Postmodern socialism?
19 March 1997
Globalization and Its Discontents: The Rise of Postmodern Socialism
By Roger Burbach, Orlando Nunez and Boris Kagarlitsky
Pluto Press, London and Chicago, 1997, £12.99.

Review by “Paul Clarke

It should be universally recognised that in the light of the collapse of Stalinism, and the sweeping victory of neo-liberalism in the 1980s, socialism must go through a period of theoretical and practical renewal. Thus it might seem slightly uncomradely to say that this just-published attempt at socialist rethinking is utterly dreadful, but, alas, it is.
What mars the book is not its analysis of capitalist globalisation, and the devastating effects of neo-liberalism on big sectors of the poor and oppressed worldwide. This is unexceptional in both senses of the word. The problem is that the main strategic argument put forward is utopian, mystifying nonsense.
One caveat should be added here. As is made clear in the introduction, Boris Kagarlitsky doesn't agree with the book's main arguments. Indeed, the only chapter he wrote -- an excellent piece on Russia and eastern Europe -- concludes with an open polemic against the Burbach-Nunez position. It seems strange to help write a book you utterly disagree with, but there you are.

`New mode'

The core Burbach-Nunez argument is that the left has to reject what they call the "ideology of power" -- the obsession with revolution, taking state power and nationalising the economy -- and recognise that a new non-capitalist mode of production is in the process of emerging which can ultimately overwhelm capitalism "from below".
This new mode of production is based on workers' (and peasants') cooperatives, small traders and street peddlers, and small businesses. This sector is outside of, and logically opposed to, capitalism. Thus: "the postmodern economies, the diverse activities undertaken by the underemployed and discarded sectors of society, will grow in importance.
"Street vendors, micro-entrepreneurs, sub-contractors, garbage scavengers and recyclers, petty drug dealers, all those who operate in the so-called informal economy -- these and many other economic endeavours are at the heart of the new economy ...
"The conventional wisdom is that these are simply economic activities at the bottom of the capitalist economic pyramid, or perhaps even activities that enable new entrepreneurs to emerge who will eventually find a place higher up in the economic order. Our argument however is that they are not part of the existent system -- they are part of an emergent mode of production. Late capitalism does not have the capacity to absorb these petty producers in any significant way ... All these simple economic ventures will gradually begin to coalesce with other popular economic endeavours like cooperatives, worker-run concerns and municipal or township enterprises. They will form a vast class of `associate producers'."
And among the key tasks of the left is to provide "business leadership" to this sector.
This argument is rebutted by Boris Kagarlitsky, who is quoted in Burbach's introduction as saying that most of this economic activity "is a non-capitalist sector which is not opposing the development of the capitalist economy, but accompanying it".
This is self-evidently true, with the qualification that much of this activity is closely integrated into capitalism, and structured by it. For example, take a pedicab in India, and you are not just paying an impoverished petty trader, but a driver who hires his rickshaw in eight-hour shifts from an ultra-rich trader.
Buy an amber necklace from a street trader in Chiapas (or even one of the ubiquitous Subcomandante Marcos dolls), and part of your money goes to the rich traders who supply them, just like much of the informal economy worldwide.
Trace the source of the drugs of the "petty drug dealer", and you come back to billionaire narco-capitalists -- whose profits are laundered by the big US banks.
And including "subcontractors" in the "new mode of production" is to throw in whole sectors of the bourgeoisie and the petty-bourgeoisie. The latter is of course a class which has existed since feudal times and which has no automatic interest in superseding capitalism.

Class power

Burbach and Nunez are in reality evading the question of both economic and political power -- in the name of rejecting the "ideology of power".
Non-capitalist or marginal sectors of the economy, within particular countries and on an international scale, cannot "overwhelm" capitalism, for two reasons.
First, the market determines the overall functioning of capitalist economies, and the scope of non-capitalist economic activity. Once specific areas of trading become significant or profitable, they will be invaded and overwhelmed by capital. The key sectors of industry and agriculture, particularly in the advanced countries, are in private hands and will not be prised out of them short of a shift in class power.
Interrelated with this is the question of political -- and social -- power. Let's take a hypothetical example of pedicab drivers in an Indian city, who form a cooperative to run their own pedicabs which (miraculously) they have found the resources to buy. If they try to compete with the merchant fleets, they will be terrorised by the bosses' thugs. The police and the army will support the merchants with lethal force.
Try to set up a cooperative against capitalist interests in India, and you will be physically crushed. That's the nature of class power. Even the ability to set up worker and peasant cooperatives depends on the overall social and political conditions.
Burbach and Nunez point to the 350-plus workers' cooperatives in Nicaragua. Doubtless they represent an economic lifeline for the (limited) number of workers in them. But the fact they exist is obviously connected with the 1979-90 Sandinista revolution -- i.e. the fact that the FSLN held government power, not just "initiatives from below". These cooperatives are part of the vestigial gains of the revolution.
Second, precisely because of the loss of FSLN government power in 1990, Nicaragua is now the second poorest country in the hemisphere, after Haiti. No economic initiatives "from below" could turn back the brutal winds of social and political counter-revolution.
8Roger Burbach, the principal author of the book, approaches pure fantasy when he claims there is "no reason" that the IMF and World Bank have to support big capital and neo-liberal policies, and if their policy was to promote financing of "associate producers", things could be very different.
The IMF and World Bank are central institutions of capitalist world power, staffed by ultra-reactionaries, with less chance of becoming vectors of a new social order than the US Republican Party.
Finally, Burbach and Nunez argue that certain political parties might help to create favourable national frameworks for their new mode of production.
Most of these are in the dependent countries, but the one party they highlight in the advanced capitalist countries is, fantastically, the Italian Party of the Democratic Left, a pro-capitalist party which is currently the main holder of political power in the governing Olive Tree Coalition -- a party intent on ramming through neo-liberal, deflationary and pro-Maastricht policies at the expense of Italian workers.

Russian experience

So far, so bad. Boris Kagarlitsky has to be exempted, through, because his conclusion says it all: "The main lesson we should draw from Russia is the necessity for state ownership as a strategic alternative to neo-liberalism. Co-ops and workers participation in property, which were supported by the Russian left as a soft alternative to privatisation, never worked. And they cannot work unless key sectors of the economy become owned and formed by the state."
Further: "strategic planning is only possible by and through the state. And it is meaningless without state ownership ... A mixed economy won't work. We support in Russia more co-ops within a state-owned and planned economy, not instead of it."
Kagarlitsky goes on to defend socialist democracy, as opposed to the old Stalinist bureaucratic system, but insists: "We need to democratise public enterprises, but stand firm against those postmodernists who argue for `stateless socialism'". Obviously he is referring to his fellow authors.
Postmodernism, a historically ephemeral ideological growth of frenzied neo-liberal excitement as the finance markets de-regulated and the yuppie boom developed in the 1980s, has nothing whatever to do with socialism. Attempts to introduce any variant of it into socialist thinking are doomed to fiasco.