How Marxism Redefined Human Society

Who Won the Cold War?

by Gwydion M. William

Marx was the first thinker to clearly state that politics and ideology were massively affected by the “means of production”. More exactly, by the working conditions of the vast majority of the population was the key to the society.

After Marx became prominent, various politicians saw that they could take some of his insights and direct their policies to produce a different outcome. Bismarck figured that if a conservative state gave benefits to workers, they should stay loyal. Later a hard-line left-winger called Mussolini saw that he could blend aspects of socialism with nationalism and produce something new, Fascism being quite unlike anything that had gone before.

Marx was also spot on in saying that Small Independent Production was doomed and would never be able to generate politics able to stop itself being destroyed. This wasn’t wholly original, Robert Owen had much earlier decided that the factory system was fine in itself and just needed to be modified to be benevolent for workers. That it should be a community rather than an economic machine running for the benefit of the owners of capital.

Things get more complex when other forms of collective production start replacing factories, and when administrative and cultural work starts overshadowing the actual creation of material goods. Socialism and Trade Unionism were left floundering when production shifted away from the factory system. It had assumed that this would be the core of the economy, and now it was much less important. A lot of it was overseas, and also it became increasingly easy and profitable to import workers from lower-wage economies.

There was also the problem that Marx had mostly assumed simple and linear progress, the common European world-view up until the 1960s. It was neatly summarised in the “March of Progress” [A], the famous diagram of five walking figures, starting with a monkey and ending with a human. Except that monkeys are still around and were doing better than humans until the very end of the “march”. And it also made it look inevitable, which is doubtful.March of progress

In addition, the Soviet Union had been formed on the assumption that it was the first territory of a global Leninist World State. But the power of nationalism was stronger than had been supposed, and was boosted by the re-appearance of nations that had not existed as sovereign entities for centuries. It began with Europe undermining the Ottoman Empire, and was initially called “Balkanisation” after these new states emerged there. But the Versailles Peace greatly strengthened this. The rival Empires all played the game of stirring up nationalism and separatism among the subject people of their rivals, while trying to stop this happening in their own dominions.

Stalin had the idea of merging all of the new Leninist states into a single entity. His successors failed to do this, and also failed to come up with anything else. Khrushchev set a precedent by invading Hungary rather than come to terms with people who were broadly socialists, just not obedient to Moscow. He took exactly the same approach to China, except he lacked the power to impose his views by invasion.

The New Left of the 1950s and 1960s addressed these problems and might have succeeded. But the core of new politics was how you assessed the Soviet Union, and almost all of them were flatly wrong. Lenin, who had rejected conventional multi-politics and created a one-party dictatorship, was hailed as brilliant. Stalin, who gave the dictatorship coherence and raised the Soviet Union to second place in the world, was denounced as wicked. Khrushchev, who achieved nothing and who frittered away a lot of Stalin’s heritage, was viewed sympathetically. Khrushchevite and Trotskyist sentiments dominated, and were unable to make coherent politics out of this dominance. They would make gnomic statements and expect to be taken seriously.

When there was a real prospect of socialist advance in the 1970s, based on Incomes Policy and Workers Control, the New Left was either indifferent or hostile. Eric Hobsbawm announced inevitable defeat in 1978 in “The Forward March of Labour Halted?”. Actually the need was for new politics, but the New Left failed to create it.

In this period of incoherence, the New Right found a winning formula – sound conservative but actually conserve nothing. A lot of the working class in those days were offended by the new social freedoms of the 1960s, and also were losing faith in trade unionism when it became an endless round of rather pointless militancy. There was also a general fear of “corporatism”, and the New Right sounded as if they were going to end it.

None of these claims were true, of course. But in the absence of anything better, enough people were willing to give them a try. Never a majority, the Tories never had anything close to half of the electoral vote. And Thatcherism would have certainly split the Tory party if the UK had operated some sort of Proportional Representation system.

From the 1940s to the 1980s, the West denied that it was still capitalist. The mainstream view was that it had a Mixed Economy, which combined the best of both capitalism and socialism. A genuine debt to both Leninism and Fascism was not denied at the time. Nor were there any qualms about working with governments that could loosely be called Fascist. Portugal with a pre-Fascist military dictatorship was a member of NATO. Spain was ruled by a hybrid of Spanish fascism and other right-wing creeds, and the USA protected it.

