Friday 5 October 2007



Socialism, and economic liberalism, paradoxically share the same intellectual origin, namely Adam Smith’s idea of the bourgeois society as a self-acting, self-driven economic order (1). Any restrictions placed on the functioning of this order by meddlesome sovereigns or governments is at best futile and at worst pernicious since it destroys the coherence of its functioning. Adam Smith saw this order as being in conformity with the laws of nature, and, in its consequences, benign and productive of “progress”, in the sense of an augmentation of the “wealth of nations”. He and his followers therefore drew the implicit conclusion that nothing lay beyond capitalism, that we had come to the end of history. As Marx was to say of classical political economy (1976, 174): “…there has been history, but there is no longer any.” (2)
While accepting the fact however that bourgeois society constitutes a self-acting, self-driven order, if we see this order analytically not as being benign and productive of progress, but as being antagonistic and exploitative, giving rise to the growth of wealth at one pole and of misery at another, then the quest for human freedom, precisely because government intervention cannot mend it, must require a transcendence of this order. The same “spontaneity” (to use Oskar Lange’s (1963) term) which underlies the bourgeois economic order and constitutes the case for economic liberalism if its consequences are seen to be benign, gives rise to the very opposite conclusion, of the need for a revolutionary overthrow of this order, if its consequences are seen as destructive and de-humanizing.
This of course was Marx’s argument. His case for socialism was “scientific” in the sense that it took classical political economy as its starting point but came to different conclusions precisely by re-examining classical questions at greater depth. It did not entail placing a capitalist and an imaginary socialist order side by side and establishing the comparative superiority of the latter; it did not entail asking questions like: “what is the justification for a separate group of persons, the capitalists, earning profits, when the society could function just as well if the means of production are collectively owned?” (3) In short, it did not make out an ethical case for socialism, a case based on an abstract extrinsic comparison between systems on ethical grounds. True, it took mankind’s quest for freedom as given, but it showed that this quest necessarily entailed going beyond capitalism. This is also why Marxism must not be confused with a theory of the inevitability of socialism (4). To say that the quest for freedom cannot be satisfied within capitalism is not the same as saying that socialism is inevitable. The matter in short is one of praxis, not of prediction.
Marx’s argument however was not just this; it went deeper. Capitalism is inimical to human freedom not just because it spontaneously produces wealth at one pole and misery at another as a condition for its self-reproduction, and not just because inequality, insecurity, and the non-availability of the means to satisfy a certain minimum level of material needs (which may itself be changing over time), all of which are conditions for freedom in the sense of the realization of one’s creative potential, are incapable of being achieved under capitalism; it is inimical to human freedom precisely because within it mankind is trapped in a self-acting and self-driven order where individuals become the objects of external coercive forces. This is true not just of workers, but even of the capitalists whom Marx in Capital (Volume I), described as “capital personified”, that is, as human agents through whom the immanent tendencies of capital are mediated.
Not only is it the case that the outcome of the functioning of the system is different from the intentions of the individuals participating in it, but these intentions themselves are neither a matter of individual volition, nor autonomously sociologically caused (like the desire to “keep up with the Joneses” etc.). The very logic of the functioning of the order imparts to the different individuals specific motivations which they can ignore at their own peril, the peril of getting displaced from their positions within the economic order. For instance, a capitalist who chooses to opt out of the Darwinian struggle of survival, in which all capitalists are caught, will get displaced as a capitalist; and so on.
In his discussion of commodity fetishism, Marx had talked of the fact that social relations within capitalism appeared as the relations between things, and that the outcome of social relations appeared as the inherent property of things (such as for instance the “fantastic” notion of bourgeois economics that profits arise because of the productivity of “capital”, seen as a set of means of production detached from its relational aspect). In fact however his analysis went further: human beings under capitalism were actually indistinguishable from things; human beings under capitalism became “objectified”. As against the criticism made of Ricardo that his theory of wages rested on a view of workers as if they were no different from animals, Marx argued that this was actually the case under capitalism and that Ricardo’s greatness lay precisely in the fact that he did not flinch from speaking the truth about capitalism.
