very problems of coercion and subordination that the collective solution is intended to eliminate.

Socialists' hopes, if not dashed, are greatly curtailed, by potential limits to the state's economic competence. Any particular collection of organisational and institutional constraints on the effectiveness of an economy - like the ones collected above - can never be demonstrated to be necessary. However, they highlight the inescapable complexity of any economy and the logical and functional interrelations it must contain. By treating the state as a black box - 'as a pure originator of action and a first cause of social change - socialists have vastly overestimated the susceptibility of any economy to the demands their project places on it.

THE LIMITS OF THE RATIONAL-BUREAUCRATIC STATE

Socialists' politics of the state have been further undermined by the growth of 'new social movements' with their 'unconventional' demands for political change. These are products of the reduction of economic risk that the welfare state has accomplished. However, they also represent a direct challenge to socialists' instrumental state politics, and can help us to diagnose its inherent weaknesses.

Offe identifies a 'new paradigm' of politics, including 'alternative movements' such as student, feminist, ecological, urban, sexual liberation, ethnic minority, health and peace movements.37 These, he argues, share common values of autonomy and identity. Furthermore, all of them make qualitative, rather than quantitative, demands, emphasising identity rather than interests. Rejecting traditional class codes, as well


as Left/Right or liberal/conservative distinctions, they classify the universe in categories taken from their own issue areas: gender, locality/ or 'humanity itself.

Social composition provides the first major marker of the different nature of the New Social Movements. As Offe has commented, their politics are those 'of a class, but not on behalf of a class', and that class is the 'new middle class'. Other identifiable actors, where they are readily classifiable, are 'non-classes' or peripheral segments, such as 'housewives', students, and elements of the old middle class. The social composition of new social movements arises from the long process of divergence between working-class conservatism and middle-class radicalism, which has followed the development of the welfare state. As Offe notes, these groups include 'almost every element except the principal economic agents of the mode of production'.38 Inexplicable by socialist models of class political mobilisation, these movements also undermine the explanatory power of socialist analyses of discontent. Either very particular or very universal, usually lacking a broader theoretical project, the demands of these groups are neither class-specific nor motivated by economic interests.

Offe's explanation for the importance of the new middle class in this new politics centres on the development of the welfare state itself (broadly understood). In granting political representation, economic representation and legal claims to the working class, modern states narrowed the goals of working-class movements. 'Struggles won on behalf of people as workers, employees and recipients of social security transfers were accompanied by a cumulative de-emphasis of their interests as citizens, consumers, clients of state-provided services and human beings in general.'39 Hence, he claims, issue areas have been abandoned and left to middle-class radicals, while working-class movements concentrate on core social and economic concerns.

However, Offe ignores the extent to which the working-class struggle has been tied up with the expansion of general citizenship rights to offset market power. He also overlooks the extent to which the agendas put forward by contemporary movements, far from being the birthright forsaken by the working class, contain demands completely new to Western political debate. It seems better to take the expansion of middle-class activity at face-value, accepting it as a part of the sociological increase in the elements of the population who do not fit the traditional class models. As material needs are secured, moreover, a different category of 'post-acquisitive' needs may come to the foreground.40 Placing these political actors in a theoretically unknown new


middle class, in 'non-classes', or in peripheral classes merely indicates the inability of conventional class analysis to explain this new politics.

A deeper understanding of the goals, prospects and weaknesses of these movements is crucial to socialist and labour parties, given the sociological decline of their traditional constituencies. They need to attract the very segments of the population whose support has buoyed the various new causes: women and ethnic minorities, youth and the unemployed, as well as the 'new middle class'. More flexible responses to new agendas have won socialist parties more of these votes than their communist rivals. Furthermore, socialist parties can draw upon a strong heritage in such areas as pacifism, anti-discrimination, and cooperatives, in forging alliances with the new social movements (although socialists last waved those banners rather long ago, and they may quickly rediscover their initial reasons for abandoning such causes). Similarly, the legacy of early nineteenth-century socialism, with its dreams of achieving social harmony and vanquishing industrialisation, gives existing socialist parties an ideological ancestry in common with the new causes. The tensions within socialist thought between romantic anti-industrialism and the rational planning of industrialisation have largely been resolved in favour of the latter. As I argue below, its transformative conceptual strategy cannot accommodate concerns which vary widely according to taste or perspective. The decline of heavy industrial production,41 however, might allow socialists to engage their potential allies on the less antagonistic terrain of modernisation.

Offe exaggerates when he warns that the new social movements have no natural tendency to align with the left, but he is right to predict that such alliances will be unstable.42 The anti-productivist attitudes toward technology and growth held by some of these groups will conflict both with any left vision of reform underwritten by economic progress, and with a still-important constituency of the left in the industrial working class. Furthermore, the members of the new movements seldom recognise their own cause as part of any wider political project; therefore, they often refuse to modify their policy goals to mitigate conflicts with other causes.

Perhaps these issues cannot be coherently advanced on the terms of myriad cause groups. Although strategically expedient, the attempt to integrate the new.social movements, rather than just their concerns, burdens socialists' political cohesion as well as their economic strategy. Working-class support will be threatened by the weakening of class as a basis for identification, and by direct clashes between the interests of workers and interests organised by gender or understood as those


of humanity as a whole (in its future as well as its present). But socialist movements have to solve these problems for themselves, on their own terms. Causes cannot be imported by alliances with new social movements.

For their part, as long as they lack the discipline of any wider political project, the new social movements have little chance of accomplishing their goals. Their oversimplified models of individual remedy applied to individual social ill gives them little leverage over the complex bureaucratic reality that weaves different problems so tightly together. They can succeed only in displacing the costs of reforms outside the narrow bounds of their understanding. Only the comprehensive categories of instrumental rationality, and the effort to objectify the interdependent fields of social life, could permit these groups to identify and evaluate these potential consequences, and thereby to assess the value of their cause relative to others.

There is one further source of alliance instability. The resolution of the cause groups' discontents involves that application of the very instruments and techniques of intervention to which they object. State agency may come under increasing attack if Offe is right that 'the new social movements' demand for autonomy focuses. . . . on the protection and preservation of values, identities and modes of life in the face of the political and bureaucratic imposition of some kind of "rational" order'.43 Habermas idealises new middle-class politics, viewing it as resistance to the 'colonisation of the lifeworld' by the systems of economy and state. Advancing through the media of power and money, these systems are products of institutional differentiation of modern society and so cannot be rolled back - merely held off by resistant social forces.44 While socialists must resist the implied equivalence between these systemic threats, they cannot ignore their existence. From Marx onwards, socialists have correctly identified the dynamic of global economic exchange as the major shaping force of human society. By contrast, they have looked more favourably on the advances of human reason in the fields of scientific knowledge and bureaucratic power, seeing in them the potential means to subdue, and eventually replace, the irrationality of capitalist economic causality. Their state has remained an agent of benevolence alone, while it has come in part to be experienced - in its guises of welfare state and economic planning state - as a mode of systemic domination. Scientific knowledge and technological advance, likewise, have generated danger almost as much as human control over nature, and have themselves fallen prey to the logic of international economic exchange.


While these internal strains became ever more troubling, the greatest blow to socialism came from the practical disintegration of the conditions for the state to act in society. The economic growth rates which had sustained the left's creaking programmes collapsed; and socialists came very quickly to realise the extent to which international economic integration had undermined the bases of national economic intervention. There has always been a perception of the American multinational corporation as a threat, especially within the French left; but international Capital movements and fragile trade balances represented a new scale and power of impediment to socialist strategy. In the next chapter I examine the responses of the British left to these new crises.

4 A State in Decline

Socialists' conception of state agency was destined eventually to fail. It did, however, succeed in making widely intelligible the postwar transformation. In this chapter I trace the responses of the British left to the developing strains of their state-in-society conception of political action. The theoretical and practical turmoil into which they were thrown in the 1970s led inexorably on to their disastrous elaboration of Alternative Economic Strategies. British socialists have yet to recover from the consequent collapse of their entire framework for understanding politics.

Economic policy has long tormented the British left. At a theoretical level, a tension between strategic centralisation and unalienating decentralisation has prevented socialists from clarifying the state's role in the economy.1 Likewise, they have been unsure whether capitalist crisis or its lack best facilitates socialist politics. Moreover, they have often combined an aversion to accumulation with a desire to promote investment; and mixed their suspicion that the welfare state is the historical snare of the working class with the hope that it might lead to full socialism. Attempts to have it both ways with regard to these problems were obscured in the period of postwar growth by the development of the welfare state, the fortuitous arrival of Keynesian economics from a different intellectual universe, and the successful institutionali-sation of trade-union bargaining power. In contrast to some continental cousins, British socialists - from the early rejection of Marxian economics by the Fabian left - swept theoretical questions under the carpet whenever possible.2

The postwar boom made it conceivable that capitalism, as hitherto understood, had disappeared. Thankfully undermining critiques of capitalism, this freed Labour from the onerous duty of theoretical elaboration.3 Keynesian demand management promised a rationally directable economy. Strong growth kept disputes over distribution manageable, and the welfare state eased the severest visible hardships. Income transfers and progressive taxation made the issue of private property expropriation less pressing. Boltho summarises the joint impact of Keynesian economics and the welfare state as a massive decrease in 'economic risk'. Just as macro-economic policy reduced the threat of the business cycle, so welfare provision pooled personal risk.4 The old socialist view

82

A State in Decline 83

of irrational, dehumanising and destructive capitalism seemed obsolete. From the mid-1970s onwards, as the postwar settlement disintegrated

beyond hope of repair, British socialists had to think in post-Keynesian terms. Central planning's technical failings, and the need for economic growth, had become widely appreciated - so helpfully paralysing Labour's most reactionary thinkers. Britain's evident and urgent problems - relative economic decline and low investment - generated a sense of urgency. Unemployment grew to shocking levels in Labour heartlands. At the same time, energetic Trotskyites and Anglo-socialists under the unlikely leadership of Tony Benn had achieved unprecedented prominence in the Labour Party (by the unfair, almost unintelligible, device of party democratisation). The left, unusually, had the chance to elaborate programmes for radical social reconstruction which might be implemented. These propitious circumstances might have encouraged attractive economic thinking. By the early 1980s, however, an unattractive and contentious formula for economic recovery emerged in versions of the 'alternative economic strategy'.5 Their proponents prescribed reflation to reduce unemployment and fully utilise productive capacity, and restructuring of British industry for faster sustainable economic growth.

Economic ills were cogently diagnosed, but the suggested remedies generated heated controversy within the labour movement and beyond. Major defects were touted: the proposals relied on faultless performance from a battery of agencies to stave off the constant threat of collapse. Measures rested heavily on old Labour Party constituencies for successful implementation - notably trade unions in the manufacturing sector - promising to create unpopular alliances just when Labour needed to broaden its support. Many of the policy instruments proposed, furthermore, were considered relatively ineffectual even by their proponents. They offered only marginal economic gains, and threatened political

r disaster. Socialists failed to rethink the institutions of the postwar settlement, the beloved creations of postwar labourism. The instrumental character of these vaguely socialist responses to postwar challenges escaped the left's notice. They had become heavily defended ends, tied into public sector and trade union constituencies, and surrounded by a protective cloud of sentimental folklore.

While socialist thinking about economics is not uniquely evasive, the economy has special restrictive powers. Economic theory weaves tight webs of constraint around the constructive imagination. The loose translation of intentions of social transformation, through the frameworks of Keynes and Beveridge, into the postwar settlement, had produced paralysis by the late 1970s. The doctrines in which the settlement was


enshrined escaped reconsideration for decades, despite changes in the world they had to inhabit. In this ossified form, these policies threatened to pull the left's entire project for social change down with them. Falling victim to a converse wilful idealism, alternative economic strategists prescribed a new economy out of thin air. This new economy was an exemplar of the state-in-society socialism whose time had so decisively passed.

The political backers of these strategies have lain low recently, if not cheering then not noticeably impeding the stampede of Labour's blue-suited ranks towards market allocation and the European Union. In this chapter I show how the left found itself in this predicament, explaining the attractiveness of statist programmes in the light of the economic and political pressures which shaped them. I analyse the AES on its own terms and show how it expressed a transformative political style: I discuss its commonality with other socialist experiments in the next chapter.

GROWTH IN THE ALTERNATIVE STATE

Sustained economic growth is at the heart of government policy for both left and right. In the last chapter we saw how abstract socialist analyses relied on an unrealisable abundance. Practical socialists in the 1970s saw growth as a necessary response to resource demands posed by domestic political competition and by the expanding welfare state - and sometimes to the need to maintain high levels of demand for exports in developing countries. The unanimity of support for high-growth policies in the UK followed relatively poor performance in the postwar years. Moreover, previous equivocation and theoretical error - the half-thought that economic crisis might generate socialist political consciousness in the working class - encouraged quick conversion to the growth camp. Former enthusiasm for Keynesian economics had systematically relegated growth as an aim of policy.6 Most important in the rethink, however, was the realisation that the various generators of domestic resource competition were close to the heart of traditional labourism. To constrain them was to abandon hard-earned defences against the ravages of capitalism.

Alternative economic strategies, once they had been suitably translated by their political advocates, boiled down to the following structure of argument. A series of pressures within society must be serviced by corresponding levels of economic growth. These demands include


the maintenance and expansion of welfare state spending; control of the political conflict resulting from distributional struggles (especially within the trade unions, and between unions and capital); and the need for room to 'trade off' growth for the attainment of costly social programmes in the fields of equality and the environment. Prerequisites for achieving the necessary rate of growth include a stable and high level of aggregate demand and a restructuring of the economy in order to improve its international competitiveness. The latter requires investment, which has not been forthcoming in requisite quantity or quality from the private sector in the UK, suggesting a need for state direction. To support this package, direct import and capital controls are needed in the medium term, and the UK must leave the European Community to implement them.

This rapid growth goal, I shall argue, merely provided socialists with a back-door escape from restructuring the social and institutional context within which the economy operated. Without such restructuring, promises of rapid growth relied on sleight-of-hand. Proponents moved from the fact that slow growth undermined the left's entire strategy to visualising growth as a moving target which could be pushed ever upwards to accommodate resource demands. In fact, we know little about the determinants of the rate of growth or how to enhance it. In the postwar years the UK tried everything from demand management with a fixed exchange rate to indicative planning and devaluation, to incomes policy; the period was rounded off with a bout of monetarism and 'non-intervention'.7 No relation stands out between adopted policy and rate of growth or trade patterns, making it dangerous to treat a high level of growth as an exogenous accommodator of pressures within the economy.

Bennites posited a rate they considered might ameliorate domestic resource competition and advance socialist causes (by hypothetically trading off some of the growth they had imaginatively summoned up). The more socialists used growth as a hypothetical pressure-valve, the more likely it was that the strategy would collapse - and so the more implausible the rate of growth. However, the left considered a rapid growth strategy inescapable. They could not see how to disengage the direct relationship between income growth and welfare provision, or how to address the causes of uncoordinated interest competition. Intellectually and politically they evaded these issues, instead shifting debate to apparently more tractable (but in fact merely less well-understood or politically sensitive) areas like growth and planning.

The relations between economic expansion and government spending


were something of a preoccupation in the 1970s. The public sector of Western European economies had grown relentlessly and failed to respond significantly to attempts to reverse the trend. The distributive transfer portion of government expenditure rose from less than 10 per cent of GNP in the 1950s to well over 25 per cent in the late 1970s, and greater wealth seemed always to bring demands for more than proportional increases in public spending.8 Any programme to induce growth had to take account of the reasons for this expansion of spending. If the climb was due solely to unavoidably high public sector inflation rates, or to demographic factors, then this might justify a growth strategy. However, a causal and elastic relationship between increases in economic growth and demands upon the public sector would threaten a strategy of growing out of resource competition. Such elasticity might reflect a growing predominance of services, where productivity growth slackens behind (disproportionately important) wage increases; or a lengthening list of public welfare 'necessities' which cannot be effectively distributed through market pricing.9

THE WELFARE STATE

Labour had no clear strategy for setting spending priorities and ceilings. The elusiveness of the economic costs of the welfare state, and the way its benefits are spread over a long-time horizon, each played a part. But the left avoided any basic assessment of the significance and purposes of the entire welfare apparatus. By the 1980s it was rarely argued in polite company that the welfare state was merely a false turning on the road to socialism. But it was debatable whether it was a staging post on the way, or whether socialism might simply be a properly funded and structured welfare state. The second was politically unpromising in the UK, where the welfare state was seen as a supplement to private appropriation that reduced the moral status of its beneficiaries. Only in the field of health care, and perhaps the care of the elderly, had self-reliance been surely demoted from ethical priority over public welfare - one reason these areas received consistent government support. Universal provision threatened to undermine efforts to attack severe hardship.10 Moreover, as we have seen, the relation between provision and receipt of public welfare is fraught with complexity.

Alternative economic strategists' ambivalence was deepened by their uncertainty about the significance of the welfare state. Of all the debates in 1970s politics, that over the welfare state was the most intel-


lectually evasive and morally unedifying. The characteristic inflexibility of the parties is best brought out by frontally counterposing neo-Marxist and New Right critiques. Marxists maintained that all public welfare provision was functional to capital accumulation. The right, by contrast, considered the welfare state solely a burden upon private profitability. This stark opposition failed to stimulate constructive debate, reinforcing public rancour and further clouding protagonists' obscure theoretical languages.

The intellectual lineage of each critique is easily traced. The Marxist left doggedly maintained that the state acts in the interests of the capitalist class." The state's production of a healthy and well-educated workforce in an environment of well-designed and extensive public good provision must indeed facilitate capital accumulation. But the Marxist account is strained by comparative evidence - notably by the differential generosity of comparably rich states, and by often gratuitous extensions of transfer payments. (States cannot tailor old-age pensions to undermine revolutionary sentiment, nor indeed have they the faintest idea how to do so.) Neo-Marxist analysis was weak in its all-encompassing nature - incorporating all state activity without discrimination - and in its unsophisticated conception of the state as a mere vector of social forces. The complexity of executive government and the impact of democratic institutions were understated or simply ignored.

The great intellectual tapestry of the New Right was woven from at least two threads. The first exposed the liberal democratic state as susceptible to political competition and internal aggrandisement. Labouring in conditions of unfettered democracy, political parties and interest groups bid up their promises in order to secure support. While uneasily combining assumptions of rationality with a strong presupposition of public gullibility, these models nevertheless did address the role of interest competition in a democratic society. Moreover, they helped neo-liberals to uncover the interests of state officials. The second strand of thought, yet more insightfully, addressed the economic consequences of an expanding state. Private investment would be 'crowded out' by public borrowing, or lax monetary policy would be employed with inflationary consequences. Authors prophesied the imminent collapse of private accumulation under the strains of a growing state, although each time they did so the danger threshold seemed to have increased.12

Whereas the phrase 'welfare state' remained an all-encompassing category for the left, it shrank alarmingly for the right. For example, a close inspection of the overfed but vital educational establishment led


neo-liberals to distinguish education as 'investment in human capital' from its wasteful welfare aspects (such as socialistic school teachers and bearded administrators). Straightforward public tasks which the state executed with obvious effectiveness were redefined out of the welfare state. Conservative commentators ended up focusing their fire on a very narrow range of welfare services - precisely those state-delivered items they had already isolated as a net cost to private accumulation.

The stark contrast between left and right was thus explained by evasive intellectual strategies. The identified scope of reference of welfare state activity - the full extent of state activity for the left and a narrow range of kindly services for the right - varied with the answer at which the commentator wished to arrive. Very different degrees of attention to the state as a sociological and democratic entity were deployed. Less obviously,, analysts were also shifty about time-frames: the selective introduction of 'in the end' into socialists' analyses contrasted with the new right's focus on short-term fiscal constraint.

The comparative literature suggests that such general theorizing was misleading.13 The functional demands of an economy, the institutional complexities of the modern state, and the role of democratic competition each matter in concrete historical circumstances. High levels of state provision - directed to education, training and mobility-inducing social security transfers, in conjunction with state ownership and careful infrastructural provision - can encourage prosperity. If the state has strategic informational advantages over private firms, is organisationally lean and effective, and is not exposed to uncoordinated interest group pressures, it may use resources most beneficially. Such states can easily underspend on human and physical capital. Alternatively, a state may spend little, but with poor judgement and in response to powerful interests. It might also have inadequate information on which to plan. Regardless of the small absolute magnitude of the budget, it is a net burden.

The institutional characteristics of markets and state agencies permit wide variations in economic performance, and present each government with different feasible policy options. The most important markets - in labour and capital - are those most visibly interwoven with states' regulatory machineries. The British state lacked many capacities for optimal resource direction. Prospective information about skill shortages, infrastructural bottlenecks, labour mobility constraints, investment plans and possible trading partners, for example, was rarely available and of poor quality. Party dogma, the electoral system, and


the Whitehall executive machine represent three of many obvious obstacles to benevolent intervention. On the other hand, given the woeful institutional inadequacies of private markets, the freeing of resources for private deployment might not have improved matters. Success turns on particular goods and services, and specific firms in determinate market structures. British socialists needed to disengage income growth from welfare state provision, and to direct their energies to improving both state and market capacities. In the late 1970s, they neither developed such particular analyses, nor offered any cogent means of setting spending ceilings. Rather they became locked into a futile debate for more state spending while the right argued for less.

WAGES

Similar evasions obstructed labour market strategy, in the context of British quasi-corporatism. Effective corporatism required agreement beyond union leaders and activists. Reliance on high growth rates alone to dissipate conflict would encourage wage demands uncontainable by even the most determined union leadership. Once again some disengagement was needed - this time between wages and economic growth. Using inflation as a regulating device was no longer a viable strategy, further undermining the competitive position of the British economy, being politically unpopular and too transparent to avoid rousing trade union opposition.14 Incomes policy, however, was marginalised even by those socialists who stressed the need for restraint in real income growth. Labourites systematically evaded the problems of wage restraint, instead shifting debate to the seemingly more tractable fields of growth and planning.15

Since the left agreed that real competing social claims had undermined control over the price level, and that moves towards full employment would progressively strengthen those pressures again, their control should have been strategically pivotal. It was also clear from the continuity of price performance inside nations, through the great changes in international environment and domestic policy since 1950, that the control of inflation was ultimately a domestic problem.16 The more wages rose in response to tighter labour markets, the more demand management would have to be used to control inflation. This was true in any reflating nation, but essential to raise the ratio of investment to GDP. Despite this, incomes policy - however attractive it often seemed - proved elusive.


This failure damaged Labour's credibility. Many collective action problems were hypothetically to be solved by planning - in the absence of relevant institutions - yet the most obvious unwanted macro-economic consequence of local actions, wage inflation, could not be addressed, although relevant institutions already existed. The roots of this paralysis lay deep in the conflicting interests and aspirations that generated wage push, and in the mechanisms translating it into wage and price increases. Popular acceptance of high unemployment, and the failure of the rational expectations hypothesis about the effects of a non-accommodatory monetary policy, show that visible aggregate consequences of local wage push do not generate localised responses - and thus that mechanisms must be provided to overcome this collective action problem.

Wage push was not caused by the institutional structure of trade unions, as some commentators supposed. Workers tended to judge wage levels against a very limited reference group when making pay comparisons.17 Hence, differential maintenance, combined with wage growth in some sectors, would create wage push pressures from below. In economies that were increasingly 'positional',1X but with limited frames of reference, unemployment elsewhere would not lead to restraint, and general material advance could not dissipate dissent over distribution. The notion that a cooperative union movement could somehow deliver its memberships missed the point: the unions were uncooperative precisely because in the long-term they had to be so. The TUC lacked credibility and efficacy as a representative, unifying force not because of lack of effort, but because individual unions deliberately distanced themselves from it. There was little active corporatism in the trade unions beyond the TUC itself.

The political dangers of bringing the trade unions back into the political sphere, in return for wage concessions, were too great where no one could guarantee the behaviour of individual unions' members. Quasi-corporatist agreement had to be the consequence, not the foundation, of a wage restraint policy, suggesting that the need for real wage control had to be pressed explicitly and widely. That this was impossible to achieve, given the state of play in the Labour Party and trade unions, explains why the left so often skirted the issue of wage restraint, and why socialist economic strategies were so unconvincing in this crucial area. Today, it is true, few structures remain through which an incomes policy might be implemented in the UK - especially given labour market decentralisation over the 1980s.19 But, in the early 1980s, the left failed even to press for the harmonisation of wage rounds, or for


the use of comparative price and productivity figures to inform the bargaining process. It is not a criticism of alternative economic strategists that they failed to discover some panacea - the right has acted even more ineptly here - but rather that their silence undermined the credibility of their reflationary economic strategy. Debate was not suppressed by the left's intellectual bullies. The unsuitability of British trade unions to corporatist bargaining, and the political sensitivities of public servants, were ingrained practical understandings. The political advocates of alternative economic strategies studiously averted their eyes, and turned with relief to the poorly understood causal relations between investment and growth.

WESTERN EUROPEAN GROWTH AND RECESSION

The left's economic programme was shaped by a particular perspective on Britain's relative economic decline and the crisis of the world economy in the 1970s.20 In this section, my aim is not to construct an alternative to AES; nor do I analyse the crises of the decade in any detail. Rather I examine how the left became obsessed with a particular construal of the growth question.

Most leftist analyses of the Western European postwar boom treat supply-side factors as permissive rather than causative. The supply-side, they argue, was characterised by flexible labour supply to manufacturing from the still-substantial agricultural sectors in West European economies (excepting Britain). Rapidly growing capital stock and fast technical progress were typical of the period - the former, and the application of the latter, themselves spurred by growth. Since these factors either predated the period of accelerating growth or were endogenous, the reasons for accelerating growth were sought on the demand side. Investment expanded at an unprecedented rate, suggesting considerable and sustained business confidence - bolstered initially by Marshall Aid, international reconstruction, and exchange rate stability. Persistent and increasing US balance-of-payments deficits allowed a virtuous circle of trade surpluses and increased investment to develop in Western Europe. High exports fuelled investment through accelerator effects, and sustained trade surpluses increased confidence that governments would continue to push for expansion. Most socialist economists attached considerable importance to the role of Keynesian demand management in sustaining confidence in future expanding aggregate demand, so encouraging private investment and making government


intervention scarcely necessary at all in the end.21

Reduced economic growth from 1973 was much over-explained.22

On the supply side, some economists indicted gradual depletion of residual technical innovation from the Second World War and diminished transfers of military advances to civilian uses. More important was growing labour market inflexibility and cost-push inflationary pressure. Labour supply depends on at least five factors: population size (including immigration), demographic structure, attachment by age and sex to the markef, working hours and 'work effort'.23 Migration was comparatively low over the period 1950-73 and slowed towards the end of the 1960s, and there was only limited flexibility provided by the entry of women (largely) into a secondary labour market. By the late 1960s the pool of labour in the agricultural sector within the major western nations had disappeared. Hence employment in the (non-dynamic) service sector expanded at the expense of the manufacturing sector. Most commentators suggest that job security and the welfare state helped reduce labour market flexibility. Some also point to the independence of public sector wages from market conditions, and the consequences of effective indexation of wages.

