McDonnell's Marxist critics

It’s sometimes said – usually by those who know nothing about Marxism – that John McDonnell is a Marxist. In one sense, this is the exact opposite of the truth: it is not McDonnell who is the Marxist, but his critics.

To see what I mean, remember that there are several differences between Marxism and social democracy. Not least of these is the question: can capitalism provide adequate living conditions (both material and non-material) for workers? Social democrats believe it can with the right policies and institutions. Marxists say it can’t.

Now, McDonnell’s main policies are social democratic ones. Higher corporate and personal taxes, more infrastructure spending and borrowing and nationalized railways and utilities are all compatible with the continuation of capitalism. They merely tweak the mix of public and private sector activity towards the former. Anybody in western Europe, or who remembers the 1960s, should be familiar with this.

Let’s, though, assume (for the sake of argument) that McDonnell’s harshest critics are right and that these tweaks would be very damaging: that higher borrowing would raise interest rates and crowd out private sector capital spending; that higher corporate taxes would deter investment; that higher minimum wages would destroy jobs; that higher top taxes would have big adverse Laffer curve effects; and that regulations such as bans of zero hours contracts or high credit card charges would cumulatively depress economic activity.

What this amounts to is exactly the attack that Marxists make against social democrats – that they cannot reform capitalism to greatly help workers.

In fact, such criticisms go further than I would. True, I’m sceptical about higher corporate taxes and minimum wages, and I doubt that trend growth is as malleable as McDonnell thinks. But I resist CapX-style hyperbole because I suspect that developed economies are more resilient to bad policy than many people think. (We'd be out of luck if it were otherwise.)

Of course, these attacks on McDonnell would not be Marxist at all if they were accompanied by positive defences of capitalism. If we lived in an economy in real wages were growing and jobs improving, McDonnell’s critics could argue coherently that unreformed capitalism was delivering rising living standards and that social democrats and Marxists were both wrong.

But this is not the world we live in.  Real wages are lower than they were ten years ago; productivity is growing at close to its slowest rate since the start of the industrial revolution; job prospects for diligent but non-academic people are worsening; and working conditions are bad for many and deteriorating even in once-good jobs.

Capitalism as it currently exists is failing working people. If this fact is accompanied by claims that social democratic reforms will fail, then we have the Marxian conclusion – that capitalism opposes the interests of working people.

Can rightists escape this bind?

Maybe. They need to show that other tweaks to capitalism would work. And I mean seriously so: fantasies about deregulation and platitudes about increasing opportunity aren’t good enough.

So, here’s my challenge to McDonnell’s rightist critics: can you really show ways of making capitalism work (again?) for working people? Or are you just going to continue to support we Marxists?

Comments

[Steven Clarke]

Yes, there are tweaks to capitalism that could work. Tweaks that would tweak the mix of public and private sector activity towards the latter.

I believe deregulation of land use restrictions would be such a tweak:

* It would allow a reallocation of workers to our most productive cities.

* It would reduce housing costs - allowing consumption of and investment in productive goods and services.

* It would allow productivity gains from economies of scale in the retail sector.

* It would reduce huge inequalities in wealth.

These ideas are consistent with rightist ideas, but not interests.

Tories are too much on the side of rentiers rather than producers.

[Luis Enrique]

Isn't everything that you advocate also compatible with the continuation of capitalism? Maybe you need to stop calling yourself a Marxist. Or can you explain what you'd do to end capitalism? I don't think greater worker ownership, reducing the concentration of capital, does it, unless you also make it impossible for any one person to accumulate more capital than the next.