This “objectification” is different from, though related to, “reification” and “alienation”, both of which are phenomena characterizing capitalism. “Objectification” refers neither to how things appear under capitalism, nor to the fact of the products of labour appearing in the alienated form of capital; it refers to the phenomenon of capitalism being a self-driven self-acting order, in which the immanent tendencies of capital are mediated through human beings, who therefore cease to be subjects and are reduced to the status of mere objects. This objectification is a denial of freedom: capitalism is incompatible with human freedom because it objectifies human beings. The case for socialism is that it alone creates the condition for human freedom by overcoming this objectification, for which a necessary condition is the social ownership of the means of production.


The above argument for socialism differs in a basic sense from the arguments usually advanced in favour of socialism. And it is important to emphasize this difference because from these different arguments different visions of socialism follow. The usual arguments are of two kinds: “productivist” arguments and “distributivist” arguments. Let us consider the former. A very common argument for socialism is that it carries forward the development of productive forces which at a certain stage gets arrested by the relations of production characterizing capitalism. This “march-of-the-productive-forces” argument for socialism, can at first sight derive sustenance from several of Marx’s writings, notably his famous preface to A Contribution to the Critique of Political Economy; but it represents a superficial reading of Marx, especially when, as is usually the case, “productive forces” are defined exclusively in material terms. This superficial reading which informs a good deal of current official Chinese literature on socialism, was epitomized by the former Soviet Prime Minister Alexei Kosygin’s remark that socialism was synonymous with a 7 percent growth rate(5)!
Marx did not see productive forces exclusively in material terms. And his remark that a mode of production becomes obsolete when it has developed the productive forces to the highest level it is capable of, should not be given a crude and exclusively material interpretation. This is borne out by his own statement in The Poverty of Philosophy (1976, 211): “Of all the instruments of production the greatest productive power is the revolutionary class itself. The organization of revolutionary elements as a class supposes the existence of all the productive forces which could be engendered in the bosom of the old society.” A “revolutionary proletariat” in short is not just a productive force, but represents the highest level of development of the productive forces in a bourgeois society.
This statement however is in keeping with Marx’s perception of socialism as essential for human freedom. The break from the human condition of unfreedom under capitalism, starts with our knowledge of this unfreedom, i.e. starts with a scientific as opposed to an ideological understanding of the roots of this unfreedom. “Freedom”, Engels had said in Anti-Duhring echoing Hegel, “is the recognition of necessity”. The immanent laws of motion of the capitalist mode of production constitute, in this context, this realm of necessity. Freedom from these laws begins with the knowledge of these laws and culminates in the formation of a revolutionary proletariat in which this knowledge has developed to a point where it can break into revolutionary praxis.
In the process of the development of this knowledge, particular episodes in the development of capitalism, such as crises and stagnation, no doubt play an important role, in providing practical proof of the validity of this knowledge, but this is not the same as saying that the existence of crises and stagnation is what constitutes the case for socialism or that there is some final phase of stagnation which constitutes the denouement for capitalism (which is what Bernstein had interpreted Marx as saying and which Lenin had explicitly attacked by saying that “there was no such thing as an absolutely hopeless situation for capitalism”).
The same goes for the “distributivist” argument. While no doubt egalitarianism and “distributive justice” cannot be achieved under capitalism, and require socialism for their realization, they are not synonymous with socialism, which, to repeat, seeks to end the objectification of human beings and constitutes a major step towards human freedom.


The objectification of individuals in bourgeois society is not a matter relating exclusively to the esoteric realm of the political economy of such societies; it permeates their very being. The realm of the economic after all does not stand alone, in isolation from the other realms; it is embedded within the whole. The realization of the immanent tendencies of capital requires therefore that the functioning of these other realms must also be in conformity with what is needed for such realization. The State in a bourgeois society, for instance, must be such that it aids the realization of its immanent tendencies. It may of course under certain exceptional circumstances, slow down such realization in the interests of the system as a whole, by placing temporary restrictions upon it; but it cannot altogether prevent the realization of the immanent tendencies of capital.