In the absence of flexible labour supply to the manufacturing sector, sustained full employment increased the bargaining power of labour, encouraging inflation and depressing the ratio of profits to national income. The reduction of internally funded investment from profits, combined with increases in borrowing costs through 'crowding out' as public sector borrowing continued to increase, weakened the viability of private investments and reduced their volume. These supply-side pressures would have led, on their own, to a gradual deceleration in economic growth and a decrease in employment. As Boltho argues, in retrospect 'the achievement of full employment conditions for a number of years was probably incompatible with a reasonable degree of price stability'.24 The oil price rises were a trigger, both as immediate inflationary shocks and through the deflationary sluggishness with which the OPEC oil revenues were recycled. When consumption got under way in these oil-producers' economies, necessary changes in the sectoral composition of European output caused strain. Balance of payments constraints also faced most European nations for several years.

On the left's reading, then, Western Europe's problems in the 1970s were generated by a combination of commodity price changes and domestic cost-push inflation. Given the inability of these states to avoid recession - despite heavy government intervention - confidence collapsed rapidly and stable patterns of private investment were lost. These


analyses were set in diagnoses of the wider and deeper problems of relative decline. The feature that most sharply set Britain apart from its Western European neighbours was its persistently low growth over the postwar period. Traditionally, Britain's low growth (and that of the US) was explained in terms of a higher starting-point and the maturity of its economy. By the mid-1950s, Britons experienced high levels of income, and employment was shifting from manufacturing to services because of an already small agricultural workforce. Britain could not easily exploit high export demand for manufactures, and it missed the high profits that came with 'leapfrogging' technological development.

Britain's de-industrialisation (in employment share terms) may have been accelerated by external policy. Some socialists indicted faulty exchange rate policy in the 1950s and 1960s (followed by a prolonged shift in trade specialisation from manufactures to non-manufactures as autonomous factors increased UK trade in the latter).25 The expansion of new services in the financial sector and OPEC construction projects - combined with growing oil self-reliance and decreased raw material and food import costs - caused the decline in manufacturing by means of the exchange rate mechanism. Countries with a non-manufacturing specialisation find rapid productivity (and so export) growth problematic, and are especially vulnerable to external shocks.26

Low growth is subject to diverse explanation, but one common theme is the link, empirical and theoretical, between growth and investment.27

Across Western Europe investment was closely related to growth from 1950 to 1973, and exports associated with investment. Some socialists argued that Britain's service-biased structure of trade undermined investment in manufacturing, so inhibiting dynamic growth. There ensued a vicious cycle of poor competitiveness, trade failure, a balance-of-payments constraint; and hence government's inability to maintain aggregate demand at a stable high level, so further inhibiting private investment. On this analysis, increased investment required strong demand for domestic manufactures: sustaining domestic activity would also reduce unemployment (for political as well as economic reasons central to Labour strategy). In the next section, I examine major strategic goals - reflation and investment - and analyse socialists' portrayal of their relations to one another. Stable and high demand, on their view, are necessary conditions for the (long-term) increase in investment. At the same time, investment is itself reflationary in the short-term. Following sections examine two English peculiarities, and the plethora of support policies which accompanied the grand strategy.


FULL EMPLOYMENT, INVESTMENT AND PLANNING

While Keynesian demand managers became increasingly confident about their capacity to 'fine tune' the level of demand through discretionary monetary and fiscal intervention, their real ability to do so ebbed away. Despite a lack of agreement about how economies work, significant forcasting errors, and indeterminate multipliers and time-lags, the left attributed a stabilising role to fiscal and monetary policy. Governments' inability to maintain full employment, the most politically significant of Keynesianism's supposed achievements, became a central problem in socialist economic strategy. Strong pressures within the Labour Party made a return to 'something like full employment' its economic priority. However, such a course could presuppose and jeopardise the process of reconstruction.

Reflationary policies would have faced similar challenges anywhere in Europe, obstacles identified by every school of economic theory. Cost-push theorists suggested that differences in price performance followed from embedded attitudinal and institutional variations. Likewise, monetarists thought the 'natural' rate of unemployment (below which it could not be reduced without accelerating inflation) was a product of the same constraints (although this was not always expressed clearly). Each agreed that without some 'non-conventional' policies, demand management could not be used to maintain full employment, but had to be used against inflation (at the expense of employment levels).28

Reflation threatened acute external problems across Europe. The failure of demand management in the early and mid-1970s was partly caused by the increasing proportion of national outputs that was exported, so decreasing any government's ability to exercise national control over aggregate demand. The actions of each government depended more than ever on those of others, and a nation with an open economy and a high marginal propensity to import was in special trouble. Worse still, the nature of the external constraint was unpredictable since it depended on the deliberate actions of other governments. The left's remedies - import controls, exchange rate manipulations, and capital controls - exacerbated this unpredictability as their effectiveness depended heavily on other governments' responses.

Inflationary pressures were especially strong and the marginal propensity to import consumer goods particularly high in Britain,29 making prospects for managed reflation poor. By 1983, the UK did not suffer from significant under-utilisation of existing capacity - at least


not in manufacturing - because of plant scrapping and investment falls since 1979. Under Labour, moreover, successful economic recovery would have had to raise the incomes of the poor and unemployed (with their income-elastic demand for manufactures). Growth, furthermore, would have worsened the non-manufacturing balance of trade, notably the fuel balance, and so would have required compensatory improvement in the manufacturing balance of trade. All of this persuaded alternative economic strategists that any growth in the British economy had to be accompanied by a more than proportionate increase in manufacturing.

Traditional short-term reflationary methods such as public sector service employment and infrastructure spending targeted on sectors with excess capacity would no longer work. Greater manufacturing capacity was now needed, with improvements in employment levels coming indirectly (in services) after some time. This third condition for success - on top of controlling the welfare state and wage pressures - placed another question-mark over a successful expansion of the economy. Although the strategy had already spawned a large variety of policy necessities, another had to be added: rapid and sustained growth was impossible without a huge increase in manufacturing output. This, in turn, required capacity-creation through investment.30

Alternative economic strategists, in this way, committed themselves to sustained growth in the manufacturing sector. The growth question was especially pressing since the government-in-waiting had to improve welfare provision, public services, and the living standards of the poorer sections of the population; it had no reliable means of controlling real wage increases; and it wished to engage in other politically necessary programmes connected with the environment and equality. This raises the question of the economic and political feasibility of socialists' proposed methods for boosting economic growth by planning, directing and encouraging investment.

Labour governments were to increase public investment in sectors suffering obvious market failure and inadequacy, including general infrastructure (necessary for sustaining economic growth and neglected in the 1970s). Skill shortages were to be minimised by education, training and manpower planning. Public spending of this kind provides economic benefit only where state strategic vision confers an informational or organisational superiority, and over a long time period.31 Its cost, however, is felt immediately, and would have to be borne through sacrifice elsewhere - preferably in the growth of disposable income.32

Serious investment planning had to include mechanisms for targeting


of the burden of public sector spending increases away from private sector profits: the ratio of profits to GDP had to rise if the volume of investment was to increase. For this reason, real wage increases had to be reined in.

Outside the public sector, socialists also had to improve the quantity and quality of private sector investment. Given a capitalist institutional inheritance, markets would of necessity continue to determine detailed output structure and relative prices in most areas, with taxes and subsidies as vehicles for public choices about patterns of income distribution and other policy goals. Policy instruments rather than executive commands had to shape markets to fit plans.33 Socialists could thus combine the following: directing, and placing appropriate stress upon, major economic variables; modifying exposure to economic risk and uncertainty; attempting to prevent negative externalities; and, above all, trying to reduce the informational problems that occur in market economies. This last task acquired pivotal importance in that the merits and demerits of 'planning' and 'markets' turn upon their relative abilities to economise on information, and avoid its distortion.

Successful investment rests on composition and productivity rather than sheer volume. Alternative economic strategists criticised past investment patterns, and proposed to plan away supply constraints and information problems. Their explanations of the low level of British investment indicated weak demand, especially for exports, but focused especially on supply-side constraints: low profits, high borrowing costs, and institutional flaws in the financial sector. Harold Wilson, architect of the attempted modernisation of the British economy begun and abandoned in 1964, later coordinated the most extensive postwar examination of the British financial system.34 This report, although widely criticised on the left, confirmed that the low level of industrial investment in the UK can as plausibly be attributed to limited demand for investment as to the evils of the British financial system. Had there been strong demand for investment financing - notably long-term loans and venture capital - there might well have been a severe supply constraint. However, even the most smoothly functioning financial system cannot generate private investment. It cannot cause British managers and investment institutions - in all their variety - to make specific, well-considered, remunerative investment decisions. Investment makes demands on complex skills: high-quality investment is not an aggregate that can be easily manipulated.

The problematic relationship between the financial sector and the British entrepreneur received a disproportionate amount of the left's


solicitude. The attractiveness of an analysis that so closely bound the problems of British economic decline to its capitalist class - and involved an internal contradiction of capitalism as well - was understandable. The entrepreneur, we were told, is a rare animal in Britain - the education system and class attitudes ensuring this. He is unable to cooperate with his workers; he is risk-averse; and when he does invest, he does so unwisely in pure research without concern for applications. He is, however, lucky to be able to invest at all. In his account of Britain, 1689 to 1987, Anderson notes that the 'political dome of the dominant bloc had indeed been essentially landowning throughout most of the 19th century; beneath it, economically, came commerce rather than manufacturing. When agrarian property lost its weight it was not industry but finance which became the hegemonic form of capital . . .'.35 In the long historical perspective, this legacy is at the heart of our intractable problems today. It hardly seems worth losing sleep, however, since

no bourgeois society - not even the last great classically national economy, Japan - will be immune to the unpredictable tides and tempests of an uneven development whose elements are acquiring a well-nigh metereological velocity around the world, across all frontiers. The British crisis has no solution in sight; and perhaps the time in which one was possible, as a national recovery, has passed. At the zenith of English capitalism, Marx declared that his portrait of it in Capital held a mirror of the future to the rest of the world. Now towards its nadir, the superscription may read once again: De te fabula narratur.3,6

Such intellectually and imaginatively appealing arguments distracted socialists from the need for a practical policy framework. They needed to provide an environment perceived by economic agents to be stable. Business expectations were of central importance, and an incoming government that could not enjoy their confidence - no matter what its supply-side policies - would discourage rather than increase private sector investment. Investment decisions are skilled, numerous, multi-faceted choices by human beings in various relations of reciprocal understanding and trust. The complexity of these tasks, and the opacity of each decision to external observers, were wildly underestimated by politicians on the left.

If anything, the supply of finance became more an obsession as Alternative Economic Strategies began to disintegrate in the mid-1980s. Malevolent agents were available in different combinations: the City


of London alone, conceived as an entity; City and international capital; multinational corporations; institutional alliances between City, Bank and Treasury; and so on. Given that British history could not be reversed (or only by the left's most advanced theorists) it was hard to be optimistic about rapid transformation. The system has been (for whatever reasons) preoccupied with the financing of overseas trade and commerce, handling only the largest-scale internal investments. Its institutions have not played an investment-bank role: loans have been short-term and 'hands-off', and the resulting gap, especially for venture capital and the small firms sector generally, has not been filled by the equities market. Furthermore, distortions in the British tax system have discriminated against industrial investment.37

Some reforms - such as the distortions promoted by the tax exemptions on mortgages - were ruled out by political considerations alone. Other changes in the volume of investment were technically problematic, but promised some channelling of investment to favoured (manufacturing) sectors. The composition of investment could be influenced by nationalising clearing banks, establishing a national investment bank, or manipulating credit by more conventional means. Nationalisation was unattractive. While it was intended to influence sectoral investment, deliver long-term loans, and reduce the oligopolistic powers of the major banks, any of these could be accomplished just as easily by regulation. Moreover, the legal and administrative complexity of the undertaking was frequently underestimated, as was the probable compensation bill. Finally, changing investment policy with a pre-existing bureaucracy (and its ingrained procedures) was institutionally naive. French experience in the 1980s suggests that 'to retain the confidence of the business community, nationalized banks might be obliged to operate even more conservatively than previously'.38 A national investment bank seemed more manageable, bringing the added advantage of transparency, which might have made the programme easier to defend against short-run contingency - something Wilson signally failed to achieve in the 1960s.

Credit controls, using rationing or multiple interest rates, could have been effective for a while only. The level of investment by sector may be influenced by the cash-flow cost of capital.39 Direct credit control was, however, a notoriously difficult business by 1979, and one reason for its abandonment was the apparent unfeasibility of such control in a complex financial sector. Changes in the structures of international production and financial intermediation had made evasive strategies and capital movements far easier since 1970. The main policy


function of capital controls - to shelter interest rates from exchange rate movements - required continuous and costly tightening. While not impossible to re-institute - as Spain and Eire showed in September 1992 - such controls were already problematic in Britain by 1979.4()

INDICATIVE PLANNING AND FUTURE CONTINGENT INSTRUMENTS

The New Left's analysis of British historical decline suggested a role for planning. If Britain lacked a powerful industrial bourgeoisie, then some centralising force had to take over its role to ensure industrial development. Other nations apparently possessed both 'rational business classes' and market-ordering institutions - the German banks, the Japanese state and banking system, French indicative planning, and Swedish social democracy.41 The most promising planning methods, however, were not dear to the hearts of the British left. They did not provide the rational control of the economy suggested by a simple planning versus market dichotomy, and demanded unflinching acceptance of the merits of capitalism. Whatever economists might say, capitalistic methods were treated with suspicion.

Expectations-based planning had three aims. Firstly, it was to reduce uncertainty about the future policy environment, so encouraging increased investment. Governments' conditional pre-commitments could not fix future economic environments, but could guide business about potential government responses to them. Secondly, a planning framework might allow more effective direction of investment for 'certain types of investment decision where, for a mixture of informational and organizational reasons, a planning agency would have a good chance of performing better, on average, than the market'.42 Finally, planning, through better communications, might reduce transactions costs, identify possible trading partners, and avoid duplication. States can transcend capitalists' 'bounded' rationality, ameliorating uncertainty over future consumption, and so present investment. This would 'make the world look a bit more like the general [equilibrium] model, specifically by providing firms with some of the price information (and other types of information too) not supplied by the absent markets'.43 The impact would not be huge. The most notable improvements would be some decreasing of capital:output ratios; and the information available to governments would allow the easier provision of finance and support to eliminate bottlenecks and skill shortages in targeted areas.


These strategies promised marginally to improve economic performance, and to reduce somewhat collective action problems. We should not, however, get carried away by the missed opportunity of indicative planning and future contingent instruments. Considering collective action and isolation problems as causes of intractable macro-economic difficulties optimistically presumes widespread rational economic agency in the economy. At the level of relations between states, moreover, where such a model may appear to be most appropriate (for example in the elimination of tariff controls) conditionality threatens to introduce a new array of strategic games for governments rather than helping to develop mutual trust. Contingent policy instruments, like indicative plans, work best where they are not needed. Britain was an open economy with a near petrocurrency. Exposed to external shocks, it had a history of rapid policy U-turns and an electoral system likely to produce more of them. Macro-variables were so unpredictable that realistic parameters for the automatic use of instruments, or confidence-inspiring developmental paths, were impossible to specify. If people lack confidence in the stability of the policy environment, or the viability of the development path, then these goals are unachievable. (Even a game-theoretical approach allows a large number of rational strategies when the future contingent instruments are not really binding.) Only in economies that can plausibly guarantee stability will the instruments be credible, and here they are not needed anyhow. (Everybody knows pretty much how the Bundesbank will react to inflation.) In the early 1980s, a Bennite planning agency might quickly have been absorbed by the Treasury.44 Planning, moreover, would have had to begin as forecasting: yet there was no integrated interdepartmental forecasting machinery. The nearest approximation - the Treasury Model - offered little help with the pivotal role of investment as generator of growth, since econometric studies had not identified any clear relationship between investment and capacity growth at aggregate level.45

In all their abstraction, these policies overlooked the lack of capacity of the British state. It was precisely the absence of the information, aptitude and orientation presupposed by these strategies that generated the need for them. The very structures that have generated under- and mis-investment cannot be used as channels for a new strategy without time-consuming, painful institutional reforms - reforms which will often prove impossible, and will generate their own share of unintended consequences. A socialist government would not have found relevant institutions in place, and planning mechanisms would have been enormously complex to institute. At best, these planning options could have made


a marginal contribution - one that would have become significant only when no longer really necessary: that is, when government had won confidence in its ability to sustain the development path it had chosen, without reneging on its contingent instruments. There were no easy answers here.

TWO RED HERRINGS

Before discussing the external policy package that accompanied the strategy of reflation and restructuring, I wish to look briefly at two areas upon which the left expended much energy, but whose economic importance was illusory: nationalisation and worker democracy.

British nationalisation has an unhappy history. It proved impossible, or blatantly undesirable, to capture dynamic sectors of the economy. More so than elsewhere, these were elements of international enterprises whose production could be relocated. When nationalisation did take place, moreover, it was not a step towards socialism. The industries concerned remained undemocratic and unresponsive, and registered few unarguable efficiency gains. Furthermore, they retained their strategic trajectories and so could not be used as tools of government policy. Indeed, if French experience is a guide, nationalisation may even hamper directive control and restructuring because of the state's exposure to political pressure to avoid redundancies.46

Alternative economic strategists argued that nationalisation was subject to unjustified attack, in that both profits and losses were poorly received by the public. But an incoming Labour government could not easily have sustained the political damage widespread socialisation would have generated. Any programme, moreover, would have involved immense expenditure of time and effort - especially as industries without a tradition of public ownership would have taken strenuous defensive measures. To avoid panic, compensation would have had to be generous, so depriving other programmes of funds.

Nationalisation's failings encouraged some socialists to explore the benefits of worker participation. We have already examined some theoretical conundrums of worker ownership. Such a programme was not on the cards in Britain, since it was too potent a stimulus to capital flight. Neither, more intriguingly, did limited programmes of employee participation enjoy much support on the left. Only a tiny constituency supported both economic planning and worker control. Battle-lines were drawn between socialism from above and below, and between centralised


state and decentralised democracy - with AES orthodoxy in the first camp in both cases. Worker participation could do little to solve the informational problems which plagued capitalist economies. At foreseeable levels of affluence, moreover, the practical question of wealth-creation had to take precedence over the demands of worker-friendly production. In the British case, there was the additional problem of the unions' role in such arrangements.

The strongest socialist arguments for planning the economy stressed that it offered strategic vision in place of the molecular and uncoordinated actions of the market. Proponents of a consultative role for workers - helping to elaborate plan proposals and to evaluate proposed investments - were unworried. Improved communications, they argued, might also make implicit employment contracts more efficient, and sharpen wage bargaining. Extending worker participation to control over investment decisions, however, presented insuperable difficulties. The benefits of planning arise from the state's strategic identification of social costs and benefits invisible to individual firms. Vesting authority in security-conscious self-managers, so favouring the interests of current workers at the expense of workers in general, worker control would create just such social costs and irrationalities.47 It would also generate political complications since managers' decisions are less charged than those reached by democratically elected representatives of the workforce. Moreover, the use of statutory instruments (for example to limit negative externalities) would develop a political dimension, as the legitimate power of decision-makers would have been further dispersed to smaller democratic units.48

Inviting worker participation while stopping short of worker control might seem a costless advance for the left, even if the basic interests and incentives of workers, managers, and directors remain so much at variance that shared information will still lead them to different investment preferences. Strategists, however, were hamstrung by their constituencies in the theoretical left and in the mass organs of the workers. The goal of partial economic democracy implied acceptance of capitalism, and led to the deceit most detested by the left: just as voting workers falsely believe in their own sovereignty in liberal democracies, and actually do elect the incumbents of the state apparatus, so they would falsely believe that they controlled their workplaces. Trade unions would incur intolerable strains. If worker representatives were from the unions themselves, then this would be (rightly) perceived as an incorporation into management that would undermine the union position in wage negotiations. If they were from the workforce as a


whole, then there would be a danger of division between workers and union. Alternative economic strategists put the matter aside for future generations to ponder.

EXTERNAL POLICY

The relation of the British economy to the world outside was a more popular preoccupation. 'Many supporters of the Alternative Economic Strategy', ventured one theorist, 'are deeply concerned as to whether any government that attempted to implement a package of the sort described would be able to survive the hostility and sabotage of world capitalist groups and government.'49 The major external problems generated by these economic strategies were the control of capital movements and the use of exchange rates and import controls as instruments of policy.

Some socialists recommended the reintroduction of exchange controls and repatriation of assets that had migrated after 1979. The control of capital movements was a problematic matter, especially as the financial sector (which already represented sinister monetarist orthodoxy) expected inflationary acceleration to result from expansionary policy. The immediate response of the left - a move to clamp down on resulting capital outflows - never did seem very promising. It was not clear how to avoid pre-election anticipation, and French and Italian experience suggested that policing even a fairly unsophisticated financial sector could not prevent a determined outflow of capital. In the longer term, restrictions on outflows of capital would have reduced inflows as these adjusted to the decreased attractiveness of domestic financial assets. Direct foreign investment, a particularly significant contributor to employment, would have suffered; and multinational corporations could incrementally shift productive capacity to less hostile environments. By the late 1970s, the changed structures of financial intermediation and international production made such movements easier by the year. Today's European Community integration, of course, makes controls look still more unrealistic, and highlights the left's major misapprehension: it was not that the control of capital movements was either intrinsically undesirable or inherently impossible, but just that it was no longer a project to be conceived on national terms.50

An immediate nervous outflow was the greatest practical hazard, and the development of a degree of trust in the City of London was a


prerequisite for escaping it. The left instead noisily condemned the political and economic power of the City. This did not make the policy problem go away. Rather, the ascription of capital movements to malevolent international capitalist forces heightened apprehension, and so made matters worse.

More controversial still were proposals to control trade in goods and services - controls dictated by the reflationary strategy. The general case for import controls presented them as a temporary, if medium-term, effort to protect industries from competition while they were restructured.51 (The Albanian model of permanent import controls had fallen out of favour with the British left.) Alternatively, the exchange rate could be manipulated downwards - perhaps an unnecessary intervention in the circumstances - or temporary dual rates instituted selectively to discourage imports and encourage exports. These instruments would encourage retaliation, and would probably reduce the effectiveness of restructuring. Planning agencies would have less information to identify which firms and sectors might benefit from protection and investment. In the face of strong political pressures, they would have to deny money to industries where protection would simply encourage wage and cost rises and a further deterioration in competitiveness. All the while, British manufactured exports needed to expand significantly in exposed and competitive international markets under the threat of retaliation from traditional trading partners.

The implementation of these external policies also posed immense practical problems since Britain was 'obligated by a large number of very detailed international commitments that regulate the way it interacts with the rest of the world and conducts its internal affairs'.52 Not the least of these went with EC membership. Although it was difficult to assess its economic effects,53 withdrawal would have been catastrophic by the early 1980s. The fantastic argument that European socialists would assist in this goal totally missed the point. Integration had developed its own dynamic, and the chaos that would have been caused by the withdrawal of an economy of Britain's size would not have been conducive to comradely sympathy. This was perhaps the lowest point of this appalling external policy.

IMPLICATIONS

The grand economic strategy examined here, with its battery of problematic support policies, always seemed destined to bring about its


own downfall. Its instability, and the nagging doubts caused by unresolved inflationary and external constraints, would have undermined proposed restructuring through investment. The failure to promote a climate in which the policies could work was a genuine internal inconsistency. It resulted from strategists' painful inability to secure any one goal without begging others, and was accommodated by their tendency to blame the dynamics of the international capitalist economy rather than to address them as they existed.

The strains underlying the strategy were not unique to Britain. However, organisational and intellectual links with the trade unions, insular thinking, and the tendency to ascribe responsibility to any manifestation of capital, forced the British left very quickly down the path of least resistance. The political and intellectual redundancy of the traditional fiscal accommodators of the left - heavy reductions in defence spending and higher progressive taxation - served to pile yet more burdens on to the strategy.

Unemployment is no longer politically decisive, and many are willing to treat it as a natural phenomenon today. However, its severity in Labour heartlands in the early 1980s was a shocking affront. Many socialists felt there had to be some way to eliminate it rapidly. Financial aims were bolstered by grandiose and inappropriately nationalistic historical understandings of the 'decline of Britain' which made realistic responses impossible.

The mechanisms by which alternative strategies were to reverse British decline were expressions of the socialist desire for rational control. Attempts to manipulate major economic variables have spill-over effects elsewhere in the economy: whereas neo-classical economists revelled in these displacements, and used them to justify withdrawal of responsibility, the left attempted to extend the mechanisms of regulation and control to each new problem that arose. This transference of the form of control to an environment in which only loose direction was possible led to the worst of all worlds. The degree of influence afforded by Keynesian demand management - itself a response to particular problems in a very particular context - could not be reproduced, suggesting the left should have sought new means of advancing its economic hopes (even if aspirations had to be savagely reduced in the process). Since expanding economic complexity and international integration broke down such control as there was, the most obvious paths to its re-establishment led the left to intellectual simplification and an attempt to reverse integration into the international economy.

These developments were linked by the comparative failure of relevant


British institutions to engage in cooperative and coordinated strategies to renew the economy, and socialists' inability to focus precisely on these failures. One way of addressing this is as a failure of strategic corporatist politics. The obstacles to economic recovery, as they constantly impinged on socialist economic strategy, represented the failure of the key elements in any corporatist politics. The state was unable to act as planner, broker, or even as a disseminator of basic information. It was ill-suited to a developmental role, with low-quality public investments, inappropriate welfare mechanisms, and a tendency to exacerbate social division. The trade unions, despite the efforts of the TUC, managed neither to rationalise their own activities nor to act cohesively or strategically. Capital was famously divided in many ways, and the financial sector performed an inadequate investment role. Even within the manufacturing sector, the inability of the quasi-corporatist Confederation of British Industry to maintain a strategic line was its most striking feature.

