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Whos Right on the Left?

The liberalization of the left

Dave Bedggood,

University of Auckland

Dr.bedggood@auckland.ac.nz

We live in the epoch of imperialism -the epoch of wars, revolutions andcounter-revolutions. The short 20th century came in with the Russian revolutionand went out with the Russian counter-revolution of 1991. But capitalism cannotresolve its fundamental contradiction. Once more we are in a world crisis whichopens up a revolutionary period. We need perspectives for this time of pre-revolutionary openings at centuries end.

What is Imperialism?

Lenin defined Imperialism as a necessary stage, the final stage, ofcapitalist development that results from finance capitals attempts to resolve its

fundamental contradiction by the export of capital in the search for super-profits.Objectively capitalism has outlived its historically progressive tendency todevelop the forces of production. It now becomes parasitic on pre-capitalistmodes and increasingly destructive of the forces of production and natureposing the question of barbaric reaction or socialist revolution. As imperialistscompete in dividing and re-dividing the world market in the search of super-profits they are forced to go to war which raises the prospect of revolution.

Therefore imperialism must bring wars, revolutions and counter-revolutions. The first imperialist war temporarily resolved the revolutionary crisisby suppressing revolution in Europe and by isolating, containing andbureaucratising the Russian revolution. However, the counter-revolution was not

deep enough to allow imperialism to drive home its victory. Mass communist andsocial democratic parties resisted further attacks at the expense of workers. Socapitalism could not for long forestall a further major slump and a secondimperialist war.

Capitalism survived this revolutionary crisis only with the aid of Stalinism,which contained revolutionary upheavals during and after the war. First, Stalinismweakened the international working class and allowed Fascism to come to powerin Europe. Second, Stalinism subordinated the world revolution to the defense ofthe bureaucratic caste rule in the SU. Stalinism actively suppressed revolutionarymovements in Europe and East Asia. Even so the legacy of the Russian

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revolution, workers property, remained intact and was extended by means ofbureaucratic conquests to Eastern Europe, East and South East Asia. One thirdof the worlds resources and more than half of this population remained outsidethe direct control of imperialism.

Nevertheless this profound counter-revolutionary settlement allowedcapitalism to embark on a prolonged expansionary period the post-war boom -which disoriented revolutionaries for 30 years. The boom created the impressionthat capitalism has outlived its internal contradictions. Yet despite state policieswhich prolonged the boom, world imperialism once more exhausted its capacityfor development with the necessary return of crisis as the expression of theinherent contradiction between the overproduction of capital at one pole and themass destruction and impoverishment of the worlds workers and peasants at theother pole.

The postwar boom ended in a crisis of falling profits caused by the TRPFbringing with it a period of structural crisis (depression) lasting from the early1970s to the present. We can divide this period into 3 phases in the crisis.

[1] Social Democratic Austerity. This phase from the mid-sixties to theearly 1980s saw SD governments introducing austerity measures against theworking class but failing to make any significant inroads into governmentspending, restructuring etc.

[2] Neo-liberal offensive. This phase from the early 1980s to thecurrent is characterized by much more extreme attacks on the working classtypified by Reaganism in the US, Thatcherism in the UK and Rogernomics in NZ

and the restoration of capitalism in the SU and EE.[3] Third way Social Democracy. Beginning with the election of

Clinton in the US and Blair in the UK, this right-wing social democratic phaseseeks to reconcile classes by transcending left and right in a end of centuryreinvention of late 19th century social liberalism. Posing as the end ofcommunism and end of history it is nothing more than a pax americana whenUS imperialism at the height of its world domination is able to impose itshegemony behind the mask of democracy and human rights.

During both of the earlier phases of the crisis the Law of Value devalued

and further concentrated and centralised capital. However this was not enough torestore the rate of profit and to create the pre-conditions for new upward cycle ofcapital accumulation. Even the incorporation of most of the former workersstates back into the capitalist world economy failed to restore profits. Productivecapital has not been sufficiently devalued and continues to face a crisis of fallingprofits and overproduction. Excess capital looking for short-term gains hasexacerbated this fundamental tendency and created the symptoms of a globalfinancial crisis in the world economy. Yet these symptoms will not go awayunless the underlying cause of overproduction of capital is temporarily offset by amassive devaluation of excess capital on a world scale. This brings us to the

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third phase of the crisis the contradiction between the Blairite politicaltranscendence of crisis and the reassertion of an impending massive devaluationof US capital.

Such is the character of the current global crisis and it informs allattempts to render the crisis in discourse and practice.

The Current Crisis and the Liberalization of the 'Left'

What distinguishes the current crisis from the previous two phasesduring the 1970's and 1980's is that it has the makings of a global, synchroniccrisis of overproduction.1 No part of the world is able to carry the rest. Theability of the US economy to drive the whole world economy is now beingquestioned by its bourgeois apologists.2

Moreover, the global economy now includes Russia and the otherEuropean former degenerated or deformed workers states that are now fully re-integrated into world capitalism. China, Cuba and Vietnam are well on the waytowards re-integration. Only North Korea resists but it is small, isolated and nearcollapse. The victory of capitalism over the workers states was a world historicdefeat for workers not because it destroyed the bureaucratic caste, but becauseit destroyed the workers property relations won as a result of the Russianrevolution of 1917.3 Yet this has not been sufficient to allow capitalism toovercome its crisis and return to the path of accumulation. Rather, these formerworkers states are now fully exposed to the destructive effects of capitalist crisismaking the current crisis truly global.

Thus the global crisis is not confined to a financial crisis.4 While thisphase of the current crisis started as a collapse of East Asian economies in1997 due to falling profits from overproduction of capital, it now envelops theformer Soviet Union and Japan, and threatens to overcome China and LatinAmerica. Far from being a financial contagion due to the so-called Asian viruswe are witnessing a Wall St Virus since it is symptomatic of the inherentproblems of the global economy including the strongest economy that of the USitself.5

This reality is making itself felt even in the highest ranks of bourgeoisapologists. Gone is the Social Democratic complacency of the post-war boom,

and the neo-liberal triumphalism of the collapse of communism. These fanciesare being replaced by anxiety if not alarm at the possibility of a breakdown of theworld economy and a return to anarchy and revolution.6

The most significant point is that the source of the instability is clearlyseen to be more than an uncontrollable excess of speculative capital, but ratherthe failure of productive investment. Neo-liberalism, the ideology that providedthe cover for the radical deregulation of state intervention in the operation of themarket (LOV) is now giving way to a new orthodoxy. This is not a return to aclassic Keynesian intervention which is now widely rejected as involving crudeand unproductive state subsidies of capital and labour, but rather the

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development of a much more selective state intervention that targets subsidies atproductive capital and penalises unproductive capital.

The new model draws on a range of intellectual sources, including thetheory of the Schumpertarian Workfare Statederived from Joseph Schumpetersbrand of neo-classical economics. Schumpeter like Keynes did not trustcapitalists to invest productively. In his view this was because competition (theLOV) did not lead to innovation and efficiencies, but to monopolies andstagnation. So rather than blanket state policies of reflation (which were suited tothe post-war upturn) Schumpeter argued for selective state targeting of firms toencourage productive investment in innovation. Hence a Schumpeterian stateintervention offers incentives to firms, (private or public is not a major issue) thatinnovate by developing new knowledge and techniques and applying these toproduction. Nor is there a welfare state mechanism since jobs are expected to

come from innovation, and welfare is replaced by workfare.7

A second, and related, intellectual source is that of Foucauldian

Governance Theory. This approach applies the method of Foucault to theanalysis of the considerable 'indeterminacy' in state policies. Couched as analternative to the modernist, particularly Marxist theory of the state, which arguesthat state policies are the result of the interests of social classes engaged instruggle, Governance theory attempts to account for political behaviour in termsof primordial assumptions about power permeating social life. The result is thatGovernance theory converges with the new Social Democracy in promotinglimited reforms based upon the micro-behaviours of individuals without monolithicor even identifiable class or other collective interests.8

Under the influence of these currents I argue that most of the socialdemocratic left has been co-opted by an ideological right-shift and cannotcounter the appeal of the new middle. The LOV, having re-asserted itself underthe sign of neo-liberalism to devalue constant and variable capital in the 1980'sand 1990's, has prepared the ground for the return of Social Democracy as TheOnly Alternative. This neo-liberal-Social Democracy convergence in the 'radicalcentre' has reverted to social liberalismas the revised minimal program of the'left', while the maximal program, socialism, has retreated backwards over thehorizon.