It is for this reason that bourgeois society is fundamentally anti-democratic. Human beings cannot be objects in the realm of the economy and subjects in the realm of the polity, save in very exceptional situations, which are invariably transitory, where there is a disjunction between the economy and the State.
To say that bourgeois society is fundamentally anti-democratic may appear odd at first sight, since its own claim has always been that it alone can guarantee democracy. But implicit in the notion of a self-acting and self-driven economic order functioning independently of human will and consciousness, is not just a denial of freedom but also a denial of democracy. This denial however is camouflaged in various ways. Formal bourgeois democracy invariably operates under layers and layers of insulation against the possibility of the people actually intervening actively in the political process as subjects.
The process of putting in place of these insulations becomes especially transparent in societies like ours for a specific reason. Bourgeois democracy with universal adult franchise was introduced in our country shortly after independence itself, prior to the consolidation of bourgeois rule, unlike in countries like Britain and France where universal adult franchise came nearly three quarters of a century after the climacteric marking the start of the consolidation of bourgeois rule. The process of consolidation of bourgeois rule in countries like ours therefore requires, as it were, a “counter-revolution” against the existing democratic institutions and practices. This counter-revolution of course also entails inter alia a change in the relationship between the big bourgeoisie and imperialism, for without the latter’s help the consolidation of bourgeois rule cannot be carried out (one of the visible symptoms of this change at present being the Indo-US Nuclear Agreement); but the counter-revolution in the realm of democracy, involving efforts to snuff out the political activism of the people, is quite evident (with the judiciary, which is neither directly nor indirectly accountable to the people, playing a leading role in it).
The means of attenuation of democracy in a bourgeois society are several: the first, which Lenin had emphasized, is the ossification of the State where the bureaucracy and the standing army become the core of the State apparatus, and the elected governments become increasingly ornamental. The second is the fragmentation of the people into ethnic, linguistic, or even religious groups, or even into sheer atomized individuals incapable of collective praxis. (The invoking of Christian fundamentalism on issues like abortion and gay rights has been a potent weapon in recent years in the hands of the Republican Right in the United States for obtaining majorities which have then been used to serve corporate interests). The third is the denial of meaningful choices to the electorate, since the agendas of the different political Parties, each trying to appease a middle-class constituency in thraldom to the bourgeois order, tend to converge ( a fact used with great effect of late in India where the imperative of so-called “development” has made Parties belonging to very different segments of the political spectrum adopt almost identical pro-capitalist policies). The very fact that despite the opposition to the Iraq war by the majority of people in each of the advanced capitalist countries engaged in the war, the war still drags on, shows the scant respect shown to popular opinion in capitalist democracies; and a major factor explaining this phenomenon is the absence of any significant difference among the political Parties. The fourth is the inculcation of insecurity among the people, which encourages mutual distrust among them, prevents united action and creates a favourable ground for the maintenance of status quo through violence. Given the fact that resistance, no matter in what form, is ever-present in any bourgeois society and its periphery, to capitalist and imperialist exploitation, the inculcation of such insecurity is by no means difficult. One segment of the people can always be made to feel insecure through demonizing another segment which happens at the time to be engaged in such actions of resistance. The fifth is the deliberate promotion of mindlessness among the people by the media and the peddlers of popular culture. One can go on listing such factors and much has been written on this subject anyway. The basic point is the incompatibility of authentic democracy where the people are the political subjects with capitalism where they are the objects.