Alternative economic strategies evaded these fundamental incapacities and refused to accept the grim constraints they imposed. This was not a matter of intellectual failure on the part of professional economists: Bennites were always willing to shop around for academic arguments to suit their purposes. Evasion, rather, was a function of an overstretched conception of what must, and therefore (some socialists supposed) could, be achieved. The weakness of the British state was to be rectified by extending its ambit. The inadequacy of British investment was to be remedied by transferring responsibilities to that same state, and by offering business a demand boom. The inability of the British financial sector to achieve long-range sectoral understanding, strategic vision, and harmonious relations with firms - weaknesses deeply embedded in long institutional histories - and shortages of information and human capacities, were to be remedied overnight by institutional innovation. The institutional shambles of British corporatism, and the deeply structured incapacity of labour and capital to act in collectively rational ways, were to be skirted. Consumers' skilled choices of imported goods were to be trumped by closing the boundaries of the national economy.

These evasions were intellectually facilitated by a selective attention to real institutional failure. The left - understanding the trade unions as living entities of immense complexity containing human beings with more or less impressive capacities to act in concert - saw them in practice as a dense thicket of problems to be avoided. The complexities of the public sector were equally clearly appreciated. The activi-


ties of capitalists, by contrast, were to be understood at a higher level of abstraction, and treated as more amenable to manipulation. This created a heavily unbalanced world in which the relative density of description varied from an intricate understanding of the nature of pay aspirations to the high-altitude generalisation of 'international capital'. The complex innards of union and public sector alike were open for inspection, their intractability to mere exhortation and superficial reform exposed, while capital drifted away into a series of abstract flows and malevolent movements. The state could never broker relations in a world conceived in this way.

The central state was not merely expected to do more things, however. It was suddenly meant to do them well. Oddly, most institutional embodiments of that state - the Treasury, Bank of England, police, military, state broadcasting, intelligence apparatus, and even the civil service as a whole - were objects of suspicion. But the more bogeys there were, the more demands were placed on 'the state' as a will expressing socialist intentions: it simply had to be the agency of its own reform too. Eventually, the state was reduced to socialists' mere aspiration to a capacity for agency.

LABOUR AND EUROPE

The crisis of the British left was both in its assumed agents and the setting of politics. The working class had long lost its plausibility as an agent of change, its residual status preserved in the rhetoric of the labour movement. The state became the repository of socialist hopes, and eventually a projection of its aspirations. The interlocking foundations of socialists' conception of politics - with the nation as the field of welfare and economic policy - suddenly collapsed around their ears. Socialists adapted very slowly to this unhappy state of affairs. The tradition of labour statism has proved resilient, reinforced by undemocratic party hierarchy and a national electoral system promising unchecked rule. The left's conception of the setting of politics, however, has undergone rapid revision - notably in its rethinking of the significance of the European Community.

It is conventional to explain Labour Party hostility to all things European in terms of foreign-policy considerations or the nationalism that permeates and underlies Labour Party solidarity.54 However, despite the importance of a persisting imperial perspective, and a desire to maintain an Atlantic alliance, these national considerations were fully


consonant with a socialist perspective, and this was fully understood. As Bevan argued in 1957, socialists 'cannot at one and the same time call for economic planning and accept the verdict of free competition, no matter how extensive the area it covers. The jungle is not made more acceptable just because it is almost limitless.'55

In the immediate postwar period, the Commonwealth could be considered a natural economic unit whose trade and capital flows expressed a rational and symbiotic relationship. In the end it was the decline in Commonwealth trade, the failures of the European Free Trade Area and economic planning to strengthen the economy, and Britain's changing relationship with the United States, that were crucial in the policy reversal of reapplication for EEC membership in May 1967. Harold Wilson's artful achievement of front-bench acquiescence did not, however, signal a strong swing in sentiment within the party. Instead, after Heath's government took Britain into the Community, nationalist rhetoric re-strengthened, and the baleful effects of entry on the staggering economy reappeared on the left's agenda. Increasingly the left perceived the Community as a cause of balance-of-payments deficits, and as an obstacle to socialist control of the economy. By 1975, national economic sovereignty was again the firmest basis for Labour's anti-Europeanism. Socialists then began the attempt, through their AES, to recreate the conditions within which the British state could operate as a strong economic agent. The opponents of the EC continued to be motivated by multiple concerns, but these were now rarely traditional foreign policy issues. More commonly they turned on the need for national economic revival. A scornful rejection of Europe, motivated by a misplaced sense of internationaf status and a belief in the coming of Anglo-socialism, had been superseded by the demands of a socialist economic strategy. By 1980, the Labour Party Conference voted in favour of withdrawal. Grudging recognition of the existence of the EC returned in 1983, and a simulacrum of enthusiasm for it was mustered by 1987. By 1992, even the left of the party positively beamed upon the forthcoming European Union.

Socialists' domestic links have a density unmatched across national frontiers. However, there are common pressures on all European socialist parties to think and act internationally. In the UK these pressures have exerted themselves belatedly, but very powerfully. The shifting socialist and union moods were at first regarded as a pragmatic response to pessimism about future electoral prospects, and a realisation of the massive complexity and cost of withdrawal. Some commentators even thought them a romantic response to Comrade Gorbachev's


vision of a common European homeland, with the attractive distancing from the US this implied. Others saw a realisation that so many socialist governments, and so much socialist theory, simply cannot be all bad - even if they are foreign.

Such characterisations capture neither the significance of the change of mood, nor its dramatic nature. The tremendous intellectual and political energy channelled into the formulation of socialist economic strategies, with their increasingly desperate attempt to secure the nation-state as an agent and arena of intervention, resulted only in increasing demands on socialists' credulity. Moreover, the suspension of disbelief was for a strategy that was at its core deeply pessimistic. Such a tortured and interdependent structure of thought could only collapse dramatically and as a whole.

Since a multiplicity of actors implied a dissolution of the collective will which socialists had carried over from class to state, the left sought to contain a contradictory reality within categories of unitary agency. The project of socialist control through the state was torn between maintaining its internal coherence and effectively tackling the discontents it identified. Sustaining the notion of a single agent addressing an ever-expanding and disparate range of tasks, the left was drawn into ever more reflexive extensions of control itself, and the accommodation of widening ambitions through the generation of more resources.

Neither Keynesianism nor socialist economics provided socialists with the ability to guarantee prosperity, let alone the abundance their project often seemed to demand. Old ways of conceiving political agency were shored up for too long, and at too great a cost. But the collapse of the conditions permitting the idea of government policy as state agency in a national setting brings opportunity and not just disappointment. Alternative economic strategies played upon metaphors of agency deeply embedded in British politics. Their comprehensive collapse helped to undermine a whole style of thinking about agency, rather than just a particular programme, and so added impetus to projects of institutional and constitutional modernisation.

5 Western European Socialism

In this chapter I analyse the postwar histories of Western European socialist movements to bring out the common character of their transformative inheritance. I explain how their attachment to state agency within society made their attitudes to international institutions - notably the European Community - so unstable. Changes in the global environment of politics, while resisted for longer by the left than the right, have now been more completely embraced by the former. After outlining the choices now confronting European leaders, I close the chapter with an explanation of socialism's unexpected strength in this period of change.

SOCIALIST INDECISION

The story of postwar Western Europe is a tale of one stunning success after another. Unprecedented economic growth transformed the lives and expectations of its inhabitants, and newly capable governments provided unparalleled economic and physical security. Western European states came to be seen by many of their citizens as a meritorious historical type, combining democracy, freedom, social consensus and social welfare. The weak, unstable regimes of the interwar years, and the territorial competition in which these states had hitherto incessantly engaged, were replaced by a series of benign and popularly supported constitutional democracies. Within each of these attractive creations, a state-in-nation understanding of political action (mediated by mass parties) became the norm.

As theorists of international political economy have long insisted, and Milward has recently reiterated in the Western European case, international structures enabled national leaders to develop their domestic social and political orders.1 In compromises between internal and external demands, postwar regimes for trade and international finance stabilised the global economy, while domestic welfare states offset the potentially devastating domestic consequences of geo-economic causality. This 'embedded liberalism' emerged piecemeal, and without explicit

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Western European Socialism 111

formulation. The liberal trading framework improved the viability of welfare states, encouraging prosperity by means of export-led growth. Economic integration, moreover, forced national capitals and labour to bargain, creating the fine balance between firms' capacity to disinvest and the strategic disincentives to them actually doing so that sustained liberal corporatism. At the same time, regulation and the welfare state made the settlement politically viable by alleviating the impact of economic adjustment.2

The European Community,3 a product of war, grew out of the need to contain inevitable German resurgence. Smaller nations recognised their vulnerability in an age of industrial war, and larger ones had learnt the lessons of the 1920s and 1930s. Postwar superpower politics re-emphasised Europe's geo-political weakness. At the same time, the evolution of the EC was an 'integral part of the reassertion of the nation-state as an organisational concept'.4 Statesmen, preoccupied with national problems and struggling to secure the gains of postwar stability, surrendered limited degrees of sovereignty to increase their states' viability.

While it remained stable, this international context was remarkably unobtrusive. Politics was conducted largely in national terms, with external relations bracketed out of consideration. In such conditions, both socialists' interventionism and their competitors' nation-based politics could settle themselves quite comfortably. From 1970, the decline of US hegemony, in combination with advances in communications and the internationalisation of economic interaction, threatened the accepted order and governments began to remake familiar institutions - the Organisation of Economic Cooperation and Development, the International Monetary Fund, and the General Agreement on Tariffs and Trade - into a new kind of neutral site within which collective benefit could be negotiated. Networks of communication spread between these sites, and between other international economic agents. The European Community, most significantly for Europeans, began its transmutation into something far more than an intergovernmental complex.

Socialists' state-in-society conception of political agency was initially threatened by these new sites of decision and the more expansive settings of politics in which they were implicated. To the degree that a rule can be advanced, parties of the left opposed intergovernmental decision-making - and most importantly the European Community -for longer and more vehemently than those of the right. They were apt to see in EC aspirations to a common market the seeds of a new international capitalism. With the same qualification as to generalisation,


the reverse tendency now holds. Socialists and social democrats - especially party leaders and activists - tend to view the Union as a vehicle for interventionist trade, labour and environmental policy, while their opponents on the right are more likely to bemoan the loss of national sovereignty this role entails. Indeed it seems probable that some non-socialist parties will be torn apart by their inability to accommodate these changes.

The debates of nations' policymakers are not easily compared because strategic national interests and historical experiences so powerfully shape them. Nationality, at any given moment, is a better predictor of attitude than is ideology. However, socialists' conception of transformative agency does help explain their characteristic pattern of surly reluctance towards international institutions, belatedly followed by passionate embrace. The former attitude was evident almost everywhere after the war. Only in Benelux countries did workers' parties actively campaign for European Communities, supporting customs union even before hostilities had ceased. Scandinavian social democrats preferred the more limited political ambitions of the European Free Trade Area (EFTA). The West German left had little formative influence on postwar economic strategy. Socialist intellectual depletion and practical constraint rapidly forged a conservative party philosophy. Capitulating before an export-driven and anti-statist conception of national redevelopment in 1959, the Social Democratic Party accommodated itself to strong popular pro-integration sentiment. Participation in coalition governments, and leadership over the 1970s, re-emphasised the strength of the Federal Republic's cross-party consensus.

The Italian left, by contrast, had a tortured history of commitment and repentance. Its largest socialist party, Partita Socialista Italiano, switched to a pro-Community stance only in the 1960s when it abandoned its Communist partner. However, the return of this alliance in 1969 took the PSI back into opposition. From 1976, under Craxi 's leadership, it became pro-EC once again, eventually adopting an evasive 'euro-socialist' position.5 Perhaps the only general truth to be extracted from all this was that Italy's communist left, like those elsewhere, was more hostile than were socialists towards the EC.

In France, socialists were able to implement a programme in the 1980s - albeit in a predictably brief experiment. Many of the same intellectual currents could be found in the French as in the British left, but they were richer and so less susceptible to practical negation. Out of power over most of the postwar period, and intellectually transfixed by a Communist Party hostile to the EC, socialist factions ex-


plored almost every possible theoretical avenue. Over the 1970s, while the British left oscillated wildly, French socialists buried their doubts by first overcoming their own factionalism, and then forging a necessary tactical alliance with the Communists. The terms of this settlement both lauded the EC and insisted that it not interfere with a leftist government's freedom of action.

A substantial group of French socialists always fancied that a semi-federal Europe might be used to dismantle capitalism.6 This conviction was encouraged by a lack of faith in the ability of unstable parliamentary regimes to transform themselves into agencies for change, and by a feeling that with de Gaulle at home opportunities must be better abroad. While the Parti Communiste Franchise remained consistently hostile towards the EC - arguing that as a supranational capitalist bloc it would constrain the independence of a left government -socialist factions, and from 1972 the umbrella Parti Socialiste, developed a diverse range of more sophisticated arguments from a national perspective. If it was possible for any single state to transform itself in the face of monopoly capitalism, the neo-Marxist wing argued, then an international anti-monopoly alliance might be able to achieve the same for Europe as a whole. The whole left could unite to condemn the powers of American multinational corporations, and to claim that international capital would be less intimidating to a continental movement for change.

Such grandiose strategies, however, went far beyond the bounds of practical politics. In time-honoured fashion, socialists' trumpeting of international working-class unity did not reflect any attention to foreign proletarians. Crass Keynesians and municipal socialists quietly dominated the PS. The benefits of integration, in classical social democratic spirit, were seen by this anti-Marxist majority as generators of wealth, and as an essential aid to the process of modernization with which French political elites were preoccupied. At the same time, socialists toyed with the thought that the EC could act as a buffer against the hostile forces of international capitalism by protecting the franc and refusing to accommodate fleeing capital. This evasive strategy scarcely disguised the capitalist character of the Community. It did, nonetheless, guarantee the availability of reserve theoretical positions when Mitterrand's classic reflation and investment strategy failed (by which time the intellectual left was in complete disarray). French socialists were already close to positing the need for coordinated Europe-wide agency.7

Socialist entrants to the Community in its second wave of expansion


- Spain, Portugal and Greece - had less room to speculate over its benefits (or otherwise). The history of authoritarian government and economic autarky in Spain impressed on its leftists the need for EC integration to guarantee political democracy, and to promote economic modernisation. As Spanish leftists sought to escape an 'organic' conception of society, and understood the roots of both unofficial trade unions and student protest movements to lie in the demands of economic liberalisation, their desire for the re-establishment of extensive controls could not have been much weaker.8 The Spanish 'economic miracle' of 1961-73 depended all along upon international integration - in tourist receipts, the export of unemployment and imported investment - and has continued to depend on easy access to the European market.9 Moreover, the imposition of external authority remains attractive. Spanish state agency since the death of Franco has at no point been conceivable as unitary, marked by regional animosities, devolved powers, and a party system that does not cohere nationally. Despite a long-standing image of technocratic competence, the Spanish state has a history of particularistic and clientelistic provision: its revenue budgeting practices were uncoordinated, and its planning commission and treasury department lacked the authority to intervene effectively.10 In such circumstances the Socialist Spanish Workers' Party has been willing to surrender control of the economy, pressing the demands of international competition and the Community - firstly for entry, and then for the unified market. Today Spanish socialists insist on their determination to participate in European monetary union from the outset. (Potential Eastern entrants also hope to bolster democratic capitalism and strategic security, but their economies are institutionally weak and inhabit the ghost of a formerly hermetic Eastern trading system.)11

The residual members of the European Free Trade Area - most of whom are acceding to the EU - had their hands forced by market integration. Antipathy to the Community's political goals was marked by their mostly neutral or independent foreign policy positions. Their social democrats, moreover, have always felt they had to shelter their welfare programmes from weaker southern versions. Negotiations over the creation of the European Economic Area - a hoped-for halfway house - exposed EFTA's political and institutional weakness. Given the Commission's unwillingness to water down regulatory and mutual recognition conditions for participation, EFTA nations swallowed foreign policy doubts. Among the wealthiest European nations, they should find it easier than most to meet the convergence criteria for monetary union.12


Despite the characteristic depth of socialists' commitment to state-in-society politics, and their tendency to leap later but further than competitors to embrace Community solutions, these debates have transcended ideology. In order to see why, we must examine the evolution of postwar constitutional democracy.

POLITICAL AGENCY IN THE POSTWAR NATION-STATE

Western Europe's stable nation-state system is a hard-won achievement, rather than a subterranean presence which awaited mere excavation. In the late nineteenth-century, states' evolution towards the purportedly most advanced example - be this Germany, France, Britain or the United States - was widely assumed by social commentators. The thought that nations resemble evolving organisms has continued to dominate the historical sociology of states. Despite the theoretical hiccup of the Depression - to which Sweden, Japan, Germany and the Soviet Union responded with obvious diversity - the developmental paradigm re-established itself after the war. Convergence was conceived in economic, social, political or ideational terms, and turned increasingly on the supposedly advanced American form. The 1970s, however, brought a wholly new literature of crisis and contradiction which took the convergence of states to be over. In the 1980s, in yet another twist, commentators identified 're-convergence' in states' supposed new emphasis on competitiveness and monetary rectitude.13

Theories of convergence focused on the evolution of welfare state capitalism. Industrialisation and the decline of agriculture carried common implications for once diverse territories. Declining agricultural employment reduced the salience of region and religion to politics, and class became the major principle of national political organisation.14 The spatial concentration of economic activity in cities vastly increased the state's visibility. Executive activity mushroomed, in the measurement, regulation and planning of economic development, the management of interest mediation, and in the socialising institutions of the modern welfare state. While sectoral planning was nothing new in these developmental states, corporatism became a newly powerful way of ordering social distribution. To manage complex events with some coherence, states' central coordinating machinery and core institutional complexes emerged. Policy styles also converged up to the 1960s. States took on unprofitable but strategic industries. Moreover, they all expanded welfare provision in the areas of housing, health, and economic


insurance. Social welfare budgets expanded faster than the overall economy across western Europe. From the 1960s, even problems seemed common. Full employment was tilting the balance of class forces across Western Europe as labour supply dried up. Rates of profit fell over the decade and balance-of-payments problems proliferated. Inflationary pressures began to trouble most countries in the middle of the decade.15

In retrospect, however, even the closest Western European cousins inherited very different political styles and institutional capacities. Three distinctive welfare state regimes - social democratic, conservative, and liberal - long predated the crises of the 1970s. Shaped by their histories of class and labour coalitions, different nations constructed quite distinct structures of executive capacity, public obligation, and social stratification. Comparative economic and public policy studies confirm these persistent and entrenched differences between states.'6 These institutional and political bequests - in particular in state bureaucracies, financial and goods markets, and labour relations - shaped emerging policy variation. Keynesianism appealed where institutional capacity for alternatives was absent. Indicative planning was most attractive where statist styles of administration predominated. Active industrial development utilised institutional foundations in both state and financial institutions; and active labour market policy flourished where states could coordinate interest organisations. Neo-corporatism and incomes policy were used with some success in Scandinavia, Germany and Austria, while France, Italy and Britain resorted to cruder methods (although favourable inflation to unemployment trade-offs made managed deflation relatively painless by today's standards).

The importance of institutional bequests was concealed by the democratic distributional politics of the postwar boom.17 The illusion of general convergence was conjured up by the triumphs of democracy and public welfare - victories which also dwarfed the ideological divisions between socialists and their competitors. Over the 1950s and 1960s, fragile prewar states were transformed into stable representative democracies. They seemed miraculously to accommodate the ideology of representative democracy to the workings of heavily regulated welfare capitalism. Postwar capitalism seemed in many ways inhospitable to democracy. Internationally, the Bretton Woods framework deprived governments of protectionist defences against the ravages of global capitalism. Domestically, the complex executive and planning institutions of corporatism, the welfare state and economic interven-tionism seemed to ridicule democrats' claims for popular accountability.1*


This was not a new problem. Histories of absolutism, and the formal frameworks suggested by Roman law, projected states as hierarchical institutional complexes carried over anachronistically into the democratic age.19 In order to survive the military and territorial competition of industrialising continental Europe, states had to mobilise resources for developmental ends. In the interwar period, the authoritarian solution to crises of representation and capitalism seemed as promising as the parliamentarian one.20

Once the parliamentary road was taken after the war, however, and mass political parties had become the instruments of reconciliation between subject and ruler, governments successfully strengthened bourgeois democracy. They portrayed the international trading regime as a natural order. European Community integration was used to formalise and regulate the consequences of interdependence. By contrast, domestic social policy was presented as a field of democratic choice. The longer and stronger the economic boom, the more easily governments could make themselves seem the instruments of the people. The most technocratic rationale for a policy could be embellished with discretionary spending, so tailoring it for maximum popular appeal. Public agencies distributed burgeoning tax revenues and constructed new physical and human capitals, so bolstering governments' claims to act as unitary instruments of the public good.21

Democratic welfare capitalism was neither a creation of socialism nor was it a harbinger of it. The problems addressed by postwar settlements predated the Great War.22 Socialism articulated the crises of political representation and the liberal capitalist economy, and by so doing helped to create the intellectual and institutional preconditions for addressing them. Socialist movements, moreover, helped displace political conflicts from the arena of production, organising them in the distributional struggles of the workplace and the welfare state. As a constant nagging presence in opposition, furthermore, the radical socialist left drew defenders of the capitalist economy to stretch themselves in justifying it. However, the absence of even the mildest social democrats from government (or their entanglement in complex coalition politics) did not necessarily preclude these changes. Liberal democracy stripped socialism of its claims to uniqueness. To left or right, the proletariat had become the people, and the mass party now acted through the constitutional state; electoralism was now the sacred relation between subject and ruler. Socialists could not see how to build on these foundations. While postwar politics fulfilled their early ambitions it also undermined their movement as a political force.


THE END OF 'CONVERGENCE'?

Prosperity and representative democracy, while helping socialists to paper over their divisions, concealed from them their growing intellectual incapacity. Some leftists believed that a fully funded welfare state would transmute into a socialist state - although it was never clear how this was to happen in even the most favourable case.23 In most Western European states - and all the larger ones - the left was reactive, lacking any strategy distinct from the right's.24 Whereas Christian Democrats and conservatives could see the welfare state as a contribution to national unity, or a reward for wartime sacrifice, the left maintained that it signified something grander. In practice, left and right alike had to forge overlaps between economic benefit and political appeal.

Socialists overcame old divisions because of qualities they attributed to the postwar settlement. Social democrats championed it as a new type of society, beyond capitalism and so unsusceptible to traditional socialist critique. Moreover, as the notion of settlement suggests, the left saw each step forward as a permanent advance that could never be rolled back by the forces of reaction. Neither of these assumptions proved to be quite accurate, as was made manifest by the 'end of convergence'. The collapse of the postwar boom, precipitated by the 1970s oil crises, had been building unnoticed by the left over the previous decade. The crisis literature of the 1970s was almost entirely disconnected from preceding socialist analysis.25

Embedded liberalism was vulnerable on both domestic and international fronts. In retrospect, sustained full-employment was temporally and cross-nationally an exception rather than the rule.26 Governments' responses to inflation - fiscal restraint, incomes policy, neo-corporatism and increased labour supply - could not provide long-term price stability. Potential solutions to distributional conflict, such as higher pensions, earlier retirement, and industrial democracy, also failed. 'Deferred' social wages proved immediately costly, and industrial democracy was unacceptable to employers. Organised labour adapted slowly. The welfare state thus became the principal focus of conflict.27 As fiscal crisis loomed, the return of unemployment as an effective instrument of wage restraint was only a matter of time.

Externally, the United States had been anchor of international trade and exchange-rate systems, the most dynamic technological innovator, and a vast export market for Europe. Anti-American sentiment blinded the European left to this dependency. By the mid-1960s, the US was


unwilling (and unable) to provide monetary security. Budget and trade deficits - justified but not caused by belated Keynesianism - undermined its stabilising role. The shift from core to periphery through technological and organisational diffusion, and so the decline of US hegemony, was perhaps unavoidable.28

European nations' economic performance began to vary markedly. Only some possessed the institutional and intellectual preconditions coherently to deploy multiple instruments in new combinations.29 From the early 1970s, moreover, deep changes in global communications, productive technology, industrial organisation, and capital markets were emerging. Europe's common vulnerability was not immediately evident, but these new challenges were to set the Community's agenda in the 1980s.

A CHANGE OF PACE

European states have come to recognise common problems over the 1980s. Motives for intergovernmental cooperation - economic, political, strategic, or even idealistic - once varied widely between national publics and at different times. Each had its own blend of reasons for keeping up the gentle momentum of the Community, even in the darkest days of the late 1970s. In the 1980s, however, the economic chickens of the 1970s came home to roost: certain economic problems came to be understood as specifically European and in need of collective solution. Moreover, new international challenges arose - trade agreements, economic integration, environmental danger and mass migration - and Eastern Europe underwent its upheaval. These events highlighted the inadequacy of old models of intergovernmental decision-making, especially as the United States lost its capacity to determine events.

Europe's economic predicament cannot be read off from the rhetorical imperatives of national governments or the European Commission. Economic interaction, predominantly trade in goods, increased globally as well as within EC boundaries over the first two postwar decades.30

Given interwar protectionism and war, the scope for trading benefits was obvious. New entrants to the Community in the early 1970s, as well as their EFTA co-members, tended to view its advantages as trade-based - specialisation and scale economies, competition and productivity gain.31

Mercantilists remained sceptical, seeing states as the creators of discriminatory trading systems. These might be disguised as free or fair


trade, but they were used to impose exports on weaker rivals. Protectionism was one of the strategies advanced in the 1970s in response to the growing strains of the postwar corporatist settlement. Strong firms were increasingly split from weak - demanding liberalism and protection respectively - and well-placed unions were divided from cousins with fewer cards to play. Protectionism invited retaliation and stifled innovation. Moreover, changes in international production and financial intermediation - transnational firms and global markets - made firms' exits easier.32 Innovative firms needed rich institutional and human resources to compete for rapidly changing markets and these were often lacking. Low-cost competition through depressed wages and subcontracted production seemed futile in the face of the literate masses in low-cost economies.33 These divisions increasingly inhibited domestic interventionism.

In the 1980s, advocates of mercantilist and liberal conceptions of trade found themselves in closer agreement about the desirable direction of EC policy. Changes in the structure of international markets and advances in the theory of trade under imperfect competition helped to bring this rapprochement about. The 'national champions' of the 1970s were abandoned for new European champions which, it was hoped, by virtue of market size and pooling of technological skill, could better compete with the fearsome giants of the United States and East Asia. These new objects of mercantilist affection could be assembled only through freer economic interaction within the Community. A fear of technological dependency in microelectronics and robotics added impetus. The now rapid diffusion of technological advances compelled European firms to match innovative leaders or else compete in the imitators' market against the teeming sweatshops of the newly industrialised world.