More importantly, I argue that the so-called marxist left' today has tailed

social democracy in adapting to neo-liberalism in various ways, all of which fail tooffer any genuine revolutionary alterative to the masses. This rightward shiftinvariably involves a move away from dialectical analysis of prodution relationstowards a politicist or culturalist analysis of exchange, distribution andconsumption moments. I call this tailing of social democracy into socialliberalism, abandoning a revolutionary left pole, the liberalization of the left. Thisprocess can be demonstrated by critiqueing the most prominent neo-marxistschools the post-lAlthusserians, Critical Theorists, RegulationistsWallersteiniansand Mandelitesthat have, under the influence of neo-liberalism,moved further away from classic Marxism towards pre/post-marxism.9

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In the face of this liberalization of the left, I argue that today as in thewhole of the 'short' 20th century, the only possibility of a revival of the Marxistmethod and analysis is to restore the unity of the science of objective reality andthe subjective practice of revolutionary struggle.10 This requires a politicalregroupment around a revolutionary international program capable of mobilisingthe international working class for the transformation of capitalism and theadvance towards socialism.11

First, I will consider the claims of the most prominent 3W advocatesGiddens, Gray and Soros. Then I will look at the former avatars of neo-liberalismpromoting a proto-global state, closely followed by the 'new new right'Governmentalists and Schumpeterians. After that we are a position to critique theclassic Social Democratic and centrist Marxist responses to the 3W. Finally I willlaunch into an orthodox Marxist analysis of all these currents and present a

outline analysis of where imperialism is heading at end of century, and a briefguide to revolutionaries about what tasks are necessary to resolve capitalismscrisis and once again pose the necessity for socialism.

The Third Way Convergence

It is clear that the past 15-20 years of neo-liberal reaction has laid thefoundations for the Schumpeterian/Foucauldian State. They can be seen in thepolicies of the Third Way the centrist tendency of Blairism and Clintonism andRogernomics in New Zealand. Brazil is a current case of a rampant remodelingof the state along these lines. Neither left nor right, the Third Way (3W)

rejects both neo-liberalism and state socialism. The 3W has come to the forenow that neo-liberalism has prepared the ground. Already in place arederegulated, corporatised or privatised Keynesian institutions of nationalisedindustry, state monopolised welfare, health, education etc. The state now targetsthrough its funding agencies the most innovative and efficient providers of goodsand services whether they are publicly or privately owned.

The problem is that while such national macro-economic reforms havecleared the way for micro reforms and direct foreign investment in production, themassive growth of uncontrolled finance capital flowing instantaneously aroundthe world threatens to destabilise these reforms. Extreme cases are East Asiaand Latin America where high interest rates are necessary to attract capital, yetpenalise domestic industry. And when this increased debt burden forces capitalto flee there is a retreat to forms of protectionism as in Malaysia, and to a lesserextent, Russia.

To overcome this problem the neo-liberal gurus, including Milton Friedmanhave seen the need to impose controls on the freedom of movement of capitalthrough regulating interest rates and exchange rates.12 Jeffrey Sachs writing inthe Economisthas put forward a scheme for an international Schumperian proto-state. This involves the reforming of the IMF and World Bank as mechanisms forthe regulation not only of finance capital, but also for the dissemination ofinnovation through targeted investments.13

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Under this proposal no longer will the IMF and World Bank act as right andleft hand of the US Treasury, deregulating Keynesianism with the right hand andsponsoring socially sensitive development projects with its left hand. Ratherthey will target loans to states or firms that innovate. The result should beinternational regime of selective state regulation of finance capital to ensure thatit is productively invested to return super-profits to imperialism, and to ensurethat social objectives of employment and social wellbeing are met.14

Can this shift from extreme neo-liberalism to the 3W work for capital? Canit offset the fundamental contradiction between use-value and exchange-valuethat threatens to collapse the world economy and open-up pre-revolutionarytimes?

We need to analyse this prospect thoroughly since it is the key tounderstanding the future. Can the 3W stimulate a return to profits without

creating pre-revolutionary depressions and wars? And even if this were possible,how long can this solution last since it must activate the more intractableproblems of a growing polarisation of classes, peoples and nations, and thedestruction of the forces of production including the environment. Does the 3Woffer the escape from chaos and revolution that its apologists hope for? Or willworld capitalism descend into the reactionary dystopia of barbarism?

The 'new middle' or the 3W gets its name from its rejection of both neo-liberal and socialist planning so-called extremes. Couched as 'beyond left andright' its most astute intellectual advocate Tony Giddens, sees the new middle as agenuine 'end of ideology'.15 Giddens along with John Gray are formidable insidersin Blair's coterie of think-tankers. Giddens critique of 'socialism' is longstanding.He argues that we are living in a 'post-scarcity' society where the old conflicts thatanimated the 'left' and 'right' are no more.

Giddens' Third Way

Tony Giddens recent book titled The Third Wayis the basic policyprescription on how to overcome the failure of both neo-liberalism andsocialism. He writes off the 'old left" and the "new right" and in its place as re-modelled social democracy. He traces the evolution of this social democracyover the last two decades in Europe. "I shall take it 'third way' refers to a

framework of thinking and policy-making that seeks to adapt social democracy toa world which has changed fundamentally over the past two or three decades. Itis a third way in the sense that it is an attempt to transcend both old style socialdemocracy and neo-liberalism. What are these fundamental changes' to whichsocial democracy must adapt?

Giddens poses these as the 'Five Dilemmas'. They are globalisation,individualism, Left and Right, political agencyand ecological problems. Theincreasing globalisation of the world economy has forced nation states to changetheir forms of governance to include non-governmental agencies, newmultinational forms like the EU and transnational organisations like the UN and

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IMF. Giddens regards the new individualism not as a form of market egoism, but'institutionalised individualism'. This means that individuals take responsibility forsocial solidarity rather than look to state or traditional authority. Sinceindividualism is now the basis of social organisation this makes the old labels ofLeft and Right redundant. The new Social Democracy does not base itself on theopposition of collectivism vs individualism, but has taken over individualism asthe means of delivering social justice.

"With the demise of socialism as a theory of economic management, oneof the major division lines between left and right has disappeared, at least for theforeseeable future...No one any longer has any alternatives to capitalism thearguments that remain concern how far, and in what ways, capitalism should begoverned and regulated" 16

Giddens argues for the end to Left and Right so the Centre can be

captured in its own name rather than as a compromise for opportunistic reasons."The idea of the 'active middle' or 'radical centre' discussed quite widely amongsocial democrats recently, should be taken seriously." 17 The reason for this isthat globalisation, and individualism have posed a number of problems, whichGiddens calls 'life politics' "the politics of choice, identity and mutuality" whichrequire radical solutions and radical policies. Social Democracy is still 'left' in thesense that social justice is its focus, but the centre now has new radicalsubstance as individuals are empowered to act to make decisions that can bring'social justice', 'ecological strategies' and 'lifestyle choice'.

The New Social Democracy requires a style of governance that capturesthe radical centre. The shift towards 'micro-politics' of social movements awayfrom the old parliamentary structures points the way. Most of these movementshave sprung out of the failure of the old Social Democracy to break downinequalities, or confront ecological crisis. Therefore, 'Third way politics' forGiddens means "no rights without responsibilities'" and "no authority withoutdemocracy" 18. There has to be a "deepening and widening of democracy".

How is the new Social Democracy going to use democracy to providesocial justice and ecological survival? Surely the existing inequalities are far toodeep seated to respond to the 'radical centre'? First, the nation state must retainits authority to act despite globalisation. Its prime task is to re-engage in socialinvestment, but with efficiency, accountability and legitimacy (popular support). It

must devolve and decentralise to democratise, and provide the framework for the'renewal civil society'. Civil society for Giddens is social life outside the statewhere individuals take responsibility for their actions.

But how does civil society survive unless the new Social Democracyprovides a material basis for survival? "The new politics defines equality asinclusionand inequality as exclusion, although these terms need some spellingout. Inclusion refers in its broadest sense to citizenship, to the civil and politicalrights and obligations that all members of society should have, not just formally,but as a reality in their lives. It also refers to opportunities an to involvement inpublic space". 19

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But how is this possible without 'radical' measures of wealth distributionsuch as radical reform of access to education, health, housing etc? Giddenssketches out his radical plan for reform of social welfare. 'Positive welfare' meanstargeting social investment at human capital rather than income maintenance. "Inthe place of the welfare state we should put the social investment state."20 Whatare his 'social investment strategies to meet the demands of inclusion?