Socialism, it follows, constitutes a necessary condition for the authentic realization of democracy. The proposition that socialism and democracy are incompatible is part of the propaganda of capitalism. On the contrary, socialism which aims to overcome the objectification of the people in bourgeois society, is alone compatible with democracy; it alone can create the conditions for the full flowering of democracy. But more than that, socialism is the full flowering of democracy, a proposition which we shall examine later. Since the claim that socialism and democracy are incompatible is usually supported with reference to the actual practice of former socialist countries, a brief discussion of that experience is in order here.


Old socialism came as a result of revolutionary expediency, through seizing an opportunity created by the war, in order to save mankind from the barbarism of that and other similar wars. It appeared in a relatively backward country; it appeared abruptly; it did not spread, as was originally expected, to other countries, especially to the relatively more advanced countries; and it was encircled, and isolated and had to fight for its very survival against vastly superior forces throughout its existence. As a Communist character puts it apropos the Soviet Union in Graham Greene’s last great novel The Human Factor: “My country has been at war since 1917”. It is within this context of isolation, of desperate efforts to develop the productive forces to overcome the challenge of encirclement, including increasingly from Nazi Germany, and of the estrangement from the peasantry arising from this desperate bid for raising the productive capacity of the country, that the political institutions of the Soviet State were formed. And these institutionalized a dictatorship of the Party in the name of the dictatorship of the proletariat.
True, this isolation of the Soviet Union was overcome in the post-second world war years when the socialist camp became much larger, but the new entrants to this camp were also relatively backward countries, and in the case of many even the entry was a result of the Soviet Red Army’s victorious march against Nazism. Far from providing succour to the Soviet Union they were often a source of strain on it; and far from contributing to a reconfiguring of Soviet political institutions, they themselves imported the Soviet political “model”.
The fact that this “model” represented a far cry from the vision of the Soviet State which had informed the revolution is obvious. On the eve of the revolution itself Lenin had said: “we can at once set in motion a state apparatus consisting of ten if not twenty million people.” The vision clearly was of a State that had got dissolved into the class itself; a State that was an association of workers, vastly different from the bureaucratized, ossified bourgeois State, where a tiny coterie of persons takes crucial decisions behind closed doors affecting the lives of millions of people, without the people having any say in the matter; a State that unleashed the political praxis of the working class. But the actual political institution that came into being was a highly centralized dictatorship of the Party, which eventually brought about a de-politicization not only of the working class but also of the Party itself (where, as we know in retrospect, a person could become the General Secretary of the CPSU without believing in socialism).
To what extent this was the result of specific mistakes, or of “personality factors”, whether, even within the constraints of the circumstances, a different course could have been taken, are matters that need not detain us here. The basic point is that old socialism, even while it overcame the “spontaneity” of capitalism, even while it got rid of the old problem of capitalist “objectification”, ensured full employment, and set up the most gigantic Welfare State the world had even seen, introduced a very different and altogether novel form objectification itself. The substitution of private ownership of the means of production by State ownership (which is supposed to express social ownership) and the accompanying substitution of commodity production by national planning, may overcome bourgeois objectification, but the only way that the people can acquire the role of being subjects in a socialist society is through political praxis. (The old Yugoslav model, reminiscent of the syndicalist position, which believed that subjectivity can be restored to the people in the realm of the economy itself by having worker-managed factories, did not overcome commodity production and hence bourgeois objectification.) The de-politicization of the working class meant that this subject-role was never acquired by the people. They escaped bourgeois objectification, but got trapped into another kind of objectification in a society which also had its own form of fetishism. This latter objectification is lucidly captured by Jean-Paul Sartre (1965) in his satirical remark: “Budapest’s subway is in Rakosi’s mind; if the subsoil does not allow it, then the sub-soil must be counter-revolutionary!”