The exports of newly industrialised countries do not in fact damage European economies in any direct way. Trade is largely internal to the OECD, and competitors anyhow create new markets for more advanced products.34 Moreover, the technological lags which shocked the Commission are themselves arguable. In chemicals and pharmaceuticals, European industry looked quite strong. Even in microelectronics, Germany and Sweden were strikingly successful innovators and practical technologists. Nonetheless, the spectre of dependency was not easily banished, especially given European unemployment rates. Europe lacked both US labour mobility and job creation, and Japanese flexible redeployment of workers.35

Member states cautiously combined some industrial policy with the


internal market programme. The first, exemplified by Airbus, the Space Agency, and Esprit,36 has been conducted outside EC channels as much as within them. Debate over 'champions' became less polarised than in the 1970s. Economists agreed that activist policy could produce benefits in principle. Competitive advantage is a dynamic creation rather than just a reflection of static factor endowments. Governments can raise educational and technological standards, so providing firms with sophisticated human capital. Knowledge, experience, and technology -whether encouraged by states, or spillover benefits accruing to firms from earlier investments or the presence of complementary producers - can increase the economic rent secured by the firms located within a territory.37 Experience and knowledge can ensure that this rent is not competed away as trade theory in competitive conditions would suggest.

Most economists also agreed, however, that it is extremely hard to pursue a strategic policy in practice.38 The internal market programme thus secured priority over industrial policy. At the end of the 1970s, the backbone of the EC was its creation of a free trade area for most goods. Agriculture and exchange-rate policies - while fairly expensive - were a subsidiary matter. There was limited factor movement between European nations, and even trade growth had started to slow. The re-launch of integration was partly accidental. A number of conditions were fortuitously met: Mitterrand's conservative programme and electoral failure weakened the left, and anti-statist governments ruled across much of Europe. The Commission, in conjunction with institutions representing major European industries, applied propagandist pressure under an unexpectedly activist President.

Given states' omnipresence, even a mere free trade area requires constant attention to prevent its corruption. The Commission's 1985 White Paper on the internal market39 thus highlighted residual obstacles to a domestic European market in goods and services. The paper argued that frontier controls for goods and people, and transport bottlenecks, could be dramatically reduced fairly easily. Indirect tax disparities, while costly to harmonise by means of market pressures, could be reduced through concerted intergovernmental action. 'Technical' barriers - notably non-tariff barriers to trade - included safety and quality standards, and national certification requirements. Any of these could be used to restrict the flow of goods and services. Another difficult field was government purchasing policy: as the largest consumers of goods and services in each nation, states could and did (and do) discriminate in favour of domestic suppliers. Incompatible legal systems, furthermore, threatened to make collaborative agreements, mergers and


the enforcement of contracts across borders both costly and unreliable. This particularly hampered growing trade in services, and new patterns of interaction whereby firms would expand and compete by purchasing subsidiaries, or by means of cross-border collaboration.40

The Single European Act of 1986 cautiously preferred 'mutual recognition' of standards to centralised harmonisation by the Commission, and many important sectors - steel, airlines, pensions, and automobiles - received special exemptions. Overall the internal market, with its net deregulatory bias, seemed fairly unambitious when it was launched.41

However, this innocuous programme was overtaken by a new phase of political integration.

CONDEMNED TO UNION?

The agreement rather hastily struck at Maastricht reflected both a new assessment of Western Europe's geo-political predicament and a particular interpretation of global economic trends. Under the former category, the collapse of the Soviet Union was the decisive event. Promising to open Eastern Europe to democracy and capitalism, the succession of changes from 1989 also threatened to undo the trans-Atlantic strategic settlement.

Western Europe had been defined by the Iron Curtain, and this basic delimitation no longer held true. Germany's importance was highlighted, even exaggerated. Before reunification, the Federal Republic was already unique - a major trading partner of almost every other EFTA or EC state, the hub of Europe's population movements, and the centre of gravity of its economy. Reunification brought a larger population, and capitalism in the East promised to move Europe's economic centre further towards Germany. Even the good prognosis for some of these new trading economies could not banish the threat of economic and social collapse in the Southern states and further to the East. The danger of spreading territorial disputes, migration, and ethnic strife - at a time when American isolationism could easily return -provided a range of fresh collective challenges for the European Community. Intergovernmental cooperation seemed unlikely to prove sufficient. The foreign-policy stances of France, Britain and Germany, for example, seemed unamenable to stable coordination. Moreover, diverse responses to strenuous efforts to tout an external enemy - such as the threat of mass migration or middle-eastern fundamentalism -reiterated how much the Cold War framework would be missed.42


Other emerging threats demanding global or regional capacities included environmental dangers - deforestation, ozone depletion, global warming - and the risk of wider resource depletion as developing countries grow in wealth and population. Development itself, a challenge of the 1950s and 1960s whose time had come again, now requires intergovernmental action to manage international debt, trade agreements, population movements and multiplied resource demands. Such challenges encouraged supporters of regional structures to see them as institutional half-way houses, which could facilitate binding agreements at global level.

More immediately, the prospective incorporation of EFTA countries, and the potential of yet more members in the East, concentrated leaders' minds on institutional capacity. Intergovernmental decision-making becomes immensely more complex with each new entrant. From Maastricht to 1993, 'deepening' was meant to be given precedence over 'widening'. By the turn of the century, however, the EU might plausibly absorb the residual countries of EFTA, the small island democracies of the Mediterranean, and possibly the four most advanced states of the former COMECON bloc - Hungary, Poland, the Czech Republic, and Slovakia. This would create a Union population of around 430 million in a total of 24 states.43 'Democratic co-determination' was rejected by five nations (and the Commission) at Maastricht, and the parliament seems condemned to weakness. Moreover, Council decision-making had become faster and more efficient. Nonetheless, the prospect of more members suggested substantial innovation was necessary.

Questions of economics, however, have been at the centre of the political integration debate. These have proved not merely close to impenetrable for purposes of public debate but also unexpectedly contentious among economists and political leaders. The changing relations between free trade, capital movements and exchange rates have been at the heart of these arguments. A single market, as we have seen, is never easy to create or sustain, but mutual recognition and a capable Commission can perform well with few political costs. Likewise, European nations have become accustomed to the idea of free capital movement. Exchange rate stabilisation - an important matter given increasing economic integration among member states - was accomplished (quite tidily from 1982) by an exchange rate mechanism which permitted periodic adjustment. The mechanism cloaked the use of recession (with consequent high unemployment) to advance an anti-inflationary crusade. The Bundesbank was effectively put in


charge of European monetary policy by other nations who used the system to borrow credibility and enforce domestic acquiescence.

The central bankers' favoured myth, that fixed exchange rates are costless, gradually became a genuine belief among some European political leaders.44 By the late 1980s, most stressed the benefits of fixed rates and disparaged potential benefits of independent monetary policy. Capital mobility, EMU's proponents claimed, had become integral to firms' competitive strategies. Moreover, hedging and insurance costs were immense in these closely integrated economies. While stable exchange rates were ever more attractive, however, the ability of the exchange rate mechanism to deliver them was declining. Massive transactions in currency and financial markets undermined the viability of central bank intervention. The problem seemed stark, and reanimated the old call of integrationists: a combination of free trade, free capital movements, and fixed exchange rates implies the elimination of monetary autonomy. Only a single currency (and central bank) can guarantee that none of these three elements is vitiated.

The proponents of a single currency usually favour both universal participation and considerable institutional innovation.45 The Maastricht Treaty makes the process sound relatively unproblematic.46 Both 'convergence criteria' and a timetable were laid out. The former, appearing tight both to satisfy German public opinion and to secure maximum domestic disciplinary benefits, are in fact of doubtful cogency. The most taxing provision - that debt to GDP ratios should not be above 60 per cent - cannot be met by some obvious candidates for early admission (notably Belgium).47 The other conditions - concerning interest rates, inflation, and borrowing - are cyclical, relational or simply beyond any hope of government modification.

The timetable - already thrown in doubt - could force last-minute concessions to secure a sizeable first group of entrants. Assistance from rich to poor - via EC cohesion and structural fund transfer - cannot grow much without straining rich nations' capacity to meet the criteria themselves. Yet there are strong reasons to favour universal participation, such as the institutional unmanageability of a two-tier union, and the likelihood that divisions, once in place, would grow.

Achieving convergence criteria represents something of a dress rehearsal for monetary union, indicating its drawbacks and creating new political and institutional demands. The elimination of monetary autonomy would bring the need for new transfer funds and some mechanism for enforcing discipline on states' spending. The supporters of EMU expect the benefits of EMU to be substantial enough to fill the necessary


coffers, so easing the strain of distributional struggle. Some socialists, however, go further and champion an altogether more ambitious conception of the EU.

EUROPEAN STATE SOCIALISM

Having transferred their allegiance from class to state, many socialists are now attracted by the idea of an interventionist European state. They reassert the politics of unitary agency but at a larger scale.48 They often began by pragmatically championing supranational measures to manage market failure, to maintain the internal market, to address environmental, transport and planning problems across frontiers, and to bargain effectively in global forums for the interests shared by European nations. However, they went on to characterise a new super-state in the same way their predecessors understood the nation-state. The Union, they argued, might be sufficiently powerful to enforce interventionist economic, industrial and trade policies which small nations cannot sustain alone. Negative externalities (especially environmental pollution) might be easily controlled, and worker participation and labour markets regularised across Europe.

However, socialists cannot expect to carry their politics into a new era by means of a simple change of scale. It is not merely the agency of states that has limits. Socialists' institutionally naive conception of agency ignores the impediment to change each nation's institutional heritage represents. Labour is immobile, and each country has its own long history of labour market regulation, corporatist legislation, and conventions for wage-setting. Unions, far from moving together, are fragmenting even within nations. Welfare policy varies widely, with any potential convergence threatening to produce liberal and minimalist welfare states rather than ones attractive to the left.49 The social appendage to the Maastricht Treaty exaggerated the potential for action in this area. Social policy exhibits, and has created, different structures of expectation and convention, and is administered by bureaucracies with entrenched interests.50 Good and service markets themselves, financial systems, the internal structure of companies, and the legal environments within which transactions occur, are all resilient to central direction. Political parties, in response to these facts, show no signs of moving towards common patterns of activity across Europe, and are as far as ever from trans-European policy positions.

This all re-emphasises socialists' need to understand their own states


and the European Union sociologically, and not as vehicles for the unproblematic expression of socialist intentions. Social and political institutions, as Scharpf's analysis of governments' responses to the crises of the 1970s illustrates, help us to act together by 'reducing the set of possible responses by all participants to a smaller set of rule-governed responses which can be anticipated by others in their own plans'.51

While institutions are susceptible to modification, this process is slow and inherently difficult.

Optimists argue that central EU agency can be justified and made comprehensible by opposing Europe to other conglomerate nations. The idea of a European identity, however, itself exposes the basic arbitrariness of nationality. It reveals that states are in a tenuous relationship to the identities which we have used to guide our understanding of complex activities. Not only might states cease to seem the natural agents of national units, but the Union may offer marginalised nations the opportunity to assert themselves. Smaller cultural entities, in any event, will scarcely be able to value the wider interests for which they are asked to countenance their own disempowerment.52

A DANGER OF REGRESSION

An equally plausible scenario is one of degradation. While Maastricht implies that political union follows economic, it does nothing very much to enforce this implication.53 Hesitant members would prefer delay, stronger mechanisms of cooperation, and soothed nationalist fears. Opponents of EMU are not blind to the instability of exchange rate coordination, recognising that a pegged system might collapse. They also value free movement of capital, goods and services. Despite all this, they still hold out against a single currency.

Detractors argue that the internal market itself is nowhere near completed - not for technical reasons, but by virtue of a lack of will to enforce its provisions. Exports are still impeded, and discriminatory purchasing practices continue. Important industries - car manufacture, airlines, insurance, agriculture - are nowhere near open to competition. Capital flows are obstructed by national regulations.

While sometimes supporting EMU as a useful myth, therefore, many sceptical politicians worry that it has come to be believed. They value the idea of convergence and the support it offers to their deflationary strategies. The very spectre of EMU helps bankers to control their politicians, and politicians to control their organised interests. EU 'ad-


vice' on sound policy reinforces national policy goals. But socialists, in particular, with their firm sense that price and income levels do not respond reliably to exhortation, or to the deliberate attempt to shape expectations, may fear a repeat of the monetarist disaster - the suppression of inflation by means of high unemployment. This sort of external imperative is far more dangerous at European level. If the lengthy austerity programmes preparing for EMU entry are succeeded by high levels of unemployment and stagnant wages, then nationalist (or regionalist) backlashes are quite likely.

The costs and benefits of placing the internal market under a single currency are unpredictable. Closely integrated regions might benefit most, and weaker ones suffer terribly. British experience since leaving the ERM suggests that there can indeed be major benefits to exchange rate flexibility. Exchange rates cushion differential price and wage trends, changes in demand such as local recessions, trade imbalances, and differently implicating external shocks. Labour productivity, moreover, will probably not converge between nations.54 Without exchange rate adjustments, this will necessitate differential levels of investment, labour migration to the core, or real wage reductions in the periphery. Real interest rates, however, will tend to equalise across the Union, and investment in weak regions may have to come from common cohesion funds. Migration - a crucial mechanism in the US - is unlikely among the less skilled who will most need it. (Social legislation is likely to impede this process still further.) Real wages are therefore expected to bear the brunt - but in countries already marked by regional disparities, with complex corporatist and collectivist procedures for setting pay agreements, and strong moral and cultural conventions resisting undercutting. High unemployment may persist, with 'outsiders' unable to price themselves into jobs at any level of pay.

Political struggle could escalate. Competition between poor states and regions would become messier and noisier, as they sought transfers of funds from the Commission. This opens the prospect of aggressive political set-pieces. At present, there is no clear logic to divisions in Europe. The Franco-German alliance, while decisive on occasion, has no universal validity. Beyond some collective lobbying over agriculture and transfers, a Mediterranean bloc has not emerged. Sometimes divisions lie between north and south, and sometimes between liberals and protectionists. Occasionally the split is between left and right. However, EMU threatens new potential battles, notably between participants and non-participants in monetary union. Since full participation is likely to be a badge of economic strength, the transfer


beneficiaries would be twice divided against their paymasters. Monetary union implies an unprecedented degree of fiscal coordi

nation. The external imperative must be backed up with real penalties to prevent often severely strained governments from stretching the rules, and there is little prospect of this becoming a naturally legitimate imposition. Enthusiasts of the European Parliament sometimes hope that it might become the vehicle of such legitimation and whip overspending governments into line. The elections of 1994, however, far from showing growing public respect for the Parliament, indicate that it has fallen into widespread disrepute.

A two-tier union, an idea most attractive to those whose economies are most deeply integrated with Germany's, has numerous drawbacks and may not be feasible. European institutions, including the Parliament, would become seriously compromised. Weaker economies like Spain and Eire, moreover, have shown some determination to participate in EMU, and their forced exclusion would be devastating. Burgeoning cohesion funds are a more likely development, equipping poor states for entry and then survival. While some are quite sanguine about this prospect, it entails the distribution of enormous funds by the least well-managed state organs in the Community, creating a deepening dependency and quite possibly entrenching further the structural impediments to these regions' economic development.55 What is more, if the proponents of dynamic benefits are right, the core countries could move ever further ahead of their dependent clients, with the latter unable to reap the benefits of competitive devaluation and opt-outs from collective policy.

While socialists might naturally incline towards monetary union as a way of recreating a vehicle for interventionism, they will have to register the potential dangers of this great leap in the dark. If socialism offers no privileged access to the truth, however, it can nonetheless help to widen politicians' ability to negotiate creatively. Public incomprehension in the face of these momentous choices has been magnified by European conservatives' renewed emphasis on questions of sovereignty and nationality. Their way of conceiving politics, with its championing of the intrinsic value of national frontiers, has inevitably miscontrued the consequences of economic and political integration in terms of violation and outside assault. For the left, by contrast, national boundaries have represented primarily cognitive and institutional obstacles.

Socialists' intellectual strategy and political history equip them to disseminate an objective account of contemporary European economic


causality. Moreover, it allows them to explain the obstructions inte-grationists face in institutional terms, rather than as expressions of essential entities. Only such a strategy of objectification can provide citizens with the capacity to react constructively to events which nobody can reliably predict, and so to develop a greater degree of trust in their governments' strategies for qualified union, and those of others - whatever form, in the end, the Union begins to take.

Conclusion: The Future of Socialism

Socialist movements, the major sustained attempts to translate the possibility of social transformation into political action, have constituted the most effective voice for discontent with the rationality and benevolence of existing institutions. Socialists' efforts to transcend perceived constraints on political possibility have registered both costs and rewards. However, they should not be dismissed as Utopians trapped within unchangeable fields of power, merely expressing their conceptions of the intrinsically desirable; neither should they be eulogised as agents whose virtuous intentions by themselves justify their political practice. The problems they have faced - the inadequacy of working-class agency, the imperfectibility of the welfare state, the appearance of movements pressing new social and political demands, and the failure to develop an economy both successful and distinctively socialist - follow both logically and historically from the radical aspirations they have embraced.

Modern political theory turns on the scope and nature of agency within social orders understood both as historically contingent and as sociologically determining. Some have argued that society, as a human creation, always remains inherently open to projects of change for the better. Others, while positing no preordained laws, have pointed to the functional constraints forced upon would-be agents of change by the social and economic structures of the modern state. Socialists once sank their hopes in a revolutionary class which never emerged, and later advanced a statism which cannot be sustained today. In each case, however, it was the transformative character of their politics which demanded the juxtaposition of objective setting with powerful agent, rather than any inextricable commitment to some specific sociological entity. Competitors have deeper troubles, remaining wedded to the problems of the past. Most liberal political philosophy scarcely engages with the contemporary world. Neo-liberals drift from economic exchange to the metaphysical holism of 'market forces' in their effort to register the changed setting of politics. Conservatives, lacking socialists' objectivist possibility, assert nationality and sovereignty with increasing desperation.

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Socialists have aspired to an inclusive transformative politics. Dramatising social structure, they have nonetheless insisted on the possibility and imperative of social improvement. The historical variations in socialist projects are insignificant next to the continuity of transformative style they have embodied. Marx's class-in-capitalism conception of politics was attractive to late Victorians. For all the intellectual sophistication of the intellectuals of Marxism's golden age, however, the theory of capitalist class politics was a rhetorical accompaniment of workers' campaigns rather than their foundation. Marxist orthodoxy evaded the reality of states as fields of institutional power, and its theorists prolonged futile resistance to the reformist drift of workers' organisations.

The First World War exposed socialist parties as the vehicles of nation-state politics rather than the transnational expressions of international proletarian interests. The divorce between western communism and social democracy freed the latter to develop constitutional mass party politics. While social democrats still spoke in Marxist tongues, class and capital were implicitly confined to national spheres. States were the agents, and societies (and national economies) the settings of this new politics. Social democrats thus accommodated themselves to the reality of state power. Over the Depression years, however, political crises followed economic, and their interpretation of capitalism provided little purchase on these new realities. Only the postwar boom rescued leftists from despair, providing them with the means to enact their state-in-society understanding of social transformation.

Social democrats embraced economic management, corporatism and the welfare state as the institutional mechanisms for mutual accommodation between workers and the all-pervading modern state infrastructure. They also accepted national schemes for the support of agricultural producers. Advancing new techniques of measurement and intervention, moreover, they championed ideologies of representative democracy in a capitalist economy. Economic success encouraged the left to put aside its critique of capitalism in favour of the collective assertion promised by the interventionist state. This once attractive state-in-nation conception of political action had inherent limits. States cannot endlessly improve public welfare even in a reliably growing economy. An ineliminable tension remains between rational state agency and human discontent. Moreover, states cannot be the instruments of such perpetual economic advance, and a planned economy cannot fulfil human creativity as socialists have desired.

British socialists' responses to the challenges of the 1970s - their


attempts to strengthen the national economy through 'alternative economic strategies' - exposed the exhaustion of their statism. The setting of politics could no longer be benevolently interpreted as a national economy to be managed or planned by the state (itself understood as a unitary actor rather than as a complex of differentiated institutions). The overlapping fields of welfare state, planned economy, and nation, were gradually invaded by the world outside them, as the left tried to shut out economic integration rather than to accommodate it in a new theory of socialist agency.

This failure had a wider Western European context. All West European socialists have had to reappraise political agency and its settings. While the stabilisation of postwar states was underwritten by international institutions - including Europe's own Economic Communities -legitimate nation-states, sharing representative democratic forms, became the norm rather than the exception. Changes in the intensity of informal economic and political interaction manifested themselves in the 1970s in the need for new and more intrusive modes of intergovernmental activity, both within Europe and globally. New quasi-economic questions - environmental degradation, migration, global security - became more urgent, and created their own need for enduring international networks of communication. The proliferation of dangers, in combination with the specific geo-political challenges posed by the demise of the Soviet bloc, accelerated the European Union's development into something more than a site of intergovernmental deliberation.

By analysing socialism as a transformative politics, we can develop a steady historical perspective on its prospects and highlight the inadequacy of the left's current policy nostrums. In a spirit of despair, many disenchanted socialists have championed crude electoralism, promising gifts in exchange for support in the polling booth. The charge of electoralism - itself mystifying to non-socialists who falsely perceive merely the attempt to please potential voters - can be laid at every leftist party's door. The populism and leadership politics of the Mediterranean socialists, no longer carried on in the service of modernisation and democracy, now often seems unprincipled.1 Their democratising objectives largely accomplished, and their rightist opponents now themselves modernised, such socialists have little distinctive to offer their electorates. Likewise, French socialists of the 1980s were sufficiently beaten down by history to bequeath their conservative successors a range of policies with which the latter have felt quite comfortable. The reforms that have taken hold in many northern and eastern socialist movements - the embrace of ecology, feminism and disarmament -


are also easily characterised by their opponents as exercises in barefaced vote-grabbing. Social democrats in Germany or Austria seem scarcely distinguishable from their opponents (or coalition partners) on the right. In Britain, where Labour offers a genuine alternative, this reflects more on the country's distinctive conservatism than on a renewal of its socialism.

Short-term electoral success tells us little about the ability of socialist movements to reproduce themselves across generations to come.2

Electoralism is a pursuit of unsustainable victory - an attempt to win without securing the conditions for successful government. Social democrats need to replace their no-longer-inspiring schedule of goals and values with something that is not merely attractive, but also substantial and distinctively socialist. Continuity of tradition, and appeal to disenchanted activists and supporters, can be combined in new conditions only by retaining a transformative political style - even if its content must be almost completely reworked.

Remedies for socialism's malaise have proved elusive. The glittering but insubstantial ideals of community and extended democracy; the appeal to new social movements; exclusive environmentalism; and Euro-socialism: each of these has been falsely advanced as a panacea. Settings and agents must be rethought together, rather than conflated as many modernisers suggest. Socialists, moreover, should retain inclusivity and the explanatory priority they have always cogently accorded to the economic.

COMMUNITY AND DEMOCRACY

Shopping-list socialists have been busily re-writing old priorities, downgrading former favourites like equality, social justice and freedom. Too many postwar successes, it transpires, were the creations of growing affluence rather than signs of cumulative human mastery over structured inequality, however defined.3 In practice, their answer to the question 'equality of what?' was always fudged. While Nordic social democratic welfare regimes, and their conservative equivalents in northwest Europe, each reduced income inequality and cross-generational transmission of poverty, their projects have been stalled for some time. Today they seem to be heading into reverse. Despite their influence on class structure, they have never looked like creating a qualitatively new kind of society. Liberal welfare states, despite the extended postwar boom, have affected the perception rather than the reality of social


immobility, and seem unable to reverse a growing inequality of income.4 Mediterranean socialism has accommodated very wide inequalities of income and access to public services.

If the project of equality has run aground, some of socialists' other ideals have suffered even more. Social justice - always a notion for the philosophers rather than for the pragmatic politician - offers scant guidance in a world of immense economic and social complexity. In practice, conceptions of the fair and the just tend to be local and self-interested, culturally specific, or simply unpalatably pre-capitalist. While therefore tending to side with the rationalising force of capitalism in its erosion of these understandings, socialists have found nothing more attractive to replace them. Even the most intellectually appealing theories of just distribution are too complex and indeterminate in application to secure widespread adherence. More often than not, their appeal is limited to the liberal academics who have created them (and the social types they most resemble).

The ideal of freedom, likewise, is difficult to define to the advantage of those subjects whom socialists intuit to be genuinely unfree. The weak can never take advantage of their liberty, and the very weakest are quite precisely enfeebled by their socialised inability to recognise or exploit the condition. The extension of citizenship rights gave the left a clear freedom-enhancing programme; today's efforts to move beyond such rights opens up convoluted philosophical problems more readily than it suggests a practical agenda. Equality, freedom and social justice are each more likely to divide socialists among themselves than to demarcate them from their egalitarian liberal (or even conservative) competitors.