There was also widespread acceptance of Fascism as a non-Communist option in the Third World, and this too was accepted while the Cold War was on. It was recognised that those states were unlikely to be able to generate overnight the sort of politics that the West had slowly built over centuries, and mostly not democratised until the system was well established. Leninism or some form of Fascism seemed like the alternatives, and the West in those days was quite content to back Fascism.

When the New Right gained power, it re-wrote its own history, but in a confused manner. It could not say that the system that began with Roosevelt’s New Deal and which flourished from the 1940s to 1970s was actually capitalist, because then why change it? But it also could not say that it was not capitalist, because then they’d have to say that a non-capitalist system could be vastly successful. They tend to zigzag between interpretations, sometimes praising it as Capitalism and sometimes denouncing it as Corporatism.

Socialists should insist on calling it Mixed Economy or Corporatism, a form of capitalism that is heavily constrained by social values. And the verdict of history is that capitalism under heavy constraints works better for everyone than capitalism given as much freedom as possible. (By analogy, human society depends on water, and when free-flowing water gets the job done, fine. But very obviously you do have to constrain it, totally within your house and extensively in the wider world.)

You’d also need to qualify this judgement by asking “constrained by which social values”? Industrial capitalism in the 19th century and through to the 1960s did not set wages just by the value of work. Employers tried to favour men over women and married men over single. Throughout the British Empire and also in its US offshoot, white people got more pay than non-whites, and there was generally a grading among non-whites that favoured the lighter-skinned among them. Also ranking and grading of white peoples, with Irish mostly at the bottom of the white hierarchy.

Libertarians would say that capitalism helped destroy these things. Maybe. There was also a massive ideological struggle which the Libertarians prefer to ignore. They’d find it embarrassing to admit that this was necessary, because the winning side was predominantly socialist. So they favour the notion that was somehow inevitable, part of the old idea of a “March of Progress”.

It would be fascinating if it were found that capitalism straining at its social controls destroyed just those controls of which one disapproved, while doing no harm to good social controls. Just as it would be fascinating if it were discovered that lightning was more likely to strike the wicked than the virtuous. In the real world, lightning showed a particular fondness for church steeples, and Benjamin Franklin worked out that it was due to electrified clouds. He also fixed it by lightning conductors, a nice example of fairly abstract research producing a useful result.

It took time to make sense of lightning, but observations of the morally corrupting effects of commerce are about as old as commerce itself. Most societies deliberately frustrated the processes that led to Britain’s Industrial Revolution and unleashed the system that came to be called capitalist. Even in Britain, there were grave doubts. People were frightened of where the new system was taking them, and with good reason. If the rulers had foreseen how much the society would change, they would certainly not have allowed it.

The “March of Progress” would be a reassuring answer, if it were true. It’s not true. Western politicians have unintentionally demonstrated that falseness of this notion by their success in discrediting socialism and undermining autocratic regimes in the Middle East.   Much to their surprise, the result is Islamism.

Thatcher in the 1980s made two false promises, to boost the economy and to restore traditional values. There’s little doubt that she sincerely believed what she said. But her understanding was shallow and she showed a fierce resistance to “off-message facts”.

If Thatcher had respected the Mixed Economy, done her best to keep full employment and made a serious attempt to restore 1950s morality, she might have succeeded. Instead she trusted to “laissez-fair”, “let things drift”. Commercial pressured helped finish off what was left of traditional morality, along with a general air of mistrust that Thatcherism encouraged. And the economy notably failed to improve, despite the vast boost given by North Sea Oil.

The lesson of the 1940s to 1960s, the so-called Keynesian era, is that capitalism under heavy constraints works better overall. Obviously some restraints can prove mistaken or can cease to be useful. But individual changes should be viewed from a general understanding that the more developed the society, the higher the taxes and the greater the need for social controls imposed by law.

Social controls imposed by law happen when customary social controls break down. Both Britain and the USA had a strong belief in commercial honesty during their economic rise. This wasn’t down to “Rational Self-Interest” in the sense used by most Economists. Rather, it was only “Rational Self-Interest” if you were devoutly religious and believed in a highly unforgiving God who could not be bought off with large charitable or religious donations and was strongly disposed to send you to Hell. You behaved well if you supposed that God was looking over your shoulder and noting your sins in a highly unforgiving manner.[B] When you start seeing God as more doubtful, distant or forgiving, the temptations of financial sins become greater. And it helps when lawyers and advertisers find numerous helpful ways to dress up vice as virtue.