The foregoing must not detract in any way from the enormous historic achievements of old socialism. Leaving aside what it achieved internally in those societies where it prevailed, it was responsible for the defeat of fascism, for making possible the entire process of decolonization, and for putting a check on the depredations of imperialism for well over half a century. As Professor Joan Robinson used to say in her Cambridge seminars, “we would not be sitting here today but for the Soviet Union”. Nonetheless, the fact remains that old socialism was a product of its times. Apart from anything else, the times today are vastly different. For instance, inter-imperialist rivalries which played such an important role in Lenin’s thinking, are far more muted today. The socialist project today must be based on very different foundations for this reason at least, if not for the more basic reason that the realization of its vision of overcoming the objectification of human beings requires such a re-foundation.


Central to any such re-foundation must be the people’s political praxis. Since authentic democracy consists in unleashing this praxis, socialism must be seen as the full flowering of democracy. An economistic perception of socialism as consisting essentially in State ownership of the means of production is not enough; socialism must mean the unleashing of authentic democracy in the sense of political praxis of the people. This praxis is limited at any time by lack of understanding of the conjuncture. The role of the revolutionary Party is to provide this understanding. The revolutionary Party locates and opens doors when no doors are visible. It points the way forward for people’s political praxis at every stage, so that the process of unleashing of democracy, which constitutes the essence of socialism, does not get stymied. The role of the revolutionary Party is not to substitute itself for the people, not to de-politicize them as a counterpart of the establishment of its own dictatorship; it is on the contrary to politicize them, to ensure that their political praxis is not thwarted, by pointing at every stage the way forward.
This however requires not just a right set of institutions through which the relations between the Party and the people, the relations between the Party and other Parties etc. are mediated, but also the right approach to Marxism. The old socialist view canonized Marxism, saw it as a closed and complete system, which only had to be grasped, like a religious text, through perseverance, and “applied” to specific contexts. According to old socialism there was a “thing” called Marxism (or rather Marxism-Leninism, since Lenin too was canonized in hyphenated splendour), and Mao “applied” it to China, and we have to apply it to India. This fundamentally erroneous attitude has been a predominant characteristic of Left thinking to this day.
It is erroneous because it arbitrarily separates “theory” from its “applications” and does not recognize that “application” too is theory. It is erroneous because via this separation it implicitly presents a religious attitude to Marxism, as a closed complete theory. It is erroneous because it refuses to recognize the progress of knowledge which mankind acquires and which should be a source of enrichment of Marxism; instead it arbitrarily and unjustifiably selects only those strands of the advance of knowledge which in its view support canonical Marxism, and treats the rest as inconsequential if not reactionary. And it is erroneous because in the process it devalues theoretical endeavor on the Left, and discourages creativity. (The attitude becomes: “Since Marx has said everything of importance that there is to say, what more can I say except simply finding more evidence of his correctness?”).
All this is usually sought to be justified by saying that if we abandon the “texts” then we will be in a world of theoretical free-for-all which would stand in the way of praxis. To believe this however is to believe that people cannot act except with reference to canonical texts, i.e. they cannot act except when inspired by a religion, which itself constitutes a fundamental epistemological negation of socialism. The people cannot acquire the role of subjects in social and political life, if they do not acquire the role of subjects in the theoretical domain. To say this is not to applaud half-educated cocky self-assurance; it is simply to break the religious approach to Marxism, to treat it as essentially an open system.
There is in other words at every moment an attempt to understand the present through a reconstruction of Marxism(7).Every attempt at understanding the present is a theoretical endeavor, based not on an “application” of a given closed set of doctrines, but a creative effort to reconstruct Marxism. Its validity has to be judged, as in all theoretical efforts, not with reference to whether or not it deviates from the “text”, but whether or not it is correct, i.e. whether or not it enables us to understand the present. Every person who thinks, every person who wants to carry the cause of socialism forward, is thus engaged in reconstructing Marxism. Debates in society are inter alia debates among alternative reconstructions of Marxism, each seeking to make the present comprehensible through the use, in different ways, of concepts left to us by Marx, Lenin, and others, but not necessarily confined to these concepts alone (which is another way of saying that Marxism must be continuously nourished by advances in knowledge).