Partly in consequence of this impasse, many socialists have turned their attention to inescapably social ideals, such as democracy and community, in the hope that these might suggest more definite practical implications. However, in the absence of a transformative framework, hoped-for bridges between principle and practice have served as vehicles for evasion rather than as guides to collective assertion. A term with as many possible meanings and intellectual settings as 'community' tends to escape analytic control. A village as a community (imagined or otherwise) cannot be the same kind of item as a national community. Neither can the sense of community as shared source of constitutive identity5 be taken to match communities as small clusters of dwellings with semi-autonomous political arrangements. Nostalgia for community is 'endemic among those who live in the higher echelons of capitalist society'.6 But those actually implicated in existing com-


munities as shared physical spaces may need less reminding that 'the stifling intolerance that small communities can exhibit is a constant motif in twentieth century literature', and that small bodies are susceptible to the tyranny of minorities.7

Today's Eastern Europe engenders scepticism about the merits of a reassertion of local affective attachment. The idea that we are consti-tutively precommitted to social roles is a major source of political instability rather than a promising solution to it.8 Furthermore, what appears to be a tolerant political community to one person may seem to incorporate an oppressive national bigotry to another. In dangerous political settings, as the history of modern South Africa demonstrates, manipulations of the concept of 'community' by the state and others expose the futility of supposing its ascription to be merely a process of identifying the appropriate reference group.9

The ambiguity of the term in part explains its attractiveness. The Economist, for example, hazards that a communitarian programme 'might place strict controls on out-of-town shopping centres and new road developments, encourage schools to stay open in the evening as drop-in centres for pensioners, and urge adult children to help elderly parents'.10

What is not clear, obscured by the aura of niceness around the term community, is why it might do so. While the emotive appeal of community comes from the solidarity and simplicity of the relationships it posits, most socialists value it as a disguised reference to collective human assertion (and one which effaces class structure with bourgeois pseudo-universalism). One commentator, for example, suggests that 'communal identification must take place at the level at which most major decisions affecting the shape of a society are made - meaning, in practice, at the level of the nation state. Although smaller-scale forms of community may provide the most intense experiences of solidarity, these communities will have little power to shape their environment'. We need society-wide 'overall community' for people to 'regard themselves as active subjects shaping the world according to their will'. Community is the basis for a 'common identity that makes it possible for [people] to conceive of shaping their world together'.11

Since the rationalisation of social life and the complexity and spatial extension of communities caused our inability to imagine them, the reassertion of communal bonds - and which bonds, precisely, are to be renewed is seldom specified - cannot be expected to stave off those massive processes of change. A sense of community is itself a causal outcome - 'an outcome of the way in which particular human beings have been caused to see the world', and so to prescribe a sense of


community for those lacking one 'is in effect to will them to be (or to become) different persons'.12

The nation, in any event, cannot be sustained as an exclusive focus of collective political agency. Indeed, its loss of powers has brought the reassertion of the national idea, explaining why we are only offered 'the sense of shaping the world'.13 To be free today, we would have to act together on a scale beyond that to which nation-states can aspire. But at such a scale we cannot collectively grasp the causal consequences of our collective actions or identify with them as they actually occurred. Only super-states seem able to give socialists the agency they have wanted, but even states' acts exclude the intimacy that could make them meaningfully belong to their citizens. Socialist communitarians combine statism with a characteristic conservative strategy of popular consolation: the left's leaders act in the name of the people (and for their supposed good) while using national identity symbolically to compensate subjects for their lack of power.

The elevation of 'democracy' to a prominent position in contemporary socialist theory has much the same roots as the veneration of community. Once again, socialists conjure up an alluring vision and assert it against a world which lacks the basic practical conditions for its viability - in the process conflating conceptions of setting and agency to disastrous effect. Democracy, another term with only positive connotations, has been appropriated by almost every regime on earth regardless of character. Its new socialist enthusiasts, bedecked in the flowery language of 'radical democracy' and 'citizen socialism', are the bold champions of 'decentralisation', 'accountability', 'participation' and the subjugation of the state to 'the will of the people'. Their intentions are twofold. Firstly, they want to extend the reach of democratic method so that its magic might touch institutions beyond the legislative bodies in which it has hitherto been contained. Secondly, they hope to increase the frequency of the method's application - to make democratic practices a perpetual force for accountability and for the renewal of social structures. The humble democratic method - the enforcement of participatory procedures, equal suffrage, freedom of expression, and so on - can, they argue, transform social life into a tapestry of perpetually self-adjusting institutions. Individual choice - through the ballot rather than the market - can be the engine of endless social improvement.

The imaginative appeal of democracy is not hard to find. Even more so than community - which, after all, always suggests a degree of constraint - democracy seems to promise a diminution of externally


enforced demands and the assertion of the human will. But the idea that the reach and rhythm of democratic choice can be easily extended seems quite false in the modern world. The democracy we desire bears scant relation to the kind that we can actually realise. Participatory democracy might at best engender a common will from a living community. In an ideal world, democracy would be the natural method for a community to rule itself. Modern democracy, by contrast, is first and foremost defensive. Votes are negative sanctions - threats to the incompetent and corrupt - rather than vehicles for the expression of preferences. Indeed, modern political theory has been preoccupied with the dangers of majority rule. Populist appeals threaten minorities of any citizentry (notably the rich), imposing on them a majority oppression (the sharing-out of their wealth). The majority of citizens, moreover, may fall prey to utilitarian appeals to sacrifice minorities for the greater good. The content of a popular will, should such a thing exist, perhaps need not be unedifying, but imaginative projections are unreassuring. Fortunately, perhaps, in few spheres of the modern state's activity do its differentiated institutional complexes constitute plausible vehicles of anybody's will, let alone that of the people as a whole. Constitutional democracy, moreover, guards against the majoritarian danger, disempowering the citizenry by making the state legitimate as a structure of authority independent from the claims of the people to rule.

In postwar Western Europe, representative democracy has been prosecuted through hierarchical mass political parties offering interdependent policy packages for implementation through opaque administrative structures. The immense cognitive gulf between ruler and elector can scarcely be bridged by means of national identification or the ideologies of representative government. Legislative institutions are anyhow too distant today from the heart of government. Technicality and sheer volume make government business bewildering even to its specialists. The scale and complexity of modern states; the networks of interrelations between their component parts, and between the state and outside agencies; and the expectations-shaping institutional power and epistemic independence these networks display: all of these make a heavily mediated representative democracy a necessary surrogate for the direct form.

Even this much democracy is vulnerable. The familiar reference-points of postwar politics are today harder to locate. Its left-right axis is losing some of its force, and mass parties are in decline while citizens act instead in support of particular causes. The erosion of the


institutional and ideological preconditions for intelligible political leadership, and of the interpretative filters through which electors have viewed political action, makes the elaboration of considered opposition or consistent support for a government intensely difficult.14 Moreover, the pressures for executive decision-making to occur at still greater distance from electors, in intergovernmental forums, threaten to make these conditions worsen.15 Some see these new conditions as a call to arms, driving us to create new systems of accountability across borders, turning global institutions into arenas of public scrutiny, and tying global interest groups and agencies into accountable institutions. A cosmopolitan democracy has slight immediate prospects, but at least addresses the challenges we already face.16

Despite this, the idea of participatory democracy - in which the joys of civic participation combine happily with the conferring of legitimacy upon collective decisions - is a stubborn ideological residue that will not easily wash away. Democratic theorists may accept that one must secure current constitutional frameworks, and extend them outwards to intergovernmental structures, before encouraging participation to work its magic. Citizenship, they may agree, must define our freedom from others' interference, and allow us the space within which to pursue our more local conceptions of how we wish to live. But then, they argue, participation is vital and potentially transformative.

We may agree that an enthusiastic and active political culture might well bring distinct advantages. (Even this must be argued rather than assumed: to engage with alienating political structures demands a sacrifice.) The call for a greater quantity of political participation seems, however, to require especially careful scrutiny. Judging from community power studies, the activist politics that develops in local settings, although not dominated by small elites, tends (at its most benign) to be a minority pastime of enthusiastic middle-class activists.17 (Indeed, one might speculate that these are the very same people who are enthusiastic about the extension of activist politics.) In less attractive forms, fraud, corruption and clientelism cry out for the imposition of external rules.

Today's limited democracy accords weight to the inarticulate, the lazy and the mildly apathetic. Wariness is not cynicism, and even the latter should not disqualify a citizen from political voice as radicals often imply. We are, after all, socialised into apathy, just as activists' enthusiasm is socially produced. Clamour for participation serves to disguise the illegitimacy of minority claims to rule -- the articulate and energetic constructing a theory of legitimate authority to suit their


strengths. More practically, the supporters of frenetic participation often fail to realise that the recommended mobilisation would itself vastly complicate politics. Faith in the efficacy of consensual grassroots solutions to even the most local of problems may reflect predictable debate and participants' sociological self-selectivity, rather than offering a glimpse of untapped communal solidarity.

Community and democracy are too insubstantial to serve as the bases for a socialist renewal. Democratic procedures can help to keep structures of argument open, and reduce their vulnerability to coercion, ignorance, and self-validating ideology. But before they can be benevolent, we need to share a truer grasp of the questions we must answer together, and of the challenges we have to face. Socialists' inherited account of the structural sources of power is no longer convincing. However, this cannot justify their abandonment of transformative ambitions in order exclusively to examine the processes by which power is validated and checked.

SUBSTITUTES AND SURROGATES

Marxist theorists, from whom we might expect enlightenment about the objective character of our predicament, have contributed little to these debates. From being a transformative politics, Marxism has become a major obstacle to socialist advance. It is not so much that its classical formula retains appeal - although it does still have its adherents - but rather that piecemeal change has created a series of hybrid monsters. While laudably retaining a transformative style, one-time Marxists have switched agents (finding a surrogate for the proletariat) or settings (replacing global capitalism with some new framework of despair).

The proponents of new agents are mostly Marxists who missed the social democratic boat. While the mainstream left applied itself to the creation of the welfare state, radicals retreated to the universities across Western Europe. Traditional Marxist languages were reproduced within superstructural and aesthetic realms, the most brilliant theorists creating local academic communities within which enlightenment might be sustained through the dark ages of late capitalism. Like all such fantasies, Marxists' withdrawal from politics enfeebled them beyond hope of recovery. When the new left emerged to fill the ideological vacuum of the 1960s, its young middle-class radicals lacked the intellectual tools with which to diagnose their irrelevance to contemporaneously rising working-class militancy (in fact caused predominantly


by tightening labour markets). Marxists misunderstood the crises of the 1970s and found no new ways to give voice to traditional socialist ideals. Globaliscition, and the stark gulf between western workers and the inhabitants of the developing world, underscored the problematic nature of modern exploitation.

Marxists gradually registered, but could not admit, that the proletariat could not constitute a plausible agent of European socialism. Workers had not suddenly changed. Social democrats' shift of the site of agency to the state was already ancient history. But Marxists, returning to politics after decades otherwise engaged, had to make up lost ground in a hurry. Finding no conventional workers to occupy the space optimistically awaiting the proletariat, and scornful of social democrats' co-opted statism, they sought out surrogate agents of change. Many had long ago turned to the peasants of the Third World. The domestic-minded, however, saw as prime candidates a new lumpen-proletariat or new social movements - in each case mediated, or even directed, by intellectuals themselves.

The identification of a lumpen-proletarian agent reflects shifting sites of oppression rather than capturing any plausible concentration of potential power. The modern working class - unionised, and fortified behind legal immunities in privileged sectors of the labour market -has long ceased being a credible supreme victim. This role is performed by the unemployed, workers outside the core economy, those dependent on the state, the ill, the old, or the imprisoned; the homeless, the residents of regions in chronic decline; and women and racial minorities in any of these categories. Injustice and absolute poverty have long fallen predominantly outside the industrial working class, a fact disguised from much of the left by a combination of romanticism and self-interest.18 But the suffering of excluded groups, far from potentially spurring them to action, fairly directly reflects their inability to constitute an effective agency. They are structurally condemned to impotence, unable to act collectively to transform their condition.

Other ex-Marxists have found new social movements to be more promising. Influenced by the student politics of the 1960s, and the rapid development of feminism, environmentalism, and single-issue cause groups, socialist theorists have sometimes thought these might constitute a surrogate agency. These movements, however, lacked strategic direction. Marxist intellectuals, by noisily exploding their own myth of working-class agency, designated themselves as their driving force. New social movements are organised by those outside the conventional class codes of Marxist theory. Their memberships, indeed, are dispropor-


tionately from the highly educated - the bearers of the spirit of rational debate rather than the purveyors of the politics of identity. For this reason, their relations to the traditional left have been characterised by swings between affected comradeship and opposition to the anti-universalism of class politics.

Much of this new socialist theory is attractively rationalist and egalitarian, and rejects the 'essentialist apriorism' which favoured class and state as necessary fixtures.19 However, such socialists misconstrue the role of intellectuals, either hoping that increased education will cumulatively expand popular susceptibility to universalist discourses (once these workers are properly educated they will be able to think like us) or planning to manipulate the fractured selves of late capitalism by means of sophisticated seminar-room ideology alone. Intellectuals cannot create common consciousness syncretistically, but rather can only provide the objective theories from which a cogent project can emerge through political leadership and public argument. These socialists are also unfortunately often susceptible to the charms of postmodernism and post-capitalism. When the structures of capitalism promised to deliver revolution, their lines of causative power were diligently traced. Now that agency must be elicited by the manipulation of discourse, structures call to mind obstruction and are consigned to history. The trumpeting of indeterminacy is a projection of the intellectual disarray of Marxists' political theory on to the world, rather than a reflection of new-found intellectual sophistication.

Social democrats have coped better than Marxists with change.20 While avoiding the excesses of their radical comrades, however, these practical socialists have often adopted two deceptive doctrines - European socialism and environmentalism. As we saw in Chapter 5, the idea of state agency in a national setting has seen better days as a guide to politics, but enthusiasts for a centralised European state falsely expect a change of scale to bring a change of fortune. Leftist environmentalists expect all frontiers to be overwhelmed by new threats. In place of the choice between barbarism and socialism which some expected in the terminal crisis of capitalism, these new socialists posit a choice between environmental catastrophe and collective redemption.

While environmentalism has a part to play in any rethinking of socialism, it does not deserve this leading role. Greens categorise diverse and unrelated social problems as 'environmental', and fail to analyse how they differently impinge on diverse agents. When still marginal to politics, united more by social background than by programmatic consensus, bourgeois environmentalists' eccentric classification of causes


was irrelevant. Development, pollution, deforestation, resource depletion, climate change, endangered species, the ozone layer - these were related to one another by activists' culture rather than through any intrinsic logic. Greens' muddled rejection of 'the pursuit of growth as an end in itself, and their advancement of the tragedy of the commons and the collective accounting of externalities as cover-all principles, cannot give their diverse concerns more coherence.

Integrated into conventional politics, environmentalists' traditional concerns have to sink or swim on their individual merits, open to the messy politics of amelioration, compromise and interest-group competition. The costs of environmental policy are distributed widely and unevenly, rather than representing a common human burden. Even the corruption of the biosphere does not represent a summum malum. Greens overlook the degree to which much of the world's population, already faced with the collapse of rural life-support systems, must choose the danger and squalor of modern cities. Their passage to tolerable living conditions depends in complex ways on trade and development. Western European socialists cannot achieve global solutions for others, and their necessarily local strategies will inadvertently reflect their own privileged interests while providing incentives for costs to be transferred elsewhere.

None of the hypothesised great hopes for socialism stands up well on its own. Traditional socialist ideals cannot much help socialists to decide what to do. Socialism cannot simply mutate into European in-terventionism as some social democrats have hoped, and neither can it become the ideology of the greens. Each of these many ideas, however, can play a part in a modified transformative politics. Democratic socialists' political argument has remained relatively open because of its exposure to the twin pressures of party democracy and electoral competition. Unlike Marxists, they cannot shelter behind the obfusca-tion of the academy or the closed conventions of apparatchik accountability. If anything, the welter of ideas recently advanced on the left -the rejuvenation of freedom, equality, democracy and community, and the new projects of internationalisation and environmentalism among them - are too diverse and unconfined. If we are to appraise the relative significance of these different preoccupations, we need a more sturdy framework for relating social settings to political agents. Socialists' objectification must temper the confidence in the knowability of society that has characterised much of their thought; the priority of the economic must avoid dogmatic materialism; and they must posit agency without resort to utopianism, or an insistence on its unitary nature.


But socialists cannot think clearly together without first renewing their transformative project.

RETHINKING TRANSFORMATIVE POLITICS

Socialism's resistance to change in part reflects the circumstances of its birth as a mass political movement. Its ideologists, organising themselves at the high point of industrial society, internalised the characteristic images and metaphors of their age - determinism, bureaucracy and mass organisational forms - in a world dominated by the growth of modern industrial production. Diverse workers' movements, moreover, crystallised into parties and unions within the framework of the nation-state, and they embedded this context in their language and institutions.21 Transformative projects, however, also embody inherent resistance to easy modification. Socialists' ideological strategy of combining objectification with specific agents has guaranteed a continuous and continuing socialist politics immune to passing fashion. If their stable and interlocking framework of thought is to anchor political practice, it must necessarily resist easy selective modification under local or passing historical pressures. In contrast to bemused liberals in this post-liberal world, socialists know they have lost their bearings because they had some bearings to lose.

The relation between a posited agent and its setting is a cognitive and cultural construction, not a given ontological fact. Socialists, indeed, have astutely drawn on the reliability with which social structures shape the perceptions of those causally and ideologically implicated in them. We all have a firm sense of social ontology, and strong beliefs about the institutions of which we are a part. To exploit potential for transformation, socialists must bring these understandings into some form in which they can constructively accommodate each other. Since the logic of capitalism did not deliver collective proletarian consciousness as predicted, any collective project must be a complex construction in which diverse agents register the understandings and intentions of others. Political leaders therefore feel two contrary pulls. On the one hand, they want to challenge routine categories and practices, so dramatising the indeterminacy of the social world and opening politics to creative change. On the other, however, they must acknowledge human beings as subjects of understanding. Given the complexity of action and ramification in modern social life, and the vast ranges of human experience and disposition, people need intellectual frameworks


to hold themselves together, rather than just to be freed to think creatively apart. If individuals are to inhabit a common world of simplified settings and personal agents - one which seems sufficiently robust to orientate their collective activity - they must willingly suspend their intricate structures of disbelief and think through objective theories.

Socialists need compelling practical theories to integrate actors' wills by providing the points of reference which allow mutual intelligibility. As Allott has argued, societies 'live within the theories they make'. Each is a 'theory-filled reality which shapes its willed action which, in turn, shapes its everyday living'.22 Such 'practical theories', understood more distantly and depressingly, comprise the rules, roles and structures of expectation which govern our social institutions. Our most sophisticated practical theories help make intelligible the activities of the vast institutional complexes of modern society - its state bureaucracies, legal, administrative, educational and political institutions - so helping us to sustain (however tenuously) our sense of knowing the same world as one another. Such simplifying devices are not just a form of epistemic shorthand, since they themselves help to constitute social order.

There is a tension between the assertion of an objective framework for politics and the repudiation of socialists' old claims of insight into necessary social laws. However, leftist intellectuals exaggerate this by conflating academic with political argument. Academics enjoy protected debate within specialised institutions. The bourgeois public sphere Habermas believed himself to have identified - those institutions and practices of modern society open equally to all its members, without intrusions of coercion and hierarchy - is remotely approached within (and only within) the wealthy modern university. Having been lengthily socialised into conventions and idioms which promote debate and minimise overt coercion, institutionalised intellectuals are apt to overestimate the procedural aspects of understanding and dialogue.23 Likewise, they can overlook the role of practical theories, in conjunction with shared senses of social ontology, as basic preconditions for argument.

Even in the most attractive democratic contexts, moreover, power nakedly and repeatedly triumphs over dialogue. For this reason, a political theory must always keep agency (and so audience) in mind. Marx's formulation of the dialectics of theory and praxis, whatever its drawbacks, did treat understanding as a path to change rather than something to celebrate in its own right.24 Later Marxist strategists' rhetorical insistence on necessary social laws served to suppress the metaphysical questions which might inhibit political argument.


All political movements today face a challenge to their traditional programmes. Socialism's history and conceptual strategy equip it better than its liberal and conservative competitors to remake itself for changed conditions, and inhibit evasive piecemeal adjustment or ameliorative appeals to nationality or community. While it is easier in the short term to exploit the divide between ruler and subject than to narrow it, objectification can improve the quality of electorally successful socialism. The manipulation of identities, whether or not it is dosed with participation, makes governing harder, and movements which respond to change in this way court disaster. A transformative politics, by contrast, can make use of the detachment that cynicism reflects. Advancing practical theories which can help citizens systematically to relate government actions to social outcomes, socialists can reap later rewards in public trust and patience.

RETHINKING OBJECTIFICATION AND ARGUING FOR MULTIPLE AGENTS

Marx's and Engels' objectification of capitalism made possible new forms of self-understanding and action (albeit ones largely unsuccessful on Marxists' own terms). Social democrats more fruitfully took societies to be the settings of politics, accepting both liberal democratic institutions and a nationally bounded economy and polity. They left mostly unsaid their narrowing of the setting of politics to specific societies, and their practical shift of agency to the state. Eventually, through frameworks for interpreting public action, such as Keynesianism, national reconstruction, planning and the welfare state, they integrated popular and elite interpretations of politics into a paradigm of state-in-society rule.

Social democrats and revolutionary Marxists each aimed to make professional social explanation into available theory, taking powerful causal forces - material and economic determinants, science, the infrastructural powers of the modern state - and insisting that these represented an inescapable social reality. Marxists confused objectivity with knowledge, using scientism to close their systems of debate into hermetic doctrinal circles and to validate their dogmatic materialism. Social democrats fell under the sway of the power-fields of the nation-state until they could no longer think clearly beyond their confines. Given relatively closed economies, and the stable international order of the immediate postwar decades, they could construct domestic


welfare states with more determination than otherwise might have been possible. The opening structures of international production, trade and finance, and the blossoming of non-economic forms of globalization, exposed the limitations of this understanding.

To create the conditions for public argument, the content of objective theory must describe the setting of politics so as to distance its audience from variations in taste or perspective. Today three elements are indispensable for socialist theory: the notion of a global environmental field; an understanding of the economy which goes beyond the narrowly national and beyond conventional time-horizons; and a conception of modern society which makes sense of the welfare state as the setting of individual lives.

Sciences are methods of understanding which in principle rest on structures of questioned belief and experiment. While the cognitive superiority we assume for these sciences is rightly a matter for scepticism, they are objective in that they allow agents to confront and evaluate the (non-negotiable) reality that constrains the scope of their actions. Contrary to inclination, socialists should shy away not from scientistic styles of environmental thought but from blatantly subjectivist attachments to nature. Scientific theories of biosphere degradation, climate change, and the depletion of the ozone layer, even if often inaccurate, fulfil socialists' need for objective appraisal. By contrast, they should avoid preoccupations which vary drastically according to human taste or perspective. Bourgeois environmentalism is disposable.25 At the same time, socialists must show caution about the content of such theories and not advance them as firm social knowledge. While promoting argument about population growth, controlled development, environmental degradation, and technological change, they must fully register doubt. One aspect of our objective setting, as Marxists have often failed to acknowledge, is our uncertainty about the nature of the challenges we face.

A second, more important, plank of a strategy of objectification must be the dissemination of a new framework for understanding economic policy. Marxists' analyses of the dominance of processes of production and exchange over the life of the species remain powerful today. The idea of global capitalism, however, can be as misleading as state-in-nation conceptions of the economy. Moreover, socialists need to repudiate the goal of making the global economy transparent, and work instead objectively to appraise it. The Soviet Plan tried to make transparent the entirety of economic activity by imparting rationality to production and distribution themselves. Soviet citizens, it was supposed, could relate their energies to a transparent collective enterprise.26 War


has likewise informed the idea that individuals' efforts can be directed towards a common purpose. Social democrats understood planning more subtly as part practical method and part propaganda tool. Planning could improve private and public investment allocation, but it also minimised social conflict by presenting political choices as economic necessities. Leaders used plans to clarify debate, by narrowing choices even while seeming to widen them; and they overcame resistance to present sacrifice by relating it to future collective gain.27

Some such institutional and intellectual framework is a precondition for the collective assertion which socialists desire. The causal chains linking states' economic instruments to the outcomes which citizens experience have always been bewildering. Yet they underlie intelligible relations between ruler and ruled, and underpin democratic competition and so collective decision. Today, however, the phenomena of increased openness, volatile exchange rates, and new kinds of capital movements, all complicate the re-establishment of preconditions for public argument.

The economic policy paradigms of socialists' opponents on the right have degenerated into a new incoherence. Their championing of 'free trade' and domestic markets contradicts their emphasis on sovereignty and the national idea. They have often, in consequence, moulded their descriptions of the international economy around the assumptions of economic nationalism - such as the idea that states are in competition with one another in a new form of war through trade, or the claim that the European Union should take up cudgels against other regional trading blocs.28 The nation (like the community) is a tempting fall-back in times of insecurity and human dislocation, but the buttressing of decaying interpretative structures eventually becomes counterproductive.

Socialists' history of objective appraisal of production and exchange equips them better to advance a cogent characterisation of contemporary economic interaction. Radicals' attempts to treat the world economy as a single system of surplus value extraction, however, seem as fatalistic about human agency as neo-classicism. Analyses of the interdependence of North and South at global level likewise seem too distant from the immediate policy questions and human problems which European citizens experience.29

The European Union offers socialists an unexpected opportunity since it uniquely combines institutional innovation, geo-economic power, and sufficient proximity and familiarity to allow intelligible politics in new circumstances. No proposed institutional innovation is indubitably benevolent, and Monetary Union, in particular, is unpredictable in effect.


But socialists have an independent political rationale for supporting collective projects of this kind, since institutional reform and objective appraisal are best advanced together. In challenging the national economy as a field of politics, European Union provides an unprecedented opportunity to overturn accepted presumptions of political understanding. Should European states opt instead for slower integration, or for an altogether less ambitious consolidation of existing structures, the need to outline economic causality clearly will remain.

The third element of a new objectivity must be a re-conceptualisation of welfare society itself. Intergovernmental organisations and the European Union are plainly human collective creations, and so they are not intrinsically susceptible to the mystification which surrounds the nation-state. At the same time, this artefactuality makes possible a greater sense of distance about the domestic state. The idea of nation denies this, asserting exclusive pre-commitments and so positing a threat of violation. Socialists' statist heritage is also obstructive. The thesis that 'the evolution of the European Community since 1945 has been an integral part of the reassertion of the nation-state as an organisational concept'30 tells only half the story, and offers statists false hope. The sites of decision of the EU transform rather than merely rescuing the nation-state, and make necessary new intellectual frameworks (such as that of 'subsidiarity') to explain them.

If the creation of new publicly accountable sites of decision can help to remake public understandings of older sites, then programmes for constitutional and institutional reform can magnify this effect, exposing states' perpetual making and remaking by human decision. Cooperation across frontiers must rest, in the first instance, on a deeper understanding of commonality within them, something inhibited by nationalism and statism alike. The left's leaders and intellectuals still often conceive the welfare state in terms of state agency - as a series of interventions in some social field independent of the state. By contrast, the populations of modern welfare democracies see the welfare state they experience as a part of society itself. Throughout our lives, we creatively engage with public institutions, treating them as social fixtures rather than as the products of benevolent and perpetual intervention. Just as socialists have disseminated the idea that our societies are human artefacts, so they can stress more starkly that our commonality is created by the institutions which socialise us.

In order to make room for these new public understandings, socialists have not only to reject the conservative language of community and nation but also to assault their own statism frontally. Institutional


and constitutional reforms can help in this task. Socialists need to emphasise the quality of public expenditure rather than the unity of the state. (Since the public sector executes a quarter to a third of all spending, their effectiveness in doing so can also massively improve human welfare.) Public debate over citizens' entitlements and duties, and about just allocative rules, can be largely isolated from the idea of the state as a collective agent of change.31 Moreover, the afflatus of socialist romanticism - especially its portrayal of unitary party rule as the outcome of a long struggle for parliamentary representation - must be dispersed, since it surrounds and protects the statist assumption.