Giddens recognises that workfare can only work if part of a wider strategyof social investment in production. This means state investment in (1)entrepreneurial activities; (2) life-long education; (3) public project partnerships;(4) portability of human resources; (5) family friendly workplace practices.Giddens asks: "Can these strategies produce...enough good jobs to go aroundfor everyone who wants one"?21 His answer is that there is already evidence thatwork can be provided at a living wage with reduced hours so long as productivity

increases. Therefore the positive welfare state that invests in social capital canprovide the platform on which productivity increases and with it the jobs andincomes that are needed to prevent social exclusion. "Positive welfare wouldreplace each of Beveridge's negatives with a positive: in place of Want,autonomy; not Disease but active health; instead of Ignorance, education, as acontinuing part of life; rather than Squalor, well-being' in place of Idleness,initiative." 22

Sounds great but will it work? Social justice requires inclusion via jobsbased on innovation and growing productivity. This line of logic seems unbroken.For Giddens the trick is for the new Social Democracy to coordinate globally sothat it can regulate social investment in jobs and achieve social inclusion. What

he overlooks, however is that the problems of the global financial market are theconsequences and not the cause of insufficient investment, which in turn arisesfrom falling profits. The New Social Democracy cannot overcome the inherentbarrier of the old Social Democracy, how to get capitalism to pay for socialinvestment when its profits are already falling, and capital is forced to speculateor die? It seems that Giddens prescription for the new Social Democracy is nobetter than the old.

False Dawn

John Gray is Professor of European Thought at the London School ofEconomics. In a recent article headed "Unfettered capital spells doom", Grayspeaks out about an impending worldwide slump as Russia, Japan and finally theUS economies go into free fall. "A sustained slide on Wall St would not be amarket correction but a signal for a major dislocation of the world economy." 23Such comments coming from the left would carry no surprise. It is to be expectedthat the left should be the cheerleaders of global capitalism in crisis and thecollapse of triumphalism into doom and gloom. What is remarkable about Gray'spronouncements is that he is a former leading advocate of neo-liberalism. Over anumber of years he has promoted the ideas of the late Sir Isaiah Berlin - a leadingneo-liberal philosopher. But today Gray has been converted to the centre and to a

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defence of democracy that he says is imperilled by neo-liberalism. "The naturalcounterpart to a free market economy is a politics of insecurity. If 'capitalism'means 'the free market,' then no view is more deluded than that the future lies with'democratic capitalism.'"

This is one of the memorable quotes from Gray's new book.24 Essentialreading, for all those who want reasons to abandon the more market fetishisms ofthe New Right, False Dawnis a damning indictment of the ills of global capitalism.The free market has proven nothing but a disaster. Gray takes us through thehistory of the market and proves that the market was the creation of the state: "Thelaissez faire policies which produced the Great Transformation in nineteenthcentury England were based on the theory that market freedoms are natural andpolitical restraints on markets are artificial. The truth is that the free markets arecreatures of state power, and persist only so long as the state is able to prevent

human needs for security and the control of economic risk from finding politicalexpression." 25

The corrosive agent of economic liberalism is seen most clearly in NewZealand where the counter-reformation was swift and deep. Here in miniature isfound the inevitable rise of poverty and the undermining of democracy. "The NewZealand experiment" Gray writes, "is the free market project in laboratoryconditions." The same policies of privatisation, deregulation, attacks on the unionsand on welfare benefits resulted in the "creation of an underclass in a country thatdidn't have one before...New Zealand has experienced an astonishing growth ineconomic inequalities of all kinds...more than in any other western country." 26

In advanced, 'social democratic' countries like Britain and New Zealand theconsequences of neo-liberalism have been devastating but they are nothingcompared to the destruction of third-world contries like Mexico. Mexico"had longbeen one of the world's most unequal societies. Two-thirds of all income isdistributed to 30 per cent of the population...The lowest 30 per cent of the Mexicanpopulation receives only 8 per cent of national income. The minimum wage in1993 was less than half of what it was in 1975." 27

Behind the New Right thrust is the United States and its attempt to imposelaissez faire as part of its planned domination of the global economy. It is theideology of free trade and capital mobility by which the US economy hopes to winout over all its rivals. But the price of this policy is rising poverty at home as well as

globally, and for Gray this poses the real problem. What happens when the poorrevolt?

The rise of poverty and insecurity must lead to anarchy and rebellion saysGray. There are no reliable institutions left to act as buffers to contain theinsurgent masses. Families, trades unions and the nation state itself have becomepowerless to stop the rot. "The raison d'etre of governments everywhere is theirability to protect citizens from insecurity. A regime of global laissez-faire thatprevents governments from discharging this protective role is creating theconditions for still greater political, and economic, instability".28

So what to do? Gray rejects socialist or state planning solutions as

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unworkable and no answer to the free market. But he is no less dismissive socialreforms and the so-called 'social-market' economy. Global democratic capitalismis as unrealisable a condition as world-wide communism". The old social-democratic model of peaceful reform and Keynesian methods of governmentprotectionism cannot cope with global capitalism that operates with the "houserules of a casino."

There is no escaping the market that today leaves little room for nationstates to manoeuvre. "No western government today has a credible successor tothe policies which secured western society against mass unemployment in theKeynesian era...The social democratic objective of full employment cannot now beachieved by social democratic policies."

So what prescription are we offered for all of these ills? "A regime of globalgovernance is needed in which world markets are managed so as to promote the

cohesion of societies and the integrity of states. Only a framework of globalregulation - of currencies, capital movements, trade and environmentalconservation - can enable the creativity of the world economy to be harnessed inthe service of human needs." 29

Instead of nation states and Keynesian policies it seems we need aninternational (neo-Keynesian?) body capable of reining in the market. This globalreformism is even more unlikely since it would require a high level of agreementamong rival nation states. What is more it would mean the US voluntarily backingdown from its world hegemony.30 To his credit Gray sees such global regulation asutopian. As a result he is deeply pessimistic. Indeed, "a deepening internationalanarchy is the human prospect." 31

So False Dawn does not end happily in a New Dawn. Which is to beexpected given Gray's vision of the fall of his once prized neo-liberalism. It seemsGray wants to transport himself into a New World where the dominance of aWestern Civilisation is replaced by a "diversity of cultures, regimes and marketeconomies as a permanent reality". For him such a vision is an intellectualexercise in post-modern pessimism. Yet for the vast masses of those countrieswhose lives have been ripped apart by the neo-liberal offensives of the last twodecades this is no academic exercise. Those who struggle for economic survivaland a democratic voice in the face of the neo-liberal jackboot don't have the luxuryof pessimism because for them it is a matter of life and death.32

The new centre appears to be a shift to the left. However we can see thatthe end of ideology is a cover for the centrist adaptation to the new right. The mainpositions of the NR are accepted. The market is supreme in the economy. Thestate's role is limited to guiding the economy in such a way as profits are promotedand not diverted into social spending. Blair's New Labour party is the setting thepace here but the new German DSP coalition government is hard on its heels.33

Blair's success in office can be summed up in the "Smart wired zero sumdesigner state". The Smart state is designed to regulate the next phase of capitalaccumulation once the fallout from the neo-liberal wrecking ball has settled. Itsmodel is not Keynes but Schumpeter. Not nationalisation and social welfare but

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targeted incentives in capital and labour markets. The logic is that the Smart statewill be run by the new Social Democracy or by popular fronts between SocialDemocracy and centre parties that contain workers aspirations and imposesophisticated social controls on social insurgency.

From Nation State to Global Governance.

Giddens provides a sophisticated intellectual rationale for Blairism as aninternational middle movement.34 His, and Grays, arguments converge in arightward moving Social Democracy that no longer credits the working class orthe union movement with any historically progressive role. Rather the new SocialDemocratic apologists are trying to take over the globalisation project andconvert it to the ends of positive welfare and a multicultural pluralism. In this

global vision Giddens and Gray join forces with that of the Schumpeterianeconomists and Foucauldian governance theorists.

As the third of the trio, George Soros concern is less with realising ademocratic ideal but with the fear of revolution. He advocates the 3W as acounter to revolution.35 Soros forms the link between the philosophy of the 3wand neo-liberal economists who advocate new regulatory mechanisms. Hisimmediate interest is in protecting his vast speculative investments and the bestway he knows is to establish stability as a precondition for growth.

