"Values" and the crisis of social democracy

Phillip Collins in the Times (£) reminds me why I’m a Marxist rather than a social democrat. He mocks Ed Miliband’s claim that Britain has been run by people with the “wrong values” as being “the dying breath of vintage social democracy.”
What Philip doesn’t do, though, is show why Miliband is so wrong.
To do this, let’s concede his factual premise - that bosses have had the “wrong values”. How can this be so?
Miliband seems to suggest that it might be just bad luck.
Nonsense.
What he misses is that selection effects and incentives serve to generate the “wrong values” at the top. I mean this in four ways:
1. It tends to be the ambitious and charming to rise to the top, but these are disproportionately psychopaths.
2. Bosses and politicians are selected for their irrational overconfidence. This means that, when they get power, they are likely to over-rate their own ability and so undertake dangerous policies such as takeovers.
3. “Yes men” tend to get promoted more than nay-sayers and “trouble-makers”. This can contribute to groupthink in boardrooms in which bad decisions are not sufficiently scrutinized.
4. Even if these selection effects were not to work, and bosses had “good values”, competitive pressures would compel them to act badly. As Marx wrote:

Capital is reckless of the health or length of life of the labourer…But looking at things as a whole, all this does not, indeed, depend on the good or ill will of the individual capitalist. Free competition brings out the inherent laws of capitalist production, in the shape of external coercive laws having power over every individual capitalist.

Granted, Marx slightly overstated the case: it can sometimes be rational for bosses to offer good pay and conditions. But the general point holds (sometimes). The bank boss who didn’t hold dodgy mortgage securities or sell payment protection insurance policies would have seen his bank’s share price fall and been under threat of losing his job.
The problem, then, is not one of values but of mechanisms. Capitalism contains mechanisms which tend to produce the "wrong values". The challenge for social democrats is: can you provide alternative mechanisms that constrain this tendency?
Years ago, the answer was: yes, sort of. Strong trades unions acted as a countervailing power - for example by reining in bosses’ “greed.”
But in a world of weak unions, what have social democrats got? Nothing, I fear, but windy moralizing.
Another thing: It’s quite possible that politicians, quangocrats and top civil servants are also selected for overconfidence and “yes-men” characteristics. If so, this just deepens the mess that statist social democracy is in.

Comments

[Rob]

Does Marx specify a way of creating organizations without suffering from the mephitic ambitious?

[Luis Enrique]

OK but this is, again, a comparative thing. What are the incentives and mechanisms that operate under non-capitalist systems?

You can take liberal democratic capitalist systems and point out all the things you don't like, use Marx to explain these things, and conclude capitalism contains mechanisms which tend to produce the "wrong values" but you haven't ruled out capitalism containing mechanisms which are better at producing the "right values" than all other available forms of society.(or the least bad at producing "wrong values"). So what you think is a critique of capitalism might actually be a celebration of it.

Plus you make it sound like bosses etc. are selected for no other reason that overconfidence etc. Suppose individuals are scored along two dimensions - genuine ability and greasy-ladder-climbing skills - it could be true that climbers are more likely to be bosses, but for all you know that genuine ability could be by far the more important determinant of position. It might be, for example, that bosses are actually less likely to be talked into rash takeovers than a randomly selected person would be, so that the selection mechanism is actually working well - you make it sound like selection mechanisms tend to put the wrong people in top jobs, but all you've got a a list of reasons why selection mechanisms might be less than ideal i.e. quite possibly still fairly good.

[Jim]

'It’s quite possible that politicians, quangocrats and top civil servants are also selected for overconfidence and “yes-men” characteristics.'

Indeed. Its almost as if the solution would be to give as much freedom as possible to individuals over their own lives, and reduce the power of the corporations AND the State. But that can't be right surely??!!

[Keith]

I don't want to quibble but surely your distinction is not in the tradition of Marxism? Trotsky maintains communists can have a transitional programme and support reforms introduced via Parliamentary Elections. And this position is the orthodox theory before the first world war. It is only the Russian revolution that entrenches an all or nothing attitude in left wing movements, As the all or nothing approach clearly did not work very well the original more flexible approach is arguably better? As no one can tell when or if there may be a social revolution half a loaf is better than none. Especially if it allows the suffering of the disadvantaged to be relieved at least? Jim is wrong as usual. Only workers power can abolish both corporations and the state. Libertarians are merely the useful idiots of the corporations. False flags of Liberty should fool no one. So I accuse Chris Dillow of ideological error! If you were in a workers party Chris we would have to expell you. Being a stoch jobber is so much safer.