Some socialists will complain of the drastic down-scaling of ambitions all of this implies. Not only is there no revolutionary class: there is not even a coherent state agent. A cogent strategy of objectification must assert a global setting and recognise other states, intergovernmental organisations, and the European Union, as sites of decision and action. Multiple agents, and the recognition that others may not see the setting of politics as we do, seem to undermine collective human will. However, the old ways of understanding politics were self-deceiving. Working classes have always remained minorities; international events were bracketed out of consideration, rather than irrelevant; and representative democracy and mass parties came between people and their collective assertion. Moreover, ambition should be measured against the scale of tasks at hand - mass unemployment, economic insecurity and environmental degradation among them - rather than by the yardstick of historical aspirations. Socialists do not, right now, need still more problems they cannot solve.

Their conception of collective political agency made a virtue out of a necessity. Whenever we talk about the activities of collectivities, we play on our understandings of what it is for a human subject to act in an objective world. Socialists' ambitious plans for the proletariat, and later for the state, each promised to channel the intentions of multitudes of human beings, without distortion, into a unitary will. The resulting entity was to bring about a collective escape from oppressing social structures. Socialists have learned that causal and moral complexity, and the unintended consequences of actions, must be accommodated within their political theory. Moreover, they are now aware that collective agency is a complex creation rather than a gift of history. If they are to address today's bewildering challenges and breathe fresh life into their project of collective human assertion, they must renew rather than abandon their commitment to objectification.

Notes

INTRODUCTION: THE END OF SOCIALISM?

1. On the working class, see A. Gorz, Farewell to the Working Class: An Essay on Post-Industrial Socialism, trans. M. Sonenscher (London: Pluto, 1982). On new social movements, see C. S. Maier (ed.), Changing Boundaries of the Political (Cambridge: Cambridge University Press, 1987). On the welfare state, see C. Offe, Contradictions of the Welfare State, ed. J. Keane (London: Hutchinson, 1984).

2. J. Roemer, 'Rational Choice Marxism', in Roemer (ed.) Analytical Marxism (Cambridge: Cambridge University Press, 1986); A. Nove, The Economics of Feasible Socialism (London: Allen and Unwin, 1983).

3. See J. Dunn, 'Defining a Defensible Socialism for Britain Today', in P. Nolan and S. Paine (eds), Rethinking Socialist Economics: A New Agenda for Britain (New York: St. Martin's Press, 1986).

4. Dunn, 'Defining a Defensible Socialism', p. 35. 5. G. Therborn, 'The Life and Times of Socialism', New Left Review, no.

194 (1992), 17-32. 6. For the notion of styles of reasoning, see I. Hacking, 'Language, Truth

and Reason', in M. Hollis and S. Lukes (eds), Rationality and Relativism (Oxford: Blackwell, 1982).

7. J. Dunn, The Politics of Socialism (Cambridge: Cambridge University Press, 1984), p. 39.

8. If there is 'abundance', and conditions of scarcity no longer obtain, society as a set of alien structures dissolves into society as true collectivity. The self:world dichotomy governing our present conceptions of the agent, moreover, would no longer make the generation of collectivities problematic.

9. The most ambitious liberal theory of justice has been J. Rawls, A Theory of Justice (Oxford: Oxford University Press, 1973). On the illusory conflict between freedom and equality, see A. Sen, Inequality Examined (Oxford: Clarendon, 1992).

10. I shall defend the view that social democracy is a kind of socialism. For some timely remarks, see N. P. Mouzelis, 'The Balance Sheet of the Left', New Left Review, no. 200 (1993), 182-5.

11. See H. Marcuse, One-Dimensional Man (London: Routledge, 1964); Gorz, Farewell to the Working Class.

12. P. Anderson, A Zone of Engagement (London: Verso, 1992), pp. 358-9; J. Dunn, 'The Heritage and Future of the European Left', Economy and Society 22 (1993), 516-24; D. Marquand, 'After Socialism', Political Studies 41 (1993), 43-56.

13. D. Miller, 'The Relevance of Socialism', Economy and Society 20 (1991); p. 358.

14. Among contemporary philosophers, this matter has been most assiduously pursued by T. Nagel. See 'Subjective and Objective' in his Mortal

150

Notes 151

Questions (Cambridge: Cambridge University Press, 1979). 15. For example, in interpreting or predicting (or trying to influence) the

acts of others one uses moral language which defines persons as elements of a collectivity.

16. On classes as collectivities, see A. Callinicos, Making History (Cambridge: Polity, 1987). On nations as imagined communities, B. Anderson, Imagined Communities: Reflections on the Origin and Spread of Nationalism (London: Verso, 1983); and on national identity as basis for modern socialism, see D. Miller, Market, State and Community (Oxford: Oxford University Press, 1989).

17. S. Avineri, The Social and Political Thought of Karl Marx (Cambridge: Cambridge University Press, 1968), pp. 68-70; L. Kolakowski, Main Currents of Marxism I: The Founders (Oxford: Oxford University Press, 1978), pp. 376-97.

18. Gorz, Farewell to the Working Class; P. Anderson, In the Tracks of Historical Materialism (London: Verso, 1983).

19. G. Kitching, Rethinking Socialism (London: Methuen, 1983); B. Barry, 'The Continuing Relevance of Socialism', in his Liberty and Justice: Essays in Political Theory II (Oxford: Clarendon, 1991).

20. The problem has been posed in this form by C. A. MacKinnon, Toward a Feminist Theory of the State (Boston: Harvard University Press, 1989).

21. See A. Gamble, The Free Economy and the Strong State (London: Macmillan, 1988), pp. 28-32.

22. J. Habermas, The Theory of Communicative Action, 2 vols (Cambridge: Polity, 1991). Luhmann, yet more pessimistically, considers that even new social movements must fall victim to systematic functional differentiation. See N. Luhmann, Ecological Communication (Cambridge: Polity Press, 1989). On the conflation of methodological and substantive divisions in Habermas's work, see N. P. Mouzelis, Back to Sociological Theory: The Construction of Social Orders (London: Macmillan, 1991).

23. See M. Strathern, The Gender of the Gift (Berkeley: University of California Press, 1988), p. 7.

24. Marxists, east and west, have famously spent little time theorising about politics. See P. Anderson, Considerations on Western Marxism (London: New Left Books, 1976).

25. This is not just stubborn reservation of the metaphor of agency for human individuals: Hindess rejects methodological individualism, insisting that some social actors have relevantly similar properties to human agents. Defining an actor as 'a locus of decision and action, where the action is in some sense a consequence of the actor's decision', he takes state agencies, firms, churches and political parties to be actors. The concept cannot, however, apply to class, society, or gender group since these allegories of actorship lack the relevant 'decision-making apparatus'. B. Hindess, Choice, Rationality, and Social Theory (London: Unwin Hyman, 1988), p. 44; Politics and Class Analysis (Oxford: Blackwell, 1987).

26. See R. M. Unger, Social Theory: Its Situation and Its Task, An Introduction to 'Polities' (Cambridge: Cambridge University Press, 1987).

27. This account of objectivity follows T. Nagel, The View from Nowhere (Oxford: Oxford University Press, 1986), pp. 5-7.

152 Notes

28. Most political theorists vastly underrate how hard it is to provide a conception of a morally laudable future that appeals to diverse actors. Socialists' objectification of the capitalist mode of production accepts that the construction of future goals is marred by present false consciousness, and organises socialists' goals as the negation of present discontents.

29. Unger, Social Theory, p. 1. 30. Socialism has also embodied an assumption of progress: well-motivated

change can always improve the moral condition of society, and a sociology of sufficient sophistication for accomplishing the transformation of whole societies is seen as at least possible, if not already achieved.

31. See R. Bahro, From Red to Green (London: Verso, 1984). 32. P. Kennedy, 'Preparing for the 21st Century: Winners and Losers', New

York Review of Books, 11 February 1993, 32-44; see also P. Kennedy, Preparing for the Twenty-First Century (New York: Random House, 1993).

33. Environmentalists lack a theory of false consciousness tying the science of material change to potential agents. But for Marxists such a theory has been more a selective consolation than a necessary feature of analysis.

34. Gender relations are transformed in most Utopian visions, but attempts systematically to explain current relations in terms of the properties of capitalism have redoubled recently. See, for example, S. Benhabib and D. Cornell (eds), Feminism as Critique (Cambridge: Polity Press, 1987).

35. P. Allott, Eunomia: New Order for a New World (Oxford: Oxford University Press, 1990), pp. 132, 257.

36. Socialists have often failed to register the strength of nationalism for these same reasons.

37. Dunn, 'Defining a Defensible Socialism', pp. 48-9. 38. Rawls, Theory of Justice. For this criticism see M. J. Sandel, Liberalism

and the Limits of Justice (Cambridge: Cambridge University Press, 1982). On the narrow scope of the tiresome liberal-communitarian quarrel, see A. Ryan, 'The Liberal Community', Nomos XXXV (1993), 91-114.

39. Barry, 'Continuing Relevance of Socialism'. 40. Nozick's meta-utopia, in which individuals can move between com

munities of their choice until they settle in one in which they are both comfortable and welcomed, seems merely to reflect a relatively privileged perspective on the academic labour market of the 1960s. R. Nozick, Anarchy, State and Utopia (New York: Basic Books, 1974).

41. See, especially, J. Elster, Making Sense of Marx (Cambridge: Cambridge University Press, 1985), and Roemer (ed.), Analytical Marxism.

42. To explain collective action, we must consider not just 'vertical' divisions in society (reflecting 'distinctions between agents, loci of deliberation and the search for coherence') but also horizontal divisions (reflecting 'formal or substantive distinctions within agents, among the various values and circumstances that inform their desires and beliefs'). See S. Hurley, Natural Reasons: Personality and Polity (Oxford: Oxford University Press, 1989), pp. 317, 148, 158.

43. R. N. Berki, On Political Realism (London: Dent, 1981). 44. For enlightened realism, see Dunn, Politics of Socialism and Rethinking

Modern Political Theory (Cambridge: Cambridge University Press, 1985). Realism need not, as some suspect, collapse into conservatism. See, for

Notes 153

example, the conclusion to Dunn, Political Obligation in its Historical Context (Cambridge: Cambridge University Press, 1980).

45. Elster, Making Sense of Marx, pp. 200-201. See, also, G. A. Cohen, 'Illusions about Private Property and Freedom', in J. Mepham and D. Ruben (eds), Issues in Marxist Philosophy IV (Brighton: Harvester, 1979), esp. pp. 233-4.

46. Understandings of the plasticity of human dispositions are therefore relevant. Conservatives' scepticism about the malleability of human personality is plainly unconducive to any transformative project.

47. Unger has attempted to maintain and develop the Marxist distinction between the underlying institutional arrangements and imaginative preconceptions of a society (the mode of production) and the routines shaped by that context (the laws of each mode). Yet, at the same time, he rejects Marxists' necessitarian assumptions about the indivisibility of those contexts, and their subjection to lawlike constraints that generate a specific sequence of particular frameworks and a limited list of possible social orders. R. M. Unger, Politics, a Work in Constructive Social Theory, 3 vols (Cambridge: Cambridge University Press, 1987), esp. Introduction, pp. 87-128.

1 CLASSES IN CAPITALISM

1. See G. A. Cohen, Karl Marx's Theory of History: A Defence (Oxford: Clarendon, 1979); J. Elster, Making Sense of Marx (Cambridge: Cambridge University Press, 1985).

2. Reactions to Gellner's characterisation of the industrial revolution as a combination of the miraculous and the contingent show the dismay such accounts can still produce. See E. Gellner, Plough, Sword and Book (London: Collins, 1988).

3. In The Eighteenth Brumaire, Marx identifies at least the following as actors: the bourgeoisie, the proletariat, large landowners, the aristocracy of finance, peasants, a petty bourgeoisie, the middle class, the lumpen-proletariat, the industrial bourgeoisie, and hjgh dignitaries. See E. O. Wright, Classes (London: Verso, 1985), p. 7.

4. Figures are from A. R. Zolberg, 'How Many Exceptionalisms?', I. Katznelson and A. R. Zolberg (eds), Working Class Formation: Nineteenth-Century Patterns in Western Europe and the United States (Princeton: Princeton University Press, 1986), pp. 397-455, esp. 432 ff.

5. A. Przeworski, Capitalism and Social Democracy (Cambridge: Cambridge University Press, 1985), p. 18.

6. Kautsky's intellectual influence was primarily through Die Neue Zeit, the journal he founded in 1883 and edited until 1917. Its influence is discussed in L. Kolakowski, Main Currents of Marxism 2: The Golden Age (Oxford: Oxford University Press, 1981), pp. 32-4.

7. This generates the two competing notions of determinism and voluntarism - objective interests must be realised in the end, whatever actors try to do, or special intervention is needed, such as an active party. See Przeworski, Capitalism and Social Democracy, pp. 50-2.

154 Notes

8. F. Engels, The Condition of the Working Class in England (Harmonds-worth: Penguin, 1987).

9. See Barrington Moore Jr, Injustice: The Social Bases of Obedience and Revolt (New York: White Plains, 1978).

10. A Gorz, Farewell to the Working Class: An Essay on Post-Industrial Socialism, trans. M. Sonenscher (London: Pluto Press, 1982), p. 19.

11. See G. Stedman Jones, Languages of Class: Studies in English Working Class History, 1832-1982 (Cambridge: Cambridge University Press, 1983), p. 26.

12. J. Foster, Class Struggle and the Industrial Revolution (London: Weidenfeld and Nicolson, 1973).

13. Z. Bauman, Memories of Class: The Pre-History and After-Life of Class (London: Routledge and Kegan Paul, 1982), Ch. 4, and pp. 55-7.

14. Lukes argues that Marx was a consequentialist perfectionist, and more consistent in his rejection of bourgeois morality than he sometimes seems. S. Lukes, Marxism and Morality (Oxford: Clarendon, 1985).

15. The literature on the obligation of citizens to obey their states is thin, superstitiously favouring either obedience under almost all circumstances or disobedience likewise. For an exception, see J. Dunn, Political Obligation in its Historical Context (Cambridge: Cambridge University Press, 1980).

16. T. Garton Ash, 'Eastern Europe: The Year of Truth', New York Review of Books, 15 June (1990), p. 17.

17. On the idea of a transparent, undistorted, directly experienced popular will, see L. A. Hunt, Politics, Culture and Class in the French Revolution (Berkeley: University of California Press, 1984).

18. See E. O. Wright, A. Levine, E. Sober, Reconstructing Marxism: Essays on Explanation and the Theory of History (London: Verso, 1992), p. 189.

19. For discussion of these issues, see C. M. Vogler, The Nation-State: The Neglected Dimension of Class (Aldershot: Gower, 1985).

20. It was not clear whether this schema was to include non-historical peoples (notably southern Slavs, Scots, and Basques) or those ambiguously related - then as much as now - to the historical process (Africans and Americans).

21. A. Giddens, The Constitution of Society (Cambridge: Polity, 1984), p. 163. 22. L. Trotsky, 'Results and Prospects' [1906], in 'The Permanent Revolu

tion' and 'Results and Prospects' (New York: Pathfinder, 1970). See J. Dunn, Rethinking Modern Political Theory (Cambridge: Cambridge University Press, 1985), pp. 103-18, for analysis.

23. Kolakowski, Golden Age, pp. 88-94. 24. Wright's Classes offers no systematic treatment of the national question.

Przeworski's comparative analysis in Capitalism and Social Democracy studiously ignores the problem: comparative works are often most casual about units of analysis - castigating authors for not looking at enough of them, rather than for assuming their naturalness. See, especially, Katznelson and Zolberg, Working Class Formation, Introduction.

25. R. M. Unger, Social Theory: Its Situation and Its Task (Cambridge: Cambridge University Press, 1987), pp. 101-11.

26. See, also, M. Fulbrook and T. Skocpol, 'Destined Pathways: The Historical Sociology of Perry Anderson', in Skocpol (ed.), Vision and Method in

Notes 155

Historical Sociology (Cambridge: Cambridge University Press, 1984). 27. See T. Judt, Marxism and the French left (Oxford: Clarendon, 1986),

Ch. 4. 28. T. Skocpol, States and Social Revolutions (Cambridge: Cambridge Uni

versity Press, 1979). 29. Z. Bauman, Modernity and Ambivalence (Cambridge: Polity, 1991). 30. K. Polanyi, The Great Transformation (Boston: Beacon Press, 1957 [1944]). 31. For the latter view, see G. Hawthorn, Plausible Worlds: Explanation and

Understanding in History and the Social Sciences (Cambridge: Cambridge University Press, 1991).

32. This was towards the end of the first decade of the twentieth century. All figures from Zolberg, 'How Many Exceptionalisms?', 432 ff., which also contains analysis of capital intensity.

33. See G. Esping-Andersen, Three Worlds of Welfare Capitalism (Cambridge: Cambridge University Press, 1990).

34. On the boundary problem, see F. Parkin, Marxism and Class Theory: A Bourgeois Critique (London: Tavistock, 1979). On contradictory class locations, see Wright, Classes.

35. See Przeworski, Capitalism, p. 53. 36. Stedman Jones, Languages of Class, pp. 19-20. Marx's historical and

relational understanding of 'exploitation' need not denote material deprivation or discontent.

37. Stedman Jones, Languages of Class, p. 17. If this group really was so narrow, of course, this makes the pervasiveness of 'languages of class' in England harder to understand.

38. G. A. Cohen's recent ingenious attempt to solve this problem of agency without recourse to shifty metaphysics treats some collective revolt as a rational response to a perceived choice between barbarism and socialism. G. A. Cohen, 'Historical Inevitability and Human Agency', History, Labour and Freedom: Themes from Marx (Oxford: Clarendon, 1987) pp. 51-82.

39. Bauman, Memories of Class, pp. 12-16. 40. From History of the Russian Revolution, quoted A. Callinicos, Making

History (Cambridge: Polity, 1987), p. 227. 41. Even Karl Kautsky, that very model of orthodoxy, was obliged to ac

credit national citizenship with some weight (for Germans, at any rate). Likewise, French leftists overrated the importance to the other members of the International of their domestic politics.

42. See P. Anderson, Considerations on Western Marxism (London: New Left Books, 1976).

43. R. Miliband, Marxism and Politics (Oxford: Oxford University Press, 1977), p, 118.

44. R. Miliband, Capitalist Democracy in Britain (Oxford: Oxford University Press, 1982), p. 5.

45. See Judt, Marxism, Ch. 4. 46. Cohen, Karl Marx's Theory of History, p. 73. 47. E. P. Thompson, The Poverty of Theory (London: Monthly Review Press,

1978), p. 238. 48. Thompson, Poverty of Theory, pp. 70, 238.

156 Notes

49. P. Anderson, Arguments within English Marxism (London: New Left Books, 1980), pp. 40, 10. Thompson, by contrast, favourably quotes Sartre's distinction between concepts and notions, the former, because atemporal, being inapplicable to time and history. Poverty of Theory, p. 238.

50. Anderson, Arguments within English Marxism, p. 58. Elsewhere, for example In the Tracks of Historical Materialism (London: Verso, 1983), p. 34, he describes the subjective (class struggle) and the structural (clash between forces and relations of production) as 'two distinct types of causality' or 'principles of explanation'. Yet his asymmetrical view of the relations between structure and subject - that structural change does not generate subjective action, but that action is always subject to structural negation - is inconsistent with the treatment of structure and subject as different types of causality.

51. Anderson, In the Tracks, p. 93. 52. Anderson, In the Tracks, pp. 106, 96.

2 STATES IN NATIONS

1. R. N. Berki, Socialism (London: Dent, 1975), p. 91. 2. A. Przeworski, Capitalism and Social Democracy (Cambridge: Cambridge

University Press, 1985), p. 3. 3. The French liberal tradition has been an exception. See B. Fontana,

Benjamin Constant and the Post-Revolutionary Mind (New Haven: Yale University Press, 1991); G. A. Kelly, The Humane Comedy: Constant, Tocqueville, and French Liberalism (Cambridge: Cambridge University Press, 1992).

4. See A. van den Berg, The Immanent Utopia: From Marxism on the State to the State of Marxism (Princeton: Princeton University Press, 1988).

5. See P. Evans, D. Rueschemeyer, T. Skocpol (eds), Bringing the State Back In (Cambridge: Cambridge University Press, 1985); J. A. Hall (ed.), States in History (Oxford: Blackwell, 1986).

6. On the state's ability to constitute society, see P. Corrigan and D. Sayer, The Great Arch (Oxford: Blackwell, 1985) and P. G. Cerny, The Changing Architecture of Politics: Structure, Agency, and the Future of the State (London: Sage, 1990), pp. 5-35.

7. D. Geary, 'Socialism and the German Labour Movement before 1914', D. Geary (ed.), Labour and Socialist Movements in Europe before 1914 (Oxford: Berg, 1989) pp. 101-36; D. Geary, European Labour Protest, 1849-1939 (London: Croom Helm, 1981), Introduction.

8. K. Marx and F. Engels, The Communist Manifesto (Moscow: Progress Publishers, 1977), p. 50.

9. M. Mann, 'The Autonomous Power of the State: Its Origins, Mechanisms and Results', Hall (ed.), States in History, p. 135.

10. The need for a literate and interchangeable workforce perhaps forced states to impose uniform culture on society. E. Gellner, Nations and Nationalism (Oxford: Blackwell, 1983), p. 46.

11. Britain was exceptional here: the priority of its industrialisation vitiated the need for state economic activism, and its territorial, isolation removed

Notes 157

the need for constant mobilisation. See E. M. Wood, The Pristine Culture of Capitalism: a Historical Essay on Old Regimes and Modern States (London: Verso, 1992).

12. See, especially, J. Dunn, Interpreting Political Responsibility (Cambridge: Polity, 1990).

13. C. Geertz, The Interpretation of Cultures (New York: Basic Books, 1973), p. 317 See also J. C. D. Clark, 'National Identity, State Formation, and Patriotism', History Workshop 29 (1990) 95-102.

14. M. Oakeshott, On Human Conduct (Oxford: Oxford University Press, 1975), pp. 200-1.

15. This reflects two ways of explaining politics, focusing on recht or on fields of power. States are both particular organisations through which a collectivity can pursue goals, and wider configurations that shape the meaning and methods of all political activity. They are both governmental institutions of a definite type within society, and the overall form of a state-based society. For these readings, see T. Skocpol, States and Social Revolutions (Cambridge: Cambridge University Press, 1979); A. Giddens, The Constitution of Society (Cambridge: Polity Press, 1984).

16. Furthermore, in order to make full sense out of the actions of others we need to ascribe to them human attitudes of good will, carelessness, or ill will. Our reactions to what we perceive to be an ill-intentioned action will be vastly different to our feelings about something done accidentally to us. P. F. Strawson, 'Freedom and Resentment', Proceedings of the British Academy, 43 (1962), 187-211.

17. G. Hawthorn, Enlightenment and Despair, 2nd edn (Cambridge: Cambridge University Press, 1987), p. 268.

18. T. Nairn, The Break-Up of Britain (London: New Left Books, 1977), p. 343. 19. E. Hobsbawm, 'Inventing Traditions', E. Hobsbawm and T. Ranger (eds),

The Invention of Tradition (Cambridge: Cambridge University Press, 1983), pp. 13-14; B. Anderson, Imagined Communities: Reflections on the Origin and Spread of Nationalism (London: Verso, 1983).

20. The sceptical parentheses are explained, in two very different contexts, by Nairn, Break-Up of Britain, and by the introduction to L. Vail (ed.), The Creation of Tribalism in Southern Africa (London: James Currey, 1989).

21. Geary argues that there was in fact little interest in Marxist theory even among the leaders of the German Social Democratic Party at the height of its theoretical predominance. See European Labour Protest, pp. 11-14.

22. Przeworski, Capitalism and Social Democracy. 23. L. Kolakowski, Main Currents of Marxism, II: The Golden Age (Oxford:

Oxford University Press, 1981), p. 24. 24. Kolakowski, Golden Age, pp. 29-30. 25. See A. Gorz, Farewell to the Working Class (London: Pluto, 1983); P.

Anderson, In the Tracks of Historical Materialism (London: Verson, 1983). 26. B. Barry, 'The Continuing Relevance of Socialism', in his Liberty and

Justice: Essays in Political Theory II (Oxford: Clarendon, 1991); G. Kitching, Rethinking Socialism (London: Methuen, 1983).

27. V. I. Lenin, Imperialism: the Highest Stage of Capitalism (New York: International Publishers, 1939).

158 Notes

28. In Britain a more systematic, albeit still informal, dynamic of cooperation emerged. K. Middlemas, Politics in Industrial Society (London: Deutsch, 1979).

29. In Britain this settlement has been unwisely viewed as a postwar consensus. See A. M. Butler, 'The End of Post-War Consensus', Political Quarterly 64 (1993), 435-46.

30. Przeworski, Capitalism and Social Democracy, p. 36. 31. See E. M. Wood, The Pristine Culture of Capitalism (London: Verso,

1992). Political thought it Italy has reflected the weakness of its state. See P. Anderson, A Zone of Engagement (London: Verso, 1992), pp. 107-8.

32. For an analysis stressing containment of working-class protest, see C. Leys, Politics in Britain: From Labourism to Thatcherism, 2nd edn (London: Verso, 1989), p. 278 ff. On the containment of middle-class entrepreneurial politics by an aristocratic elite, see G. R. Searle, Entrepreneurial Politics in Mid-Victorian Britain (Oxford: Oxford University Press, 1993).

33. C. Pierson, Beyond the Welfare State? The New Political Economy of Welfare (Cambridge: Polity Press, 1991), p. 112.

34. States have varied widely in such capacities. The comparative weakness of the British state has been ably documented'by D. Marquand, The Unprincipled Society: New Demands and Old Politics (London: Jonathan Cape, 1988); A. Gamble, Britain in Decline: Economic Policy, Political Strategy, and the British State, 3rd edn (London: Macmillan, 1990).