This is also the pressing concern of other well-known neo-liberalsproposing international regulatory institutions.36 But how feasible is it to getagreement on international regulation? The globalization proponents deny thatnation states have the power to control their domestic economies now under thedomination of multinational capital. Yet global regulation means agreement on aset of rules. It seems that regulation will have to be imposed by the US in itscapacity as backer of the IMF and World Bank. So it looks as if this expandedglobal role amounts to the expansion of the US imperialist state, which poses thequestion of what other imperialist powers will do in the face of this further USaggrandisement. Will a US proto-global state lead to super-imperialism? In theUS the advocates of a 3W see this as putting limits on US imperialism in thename of a "new progressive" global governance.37 Social democrats like Wadeand Veneroso argue that the ills of global capitalism can be managed by thecorrect state interventions that counter the institutions of US imperialism.38However, their critics point out that this is a cover for further US hegemonicplans. Chomsky is clear in documenting the current thrust of US imperialism asone of total world domination.39 Michel Chossudovskys account of the recent USspeculators raid on Brazils hard currency reserves gives a glimpse of how thisUS proto-state would work.40 It demonstrates how the proto-global statebecomes the necessary complement of the national policies of theSchumperterian/Foucauldian State and vice versa in the interests of USimperialism.41

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world economy, but rather the result of a conjunction of 'rationalities' and'practices' in the nation states and international economic agencies which ofcourse are open to 'radical critique' and hence policy change.46

It seems then that the governmentality ideology is itself selected to coverfor the shift from open neo-liberalism towards a new right centrist socialliberalism. It becomes no more than an official bourgeois doctrine thatpronounces after the fact on the processes and outcomes of the post-modern,multicultural, pluralist, social democracy.

Neo-Marxism backslides into Social Democracy.

Along with the right shift of Social Democracy into social liberalism, post-marxism and the conversion of the former Communist Parties and Maoist parties

of the East into ordinary Social Democratic parties,47 the Marxist left is alsomoving to the right and providing a left cover for social liberalism. One of themajor causes of this weakness on the neo-Marxist left is the pre/post-marxismofthe 'left' petty bourgeois intelligentsia. Neo-marxism is nominally opposed topost-marxism, yet abandons the base/superstructure model as determinist andreductionist and moves towards post-marxism. We can trace the development ofa neo-post marxist trend over the three phases of the current structural crisis ofcapitalism.

In the first phase during the 1970's Althusserian marxism sought to offer aEurocommunist cover for a declining Stalinism. Its intellectual doctrine was littlemore than a bureaucratic rationale for the Gramscian war of position thefunctionaries long march through the institutions of bourgeois democracy. Itsanti-humanist bias and the complicity of the Communist parties in the 1968reaction prompted a revival of the equally elitist Frankfurt school critical theory asa democratic socialist New Left opposition to structural determinism.

The second phase of neo-liberal reaction in the 1980's saw the rise ofpost-marxism in the form of world-system theory, regulation theory, RationalChoice marxism etc. The defeat and retreat of the labour bureaucracy before themarket threw up echoes of market rationality in these currents. As the workingclass receded as the agent of revolution, the Althusserian apparatchnik andFrankfurter voluntarist gave way to the agency of the ordinary freely choosing

individual.48

It is the third current phase of the structural crisis in the 1990's, the post-

cold war new world order, that has pushed most neo-marxisms beyond the paleinto post marxism. The inherent weakness of neo-marxism based on the flimsyfoundations of neo-ricardian economics, collapses into the arms of its post-structuralist middle class suitors. As a test of this I shall look at the transformationof 'marxist' economic theory in the work of Robert Brenner. Though Brennerdefends the LOV, and rallied to the defence of Marxism against Wallerstein in the1970's, in his recent analysis of global economics marxism ceases to privilegeproduction relations and reverts to a neo-Ricardianism that naturalises

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production relations and limits class struggle to a power struggle to rectifyunequal exchange in the market.49

All of these brands of neo-marxism are more or less open in justifying theirabandonment of marxism. Their common post-marxismis the 'destination of the'Euromarxist' left which now rejects not only economic determinism but also thehistorical interests of the working class in socialism. These currents are not newsince they reflect the long-standing traditions of Euromarxism in failing to unitethe objective development of capitalism with the subjective organisation ofrevolutionary politics.50 We can begin by looking at the decline and fall of one ofthe most influential recent currents in Euromarxism structural Marxism.

post-Althusserians

Influenced by the late French stalinist philosopher Louis Althusser, muchmodern Western marxism is bogged down in ideological disputes withinacademia over which section of the middle class has the franchise for revolution.This swamp includes left cultural studies and left feminist studies. Culturalstudiesbegan in Britain in the 1970's as a declassed Gramscian critique ofcapitalist culture. But it took the enemy to its heart by adopting Althussser's claimthat Marxism too was an ideology. This left the door open for cultural studies tobecome relativised by postmodernism during the 1980's. As a result, theanalysis of politics and culture becomes contingent or 'free floating', apeing thepost-modernist theme.51 There is no grounded materialist method with which toexplain and critique the culture of 'late capitalism'. Into this void the post-alsromp

with gay abandon.52

For example, Fredric Jameson in critiquing the cultural turn,also takes a turn.53

Another example is the current of materialist feminismstarts fromAlthusser and derives a 'global analytic' that marries marxism with someelements in postmodernism. Most important it shares with pomo, the rejection ofWestern science, including marxism, as 'foundational'. So the LOV is disclaimedas the distant inoperative 'last-instant' premise of Althusser. Even more thandistant, as Rosemary Hennessey argues that Althusser was still too determinist.He had theorised the 'overdetermination' of the economic by politics andculture, but elements of 'economism' still needed to be removed.54

Note that Althusser's so-called 'Marxist economism' was already neo-Ricardian in the 1970's.55 Yet such is the rejection of economic determinismamong feminists in the 1980's we had the de-economising of Althusser into abrand of mystical 'materialism' in which contradiction, exploitation, crisis etc allbecome sacrificed to empirical contingency. Once more a current ofEuromarxism, this time augmented by Stalinist/Maoist and Althusserianpositions, ends up in the post-al camp of anti-science.

Pierre Bourdieu is perhaps the most prominent of the fashionable 1990'spost-Althusserians.56 His position is based on a neo-Ricardian rather than Marx'smethod. That is, production is naturalised. It's true that Marx employed general

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(i.e. transhistorical) abstractions which applied to all modes, but these wereincidental to his method. Such generalisations could only be made as the resultof first establishing the historic categories of capitalism to then determine whatwas 'left over' or 'embryonic'.57

Following the tradition of euro"marxist" sociology, Bourdieu employsmarxisant type language (eg cultural capital) in order to co-opt marxism back intoradical pre-marxist bourgeois ideology. Its interesting that Bourdieu has toreinvent Althusser (who himself was reinventing Gramsci and Western Marxismfor the post 1956 "de-stalinisation") but in a quite different untainted languagenecessary to distance itself from even de-stalinisation. So Bourdieu becomes the"sexy" de-marxised, or marx-excised, sociology of the French social democraticopposition to the neo-liberal reaction.58

There is a real problem with Bourdieu's classifications of capitals. At some

point he says that all capital derives from an economic surplus appropriated by aruling class, which is a broad neo-Ricardian concept of exploitation in my view.59Then he breaks capital up into all these other thingies as if cultural capital orsymbolic capital is not commodity production already. The only differencebetween economic capital and symbolic capital that I can see is that one is theproduction of commodities that have an immediate connection with the materialreproduction of labour power, or variable capital, while symbolic capitalrepresents the production of immaterial commodities for exchange which meetcertain cultural needs such as films, books, sexual attachments etc.

So what are the consequences of Bourdieu's understanding of capital. Atleast he doesn't detach power from economic capital as Foucault does. But theeconomic capital he is talking about is labour expropriated during exchange.This expropriation is relatively transparent since it is a question of wages risingand falling relative to profits. It corresponds to the distributional discourse ofmorality and statistics that both "classes" throw at each other via their respectiveintellectuals. It follows that the reproduction of this appropriation which isrelatively transparent depends heavily upon the use of political power andideological domination in winning control of the instrumental state.

And in the last analysis, it is not the production relations that speak but the(petty) bourgeois radical intellectuals. Their political responsibility is to uncoverand expose the exercise of power and domination and contest it (politely in long

very difficult books or dramatically turning up on the picket lines like Bourdieu) byadvancing a superior morality and statistics from those put up by the traditionalintellectuals of the ruling class. So note that when Bourdieu organises in supportof workers it is as a separate intellectual "class".60

This radical Ricardian position slides inevitably from the class struggle atthe point of production in which the contradiction use-value/exchange-value isthe motive force of capitalist development, into exchange politics via thesubstitution of the petty bourgeois political elite in the bourgeois parliament. Thepetty bourgeois intelligentsia's leadership of the working class depends uponkeeping the working class ignorant of this intellectual mystique by coining bullshit

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language like 'habitus' or 'field' for what are already scientifically categorised byMarxist analysis of class, state and ideology.