It is in this rich atmosphere of discussion that the revolutionary Party must function, for this alone can provide a check against its going horribly wrong in its assessment of the present. Free scientific discussion is like oxygen for a revolutionary Party; without such discussion it cannot survive. But such free discussion in turn requires not just complete intellectual freedom, but also the existence of a multiplicity of opinions (which in turn entails a multiplicity of political Parties), and a redefinition of the concept of “democratic centralism” as the organizing principle of a revolutionary Party. It is not often appreciated that Bukharin and other “Left-Wing Communists” who opposed the Treaty of Brest-Litovsk were freely bringing out their own newspaper even during the most difficult post-revolutionary times, which argued against the official position of the Bolshevik Party. And while Lenin, the strong advocate of “democratic centralism” as the organizing principle of the Bolshevik Party, entered into fierce polemics with the Left-Wing Communists, the question of silencing them through disciplinary action never arose. Such silencing of dissent was a later and altogether unwholesome development.
The dictatorship of the Party under old socialism was typically justified through a dichotomy between “science” or “theory” which was the preserve of the few, who happened to be in leading positions, and “politics”, where the masses participated, increasingly without enthusiasm, in conformity with this “theory”. The “theory” in this conception was necessarily a closed system. Once we see theory as open, once we eliminate the dichotomy between theory and “politics” or theory and “applications”, or “theoreticians” and “activists”, the intellectual ground for any dictatorship of the Party would have been removed.


A basic question which has been raised in the context of socialism relates to the motivation for work in a socialist society (8). In a feudal society, people work because of the pressure of customs and traditions, backed by force; if the serf does not put in his labour in the lord’s field or does not hand over product rent (where labour rent has been so commuted), then he will be physically punished, and if he does not work in his own field sufficiently hard, then his income net of rent will force him to starve. In a capitalist society, people work because of the existence of the reserve army of labour, which acts as a coercive, disciplining device. If a worker is suspected to be a “laggard” or a “troublemaker”, then he is dismissed and some one else takes his place, such substitutes being always available owing to the existence of the reserve army. But in a socialist society, where there is neither the fear of the Monseigneur’s whip, nor the fear of being unemployed, since the economy is operating at full employment and in any case substantial Welfare State measures are available to all, what will be the source of the motivation for work? Some would even suggest that political authoritarianism, as expressed through the dictatorship of the Party, becomes indispensable for the functioning of a socialist society, precisely because it operates close to full employment and has an array of Welfare State measures, i.e. the modus operandi of such a society must include an element of coercion.
The old Yugoslav answer to this, which paralleled something tried briefly in the Soviet Union during the Gorbachov era, was to make peer pressure an instrument for work discipline. In worker-managed factories, the workers’ collective itself would take on the role of pulling up laggard workers, and this social pressure from one’s own fellow workers would be sufficient to inculcate work motivation among workers. In Gorbachov’s time when contracts were signed between the State and workers’ collectives, again the question of imparting work motivation was relegated from the domain of the State to that of the workers’ collectives which could bring peer pressure to bear on workers. But Yugoslav socialism was afflicted with substantial unemployment even in the heyday of self-management, so that while peer pressure was dubious, the fear of the “sack” was very real. And the Soviet experiment did not last long, quite apart from the fact that had it continued, it might have reproduced features of the Yugoslav system, based as it was on similar syndicalist perceptions.
The Yugoslavs always said that workers’ management did not negate social property, that it was workers’ management of social property; it simply entrusted the management of social property to individual factory-based workers’ groups. The system does nevertheless mean a fragmentation of the working class, not into atomized individuals but into atomized groups of factory workers. Since the relations between the different worker-groups managing different factories are mediated through the market, “market socialism” is a form of commodity production which reproduces the well-known features of commodity-producing bourgeois societies, such as inflation, unemployment, and huge inequalities. “Market socialism” of this sort is a contradiction in terms, a negation of socialism (from which it follows that the concept of “socialist commodity production” which China has been talking about of late is equally untenable, though the idea of using markets for certain specific purposes in socialist societies is not).