None of this was absent from the earliest days of the Industrial Revolution, of course. But is used to be the exception and is now the norm.

Capitalism worked well, in as far as it worked, only for as long as it included a personal morality among capitalists that was completely different what’s now described as “Rational Economics”. Also it didn’t work all that well: Britain rose to dominance with a growth-rate of 1% to 1.5% per year. In the late 19th century, the USA were overtaking Britain with growth-rates of maybe 2%. Classical Capitalism has actually never worked better than that, and probably can not.

Capitalism as it developed in Britain also wasn’t all that free from state interference. Industry was heavily protected from foreign competition during the key breakthrough of the Industrial Revolution, generally dated from the 1760s to 1830s. This was also done under a narrow oligarchic government, in which the monarch and House of Lords had a big say in government, and in which a couple of hundred rich families controlled a majority of the seats in the House of Commons.

Even using a very generous definition of democracy, votes for a majority of adult males in the core territories, the British Parliamentary system was not democratic until the 1880s. And the British Empire never was: the Indian National Congress under Ghandi had a clear majority of voters and demanded real power as their price for taking part in World War Two, but instead spent the war locked up.

Democracy is not necessarily the same thing as regular multi-party elections with the whole population voting. In Britain, there had been a workable parliamentary system since 1688, based on votes for just a rich minority. Extending voting to a wider population democratised it, without destroying the effectiveness of government in Britain. Suddenly applied elsewhere, it has mostly produced chaos.

You could even argue that democracy destroyed the effectiveness of the British Empire. The Upper Classes would accept as equals some non-white aristocrats from India and sometimes beyond. But the stratum just below them was bitterly opposed to this, insisting on a colour bar that kept them in a position of privilege, for as long as the Empire lasted. And whereas the Upper Classes tended to view Christianity as useful nonsense and would have been happy to let their subjects keep their own alternative brands of nonsense, the strata that provided most of the actual machinery of the Empire included many serious Christians who insisted on attacking old deep-seated cultural values. Had the Upper Class stayed in control, the Empire might have lasted a lot longer.

Britain’s global economic dominance peaked in the 1840s. If we see the Industrial Revolution as a follow-on from the rise of modern science and from the European Enlightenment, it was perfectly predictable that Britain’s advantage would not last. But Britain’s rulers reacted foolishly, seeing Free Trade as a panacea. Joseph Chamberlain wanted something different, the British Empire as a closed system co-existing with other Empires. But the majority of the ruling class thought in terms of world domination, either for Britain or for some rival. And they saw Free Trade as the best way forward. Meantime the USA and Unified Germany took the opposite view, choosing protectionism and closing the gap with Britain.

It can sound very nice saying “freedom without limits”. Taken literally, this would mean allowing the following:

  • Unlimited gun ownership.
  • Removing all traffic rules – anyone can drive anywhere, without a licence or road test and at any speed they please.
  • No copyright. Anyone could do their own versions of popular songs, stories, popular films and television programs
  • The free sale and even advertising of all drugs including heroin, crack cocaine etc.
  • Permitting under-age sex so long as the young person consents to it.
  • Removing all planning rules. Build as high as you like and without safety rules

When people talk about “freedom”, they mean “freedom of the sort I like”. I’ve never been able to see any inherent difference between freedoms of the sort the current generation of Anglos approve of and freedoms of the sort they do not. Each of the six items I listed has its advocates, though talk about removing the age of consent in the UK has been largely silenced by an unofficial campaign of intimidation that most Britons approve of.

Myself, I approve of none of those six – partly why I listed them. But I would favour relaxing other controls, including freedom for commercial sex in specific zones, while also banning the use of even mild sexual imagery in normal everyday advertising. And I’d support a “right to die” for anyone could sensibly be seen to have nothing more to live for. But these are just my opinions, not a clear matter of “Freedom” versus “Repression”.

Note also that the mainstream understanding of “acceptable freedom” has changed massively. Someone who was magically transported from Europe in the 1950s to Europe in the 2010s would be staggered by the changes, such as homosexuality legal and heading for social equality, while smoking tobacco was being increasingly restrained. They’d also be surprised that women hadn’t accepted what they had in the 1950s as equality, but had pushed ahead with all sorts of extra demands.

People say “unlimited freedom”, but mean “freedom if I like it”. You could call it the Sinatra Principle “I’ll do it my way, you’ll do it my way”.