35. J. Dunn, Interpreting Political Responsibility: Essays 1981-1989 (Cambridge: Polity Press, 1990), pp. 135-9.

36. R. McKibbin, Ideologies of Class (Oxford: Oxford University Press, 1991), Ch. 9.

37. A. Cairncross, Years of Recovery: British Economic Policy 1945-51 (London: Methuen, 1987), Ch. 11.

38. S. H. Beer, Modern British Politics (London: Faber, 1965), Ch. 7. 39. K. O. Morgan, Labour in Power 1945-51 (Oxford: Oxford University

Press, 1985), Ch. 3. 40. A. Nove, An Economic History of the USSR (Harmondsworth: Penguin,

1982); Cairncross, Years of Recovery, pp. 310-12. 41. P. A. Hall, 'Policy Paradigms, Social Learning, and the State: The Case

of Economic Policymaking in Britain', Comparative Politics 25 (1993) 275-96.

42. C. S. Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge: Cambridge University Press, 1987), p. 267; P. A. Hall, (ed.), Conclusion, The Political Power of Economic Ideas: Keynesiasn-ism across Nations (Princeton: Princeton University Press, 1989).

43. British corporatism, unusually, was too institutionally weak and historically underdeveloped to be an explicit element. British unions were small, fragmented and competitive; industrial capital was divided between international conglomerates and small producers; the financial system was market driven and internationally oriented; and the state lacked capacities for investment planning and corporatist management. While the British state was in this sense unusual, each nation had its particular framework for construing executive capacity as an enabler of representative govern-

Notes 159

ment. C. S. Maier, 'Preconditions for Corporatism', in J. H. Goldthorpe (ed.), Order and Conflict in Contemporary Capitalism (Oxford: Clarendon, 1984).

44. R. Skidelsky, 'Keynes and the State', in D. Helm (ed.), The Economic Borders of the State (Oxford: Oxford University Press, 1990), p. 144.

45. C. A. R. Crosland, The Future of Socialism (London: Cape, 1956), p. 29. 46. See A. Cairncross, Years of Recovery: British Economic Policy 1945-51

(London: Methuen, 1987), Ch. 11. 47. P. A. Gourevitch, 'The Politics of Economic Policy Choice in the Post-War

Era', in P. Guerrieri and P. C. Padoan (eds), The Political Economy of European Integration (Hertfordshire: Harvester Wheatsheaf, 1989), p. 270.

48. Pierson, Beyond the Welfare State, Ch. 4. 49. P. Willis, Learning to Labour (Farnborough: Saxon House, 1977): C.

Offe, Contradictions of the Welfare State, ed. J. Keane (London: Hutchinson, 1984). Free health care and state pensions came to be seen as a part of the setting of social life, rather than as discrete and repeated actions of the state, and so were dependent on growing resources.

50. T. Nairn, The Enchanted Glass: Britain and its Monarchy (London: Century Hutchinson, 1988).

51. The 'British public' and their 'way of life' have always been notions as exclusive as inclusive - and not just for the non-English. See R. McKibbin, 'Class and Conventional Wisdom: The Conservative party and the "Public" in Inter-war Britain', in his Ideologies of Class: Social Relations in Britain 1880-1950 (Oxford: Oxford University Press, 1991), pp. 259-93.

3 THE LIMITS OF THE UNITARY STATE

1. A. G. Jordan and J. J. Richardson, British Politics and the Policy Process: An Arena Approach (London: Unwin Hyman, 1987).

2. The successes of welfare policy are documented in S. Ringen, The Possibility of Politics (Oxford: Clarendon, 1989); C. Pierson, Beyond the Welfare State: The New Political Economy of Welfare (Cambridge: Polity, 1991); J. Le Grand, The State of Welfare', in J. Hills (ed.), The State of Welfare (Oxford: Clarendon, 1990).

3. On problems with the idea of shared intentions, see W. M. Reddy, Money and Liberty in Early Modern Europe: A Critique of Historical Understanding (Cambridge: Cambridge University Press, 1987).

4. The debate between Lindblom and Wildavsky was always at the forefront of this evolving discipline. See C. E. Lindblom, The Policy-Making Process (Englewood Cliffs, NJ: Prentice Hall, 1968), Politics and Markets (New York: Basic Books, 1977); A. Wildavsky, Evaluation as an Organisational Problem (London: CES, 1972). Sophisticated British practitioners include B. Hogwood and L. Gunn, Policy Analysis for the Real World (Oxford: Oxford University Press, 1984), and C. C. Hood, The Tools of Government (London: Macmillan, 1983).

5. S. Brittan, The Role and Limits of Government (London: Temple Smith, 1983); D. Bell, The Cultural Contradictions of Capitalism (London: Heinemann, 1976).

160 Notes

6. C. Offe, Contradictions of the Welfare State, ed. J. Keane (London: Hutchinson, 1984); J. Habermas, Legitimation Crisis (London: Heinemann, 1975), The Theory of Communicative Action, 2 vols (Cambridge: Polity, 1988).

7. Especially A. F. Robertson, People and the State: An Anthropology of Planned Development (Cambridge: Cambridge University Press, 1984).

8. A. J. Polan, Lenin and the End of Politics (London: Methuen, 1984). 9. Polan, Lenin, p. 95.

10. S. Barret and C. Fudge, Policy and Action (London: Methuen, 1981); Hogwood and Gunn, Policy Analysis.

11. Non-hierarchical organisation and careful information management can enhance agencies' capacities.

12. Jordan and Richardson, British Politics. 13. Developing countries face the starkest dependence on their states. See

Robertson, People and the State. 14. This was by no means a novel thought. For an example in this century,

see B. A. Lee, 'The Miscarriage of Necessity and Invention: Proto-Keynesianism and Democratic States in the 1930s', in P. A. Hall (ed.), The Political Power of Economic Ideas: Keynesianism across Nations (Princeton: Princeton University Press, 1989).

15. J. Buchanan and R. Wagner, Democracy in Deficit: The Political Legacy of Lord Keynes (New York: Academic Press, 1977). The best analysis of internal union politics comes not from the right but from C. Sabel, 'The Internal Politics of Trade Unions', in S. Berger (ed.), Organizing Interests in Western Europe: Pluralism, Corporatism and the Transformation of Politics (Cambridge: Cambridge University Press, 1981).

16. L. Thurow argues convincingly that the study of labour markets is the Achilles' heel of the theory of government policy. See Dangerous Currents: The State of Economics (Oxford: Oxford University Press, 1983), Ch. 3.

17. This point is made most forcibly by J. Dunn, The Politics of Socialism (Cambridge: Cambridge University Press, 1984).

18. There were and are, of course, fairly direct political reasons why it would be imprudent to interfere with these important constituencies too readily.

19. This vulnerability was much theorised. E. Mandel, Late Capitalism (London: New Left Books, 1975); The Second Slump (London: New Left Books, 1978); H. Braverman, Labour and Monopoly Capital: The Degradation of Work in the Twentieth Century (New York: Monthly Review Press, 1974); J. Roemer, A General Theory of Exploitation and Class (Cambridge, Mass.: Harvard University Press, 1982); G. Therborn, What Does the Ruling Class Do When It Rules? (London: New Left Books, 1978). For surveys, see P. Anderson, Arguments within English Marxism (London: New Left Books, 1980); In the Tracks of Historical Materialism (London: Verso, 1983).

20. J. Elster, Making Sense of Marx (Cambridge: Cambridge University Press, 1985); J. Elster and K. Moene (eds), Alternatives to Capitalism (New York: Cambridge University Press, 1988); C. Bay, Strategies of Political Emancipation (London: University of Notre Dame Press, 1973). Models attending to practical politics include A. Nove, The Economics of Feasible Socialism (London: Allen and Unwin, 1983); J. D. Stephens, The

Notes 161

Transition from Capitalism to Socialism (London: Macmillan, 1979); D. Miller, Market, State and Community (Oxford: Oxford University Press, 1989); M. Ellman, Socialist Planning (Cambridge: Cambridge University Press, 1979); S. Estrin, Self-Management: Economic Theory and Yugoslavian Practice (Cambridge: Cambridge University Press, 1983).

21. J. E. Roemer, 'Can There Be Socialism after Communism?', Politics and Society 20 (1992), 261-76. I couch my argument in the idiom of microeconomics, not because this language carries especial authority but because of its convenience. On the advantages of principal-agent analysis (compatible with micro-economics), see T. Moe, 'The New Economics of Organization', American Journal of Political Science 28 (1984), 739-77. Something like the same case could be made out through the Hayekian analysis of the epistemic functions of markets, or through an examination of markets as institutions.

22. Miller, Market, Ch. 6. 23. Nove, Economics, p. 52. 24. Thurow, Dangerous Currents, Ch. 3; Roemer, 'Can there be Socialism?';

R. Aberg, 'Market-Independent Income Distribution: Efficiency and Legitimacy in Contemporary Capitalism', in J. H. Goldthorpe (ed.), Order and Conflict in Contemporary Capitalism (Oxford: Clarendon, 1984).

25. Nove, Economics, p. 102. 26. Mandel and Nove analyse choice as the selection of a 'basket' of goods

and services to consume given a budget constraint - an oversimplification evident in Nove's claim that there were 12 million 'identifiably different products' in the USSR. This is 'disaggregated down to specific types of ball bearings, designs of cloth, sizes of brown shoes, and so on'. Nove, Economics, p. 33.

27. For an introduction to the anthropological literature, see A. Appadurai (ed.), The Social Life of Things: Commodities in Cultural Perspective (Cambridge: Cambridge University Press, 1986).

28. On 'synthetic' wants - a somewhat loaded term - see F. Hirsch, Social Limits to Growth (London: Twentieth Century, 1976).

29. P. Bourdieu, Distinction: A Social Critique of the Judgement of Taste, trans. R. Nice (London: Routledge, 1984).

30. E. E. Evans-Pritchard, The Nuer: A Description of the Modes of Livelihood and Political Institutions of a Nilotic People (Oxford: Clarendon, 1940), p. 89.

31. This economy is only vestigially 'planned' since outcomes are not centrally determined. Explaining the distinctiveness of its economic system, a Yugoslavian joke suggests that, in Stalinism, the representatives of the people drive Mercedes; in Yugoslavia, however, the people themselves drive Mercedes, by proxy, through their representatives. Quoted in S. Zizek, The Sublime Object of Ideology (London: Verso, 1989), p. 199.

32. See P. Hare, Planning the Economy (London: Macmillan, 1985); Roemer, 'Is Socialism Possible?'

33. C. Sabel, Work and Politics (Cambridge: Cambridge University Press, 1982), Ch. 2.

34. Miller, Market, pp. 12, 92. 35. This twee assessment is from the Introduction to J. Elster and K. Moene

162 Notes

(eds), Alternatives to Capitalism (Cambridge: Cambridge University Press, 1988).

36. Gorz, Farewell. 37. C. Offe, 'Changing Boundaries of Institutional Politics: Social Movements

Since the 1960s', in C. S. Maier (ed.), Changing Boundaries of the Political (Cambridge: Cambridge University Press, 1987).

38. Offe, 'Changing Boundaries ' , pp. 77 -8 . 39. Offe, 'Changing Boundaries ' , p. 79. 40. Inglehart controversially argues that the shift to self-expression, 'quality

of life' issues, gender and sexuality is associated with wealth during formative (pre-adult) years. R. Inglehart, Culture Shift in Advanced Industrial Society (Princeton: Princeton University Press, 1990).

4 1 . Or, more accurately, its relocation to countries that cannot afford stringent labour and environmental legislation.

42. Offe, 'Changing Boundaries ' , p. 99. 43 . Offe, 'Changing Boundaries ' , p. 74. 44. J. Habermas, The Theory of Communicative Action 11 (Cambridge: Polity,

1991).

4 A STATE IN DECLINE

1. G. Kitching, Rethinking Socialism (London: Methuen, 1983). 2. G. Foote, The Labour Party's Political Thought (London: Croom Helm,

1985). 3. C. A. R. Crosland, The Future of Socialism (London: Cape, 1956). 4. Introduction to A. Boltho (ed.), The European Economy: Growth and

Crisis (Oxford: University Press, 1982). 5. These strategies were a political dialogue more than an economic one.

Indeed, they illustrated the inescapably political nature of seemingly technical policy choice. Influential statements by professional economists included G. Hodgson, Socialist Economic Strategy, Labour Party Discussion Series, no. 2 (Leeds: ILP Square One, 1979); London CSE, 'Crisis, the Labour Movement and the Alternative Economic Strategy', Capital and Class, 8 (1979) 6 6 - 9 3 ; London CSE, The Alternative Economics Strategy: A Labour Movement Response to the Economics Crisis (London: CSE Books, 1980); B. Rowthorn, 'The Alternative Economic Strategy', International Socialism, 8 (1980), 385-94.

6. Hall argues that Keynesianism encouraged postponement of active industrial policy. See P. Hall, Governing the Economy (Oxford: Oxford University Press, 1986), p. 85; C. S. Allen, 'The Underdevelopment of Keynesianism in the Federal Republic of Germany' , and E. M. Hadley. 'The Diffusion of Keynesian Ideas in Japan' , both in P. Hall (ed.). The Political Power of Economic Ideas: Keynesianism across Nations (Princeton: Princeton University Press, 1989).

7. M. Surrey, 'The United Kingdom', in Boltho, European Economy, p. 552. 8. The income elasticity of demand for public goods in the developed econ

omies was estimated at the order of magnitude of 1. 25 and 1.8. M. Beck, 'Public Sector Growth: A Real Perspective', Public Finance 3 (1979) p. 313.

Notes 163

9. R. Lowenthal, 'The Postwar Transformation in Europe', in B. Denitch (ed.) Democratic Socialism: The Mass Left in Advanced Industrial Societies (Montclair, NJ: Allenheld Osmum, 1981), pp. 29-30; T. Scitovsky, Human Desire and Economic Satisfaction (Brighton: Wheatsheaf, 1986), p. 9.

10. J. Le Grand, The Strategy of Equality (London: Allen and Unwin, 1982). 11. The state may be a capacity or an agent; and it may be the instrument of

capitalists, or the vehicle of the interests of Capital itself (whatever the wishes of the bourgeoisie).

12. M. Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962); M. and R. Friedman, Free to Choose (Harmondsworth: Penguin, 1979).

13. See J. Freeman, Democracy and Markets: The Politics of Mixed Economies (Ithaca: Cornell University Press, 1989) for an attempt to analyse performance on more than one dimension; see also W. Beckerman, 'How Large a Public Sector?', in D. Helm (ed.). The Economic Borders of the State (Oxford: Oxford University Press, 1990).

14. Left and right often saw eye-to-eye on this redundancy. See B. Rowthorn, Capitalism, Crisis, and Inflation (London: Lawrence and Wishart, 1980), pp. 95-147; S. Brittan, The Economic Consequences of Democracy (London: Temple Smith, 1977).

15. While economic growth has some impact on the control of inflation at the micro-economic level (since increases in productivity absorb some increases in wage costs) productivity gains from investment are consequent on the transfer of resources from consumption to investment.

16. C. Allsopp, 'Inflation', in A. Boltho, European Economy, p. 102. 17. P. Willman, Fairness, Collective Bargaining, and Incomes Policy (Ox

ford: Clarendon, 1982). 18. F. Hirsch, Social Limits to Growth (London: Twentieth Century, 1976). 19. W. Brown and S. Wadhwani, 'Economic Effects of Industrial Relations

Legislation since 1979', National Institute Economic Review, no. 131 (1990), 57-69.

20. I rely heavily on the Keynesian perspectives in Boltho, European Economy. 21. This rational expectations hypothesis is developed in C. Allsopp, 'The

Macro-Economic Role of the State', in Helm (ed.), Economic Borders of the State.

22. Monetarist (and some Marxist) accounts stressed international phenomena like the breakdown of the international monetary system, and the financing of the Vietnam War and US domestic public programmes. The British left treated these matters thinly, focusing on 'real' domestic resource competition.

23. F. Bernabe, 'The Labour Market and Unemployment', in Boltho, European Economy.

24. Introduction, Boltho, European Economy, p. 27. 25. G. Ingham, Capitalism Divided? (London: Macmillan, 1984); B. Rowthorn

and J. Wells, De-industrialisation and Foreign Trade (Cambridge: Cambridge University Press, 1987).

26. De-industrialisation takes different forms, sometimes accompanied by a rapidly expanding industrial sector (and high economic growth) with compensatory employment in the service sector.

164 Notes

27. M. F. Scott, A New View of Economic Growth (Oxford: Clarendon, 1989); S. Pollard, The Wasting of the British Economy (London: Croom Helm, 1982).

28. Allsopp, 'Macro-economic Role'. 29. Financing the external fuel balance in an extended period of expansion

might trouble others, more especially as a coordinated international expansion to reduce non-oil current-account problems might generate oil-price pressures.

30. Rowthorn and Wells, De-industrialisation, p. 316. 31. The state cannot itself efficiently generate growth, which requires a crea

tivity, energy and sensitivity to signals that cannot persist in a state bureaucracy. J. Schumpeter, Capitalism, Socialism, and Democracy (London: Allen and Unwin, 1959) remained a classic and influential text.

32. P. Hare, Planning the Economy (London: Macmillan, 1985), p. 132. 33. See M. Nuti, 'Economic Planning in Market Economies: Scope, Instru

ments, Institutions', in P. Nolan and S. Paine (eds), Rethinking Socialist Economics (Cambridge: Polity, 1986).

34. H. Wilson, Report of a Committee to Review the Functioning of Financial Institutions (London: HMSO, 1980).

35. P. Anderson, 'The Figures of Descent', New Left Review, no. 161 (1987) p. 57.

36. Anderson, 'Figures', p. 77. 37. A. Hughes, 'Investment Finance, Industrial Strategy and Economic Re

covery', in Nolan and Paine, Rethinking Socialist Economics. 38. Hare, Planning, p. 200. 39. J. Carrington and G. Edwards, Reversing Economic Decline (London:

Macmillan, 1981), p. 167. Causality is unlikely to run only one-way. 40. See J. B. Goodman and L. W. Pauly, 'The Obsolescence of Capital Con

trols? Economic Management in an Age of Global Markets', World Politics 46 (1993), 50-82.

41. Anderson, 'Figures'. 42. Hare, Planning, p. 139. 43. Hare, Planning, p. 132. The absence of relevant future and other insu

rance markets is explained largely by transactions' costs. 44. For French and Spanish experience of competition between finance and

industry ministries, see Hall, Governing the Economy, and R. Gunther, Public Policy in a No Party State: Spanish Planning and Budgeting in the Twilight of the Franquist Era (London: University of California Press, 1980).

45. Hare, Planning, p. 223. 46. S. Estrin, 'Decentralized Economic Planning: Some Issues', Economics

of Planning 19 (1985), p. 154; Hall, Governing the Economy, p. 205. 47. On the intractability of this problem, see S. Estrin, Self-management:

Economic Theory and Yugoslavian Practice (Cambridge* Cambridge University Press, 1983).

48. Professional managers, of course, will also claim that they possess a specialised skill in the management of information rather than merely a special status.

49. Aaronovitch's Conclusion to S. Aaronovitch and R. Smith, The Political

Notes 165

Economy of British Capitalism (London: McGraw-Hill, 1981). 50. The potential of cooperative management of capital flows remains an

open question. Longer-term controls may be feasible and benevolent in developing countries in particular. See D. R. Lessard and J. Williamson, Capital Flight: The Problem and Policy Responses (Washington, DC: HE, 1987).

51. See, for example, F. Cripps and W. Godley, 'Control of Imports as a Means to Employment and the Expansion of World Trade: The UK Case', Cambridge Journal of Economics 2 (1978), 327-34.

52. R. Smith, 'Britain and the International State Apparatus', in Nolan and Paine, Rethinking Socialist Economics, pp. 108-9.

53. M. Davenport, 'The Economic Impact of the EEC, in Boltho, European Economy.

54. L. Robins, The Reluctant Party: Labour and the EEC 1961-75 (Ormskirk: Hesketh, 1979).

55. A. Bevan, Tribune, August 1957, quoted in M. Foot, Aneurin Bevan, Vol. II (St Alban's: 1975), p. 559. A memorandum by Ernest Davies, PPS to Ernest Bevin, is cited by Newman {Socialism and European Unity, pp. 133-4) as follows: 'Maintenance of the welfare state and a planned economy to ensure maximum production, full employment and a fairer distribution of the national income are among the chief aims of Labour's economic policy. There must be complete freedom to plan, and power to control production, investment, prices, and the distribution of goods in short supply, all of which means that the preservation of socialist democracy necessitates a closed economy.'

5 WESTERN EUROPEAN SOCIALISM

1. J. G. Ruggie, international Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order', International Organisation 36 (1982), p. 393; A. S. Milward, The European Rescue of the Nation-State (London: Routledge, 1992).

2. P. Lange, 'Unions, Parties, the State, and Liberal Capitalism', in B. Denitch (ed.), Democratic Socialism and the Mass Left in Advanced Industrial Societies (Montclair: Allenheld Osmum, 1981); L. Tsoukalis, The New European Economy: The Politics and Economics of Integration (Oxford: Oxford University Press, 1991).

3. The original communities - the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the European Atomic Energy Community (EAEC) - I refer to as the European Community (EC). I improperly but conventionally describe the conglomerate post-Maastricht entity as the European Union (EU).

4. Milward, European Rescue of the Nation-State, pp. 2-3. 5. K. Featherstone, Socialist Parties and European Integration: A Comparative

History (Manchester: Manchester University Press, 1988). 6. See M. Newman, Socialism and European Unity: The Dilemma of the

Left in Britain and France (London: Junction Books, 1983). 7. See M. Rocard, 'French Socialism and Europe', Foreign Affairs 55 (1977).

166 Notes

8. J. Maravall, Dictatorship and Political Dissent: Workers and Students in Franco's Spain (London: Tavistock, 1978).

9. C. W. Anderson, The Political Economy of Modern Spain (Madison: University of Wisconsin Press, 1970); R. J. Harrison, The Spanish Economy in the Twentieth Century (London: Croom Helm, 1985); and 'Spain: The End of the Miracle', in A. Cox (ed.), Politics, Policy and the European Recession (London: Macmillan, 1982).

10. R. Gunther, Public Policy in a No Party State: Spanish Planning and Budgeting in the Twilight of the Franquist Era (Berkeley: University of California Press, 1980).

11. The outlines of a distinctive post-communist socialism have anyhow yet to emerge. The surrender of political sovereignty to a Berlin-centred political bloc, moreover, may not provide the most propitious foundation for the institutional entrenchment of democracy. R. Smith, 'European Security Perspectives: the Case of Eastern Europe', in B. Crawford and P. W. Schulze (eds), European Dilemmas after Maastricht (Berkeley: University of California Research Series, 1993).

12. Sweden, however, like Belgium and Italy, has public debt equivalent to a year's GDP.

13. On convergence see P. A. Gourevitch, 'The Politics of Economic Policy Choice in the Post-War Era', in P. Guerrieri and P. C. Padoan (eds), The Political Economy of European Integration (Herts: Harvester Wheatsheaf, 1989). On its demise, see J. H. Goldthorpe, 'The End of Convergence: Corporatist and Dualist Tendencies in Modern Western Societies', in Goldthorpe (ed.), Order and Conflict in Contemporary Capitalism (Oxford: Clarendon, 1984). Landmarks in crisis and contradiction theory include J. Habermas , Legitimation Crisis (London: Heinemann, 1975) and J. O'Connor, The Fiscal Crisis of the State (New York: St. Martin's, 1973).

14. G. Smith, Politics in Western Europe, 4th edn (Aldershot: Gower, 1986) Ch. 2. The left favoured national economic integration: centralised bargaining reduced union division, and social democrats gained a stable tax base and national planning mechanisms. See M. Keating, State and Regional Nationalism: Territorial Politics and the European State (London: Harvester Wheatsheaf, 1988).

15. G. Esping-Andersen, Three Worlds of Welfare Capitalism (Cambridge: Cambridge University Press, 1991), Ch. 7.

16. Esping-Andersen, Three Worlds. Regimes are differentiated by social rights, which 'de-commodify' labour; by how regimes act as stratifying systems; and by relations between state and markets. See also J. Freeman, Democracy and Markets: The Politics of Mixed Economies (Ithaca: Cornell University Press, 1989). On openness, see R. N. Cooper, Economic Policy in an Interdependent World: Essays in World Economics (Boston: MIT Press, 1986). On culture, see L. Hancher and M. Moran (eds), Capitalism, Culture and Economic Regulation (Oxford: Clarendon, 1989).

17. On institutions, see J. G. March and J. P. Olsen, Rediscovering Institutions: The Organizational Basis of Politics (New York: Free Press, 1989).

18. Economy, polity, education, and religion were increasingly distinct institutional and ideational realms uniquely codifying information. Democ-

Notes 167

racy is enfeebled as state and economy progressively bureaucratise and monetise spheres of human value. See N. Luhmann, Political Theory and the Welfare State, trans. J. Bednarz Jr (Berlin: Walter de Gruyter, 1990), and J. Habermas, The Theory of Communicative Action II (Cambridge: Polity, 1991). Rather than a taut system of human communication and organisation - something that mobilisation for 'total war' scarcely approached - states remained a managed shambles, subject to varying degrees of human direction.

19. Smith, Politics in Western Europe, ch. 8. As we have seen, British executive government achieved stable institutional foundations only in the late nineteenth century.

20. C. S. Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge: Cambridge University Press, 1987).

21. Smaller nations achieved more heightened degrees of self-understanding. P. J. Katzenstein, 'The Small European States in the International Economy', in J. G. Ruggie (ed.), The Antinomies of Interdependence: National Welfare and the International Division of Labour (New York: Columbia University Press, 1983).

22. Maier, In Search of Stability. 23. J. D. Stephens, The Transition from Capitalism to Socialism (London:

Macmillan, 1979). 24. D. Ashford, 'Democratic Dilemmas: What Future for the Left?', Politi

cal Quarterly 63 (1992), 384-93. 25. Esping-Andersen, Three Worlds, p. 186. 26. Esping-Andersen, Three Worlds, p. 163. 27. Esping-Andersen, Three Worlds, pp. 170-86. 28. R. O. Keohane, 'The World Political Economy and the Crisis of Embed

ded Liberalism', in J. H. Goldthorpe (ed.), Order and Crisis in Contemporary Capitalism (Oxford: Clarendon, 1984).

29. F. W. Scharpf, Crisis and Choice in European Social Democracy (London: Cornell University Press, 1991).

30. The integration of West Europe is stressed by P. M. Wijkman, 'Patterns of Production and Trade', in W. Wallace (ed.), The Dynamics of European Integration (London: Royal Institute of International Affairs, 1990).

31. On stages of integration, see B. Balassa, The Theory of Economic Integration (London: Allen and Unwin, 1961). On rationales for free trade areas, see R. C. Hine, 'Regionalism and Integration of the World Economy', Journal of Common Market Studies 30 (1992), 115-23.