[Charles Wheeler]

I would say that social democrats had a pretty good track record from the 1890s to the 1960s - at which point they became a victim of their own success; people began to take the welfare state so much for granted they reckoned they could do without it.

Neoliberals having their cake while munching merrily on it managed to convince that the gains made by the working class in education, healthcare, pensions, incomes and opportunity came as a result of market forces, rather than despite them, as the state ensured minimum standards and greater equality.

Meanwhile, what have the Marxians ever done for us?

[BenP]

"Does Marx specify a way of creating organizations without suffering from the mephitic ambitious?"

Once you take away the dictatorial 'boss' power of such individuals their antics are more likely to be a subject of humour than fear.

Marx wisely stays non-prescriptive as his is a bottom up vision.

[Dipper]

Ed Miliband has hit on something with his comments on predatory businesses, but this obsession with "evil bankers" is misplaced.

The key is ownership. Neither John Lewis (worker owned) or the Mars Corporation (family owned) would have gone in for the kind of corporate evisceration and looting of shareholders property that has brought us to this crisis.

[Gary]

Keith,
"Only workers power can abolish both corporations and the state. Libertarians are merely the useful idiots of the corporations. False flags of Liberty should fool no one."
Is there a distinctions between workers and individuals I need to understand? Wht isn't worker freedom from State and Corps the same as individual freedom from the same?

[George Hallam]

"Is there a distinctions between workers and individuals I need to understand?"

So it would seem.

Workers are people considered in relation to other social groups.

Individuals are people considered in isolation from everything else.

[Keith]

Gary,

freedom is a complicated concept. It may involve limiting state power in certain areas of life; but it also is just as much about how we interact with the state as a organised entity. Libertarian ideas seem to mainly involve the notion that you can abolish social groups and organisations which you find an irksome restraint on some abstract idea of "liberty" divorced from practical realities of life. In classical Anarchism the debate about liberty can be conceived as about changing the nature of organisations such as the state rather than its abolition. Social organisations in other words are necessary for real freedom to achieve maximum human happiness. The distinction between merely destroying an organisation such as the state and radically reforming it is a fine one but key to grasping one element of political philosophy. Conceived like this Anarchism is a much more practical and more convincing theory than the form of Anarchy which involves throwing bombs and assassinating Prime ministers; and little else. The retention of organisations however means limiting absolute freedom by rules and procedures and accepting limits on your scope of action accordingly. The political theory called Libertarianism which has such keen friends in the USA is too individualistic and absolute to really work as its supporters wish it too.

I agree with Charles Wheeler to a degree that Social Democracy was far more successful than the ( far ) left and right want to admit. But as I pointed out as I understand the history there is less gap between reformism and Marxism than Communists parties have admitted since 1917. I think it is clear that while hoping for a revolution the left in practice always worked within existing political systems where they could before 1914. It is Bolshevik properganda to draw the very sharp distinction between "them and us". I do not really think left wing people actually would want all of the social reforms and improvements since 1870 to be ripped up on the grounds they do not constitute a real marxist revolution.

[Chris2]

Just a handful of Social Democracy's triumphs between 1890 and 1960:
1/ The First World War. Despite being pledged to resist the war by International action, the Social Democrats, almost everywhere,succumbed to the madness of nationalism.

2/ In the aftermath of the war the German Social Democrats entered into an alliance with the most reactionary elements of the army and right wing paramilitaries to suppress revolutionary movements. This was one of the moulding influences on the Weimar Republic. And then there was Hitler.

Social Democratic parties have a long record of surrendering the interests of the masses to the demands of the ruling class. Historically they have worked to purge the working class movement of socialist principles and to marginalise or expel socialist members.

The post war period, in which Social Democrats played a leading role both in anti-communist movements (purging the Unions and their own parties of critics who were red-baited) and in the formulation and execution of imperialist policies, is also replete with the very opposite of achievements.

I am surprised that this has to be pointed out within days of Miliband's empty rhetoric and not long after the PLP had voted as a body to support the war in Libya, as it has every other war on offer for decades past.

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