Thus, workers may fall for Bourdieu's link between "habitus" and what are"exchange relations" which stand in for naturalised(and hence unproblematic)production relations. At its worst Bourdieu's argument represents therecuperation of the neo-classical Say's law that supply creates demand. If'habitus' can generate demand, and 'cultural capital' can ensure supply, then"hey presto" no crisis of underconsumption. However, the limit that Bourdieufaces is, that creating new "cultural" needs in a global middle class cannotovercome the capital logic of crises of overproduction, rooted in the TRPF, butultimately as Marx says manifest in the underconsumption of the impoverishedmasses and downwardly mobile 'middle' classes.61

Fortunately for us, and unfortunately for the petty bourgeois intelligentsia,

whether they understand the contradiction or not, it "understands" them. Itsqueezes and then explodes their political chicanery in the historic vice betweenthe revolutionary vanguard that represents the interests of the working classstruggle against the destruction of use-values, and the bosses need to valorisecapital as exchange-values by means of the destruction of use-values, and thensettles the question with the "criticism of weapons".

post-Critical Theorists.

The tradition of the Frankfurt school drawn on by critical theorists likeHabermas62goes back to the 1920's i.e. the previous structural crisis ofcapitalism. Its major features were formed in the historic defeat of the Germanworking class, and as a result the world working class, in the 1930's by Stalinismand Fascism. Distorting the notion of hegemony developed by Gramsci, theFrankfurters argued that capitalism was able to hold back revolution indefinitelyby means of its cultural controls over workers. As a result this school abandonedany belief in the working class as the historical agent of socialism and substituteda petty bourgeois intelligentsia as the agents of humanity.

Today the most prominent post-critical theorist, Habermas, also usesMarxist terms to link cultural crises with economic crises. Yet the economic crisis

are understood again as emanating from Ricardian technical relations. For theFrankfurt school one side of the contradiction use-value/exchange-value isdehistoricised. Use value becomes a universal, naturalised catogory, againstwhich capitalist production for exchange is in contradiction. Marx's contradiction,inherent in capitalist social relations, is dematerialised and removed from classstruggle. Rather than the working class struggling to consume the use values itproduces and motivating the revolutionary overturn of capitalism, the pettybourgeois intellectuals become the opponents of an abstract and technicalinstrumentalism in the name of an equally transhistorical communicative reason.

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This boils down practically to 'democracy' against the 'market'.63 ForHabermas, such an "invasion by technology of the "life-world" (the space ofcommunicative reason where Enlightenment civilisation can be realised) can betranscended by a radical bourgeois democracy. Having suppressed thecontradiction in production relations and substituted exchange relations, thesetechnical relations are not determinant in the last instance, because they can be'overdetermined' by politics and ideology.

Thus Habermas' post-critical theory gives the post-structuralist culturalturn a left cover as a structuralist political turn. The causal 'play' of thesuperstructure is unlimited by natural production relations again taking anahistorical structuralism to post-structural extremes. But the problem is, and willremain, how to transform the bourgeois superstructure without reference to thedynamic laws of motion which shape the development of the infrastructure? So

long as the infrastructure is governed by the law of value that is specific tocapitalist production relations, then crisis tendencies will spread into thesuperstructure and undermine any hope of realising the petty bourgeois utopia ofdemocratic capitalism.

The recent attempt byPostone to rehabilitate Critical Theory on firmMarxist foundations unfortunately fails.64 Postone doesn't transcend the problemsof the Frankfurt school that resulted when it dehistoricised the contradiction ofuse-value/exchange-value. He rightly argues that capitalism is a historicallyspecific mode, against those who want to universalise Marxism as a form ofhumanist Hegelianism, or abstract neo-Ricardianism. The Frankfurters come infor a lot of criticism for abandoning the contradiction in capitalism. But when

Postone tries to say what the contradiction is he muffs it completely.

He correctly identifies the importance of the dual nature of the commodity- use-value/exchange-value. However instead of recognising that this dual natureunderpins the contradiction between forces and relations of production, and ismotivated by class struggle, he rejects the link completely and leaps to anabstract contradiction between 'alienated wealth ie. 'capital' on the one hand andthe production of value on the other. Hence his own argument for a methodwhich locates the historically specific contradiction within capitalism, is rejected.As a result we get a 'contradiction' in which 'value-production' ie. social relations,embedded in historical capitalism, are in opposition to the 'potential' of wealth i.e.accumulated use-values as a transhistorical category. 65

What he completely misses is that there can be no motion in thehistorically specific capitalist mode unless the contradiction is motivated byhistorical actors - ie. class agents with both feet on capitalist ground. Myunderstanding of this is that the use-value/exchange-value contradiction can onlybecome operative through class struggle. On the one side the working classattempts to retain as many use-values as possible, on the other is the capitalistclass destroys use-values unless they are also exchange-values.

Because Postone wants to reject simplistic, evolutionary, or teleologicalforms of Marxism that identify the working class as the Subject of revolution,

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Wallerstein's influence has been phenomenal and what passes today for'marxist political economy' is often a version of world-system theory. The reasonfor this is that this theory has more appeal than Marxism because its politicalproject is to reform exchange and not to expropriate capitalist property. WhileWallerstein argues for a Rainbow Coalition, Arrighi's solution to a declining UShegemony has to be rather more robust, since declining hegemonic powersresort to political/military force to prop up their collapsing economies. Thisexercise of power necessarily calls forth ideological justifications for such a "newworld order" which become the object of counter-hegemonic struggles. In thehands of Arrighi, Wallerstein's "Smithian" Marxism has become the radical socialdemocracy of Chomsky.71

post-Mandelites

Mandel's definition of late capitalism shows how the dynamics ofproduction call forth the emphasis on consumption that accounts for a post-modern cultural turn. In fact he incorporates production and consumption factors inhis multi-causal theory of crisis. Thus the third technological revolution brings withit a rising organic composition, higher productivity and the pressure to realise thisexpanding output as consumer commodities. But Mandel abandons the strictdetermination of the TRPF so there is no clear causal link between crises inproduction and consumption/culture. The TRPF becomes contingent upon thefalling rate of profit at the level of the market rather than a necessary feature of thelaw itself. 72 Therefore the LOV is present as a premise but is not clearly implicatedas a 'law' that causes the TRPF. The correspondence between the inherentdynamics of 'late capitalism' and culture is not specified. Crisis results not fromnecessity but from contingency.73

This opens up the way for the concept of 'late capitalism' to become 'post-capitalism'.74 Thus a new technological revolution the information society orknowledge economy posits the indefinite expansion of commodity productionbased on the fantastic productivity growth of information technology. Mandel'stheory would say that rising organic composition will be offset by rising surplus-value until a "certain threshold" is reached in the market when workers resistfurther increases.

Yet this possibility is excluded by Marx in the framing of the TRPF as thecheapening of C and V and other counter-tendencies can never be sufficient tooffset the formula s/C+V.75 Thus Mandels introduction of this revision opens theway for a post-marxist rejection of the necessity of crisis at the level of production,and for a much weaker theory of the possibility of crisis that can be expressed inexchange, distribution, consumption, and what is fashionable today circulation!The complex unity of the circuit production, exchange, distribution, consumption

is broken allowing even the cultural turn of post-marxism to fixate on the politicsof identity a la Jameson.76

The weaknesses in Mandel's method are expressed dramatically in therecent work of Robert Brenner once famous for critique of Wallerstein as "neo-

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Smithian".77 Brenner's critique countered Wallerstein's exchange theory with ananalysis based on relations of production. Capitalist development required thedevelopment of the forces of production resulting not from unequal exchange, butfrom the creation of capital/labour social relations of production. Hence, bothdevelopment and crisis revolved around class struggle at the point of production.Twenty years later, however, Brenner himself has moved right along with thetrend and is now much closer to Wallerstein's exchange analysis of the currentworld crisis.78