Philosophically, the West’s notions of freedom are pompous junk. But it made for good propaganda. And politically, such views mattered a lot. During the early years of the Cold War, when the Soviet Union was flourishing economically and had gained an early lead in the Space Race, the West sold its system as brilliantly free. Having taken this stand, it was unable to stop an erosion of many traditional limits in the name of “Freedom”.

This, basically, is what happened in the 1960s. Some of the changes were foolish, as we can see with hindsight. But I doubt if many Europeans under 70 would think it acceptable if it were possibly to change history and create an alternate world in which none of it had happened and 1950s attitudes were still the norm.

Since no one at the time had a coherent understanding of this process – a process that had gone outside of what all traditional political philosophies had considered possible – the way was left open to the New Right to invoke “Freedom” and attack the highly successful controls on capitalism that had been put in place in the 1940s.

It helped that the Soviet Union made an utter bungle of an attempted shift from Stalin’s successful central planning to something more flexible. It might have worked – a similar shift in China worked – but the actual process went badly wrong. Exactly what went wrong, I’d hesitate to say. Studies of the matter tend to be committed to some wholly wrong outlook, mostly a belief in the Transcendental Capitalism of the New Right. But it seems likely that if the reformism that reached it height in the Prague Spring of 1968 had not been crushed by Brezhnev, it would have succeeded in creating its own successful version of the Mixed Economy.

The pro-Moscow Communists also managed to blight the real prospect of reform in Britain in the 1970s. There was widespread acceptance that Workers Control was to be the next wave of social reform. The pro-Moscow Communists, and to a smaller extent the Trotskyists, managed to sabotage this. Acted from an absurd belief that “capitalism” was about to collapse and give them Total Victory, so that diversions into moderate reform must be avoided.

The New Right were the lucky beneficiaries of a situation they had not created. They are good at manipulation and spin, but their understanding is shallow and dogmatic. When it came to changing the wider world, they have nicely illustrated that fine old US saying, “it isn’t ignorance that makes you a fool, it’s what you know that ain’t so”. The West had once accepted dictators like Saddam Hussein as the best viable alternative to modernise alien societies without being too hostile to Western interests. Now they are certain that they must smash them and allow “Freedom” to spring up spontaneously.

In as far as the Middle East has a spontaneous drift, it is towards hard-line Islam. This has happened repeatedly, yet each time is viewed as some baffling anomaly in the natural emergence of “Freedom”.

The more the New Right have been able to apply their core beliefs, the worse the messes they have made. Commentators make various attempts to explain this away as individual failings. But the pattern is so consistent, one can only sensibly understand it by saying that the core beliefs were factually mistaken.

Note that there is a difference between a political ideology having views that you dislike, and a political ideology being factually mistaken. The Nazis were factually mistaken in seeing Jews in general as enemies, and in seeing other races as inferior. But in favouring a return to older values of racism, hierarchy, corporatism and male superiority, they were tapping into values that were still strong and viable. They lost mostly because of another factually mistaken notion, that war was invigorating rather than a matter of mutual destruction.

(Pretty well every 20th century war has ended badly for the countries on either side at the start of the war. Only ‘wars of national liberation’ have sometimes been a conditional success for the would-be liberators.)

What the New Right believed about society and the economy is not just obnoxious, it is factually mistaken on almost every matter than is specifically New Right. Removing limits on capitalism has not boosted the economy. Thatcher in the 1980s produce less overall growth for the UK than the “disastrous” 1970s. Later decades have been worse again, culminating in the stagnation we have experienced since 2008. Meantime the larger but less clever wing of the New Right who hoped to save Traditional Values have found that the small but smart libertarian faction have mostly trashed those values. Produced a society of trashed unhappy disconnected people, rather than the vibrant self-managing system the libertarians had hoped for.

On economic, where the New Right all believed much the same things, they have all been wrong. It’s not a matter of liberty, as the libertarians would have you believe. The main reason for constraining capitalism is that a few capitalists can have a vast effect on other people’s lives. When a supermarket opens, many small shops close and brand-choice gets reduced. When a factory produces shoes, small shoe-makers go out of business. When trade barriers are dropped, foreign production will put many small producers out of business.

Even John Stewart Mill admitted in his essay On Liberty that his principle of allowing individual self-injury did not extend to economics. He simply asserted that unconstrained capitalism was best for everyone, ignoring the evidence that it was not.