A socialist society clearly needs social commitment as the basis of work-motivation (apart from the fact that work must itself become a source of joy). All the solutions to the problem of work-motivation discussed so far take it for granted that the workers are motivated exclusively by individual self-interest, and then examine how to coerce them into work despite this. This may have been an accurate reflection of the reality of old socialism, especially in its later years, but it cannot form the basis of a socialist society. Such a society clearly needs social commitment and an overcoming of the exclusive pre-occupation with individual self-interest which bourgeois society tries to inculcate. Indeed the overcoming of such exclusive pre-occupation with individual self-interest is what underlies combinations among workers (9) within bourgeois society itself, and hence constitutes the starting point of the journey to socialism. And the journey to socialism which begins with the overcoming of the exclusive pre-occupation with individual self-interest among workers, culminates in the formation of a revolutionary proletariat.
Marx clearly therefore saw in politics, in the fact of struggle of which politics is the expression, a means of overcoming the individual self-interest that characterizes bourgeois society. Old socialism de-politicized the workers. Our vision of the socialism of the future must entail a resurrection of politics, a perennial engagement with politics on the part of the working class, which will also provide the answer to the problem of work motivation in socialist societies.


The two and a half decades after the second world war witnessed the most ambitious effort to “reform” capitalism that has ever been undertaken. Keynesian demand management by capitalist States brought down unemployment rates to unprecedented low levels. The boost to demand created a strong inducement to invest and hence rates of growth unprecedented in the history of capitalism. These were accompanied by high rates of labour productivity growth, because of which, in the context of near-full employment conditions, the workers succeeded in obtaining high rates of growth of real wages. These, together with social security measures introduced by Social Democratic governments, made capitalism appear as a humane system. On the other side, decolonization rid capitalism of the stigma of keeping the majority of the world’s people under its oppressive political yoke. It seemed for a while that capitalism had indeed changed, and made the case for socialism redundant, exactly as Keynes had wanted, predicted and theorized about : “a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment…It is not the ownership of the instruments of production which it is important for the State to assume” (1949, 378).
The end of this long boom, which has been called the “Golden Age of Capitalism”, constitutes proof that the “spontaneity” of the system cannot be overcome, save temporarily and that too under exceptional circumstances. The hegemony of capital over labour gets undermined by the near full employment conditions that prevail: the “sack” loses its power, and inflation gathers momentum over time as workers feel emboldened to press higher wage claims,(10) which in turn creates pressures from capital for the restoration of a substantial reserve army of labour. Adding to these pressures is another fact, namely the capacity of the State, which naturally is a nation-State, to carry out Keynesian demand management, gets undermined as the immanent tendency towards centralization of capital gives rise to globalization of finance and hence an international finance capital. Since ignoring the caprices of this international finance capital, including its preference for government-expenditure deflation, entails the risk of capital flight, the nation-States willy-nilly have to fall in line and eschew Keynesian demand management.
Keynesianism in retrospect therefore must be seen as a transient phenomenon, based on an exceptional post-war conjuncture. As the conjuncture passed, undermined inter alia by the immanent tendencies of capital, the programme of “reformed capitalism” was given a quiet burial. Not only did growth rates in world capitalism plummet, not only did unemployment in the advanced capitalist countries approach double-digit figures and remain stuck there, not only did the absolute real wage rate of the workers show a virtual stagnation in the post-“Golden Age” period, but even the tendency towards decolonization got reversed, with imperialism making a determined attempt to re-appropriate the world’s natural resources, especially oil, for itself.