In a long essay "The Economics of Global Turbulence" Brennerinvestigates the reasons for the end of the long boom around 1973 and the longperiod of downturn the world economy has experienced to the present day. IsBrenner offering an alternative explanation for the current crisis to that of theneo-liberals, and 3W apologists on the one hand? Is he offering an alternative to

the neo-marxists? Let's see.Brenner adopts a neo-Ricardian approach by reducing social relations to

technical relations of production. In any given line of production profits fallbecause new technology cheapens production, forcing higher cost firms to cutprices and profits to get a return on their sunk fixed capital. When the old firmscan no longer cut costs they have to scrap any remaining fixed capital, and investin new techniques. But since in each line of production costs must ultimately fall,this would not lead to a general lowering of profits, rather the opposite, so how toexplain falling profits and crises in the whole economy?79

To do this Brenner ignores the TRPF (that profits must fall in every line ofproduction as a result of rising Organic Composition of Capital (OCC)), andargues that the lowering of profits in an individual line becomes generalised tothe whole economy as the result of rising wages! Brenner rejects Marxassumption that crises are not caused by wage rises or underconsumption andthey cannot be solved by lowering wages or increasing consumption. They arecaused by the failure to increase the rate of exploitation sufficiently to ensure thatthere is enough surplus-value to valorise existing capital. The solution can onlycome from the destruction of excess capital. But where have we heard Brenner'sarguments before? We have come full circle. It is the central thesis of thepre/post-marxists who make profits dependent on the regulation of labour bypetty bourgeois functionaries on behalf of capital.

Here we have a classic Ricardian position. There is natural technicalprogress as capital modernises by cheapening labour outputs. In fact Brenneragrees that improved technology must bring about lower costs and thus higherprofits. But this general progress comes up against a social barrier - the inabilityof capitalists to collectively cuts costs of labour and prevent underconsumption!Since the ability of capital to maintain profits depends on its ability to hold downlabour costs and sell their products, then the disruption to the process ofincreasing technical progress is caused by individual capitalists 'rational'behaviour leading to "unplanned competitive" consequences. It follows that if themarket could be planned so that the process of adopting new technology was

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rational for the collectivity, then crises could be averted and a form of marketsocialism introduced. 80

Conclusions

All these adaptations of marxism reflect the class interest of pettybourgeois intellectuals and the labour bureaucracy in the service of thebourgeoisie. Intellectuals standing outside the working class judge history tooccur in stages and consider workers as plastic putty in their hands. Blamingworkers for their defeats in the 1920s and 1930s became after the SecondWorld War a rejection of workers ability to stage a successful socialist revolution.The long march backwards has arrived at the 3W which is a recuperation of finde siecleBernsteinian revisionism, British 'liberalism' and US 'progressivism'.

The neo-marxist trajectory has come down to earth in the form of a radicalbourgeois democracy premised on civil society and the alienated bourgeoissubject. And the long-standing historic pessimism of the European intelligentsiahas taken a particularly reactionary turn during the phase of the neo-liberalreaction in the form of post-modernism.

Since this middle class substitutes itself for the working class as theagency of historic change, it makes its own ideas the pivot of a power struggleover a zero-sum social division of labour value. This means an effectiveabandoning of capitalist social relations of production as economic determinismbecause such determinism implies the historic role of the proletariat, and deniesthat of the petty bourgeoisie, in voluntarily transforming these social relations into

socialism.Shifting the agency to the chattering (discursive) classes explains why

Social Democracy limits class struggle to a distributional struggle over wagesand profits, and why post-neo-marxists reduce class struggle to a battle overpower in order to increase wages at the expense of profits. Posing as a 'leftalternative' to Social Democracy, neo-marxism backslides into a distributionalanalysis, and an instrumental political solution to the crisis.

Both Social Democracy and post-neo-marxism are totally inadequate as abasis on which to lead the proletariat in its struggle for socialism. Why?Distributional analysis masks the relations of production and the class character

of the capitalist state that must be smashed to transform those social relations.Social Democracy posits a class neutral state that can implement the majority willof the proletariat in the form of a Labor or Social Democratic party. Neo-marxists, similarly, backslide from exchange based economics into distributionalpolitics where the instrumental nation state, or global state, acts in the interestsof the class that holds hegemonic power.

The Marxist Critique

Implicit in the above accounts of the shifts to the right of Social Democracyand neo-marxism, is a Marxist critique of contemporary capitalism. It is time to

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bring this out into the open and to offer a genuine alternative to bourgeoisideology in all of its forms.

Marx's method consists of the abstraction and reconstitution of theconcrete following many complex mediations. Capitalism consists of historicallyspecific contradiction between use-value and exchange value expressed as theclass struggle to develop the forces of production within the constraints ofcapitalist property relations. Crisis results from the inability to produce sufficientsurplus-value (living labour) to realise profits on the total capital (dead labour)accumulated. This process is invisible to the class actors and has to be exposedby the dialectical method. The unequal production relations of capitalism expressthemselves in surface forms as equal exchange, distribution or consumptionrelations. Hence dialectics entails a critique of capitalist ideology rooted infetishised exchange relations. This critique allows marxists to expose the

various forms of bourgeois ideology including the neo-liberal, liberal, neo-marxistetc. Each can be seen to represent the interests of the bougeoisie, directly orindirectly, in presenting capitalism in terms of the the dehistoricising ornaturalising the dialectical unity of production, exchange, distribution andproduction relations.

We can explain the neo-liberal, liberal and neo-marxist standpoints in termsof the levels of analysis which figure in their accounts. Consumption becomes thefocus of neo-liberals and pomos because it is totally immersed in hegemonicfetishism. Liberals, similarly trapped by fetishism, take a moral and statisticalapproach to equalise distribution relations. Neo-marxists become hung-up onexchange analysis, and naturalising use-value rebel against the market. Genuine

marxists who fail to insist on the unity of this process and the productivist focusalso necessarily adapt to the ideological distortions of contemporary capitalism.

The failure of each of these attempts to locate the problems ofcontemporary capitalism and the pre-conditions for socialism, are failures ofmethod. Each moment is not grounded in the totality of production-exchange-distribution-consumptionas explained in the Grundrisse. The neo-liberal andpomo attachment to consumption becomes clear. This is the most reified andfetishised view of capitalism. Value is seen as intrinsic to the commodity andtotally removed from production, distribution and exchange. Hence, the momentof consumption is frozen apart from the unity of production and distribution andis fetishised as in Say's law when supply creates its own miraculous demand(commodities rule OK). The consumption of commodities then does not meetneeds that are historically given as the "needs" of capital or labour, but asnarrowly individualistic, alienated 'wants' or 'desires'.81

It follows that against such pomo culturalist and politicist critiques ofcommodification, "desires" are alienated expressions of need that cannot betransformed into authentic needs without the transformation of social relations.Against the Marxist account, the celebration of 'desire' is not class specific, butreflects the alienated desires of the bourgeois individual. The fetishised themesof post-modernity ARE the cultural expressions of 'late capitalism' understood as'too-late' capitalism! That is, capitalism as historically doomed, as already 'too-

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late' since it is destroying the forces of production at a rapid rate, denyingconsumption of use-values to meet the most basic social needs in the swellingimmiserated masses. And in the process as capital cannot legitimate itself as'desirable', its historic use-by date has long expired.

To conclude, the one-sided neo-Marxist accounts of neo-liberalism all failbecause they uncritically accept the basis of the very ideology that they try tocritique. They are unable to escape the hegemony of commodity fetishism and soreproduce some of its ideological effects on the body of Marxism itself. The classexplanation of this practice is that academic Marxism from which these accountsare drawn, is isolated from the working class, and lacks the grounded materialistmethod as a corrective to its 'middle class' or petty bourgeois class interests. Aswe have seen it is class struggle which grounds the materialist method. The pettybourgeois are relatively isolated from the worst effects of class struggle, since

many act officially to regulate and rationalise this struggle in distributional orfetishist (individualised) terms. So the same set of class pressures in the pettybourgeois that have always led to revisions of Marxism are very much alive andwell today.

What drives the revived radical Social Democratic centre? The drive toreconcile, pluralise, democratise etc. is the license to practice for the radical pettybourgeois whose constituency is the 'new middle class' or labour aristocracy! Asecond set of intellectuals (Giddens is typical), some of whom are reborn (Gray),based in prominent European or US universities and Social Democraticbureaucracies, corresponds to this expression of class interest in the "middle" ofdistribution analysis.

Neo-Marxism, as always, keeps left but is dragged towards the centre andappeals to a layer of left intellectuals, post-colonials etc who identify broadly withthe labour bureaucracy, NGO's, UN agencies etc and see themselves as a leftcurrent against both neo-liberals and the new middle. The formal adherence toMarxism is pretty thin, since it remains (a la Wallerstein, Bourdieu, Habermas etal) as a neo-Ricardian exchange analysis.