The New Right view of Virtuous Capitalism does not correspond to any historic reality. When they tried implementing it in post-Soviet Russia, they shrank the economy and put wealth into the hands of criminals and tricksters. They then found themselves wholly innocent: the Russians had failed to understand them. Reviving the unfinished business of Iraq would give them a proper chance to demonstrate how brilliant they were. Or the Arab Spring would. Or the New Europe created by the Soviet collapse.

None of this has worked out.

What’s happened now is that Britain has achieved the remarkable feat of reconciling Poles and Germans. But only because both are agreed that they need to combine to do the opposite of what is urged on them by the New Right and the rulers of the Anglosphere.

Note also that the wholly non-capitalist systems of Stalin’s Russia and Mao’s China worked well. This has got lost because most left-wingers within the Anglosphere have carefully distanced themselves from all socialist successes and identified with people they viewed as heroic failures. Heroic failures work fine for entertainment, but treating them as political model could be expected to lead to failure and ineffectiveness, and has generally done so.

The historic truth is that Stalin took over a disorderly Soviet economy that was no richer than those territories had been under the Tsars, and turned it into a Superpower. Mao tripled an economy that had been static for centuries and which had failed to make any net gains from being opened up to the world economy. (Limited growth in the coastal cities had been matched by an actual decay in the rural economy.)

For that matter, Fascism was not an economic failure, a point that even the most determined anti-fascist has to admit. Mussolini’s Italy increased the constraints on capitalism and abolished parliamentary democracy. It worked passably well, and was admired by Winston Churchill and many others in the Anglo centre-right. Hitler gained status because he had a much more remarkable success in his first few years, reviving a stalled economy in which one worker in four was unemployed. Franco in Spain successfully modernised Spain without dropping Fascist politics. After his death the economy carried on much as before, but now officially sanctioned by Parliamentary Democracy.

China under Mao suffered problems because Mao made a serious attempt at putting ordinary people in charge, instead of sticking to the standard Leninist system of a progressive elite drawn largely from the people and benefiting the people, but not answerable to the peopke. Deng restored Leninist norms, which survive to this day and seem wholly compatible with unlimited economic growth.

Deng also benefited enormously from the peace with the USA that Mao had made in the early 1970s. Up until Nixon’s visit, the USA did not recognise the People’s Republic as a legitimate government and did everything it could to hamper its global trade. And for most of Deng’s rule, the USA was still fighting the Cold War with the Soviet Union. Ready to permit China free access to Western markets while keeping strong social controls on its limited re-growth of capitalism.

China, the world’s most successful large economy, runs a system of Corporatism or heavily constrained capitalism. It also does this under a continued one-party dictatorship, which seems good for economic success. Also no worse at implementing the actual wishes of the majority than a system of open elections and rival political parties. India is rated as slightly worse than China on the indexes of global corruption. Women are much more at risk of rape in India than China, and are generally less free socially. China has even decriminalised homosexuality, which remains an offence in India and other developing countries, and also in some states of the USA.

Europe has no need to copy China: simply return to its successful system of heavily constrained capitalism and an unashamedly large role for politicians in the economy. Europe could also squeeze out the tax havens by simply refusing to do business with them. When they depend for their prosperity on being a tax haven, I’d be in favour of paying them compensating for a few decades till they get over it, just to make it politically possible. I’d even be in favour of paying off the Swiss, if they were sufficiently shameless and greedy to demand it. Reformers in the past have had to pay off slave owners and parasitic landlords, it would nothing new.

Moderate Socialism won the Cold War. The New Right hadn’t had time to damage this system severely before the Soviet Union collapsed. Collapsed in part because it was still trying to realise the original Leninist goal of a socialist World State, meaning that it could never really co-exist in the way China is now doing. But Moderate Socialism had meantime been taken over by failed branches of Leninism, and was very keen to distance itself from its historic successes. That, broadly, was what New Labour was about.

Incidentally, there was a near-disaster in 1987, something rather similar to what happened in 2008, though smaller. At the time, there was no talk of austerity. The West managed to spend its way out of trouble and bounced back quite healthily, the stuff that’s forbidden today. It’s curious and depressing how most of the Left has allowed this to slip out of historic memory.


[A] []

[B] This phrase was used by Brendan Clifford to describe the apparent beliefs of the Ulster Protestants when he first encountered them. I’d reckon that it used to be the norm in Protestant countries, but had long since lapsed in most of them.

First published in Labour & Trade Union Review, 2013

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