32. C. F. Sabel, Work and Politics (Cambridge: Cambridge University Press, 1982), Ch. 5. J. B. Goodman and L. W. Pauly, 'The Obsolescence of Capital Controls? Economic Management in an Age of Global Markets', World Politics 46 (1993), 50-82.

33. See S. S. Cohen and J. Zysman, Manufacturing Matters: The Myth of the Post-Industrial Economy (New York: Basic Books, 1987). States' roles may vary more between sectors than between supposed 'strong' and 'weak' examples. S. Wilks and M. Wright (eds), Comparative Government-Industry Relations: Western Europe, the United States, and Japan (Oxford: Clarendon, 1987).

34. Changing technologies of production, however, do change relative wages

168 Notes

and employment patterns, creating vast domestic policy challenges. See also the Appendix on the lump of labour fallacy in S. Brittan, How to End the 'Monetarist' Controversy (London: Institute of Economic Affairs. 1981).

35. See M. Sharp, 'Technology and the Dynamics of Integration' in Wallace, Dynamics of European Integration', see also J. Sandholtz and W. Zysman, '1992: Recasting the European Bargain', World Politics 42 (1989), 95-128. The US created 29 million jobs between 1970 and 1990, Japan 12 million, and the EC 9 million, J. Delors, Weekly Mail and Guardian (Johannesburg: 10 June 1994), p. 20. Over this period, Japan increased manufacturing employment by 4 per cent, the US by just 1.5 per cent; in the EC it fell by a fifth.

36. On the significance of Esprit, see W. Sandholtz, 'Esprit and the Politics of Collective Action', Journal of Common Market Studies 30 (1992), 1-22.

37. Rent is a payment to an input higher than that the input would earn in any alternative use.

38. P. R. Krugman, Strategic Trade Policy and the New International Economics (Boston: MIT Press, 1986), Introduction.

39. Commission of the European Communities, Completing the Internal Market: White Paper from the Commission to the European Council (Luxembourg: Office for Official Publications of the European Communities, 1985).

40. See Tsoukalis, New European Economy, Chs 3-4; P. Cecchini, The European Challenge: 1992 (Aldershot: Wildwood House, 1988).

41. R. Dehousse, 'Integration versus Regulation? On the Dynamics of Regulation in the European Community', Journal of Common Market Studies 30 (1992), 383-402. On the modest scope of the programme, see J. Pelkman and L. Winters, Europe's Domestic Market (London: Routledge, 1988).

42. See B. Crawford (ed.), The Future of European Security (Berkeley: University of California Research Series, 1992).

43. W. Weidenfeld, 'Recasting the Political Landscape of Europe', in Crawford and Schulze, European Dilemmas after Maastricht.

44. Krugman argues that, given imperfectly integrated markets and sticky prices, the argument for exchange rate adjustments in the face of payments' imbalances seems compelling. P. R. Krugman, Exchange Rate Instability (Boston: MIT Press, 1989); Peddling Prosperity (London: Norton, 1994), Ch. 7.

45. See P. W. Schulze, 'Post-Maastricht: On the Path to a Europe of Multiple Speeds and a Series of Waiting Rooms', in Crawford and Schulze, European Dilemmas after Maastricht.

46. Treaty on European Union (Luxembourg: Office for Official Publications of the European Communities, 1992).

47. The average debt burden in the OECD is around 70 per cent of GDP. Organisation for Economic Cooperation and Development, Economic Outlook (Paris: OECD, 1994).

48. See, for example, P. Camiller, 'Beyond 1992: The Left and Europe', New Left Review, no. 175 (1989), 5-18.

49. Esping-Andersen, Three Worlds, Ch. 9. 50. P. Lange, 'Maastricht and the Social Protocol: Why Did They Do It?',

Politics and Society 21 (1993), 5-36. 51. Scharpf, Crisis and Choice in European Social Democracy.

Notes 169

52. The European Union's design, moreover, guarantees that it creates as wide a range of negative externalities for outsider states (especially in developing countries) as it could possibly achieve. Such a rearrangement of affective attachments - leaving aside the implausible human plasticity it implies - seems inappropriate for socialists: how can they rediscover the Europe beyond their national boundaries, without acknowledging the world beyond that Europe?

53. D. Marquand, 'Reinventing Federalism: Europe and the Left', New Left Review, no. 203 (1994), 17-26.

54. Compare R. Leonardi, 'Cohesion in the European Community: Illusion or Reality', West European Politics 16 (1993), 492-517; Tsoukalis, New European Economy, Ch. 8.

55. For a sober assessment of Eire's likely dependency, see T. Brown, 'Europe after Maastricht: The Irish Perspective', in Crawford and Schulze, European Dilemmas after Maastricht.

CONCLUSION: THE FUTURE OF SOCIALISM

1. See Magri's criticism of the Spanish, French and Italian socialist parties for electoralism, and his support for their virtuous British and German counterparts. L. Magri, 'The European Left Between Crisis and Refoundation', New Left Review, no. 189 (1991), 5-18.

2. J. Dunn, 'The Heritage and Future of the European Left', Economy and Society 22 (1993), 516-24.

3. For a very positive account of the British welfare state since the end of the boom, however, see J. Hills (ed.), The State of Welfare (Oxford: Clarendon, 1991).

4. On social mobility, see R. Erickson and J. H. Goldthorpe, The Constant Flux: A Study of Class Mobility in Industrial Societies (Oxford: Oxford University Press, 1993). For dismal conclusions about our understanding of growing inequality, see P. R. Krugman, Peddling Prosperity (London: Norton, 1994), Ch. 5.

5. See M. J. Sandel, Liberalism and the Limits of Justice (Cambridge: Cambridge University Press, 1982).

6. A. F. Robertson, People and the State: An Anthropology of Planned Development (Cambridge: Cambridge University Press, 1984), p. 142.

7. N. Deakin, 'Two Cheers for Decentralisation', Fabian Tracts 496 (1984), p. 29. M. Olson, The Logic of Collective Action (Boston: Harvard University Press, 1965).

8. J. Dunn, 'Political Obligation', in D. Held (ed.), Political Theory Today (Cambridge: Polity Press, 1991). Even as a foundation for political responses to racism, 'the idea of "community" has been evoked more often and more effectively by those seeking to legitimate the exclusion of the poor and particularly racial minorities from the mainstream of English society, than it has served as an effective basis of self-assertion by them'. J. Davis, 'From "Rookeries" to "Communities": Race, Poverty and Policing in London, 1850-1985', History Workshop, no. 27 (1989), p. 79.

9. B. Bozzoli (ed.), Class, Community and Ideology in the Evolution of South African Society (Johannesburg: Ravan, 1987).

170 Notes

10. The Economist, 11 June 1994, p. 21. 11. D. Miller, Market, State and Community (Oxford: Clarendon, 1989), pp.

236, 237-8, 245. 12. J. Dunn, Interpreting Political Responsibility (Cambridge: Polity, 1990),

p. 190. 13. Miller, Market, p. 235; emphasis added. 14. On the dangers of technical complexity and expert domination in mod

ern politics, see D. Yankelovich, Coming to Public Judgement: Making Democracy Work in a Complex World (Syracuse: Syracuse University Press, 1991).

15. See A. M. Butler, 'Unpopular Leaders: The British Case', Political Studies 43 (1995), 48-65.

16. On cosmopolitan democracy, see the introduction to D. Held (ed.), Prospects for Democracy (Cambridge: Polity, 1993).

17. For the UK, see K. Newton, Second City Politics (Oxford: Clarendon, 1976). 18. Z. Bauman, Memories of Class (London: Routledge and Kegan Paul, 1982),

pp. 185-93. 19. E. Laclau and C. Mouffe, Hegemony and Socialist Strategy (London:

Verso, 1985); G. Kitching, Rethinking Socialism (London: Methuen, 1983). 20. N. Mouzelis, 'The Balance Sheet of the Left', New Left Review, no. 200

(1993), 182-5. 21. G. Mulgan, Politics in an Anti-Political Age (Cambridge: Polity, 1994);

O. Kallscheuer, 'Will There Be a European Left? Theoretical and Political Enquiries', Postscript to A. Gorz, Capitalism, Socialism, Ecology, trans. C. Turner (London: Verso, 1994).

22. P. Allott, Eunomia: New Order for a New World (Oxford: Oxford University Press, 1990), p. 38.

23. See J. Habermas, Theory of Communicative Action, 2 vols (Cambridge: Polity, 1991). On the public sphere, see W. M. Reddy, 'Postmodernism and the Public Sphere: Implications for an Historical Ethnography', Cultural Anthropology 1 (1992), 135-68.

24. S. Avineri, The Social and Political Thought of Karl Marx (Cambridge: Cambridge University Press, 1968), pp. 136-9.

25. S. Owens, 'Sustainability and Environmental Policy', in D. Miliband (ed.), Reinventing the Left (Cambridge: Polity, 1994).

26. See Gorz, Capitalism, pp. 4-8. 27. P. Hall, Governing the Economy (Oxford: Oxford University Press, 1986),

p. 160. 28. On the irrelevance of comparative productivity, see P. R. Krugman, Ped

dling Prosperity, Ch. 10. 29. See I. Wallerstein, The Capitalist World Economy (Cambridge: Cambridge

University Press, 1979); Brandt Commission, Common Crisis (Boston: MIT Press, 1983).

30. Milward, European Rescue of the Nation-State, pp. 2-3. 31. Support for the left's programmes - for example, to reduce poverty, and

improve schooling and health - can only be sustained if goals are clearly defined and their accomplishment plainly demonstrated. D. Osborne and T. Gaebler, Reinventing Government (Reading, Mass.: Addison-Wesley, 1993).

Index

Aaronovitch, Sam, 164-5n Aberg, Rune, 16In absolutism, 117 abundance, 70, 71, 73, 150n agency,

collective, 7-13, 18, 26-7 socialist political agency, 7-9,

12, 13, 18, 59, 109 see also state, transformative

politics, working class Allen, Christopher S., 162n Allott, Philip, 16, 144, 152n, 170n Allsopp, Chris, 163n, 164n alternative economic strategies,

82-109, 162n Anderson, Benedict, 151n, 157n Anderson, C. W., 166n Anderson, Perry, 6, 39, 40, 97,

150n, 151n, 155n, 156n, 158n, 160n, 164n

Appadurai, Arjun, 16In Ashford, Douglas, 167n Attlee, Clement, 58 Austria, 25, 113, 116 Avineri, Shlomo, 15In, 170n

Bahro, Rudolf, 152n Balassa, Bela, 167n Bank of England, 107 Barret, S., 160n Barry, Brian, 18, 151n, 152n, 157n Bauman, Zygmunt, 35, 154n, 155n,

170n Bay, Christian, 160n Beck, M., 162n Beckerman, Wilfred, 163n Beer, Samuel H., 158n Belgium, 24 Bell, Daniel, 159n Benelux, 112 Benhabib, Seyla, 152n Benn, Tony, 83, 124 Berki, R. N., 152n, 156n

Bernabe, Franco, 163n Bernstein, Eduard, 48 Bevan, Aneurin, 108, 165n Beveridge, William, 58, 83 Bevin, Ernest, 58, 165n Boltho, Andrea, 82, 92, 162n Bourdieu, Pierre, 16In Bozzoli, Belinda, 169n Brandt Commission, 170n Braverman, Harry, 160n Bretton Woods, 59, 116 Brittan, Samuel, 159n, 163n, 168n Brown, Tony, 169n Brown, William, 163n Buchanan, James, 160n Bundesbank, 100, 123 bureaucracy, 11, 66, 80 Butler, Anthony, 158n, 170n

Cairncross, Alec, 158n, 159n Callinicos, Alex, 15In, 155n Camiller, Patrick, 168n capitalism,

setting of Marxist politics, 11, 23-32, 146

weakness of concept, 27-30 Carrington, J., 164n Cecchini, Paolo, 168n Cerny, Philip G., 156n citizenship, see democracy City of London, 96-8, 104, 105 Clark, J. C. D., 157n class,

consciousness, 13, 16, 25, 26, 34, 38-9

Marxist theory, 23-5, 36-40 new middle class, 34, 78, 79, 80 transitional, 24 see also working class

Cohen, G. A., 38, 39, 153n, 155n Cohen, S. S., 167n COMECON (Council for Mutual

Economic Assistance), 123

171

172 Index

Commission of the European Communities, see Europe

Commonwealth, 108 Communism, 2, 48 community, 17, 133-6 Confederation of British Industry

(CBI), 106 Conference of Socialist Economists

(CSE), 162n convergence

end of convergence, 118-19 postwar, 115-18

Cooper, Richard N., 166n Cornell, Drucilla, 152n corporatism, 51, 52, 54-7, 89,

105-6, 115-16, 158-9n Corrigan, Philip, 156n Crawford, Beverly, 168n Craxi, Bettino, 112 Cripps, F., 165n Crosland, C. A. R., 58, 159n, 162n Czech Republic, 123

Davenport, Michael, 165n Davies, Ernest, 165n Davis, J., 169n De Gaulle, Charles, 113 Deakin, Nicholas, 169n Dehousse, Renaud, 168n Delors, Jacques, 168n democracy,

capitalism, 53, 54-60 class struggle, 42, 46-7 cosmopolitan, 138 crisis of socialism, 136-9 participatory, 137-8

Dunn, John, 6, 16, 150n, 152n, 153n, 154n, 157n, 158n, 160n, 169n, 170n

Edwards, G., 164n Eire, 99, 128 electoralism, 132-3 Ellman, Michael, 16In Elster, Jon, 20, 152n, 153n, 160n,

161n emiseration, 28 Engels, Friedrich W., 8, 12, 23, 24,

25, 28, 29, 35, 145, 153n, 156n

environmentalism, 15-16, 78-80, 123, 132, 133, 141-2, 146

see also transformative politics equality, 4, 133 Erickson, R., 169n Esping-Andersen, Gosta, 155n,

166n, 167n, 168n Esprit, 120 Estrin, Saul, 161n, 164n Europe,

Commission of the European Communities, 119, 123, 168n

Council of Ministers, 123 European Communities, 85, 103,

107, 110-29, 148 European Parliament, 128 European Union, 108, 147, 148 internal market, 119-22 Monetary Union, 122-5, 126,

128, 147-8 weaknesses, 126-9

European Free Trade Area (EFTA), 112, 114, 119, 121, 123

Evans, Peter, 156n Evans-Pritchard, E. E., 16In

Featherstone, Kevin, 165n feminism, see transformative

politics Finland, 25 Fontana, Biancamaria, 156n Foote, G., 162n Foster, John, 154n France,

Communism, 113 European union, 112-14, 122 socialism, 33, 48, 50, 98, 99,

101, 112, 116 Franco (y Bahamonde), Francisco,

114 Frankfurt School, 66 freedom, 4, 134 Freeman, John, 163n, 166n Friedman, Milton, 163n Friedman, Rose, 163n Fudge, C , 160n Fulbrook, Mary, 154n

Gaebler, Ted, 170n

Index 173

Gamble, Andrew, 15In, 158n Garton Ash, Timothy, 26, 154n Geary, Dick, 156n, 157n Geertz, Clifford, 44, 157n Gellner, Ernest, 153n, 156n General Agreement on Tariffs and

Trade (GATT), 111 Germany,

Federal Republic, 1, 2, 99, 111, 115, 116, 120, 122, 124, 128

nineteenth-century revisionism, 48

repression of workers, 43 Social Democratic Party (SPD),

24, 112, 133 Giddens, Anthony, 154n, 157n Globalisation, 140, 146 Godley, Wynne, 165n Goldthorpe, John H., 166n, 169n Goodman, John B., 164n, 167n Gorbachev, Mikhail Sergeyevich,

108 Gorz, Andre, 26, 150n, 151n, 157n,

162n, 170n Gourevitch, Peter, 58, 159n, 166n Greece, 114 Gunn, L., 159n, 160n Gunther, Richard, 164n, 166n

Habermas, Jurgen, 80, 144, 15In, 160n, 162n, 166n, 167n, 170n

Hacking, Ian, 150n Hadley, Eleanor M., 162n Hall, John A., 156n Hall, Peter A., 57, 158n, 162n,

164n, 170n Hancher, Leigh, 166n Hare, Paul, 16In, 164n Harrison, R. J., 166n Hawthorn, Geoffrey, 155n, 157n Heath, Edward, 108 Held, David, 170n Hills, John, 159n, 169n Hindess, Barry, 151 n Hine, Robert C , 167n Hirsch, Fred, 161 n, 163n Hobsbawm, Eric J., 157n Hodgson, Geoffrey M., 162n Hogwood, B., 159n, 160n

Hood, Christopher C , 159n Hughes, Alan, 164n Hungary, 123 Hunt, Lynn A., 154n Hurley, Susan, 152n

inclusivity, 16-17, 50 incomes policy, 89 Ingham, Geoff, 163n Inglehart, R., 162n intellectuals, 37, 140-1, 144 International Monetary Fund (IMF),

111 investment, 75, 91-101 Italy, 48, 112, 116

Japan, 115, 120 Jordan, A. G., 159n, 160n Judt, Tony, 155n

Kallscheuer, Otto, 170n Katzenstein, Peter J., 167n Katznelson, Ira, 154n Kautsky, Karl, 23, 25, 35, 153n,

155n Keating, Michael, 166n Kelly, G. A., 156n Kennedy, Paul, 15-16, 152n Keohane, Robert, 167n Keynes, John Maynard, 52, 58 Keynesianism,

Britain, 55, 56, 57, 59, 82, 84, 91-2, 94-5

social democracy, 41, 52-3, 63, 105, 109, 116, 145

Kitching, Gavin, 15In, 157n, 162n Kolakowski, Leszek, 48-9, 15In,

153n, 154n, 157n Krugman, Paul R., 168n, 169n,

170n

Labour Party, economic policy, 82-109 Europe, 103, 107-9 in power (1945-51), 56-9 trade unions, 89-91 welfare state, 86-9

Laclau, Ernesto, 170n Lange, Peter, 165n, 168n

174 Index

Lenin, Vladimir Ilyich, 29, 35, 42 Leninism, 6, 36, 48, 49-50 Lee, Bradford A., 160n LeGrand, Julian, 159n, 163n Leonardi, Robert, 169n Lessard, D. R., 165n Levine, Andrew, 154n Leys, Colin, 158n liberalism,

embedded, 110, 111, 118 political agency, 8, 18, 130 relation to socialism, 4-5, 17-19,

26-7, 42 Lindblom, Charles E., 159n Lowenthal, R., 163n Luhmann, Niklas, 167n Lukes, Steven, 154n lumpen-proletariat, 140

Maastricht Treaty, 123, 124, 125 MacKinnon, Catherine A., 16, 15In Magri, Lucio, 169n Maier, Charles S., 57, 150n, 158n,

159n, 167n Mandel, Ernest, 160n, 161n Mann, Michael, 43, 156n Maravall, J., 166n March, James G., 166n Marcuse, H., 150n Marquand, David, 7, 150n, 158n,

169n Marshall Aid, 91 Marx, Karl, 4, 6, 8, 9, 11, 12, 19,

22-7, 43, 44, 80, 145, 156n Marxism,

contemporary variants, 36-40, 139-40

economic exchange, 80 morality, 8-9, 13, 15, 26, 27, 154n theory of history, 8, 13-14, 32,

35, 38-40 theory of politics, 5, 10, 13, 23-7 weaknesses, 27-40 welfare state, 87-8 see also socialism, transformative

politics McKibbin, Ross, 158n, 159n mercantilism, 119-20 Middlemas, Keith, 158n

Miliband, Ralph, 37, 38, 155n Miller. David, 71, 76, 151n, 161n,

170n Milward, Alan S., 110, 165n, 170n Mitterrand, Francois, 2, 113, 121 Moe, Timothy, 161n Moene, K., 160n, 161n Moore, Barrington, 154n Moran, Michael, 166n Morgan, Kenneth O., 158n Mouffe, Chantal, 170n Mouzelis, Nicos P., 150n, 15In,

170n Mulgan, Geoff, 170n

Nagel, Thomas, 150n, 15In Nairn, Tom, 45, 157n, 159n nation,

contemporary conservatism, 147 Marxian theory, 28-31 nationality, 44, 45, 112 relation to the state, 44-6 see also state

nationalisation, 52, 98, 101-2 neo-conservatism, 66, 68, 87 new social movements, 77-91, 140-1 Newman, Michael, 165n Newton, Ken, 170n Nove, Alec, 71, 150n, 158n, 160n,

161n Nozick, Robert, 152n Nuti, Mario, 164n

Oakeshott, Michael, 44, 157n objectivity,

communication, 12-15 contemporary socialism, 146-9 Marxism, 22-4, 30-2, 141 necessity, 14, 144, 145 objectification, 9-10, 12-14, 149 see also transformative politics

O'Connor, James, 166n Offe, Claus, 77, 78, 79, 80, 150n,

159n, 160n, 162n Olsen, Johan P., 166n Olson, Mancur, 169n Organisation for Economic Coop

eration and Development (OECD), 111, 120

Index 175

Organisation of Petroleum Exporting Countries (OPEC), 92

Osborne, David, 170n Owens, Susan, 170n

Parkin, Frank, 155n Pauly, Louis W., 164n, 167n Pelkman, Jan, 168n Pierson, Christopher, 158n, 159n Polan, A. J., 66, 160n Poland, 123 Polanyi, Karl, 155n Pollard, S., 164n Portugal, 114 principal-agent analysis, 71-4 proletariat, see working class protectionism, 120 Przeworski, Adam, 42, 47, 52,

153n, 154n, 155n, 156n, 157n, 158n

public policy, 65-8 public sphere, 144

Rawls, John, 17, 19, 150n, 152n realism,

critique of socialism, 19 relations to socialist theory, 19-20

Reddy, W. M., 159n, 170n reformism, 46-9 revolution, 48-9, Richardson, J. J., 159n, 160n Ringen, Stein, 159n Robertson, Alexander F., 160n,

169n Robins, Lionel, 165n Rocard, Michel, 165n Roemer, John E., 71, 150n, 152n,

160n, 161n Roman Law, 117 Rowthorn, Robert E. (Bob), 162n,

163n, 164n Rueschemeyer, Dietrich, 156n Ruggie, John G., 165n Russia, 29, 43, 48

see also Soviet Union Ryan, Alan, 152n

Sabel, Charles F., 76, 160n, 161n, 167n

Sandel, Michael J., 152n, 169n Sandholtz, Wayne, 168n Sartre, Jean-Paul, 156n Sayer, D., 156n Scandinavia, 1, 2, 52 Scharpf, Fritz W., 126, 167n, 168n Schulze, Peter W., 168n Schumpeter, Joseph, 164n Scitovsky, Tibor, 163n Scott, Maurice Fitzgerald, 164n Searle, G. R., 158n Second International, 29, 37, 42,

44, 46, 48 self-management, 102 Sen, Amartya, 150n Sharp, Margaret, 168n Single European Act, 122 Skidelsky, Robert, 57, 159n Skocpol, Theda, 31, 154n, 155n,

156n, 157n Slovakia, 123 Smith, Gordon, 166n, 167n Smith, Ron, 165n, 166n Sober, Elliot, 154n social democracy

early troubles, 50-4 emergence, 42-50 see also state

social justice, 4, 134, 140 socialism

crisis of, 1-2 definition, 2-12 distinctiveness, 15-20 exclusionist, 5 fundamentalist, 5-6, 37-40 inclusivity, 16-17 liberalism, 4-5, 17-19, 42 shopping list, 3-4, 133 transformative, 6-12 Utopian, 27, 130 see also Marxism, social democ

racy, transformative politics South Africa, 135 Soviet Union, 29, 53, 56, 66, 71,

75, 146, 161n Spain, 2, 29, 99, 114, 128 Stalin, Josef Vissarionovich, 29 state,

developmental, 44, 117

176 Index

economic agent, 53, 82, 106-7 nature of the modern state, 42-3,

44-6, 51-2, 54-5 postwar political agency, 115-18 relative autonomy, 32 socialist agent, 50-1, 54-5, 56-7,

62 surrogate for proletariat, 62 weaknesses as agent, 61-81,

106-7 welfare agent, 63-70, 87-8 see also welfare state

Stedman Jones, Gareth, 34, 35, 154n, 155n

Stephens, John D., 160n, 167n Strathern, Marilyn, 12, 15In Strawson, Peter F., 157n subsidiarity, 148 Surrey, Michael, 162n Sweden, 1, 53, 99, 115, 120, 166n

Thatcher, Margaret, 16 Thatcherism, 11 Therborn, Goran, 150n, 160n Third International, 40 Thompson, E. P., 37, 39, 155n,

156n Thurow, Lester, 160n, 161n trade unions, 69, 82, 89-91, 101-3,

106-7, 125 Trades Union Congress, 90, 106 transformative politics

contemporary, 143-9 defined, 9-11 environmentalism, 11, 15-16 feminism, 11, 16, 152n nationalism, 45-6 socialism, 3-4, 6-12, 48-50 Thatcherism, 11

Treasury, 98, 100, 107 Trotsky, Lev Davidivich (Leon), 28,

36, 41, 154n Tsoukalis, Loukas, 165n, 168n,

169n

Unger, Roberto Mangabeira, 30, 151n, 152n, 153n, 154n

United States, 33, 53, 91, 108, 109,

111, 115, 118, 119, 120

Vail, Leroy, 154n van den Berg, Axel, 156n Vogler, Carolyn M., 154n

Wadhwani, S., 163n Wagner, R., 160n Wallerstein, Immanuel, 170n Weber, Max, 11, 53, 66 Weidenfeld, Werner, 168n welfare state,

emergence, 52, 53, 55-8 limits of the welfare state as

agent, 63-70 Marxist and New Right analysis,

86-9 regimes, 116, 133-4 setting of politics, 148

Wells, John, 165n Wijkman, Per Magnus, 167n Wildavsky, Aaron, 159n Wilks, S., 167n Williamson, J., 165n Willis, Paul, 159n Willman, Paul, 163n Wilson, Harold, 98, 108, 164n Winters, L., 168n Wood, Ellen Meiksins, 157n, 158n working class

contemporary Marxism, 37-40 inadequate agent, 5-6, 17, 32-6,

44 international class, 28, 29 minority status, 24-5, 33-4 political agency, 22, 23 see also class

World Bank, 111 Wright, Erik Olin, 153n, 154n,

155n Wright, Maurice, 167n

Yankelovich, D., 170n

Zizek, S., 161n Zolberg, Aristide R., 153n, 154n,

155n Zysman, John, 167n, 168n

transformative politics: the future of socialism in western europe

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