Materialist Dialectics.

Marxist dialectics not only explains events, but predicts events! Laws ofmotion are grounded in the law of value. Sidelining the LOV gives usunscientific, ideological perspectives on capitalism. Marxism demolishes thesestandpoints in revealing their class base. We can test them out! Neo-liberalsfailed because the market failed in Asia and Russia and needs internationalregulation. It is not the frozen consumption moment that rules, but productiveconsumption (or lack of it)! Liberals fail because they cannot overcome thecontradiction between forces and relations since they reject the existence of theLOV. Capitalist growth does not generate distributional equity. Neo-marxistsfalter because if they seek to explain everything (Foucauldians do not actually

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explain anything they presume) as the result of unequal exchange. But theycannot account for the discrepancy between equal exchange (wage rates) andthe overproduction of capital. Even would-be genuine marxists fail to escapehegemonic fetishism if they are not immersed in the working class struggle.

So it seems that we are back were we began. But not really. The currentcrisis is another expression of too-late capitalism that has reached the end of itslong life and can no longer develop the forces of production sufficiently to preventthe onset of further periods of imperialist crisis of war/revolution. The 'Short 20thcentury' began with a war and revolution and ended with imperialism once morepushing towards war and revolution. The US struggle to maintain its hegemonymust force it to engage with its rivals in mounting trade wars and militaryconfrontations.

Once more we see that the historic contradictions of the capitalist mode

of production become manifest at the surface as symptoms of system breakdown the New World Disorder. Despite the historic distortions of the collapse of so-called 'communism', of the 'death of marxism' etc., it is capitalism that nears itsend. Revolutions are not planned by self-conscious elites, but result frommassive contradictions between nature/need and exploitation/greed that cause asystem breakdown and the creation of a revolutionary situation. This time, theworking class and its allies is the vast majority, the gravediggers of the oldsociety and troops of the new society. Yet to paraphrase Lenin, capitalism will notcollapse through its own dead weight. It has to be overthrown. This can only bedone through the conscious action of the historic revolutionary class acting out itsnecessary role.

The conscious leadership of the working class is the revolutionary party.Marx's method is in making dialectics conscious. The democratic centralist partyis the working class social scientist applying materialist dialectics. Theory andpractice are united in the living programme and tested in the struggle. It is time torevive the Marxist-Bolshevik-Leninist-Trotskyist pole of revolutionary communismin the form of a world party of revolution.

Notes and References.

1 This conception of crisis owes much to Mattick 1981, Grossman 1992 andYaffe 1973; 1975 and Bullock and Yaffe 1975. It is a structural crisis ofoverproduction that can be corrected temporarily when the law of value devaluessufficient capital to restore the rate of profit.2 Among them Soros 1998, Sachs 1998, Friedman 1999, Volkner 1999. AlsoRobert Chote "IMF: US slowdown now inevitable" Financial Times, April 21 1999.3 Clearly this position is orthodox Trotskyist. The historic defeat has materialroots in the end of workers property. Cf. the state capitalist position (eg.Callinicos 1991) and the intermediate positions of Ticktin (1992) and Meszaros

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(1995) etc.4 The dominant view of crisis is that financial speculation is bad for productiveinvestment eg. Soros, Sachs.5 Ironically, the Asian crisis is driving home the fact that international capital mustrestructure production and not merely circulation. See Sach's (1998) proposalsfor a G16 and floating exchange rates to prevent specululation getting out ofhand.6 Soros, Wall St JournalSept 15 1998 and (1998). This attempt to regulatecapital is driven by the requirement of capital to be productively invested in orderto restore the rate of profit and return to a path of accumulation. Despite itsexpression by intellectuals as a new orthdoxy, it replicates past phases ofcapitalist cycles coming out of depression into state assisted accumulation, but ofcourse in a much more open global economy dominated by MNCs that haveimposed freedom of movement across sovereign borders as never before See

Socialist Appeal"Like all Bubbles, this will Burst" Oct. 1 1999.7 Jessop 1995; Tickell and Peck 1995; Torling 1999.8 Dean and Hindess 1998.9 These schools are chosen because they claim to defend the Law of Value(LOV) against post-modern or post-marxist positions. I do not include RationalChoice Marxism (see Meiksins Wood 1989) or those like Chomsky (1998) andChossudovsky (1998a, 1998b) who do not claim to be marxist. cf Frankel 1997.10 Against those who draw pessimistic conclusions at the end of the "shortcentury" I argue that the objective conditions for socialist revolution are nowuniversal, so that the Enlightenment Project is within reach of fulfillment.11We can quote Trotsky to say that the "crisis" remains that of the "crisis of

revolutionary leadership". That is, it is necessary to rebuild a New Internationalbased on the foundations of the revolutionary 3rd and 4th Internationals.12 Friedman quoted in Sachs 1998.13 Sachs 1998.14 Wade and Veneroso 1998a 1998b; Krugman 1999.15 Giddens 1998; Gray 1997. Also Economist"Roots of New Labour" Feb 7 1998.See also debate between Nobbio and Andersen in the New Left Review#231Sept/Oct 1998.16 p.4317 p.4518 p.6619 p.10320 p.11721 p.12622 p.12823Weekly GuardianSeptember 13 1998.24 Gray 1998.25 p.1726 p.39-4027 p.4828 p.28

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29 p.19930 p.20031 p.20732 cf Gamble 199933 See Democratic Leadership Council Policy promoting Clinton as proponent ofthe Third Way. See note 38.34 See his Reith Lectures "Runaway World" .35Soros,Wall St Journal. Sept 15 1998 and Soros 1998.36 Most notably Jeffrey Sachs (1998) who supports Friedman's call to floatexchange rates to break the dependence of poor countries on Washington (IMFand World Bank) as a form of welfare dependency.37The US Democratic Leadership Council promotes the 3Way philosophyvigorously. See www.dleppi.org/ppi/3way381998a and 1998b.39 Chomsky 1998.40 "The Brazilian Financial Scam" 1998www.twnside.org.sg/souths/twn/title/scam.cn.htm . See also Krugman on Brazil"Don't Blame it on Rio..." Slate Magazine Feb 11 1999.41 See Chossodovsky, "The G7 Solution..." www.transnational.org/features

42 see Janmohamed (1995) on Foucaults power as poor proxy for Marxs value.43 Hennessy 1993.44 Lukacs 1980: 310 passim45Hindess 1998. cf. Frankel's (1997) critique of the "Anglo-Foucauldians".46 Verbal exchange with Hindess September 1998

47 This shift is most blatant in Rational Choice 'marxism' where Weber'smethodological individualism replaces Marx's method for Roemer 1994; EOWright 1994; etc ( for critiques see Meiksins Wood 1989; Burawoy 1989).48 Brenner 1998.49 Euromarxism is used here generically to mean the petty bourgeois currentsfrom Bernstein and including 'Western Marxism' that embody objective fatalist orsubjective voluntarist one-sided applicationsof marxism.50 eg Stuart Hall on "just jetting in from Tokyo.." ( 1991:31) .51 See Ebert 199652 See Jameson's (1998: 136-154) shift from Mandel economics to Arrighi's

speculations about speculation.53 Hennessy 1993:30.54 See Callinicos 1976 and Benton 1983.55 I think Bourdieu's broad structuralist elitism is closer to Althusser than anyother school.56 This point is well made by Rosdolsky (1989) and also by Colletti (1974)despite his rejection of dialectics.57 cf Callinicos 1999.58 Bourdieu and Wacquant 1992:118.59 See Bourdieu 1998a and 1998b

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60 On underconsumption theories see Mattick (1981: 60 passim) Carchedi(1991:181 passim) and Clarke (1994) .61 Habermas 1998.62 This is similar to Mandel's method (see discussion below) where thedeterminate contradiction in production relations surfaces as a technologicaldeterminism at the level of exchange relations. Once more the 'market' becomesthe target of a 'democratic socialism'.63 Postone 1993.64 Postone 1993:358 passim.65 Tickell and Peck (1995) explain that "Eventually, the capacity of the MSR tomediate, accommodate and absorb these crisis tendencies is exceeded through a process which might be characterised as 'institutional exhaustion' andthe regime of accumulation will break down." (360).66 See Carchedis (1991: 187) incisive critique of regulationists as neo-Ricardian

because they posit a direct relationship between increased productivity and therate of profit67 This is the subjective/voluntarist wing of Euromarxism from Bernstein througha bastardised Gramsci to post-marxism.68 Arrighi (1996) points to the inability of Wallestein to defend himself fromBraudel and Brenner on the origins of capitalism as arising in the social relationsof Italian cities in the 14th century or social relations of the countryside in Britainin the 16th century.69 Wallerstein 1999.70 Arrighi 1994: 330 passim71 See Mandel 1978:172.72 See Mattick's (1981) review of Late Capitalism.73 As we have seen Jameson (1998) abandons Mandel for Arrighis model ofcapitalist development74 Capital Vol 3 p etc etc75 Jameson 1998.76 Brenner 1977. Add to this Brenners political affiliations and his debt toMandel's economics.77 Brenner 1998. Brenner even reduces increased labour productivity totechnical developments resulting from competition very much like the Wallersteinmodel he critiqued twenty years earlier.78 p. ref 24 passim79 Brenner has an affinity with the Rational Choice school since he bases hisexplanation of the dynamics of capitalist development on the 'rationality' of thecompeting individual capitalists which could be regulated by 'society'.80 Heartfelt 1998

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Bourdieu, Pierre (1998a) " A Reasoned Utopia and Economic Fatalism" New LeftReview. 227 January/February.