In this re-colonization attempt it enjoys the backing of the third world big bourgeoisie, which has done a volte face, from leading the people against imperialism, to collaborating with imperialism against the people’s interests. And the people are back to a situation reminiscent of the pre-decolonization experience: of an acute agrarian crisis, of secularly adverse movements in the terms of trade against primary commodity producers, of expropriation of peasants’ land by corporate interests, of the grinding down of petty production, and in general of an unleashing of primitive accumulation of capital, or what I would prefer to call “accumulation through encroachment” in the periphery. Since all this is not accompanied by any significant increases in employment in the modern capitalist sector within the periphery, the outcome is growing unemployment, destitution, hunger, poverty, and insecurity. In short, all talk about the “reform” of capitalism has come to naught.
The socialist agenda therefore remains as relevant today as ever. And unless the socialist movement gathers momentum, the anger against imperialism will continue to take the most violent, destructive, inhuman and unproductive forms, like terrorism. The choice before us today, as it was at the time of Lenin and Luxemburg, is between socialism and barbarism, between a situation where a predatory imperialism remains locked in perennial combat with equally ruthless groups of terrorists, thus threatening the very survival of our civilization, and one where the very system that produces both imperialism and its terrorist “other”, is overthrown.
This revival of socialism of course will take time. The old Comintern perception of a “general crisis of capitalism” giving rise, within a comparatively short period of time, to the overthrow of the system, lacks relevance in today’s context, where, apart from anything else, the inter-imperialist rivalries that had produced such a prognosis, are far more muted. George Lukacs’ view, expressed in an interview in the New Left Review, that just as the transition from feudalism to capitalism was a long drawn-out one, spanning almost three hundred years, likewise the transition from capitalism to socialism is likely to be a long drawn out one, appears more plausible at this moment. If this perspective is accepted, then the collapse of the Soviet Union or the recent distortions in China would appear simply as episodes in this long transition. But anyone who has faith in the future of mankind, cannot remain skeptical about the occurrence of this transition.
The precise mode of this transition, and the precise problems that would arise in the course of this transition are issues whose discussion must await another occasion. What is important however is the overall vision that we have of the socialism that will emerge. That can only be of a socialism which accords centrality to human freedom, which remains continuously “open” and untainted by ossification in any form, and which constitutes an unleashing of democracy and a perennial engagement of the people with politics.

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Dobb M.H. (1973) Theories of value and Distribution Since Adam Smith, CUP, Cambridge.
Kalecki M. (1971) “Political Aspects of Full Employment” in Selected Essays on the Dynamics of Capitalist Economies 1933-1970, CUP, Cambridge.
Keynes J.M. (1949) The General Theory of Employment, Interest and Money, Macmillan, London.
Lange O. (1963) Political Economy Volume 1, Pergamon Press, Warsaw and Oxford.
Marx K. and Engels F. (1976) Collected Works, Volume 6, Progress Publishers, Moscow.
Patnaik P. (1990) Economics and Egalitarianism, OUP, Delhi.
Patnaik P. (1998) “The Communist Manifesto After 150 Years” in Prakash Karat ed. A World to Win, Leftword Books, Delhi.
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Schram S. (1973) ed. Mao Zedong Unrehearsed, Pelican, Harmondsworth.
Zizek Slavoj (2006) edited (with an Introduction) Revolution at the Gates: Lenin’s Writings in 1917, Verso, London.
1. On this Smithian conception see Dobb (1973).
2. Marx was to add, by way of explanation (1976, 174): “There has been history, since there were the institutions of feudalism, and in these institutions of feudalism we find quite different relations of production from those of bourgeois society which the economists try to pass off as natural and as such, eternal.”
3. This is how “Ricardian socialists” like Hodgskin and Bray argued for socialism.
4. The notion of the “inevitability” of socialism has been criticized strongly by Althusser (2003).
5. Quoted by Mao Zedong in an interview published in Schram (1973).
6. Quoted in the Introduction to Zizek (2006)
7. This point has been argued at length in Patnaik (1998).
8. A fuller discussion of this issue can be found in Patnaik (1990).
9. See Marx’s (1976, 206-11) discussion on this subject.
10. This is lucidly discussed in a prescient essay by Kalecki written in 1943 and republished in Kalecki (1971)

By Prabhat Patnaik

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