Bourdieu, Pierre (1998) Acts of Resistance Polity. Press.

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Chomsky, Noam (1998) Power in the Global Arena. New Left Review, 230July/August.

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1 This conception of crisis owes much to Mattick 1981, Grossman 1992 andYaffe 1973; 1975 and Bullock and Yaffe 1975. It is a structural crisis of

overproduction that can be corrected temporarily when the law of value devaluessufficient capital to restore the rate of profit.2 Among them Soros 1998, Sachs 1998, Friedman 1999, Volkner 1999. AlsoRobert Chote "IMF: US slowdown now inevitable" Financial Times, April 21 1999.3 Clearly this position is orthodox Trotskyist. The historic defeat has materialroots in the end of workers property. Cf. the state capitalist position (eg.Callinicos 1991) and the intermediate positions of Ticktin (1992) and Meszaros(1995) etc.4 The dominant view of crisis is that financial speculation is bad for productiveinvestment eg. Soros, Sachs.5 Ironically, the Asian crisis is driving home the fact that international capital must

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restructure production and not merely circulation. See Sach's (1998) proposalsfor a G16 and floating exchange rates to prevent specululation getting out ofhand.6 Soros, Wall St JournalSept 15 1998 and (1998). This attempt to regulatecapital is driven by the requirement of capital to be productively invested in orderto restore the rate of profit and return to a path of accumulation. Despite itsexpression by intellectuals as a new orthdoxy, it replicates past phases ofcapitalist cycles coming out of depression into state assisted accumulation, but ofcourse in a much more open global economy dominated by MNCs that haveimposed freedom of movement across sovereign borders as never before SeeSocialist Appeal"Like all Bubbles, this will Burst" Oct. 1 1999.7 Jessop 1995; Tickell and Peck 1995; Torling 1999.8 Dean and Hindess 1998.9 These schools are chosen because they claim to defend the Law of Value(LOV) against post-modern or post-marxist positions. I do not include RationalChoice Marxism (see Meiksins Wood 1989) or those like Chomsky (1998) andChossudovsky (1998a, 1998b) who do not claim to be marxist. cf Frankel 1997.10 Against those who draw pessimistic conclusions at the end of the "shortcentury" I argue that the objective conditions for socialist revolution are nowuniversal, so that the Enlightenment Project is within reach of fulfillment.11 We can quote Trotsky to say that the "crisis" remains that of the "crisis ofrevolutionary leadership". That is, it is necessary to rebuild a New Internationalbased on the foundations of the revolutionary 3rd and 4th Internationals.12 Friedman quoted in Sachs 1998.13 Sachs 1998.14 Wade and Veneroso 1998a 1998b; Krugman 1999.15 Giddens 1998; Gray 1997. Also Economist"Roots of New Labour" Feb 71998. See also debate between Nobbio and Andersen in the New Left Review#231 Sept/Oct 1998.16 p.4317 p.4518 p.6619 p.10320 p.11721 p.12622 p.12823Weekly GuardianSeptember 13 1998.24 Gray 1998.25 p.1726 p.39-4027 p.4828 p.2829 p.19930 p.20031 p.207

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32 cf Gamble 199933 See Democratic Leadership Council Policy promoting Clinton as proponent ofthe Third Way. See note 38.34 See his Reith Lectures "Runaway World" .35 Soros,Wall St Journal. Sept 15 1998 and Soros 1998.36 Most notably Jeffrey Sachs (1998) who supports Friedman's call to floatexchange rates to break the dependence of poor countries on Washington (IMFand World Bank) as a form of welfare dependency.37 The US Democratic Leadership Council promotes the 3Way philosophyvigorously. See www.dleppi.org/ppi/3way38 1998a and 1998b.39 Chomsky 1998.40 "The Brazilian Financial Scam" 1998

www.twnside.org.sg/souths/twn/title/scam.cn.htm . See also Krugman on Brazil"Don't Blame it on Rio..." Slate Magazine Feb 11 1999.41 See Chossodovsky, "The G7 Solution..." www.transnational.org/features

42 see Janmohamed (1995) on Foucaults power as poor proxy for Marxs value.43 Hennessy 1993.44 Lukacs 1980: 310 passim45 Hindess 1998. cf. Frankel's (1997) critique of the "Anglo-Foucauldians".46 Verbal exchange with Hindess September 199848 This shift is most blatant in Rational Choice 'marxism' where Weber's

methodological individualism replaces Marx's method for Roemer 1994; EOWright 1994; etc ( for critiques see Meiksins Wood 1989; Burawoy 1989). 49 Brenner 1998.50 Euromarxism is used here generically to mean the petty bourgeois currentsfrom Bernstein and including 'Western Marxism' that embody objective fatalist orsubjective voluntarist one-sided applicationsof marxism.51 eg Stuart Hall on "just jetting in from Tokyo.." ( 1991:31) .52 See Ebert 199653 See Jameson's (1998: 136-154) shift from Mandel economics to Arrighi'sspeculations about speculation.54 Hennessy 1993:30.55 See Callinicos 1976 and Benton 1983.56 I think Bourdieu's broad structuralist elitism is closer to Althusser than anyother school.57 This point is well made by Rosdolsky (1989) and also by Colletti (1974)despite his rejection of dialectics.58 cf Callinicos 1999.59 Bourdieu and Wacquant 1992:118.60 See Bourdieu 1998a and 1998b61 On underconsumption theories see Mattick (1981: 60 passim) Carchedi(1991:181 passim) and Clarke (1994) .

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62 Habermas 1998.63 This is similar to Mandel's method (see discussion below) where thedeterminate contradiction in production relations surfaces as a technologicaldeterminism at the level of exchange relations. Once more the 'market' becomesthe target of a 'democratic socialism'.64 Postone 1993.65 Postone 1993:358 passim.66 Tickell and Peck (1995) explain that "Eventually, the capacity of the MSR tomediate, accommodate and absorb these crisis tendencies is exceeded through a process which might be characterised as 'institutional exhaustion' andthe regime of accumulation will break down." (360).67 See Carchedis (1991: 187) incisive critique of regulationists as neo-Ricardianbecause they posit a direct relationship between increased productivity and the

rate of profit68 This is the subjective/voluntarist wing of Euromarxism from Bernstein througha bastardised Gramsci to post-marxism.69 Arrighi (1996) points to the inability of Wallestein to defend himself fromBraudel and Brenner on the origins of capitalism as arising in the social relationsof Italian cities in the 14th century or social relations of the countryside in Britainin the 16th century.70 Wallerstein 1999.71 Arrighi 1994: 330 passim72 See Mandel 1978:172.73 See Mattick's (1981) review of Late Capitalism.74 As we have seen Jameson (1998) abandons Mandel for Arrighis model ofcapitalist development.75CapitalVol 3 p etc etc76 Jameson 1998.77 Brenner 1977. Add to this Brenners political affiliations and his debt toMandel's economics.78 Brenner 1998. Brenner even reduces increased labour productivity totechnical developments resulting from competition very much like the Wallersteinmodel he critiqued twenty years earlier.79 p. ref 24 passim80 Brenner has an affinity with the Rational Choice school since he bases his

explanation of the dynamics of capitalist development on the 'rationality' of thecompeting individual capitalists which could be regulated by 'society'.81 Heartfield 1998.