Capitalist Stabilities Future Deferred

Capitalist Stabilities

Future Deferred

THE CONSTITUTIONALIZING OF SOCIAL DEMOCRACY

Structural reforms inability to burst the fetters of social democracys en- trenched inevitabilist assumptions is most striking. For guardians ofecon- omistic orthodoxy like Hilferding, both a respected theoretician and twice minister offinance, proto-Keynesian proposals were irrelevant tinkerings with capitalisms fundamental processes, without purchase on its ultimate collapse. Likewise, elder statesmen like Kautsky reaffirmed their faith in labors inevitable democratic inheritance. Yet, faced with the practical emer- gencies ofeconomic crisis, social distress, and right-wing political extrem- ism, socialist leaderships brooked no alternatives to the parliamentary arena, which in practice left them striving for defensive coalitions from positions ofinstitutional weakness, excluded from government power. Meanwhile, other parts ofthe movement, through the unions and party militia, sustained rhetorics ofmilitancy that frightened their opponents without ever being put to the test. As democracy became dismantledwith the dissolving ofthe SPD government in Prussia in July 1932 or Nazisms seizure ofpower itselfin JanuaryMarch 1933the workers troops never received the call.⁸

The other big case ofinterwar structural reform was the Plan ofLabor adopted by the Belgian Socialists in December 1933, known as the Plan de Man after its architect, the heterodox socialist thinker Hendrik de Man. Like economic democracy, this broke with the reified binarism ofrevo- lution and reform, which counterposed the necessity of securing the workers immediate interests against the future goal of capitalisms end. Instead, it proposed a seamless transition, in which skilfully crafted reforms cumulatively shifted the balance in socialisms favor. In 193335, the Plan de Man dramatically captured the public imagination, with wide interna- tional effects.⁹

The campaign ofthe Belgian Workers Party (POB) for the Plan was exceptionally creative, using print media, radio, theater, cabaret, song, speaking choruses, film, study courses and retreats, mass meetings, and teams of bicycle agitators for the countryside. Aside from planning per se, the strategy connected the needs ofeconomic recovery to a specifically so- cialist future. De Man offered a dynamic model of the mixed economy, in which centralized control ofthe commanding heights and generalized reg- ulation combined with support for small-scale enterprise to initiate socialist

transition. Joined to immediate nationalization ofbig monopolies, a com- prehensive national plan for all areas of fiscal, commercial, and social pol- icy would begin transferring the economy under democratic control, em- bracing investment, trade, labor markets, training, industrial relations, and social insurance. Protection for private ownership and supports for small business, appealing deliberately to the middle class, would lay the specter ofan overpowerful state bureaucracy. Amid the demoralization ofthe de- pression and increasingly frightening political setbacks, from the Nazi sei- zure ofpower in Germany to the defeat ofthe workers rising ofFebruary

1934 in Austria, the Plan of Labor was a much-needed Left counteroffen- sive. It rallied the Lefts unity, while inviting non-proletarian strata to give support. It was this seizing ofthe political initiative that proved so inspiring.

The Plans radical hopes, however, came to nothing. In early 1935, as the conservative government ofGeorges Theunis began another round of social cuts, de Man and the POB leaders faced the strategic dilemmas both SPD and SPO evadedwhether to stake the movements future on a pitched confrontation with government or to go for defensive and min- imalist compromise. An emergency conference of POB and unions nar- rowly rejected a general strike by block votes of581,412 against

481,112. Then the Theunis government resigned. The Socialists joined the Christian Democrats in coalition on 26 March 1935, with de Man as a POB minister. Another emergency congress endorsed this on 3031

March by 519,672 votes against 41,902. De Man himselfhad become dismayed by the gathering social crisis. Faced with the choice ofopen re- bellion and accompanying bloodshed or forming a moderate coalition, he took the latter.¹⁰

This Belgian experiencethe meteoric rise and fall of radical planism as a distinctively socialist answer to the Great Depression, attuned to plan- ning and managerialism, mobilizing working-class hopes, and appealing to nonworkerswas highly instructive. The most innovative structural strat- egy aimed at circumventing the need for a Bolshevik-style uprising, the Plan de Man ended by just confirming the unavoidability ofa showdown. If socialists were serious about transforming capitalism, it showed, the need for insurrectionpitched battles, via general strike or massed demonstra- tions, aimed at bringing the Left to powercouldnt be avoided. Radical- izing the political agenda meant popular mobilization, in extraparliamen- tary and thus dangerously transgressive ways, which pushed on the normative limits ofpolitics, frightening the dominant classes and their pop- ular support and raising the Bolshevik specter just the same. Where the radical Right were already mobilizing their own extraparliamentary power, against both liberal states and the Lefts popular democracy, the logic of a showdown was even more dramatically posed. Radical planism could only postpone questions ofconfrontation, direct action, and insurrection, not supersede them.

When tested, social democratsand, except rarely, Communists too could never take the insurrectionary plunge. Whether in August 1914, in the turbulence after 191718, in the central European crisis of democracy in the early 1930s, or in the French Popular Front of1936, various motives kept socialists from abandoning legality and challenging state powerre- spect for the law, fear of bloodshed, anxieties about failing, ingrained wed- dedness to electoralism and the parliamentary arena, a patriotic ideology ofthe national interest. The choice was very clear. Lacking absolute elec- toral majorities, should the Left go for confrontationist politics, entailing violence; or should it go for coalition, diluting its demands and settling for modest reform? In face of this choice, Belgian radical planism promised a third way. It combined maximalism and legality, holding out for the whole demand (The Plan; All ofthe Plan; Nothing but the Plan) while rallying diverse popular support and directly attracting the middle strata rather than negotiating with their parties. But then, as usual, socialist leaders stepped back from the brink. The POBs vote against general strike in March 1935 mirrored the Italian movements analogous decision ofSeptember 1920. Having rejected the risks ofthe showdown, socialists reoccupied their po- litical isolation, watching power from the sidelines, or joined coalitions for avowedly limited goals. Meanwhile, fascism advanced.

The lasting effect of the post-1918 settlement and the constructive achievement of those farsighted conservative politicians who faced up to the working-class insurgencies of191723 was thus the definitive consti- tutionalizing ofsocial democratic parties and their unions, those wings of the labor movements deciding not to join the Third International in 1920

21. Britain was typical: Labour never looked afterwards like a social force capable oftaking over leadership ofsociety or ofreconstructing the state.¹¹ Henceforth, the Labour Party always disavowed extraparliamen- tary and direct-action militancy and craved the legitimacy ofofficial rec- ognition, desiring nothing more than to perform its moderation, as a re- sponsible party ofconstitutional government. Decorousness and propriety became the rule. Having rejected the Bolsheviks vanguardist model ofpro- letarian democracy as authoritarian and counterproductive, a recipe for destructive violence and self-isolating dictatorship, social democrats ad- hered rigidly to parliamentary rules, trapped in a psychology ofprocedur- alism and forever shying from the fight. This hardwiring of social demo- cratic imaginations into the integrated circuits ofparliamentary legality was the key to the post-1918 period.

CORPORATISM AND PARLIAMENTARY GOVERNMENT

The political stabilizations of the early 1920s faced the Left with varying national alignments, which supported authoritarian, fascist, and some par-

liamentary outcomes. The clearest regional pattern was in the economically backward eastern and southern European periphery, which contained agrarian economies ofa particular kindeconomies that were mixtures of inefficiently organized big estates and poorly endowed family farms and were labor intensive, undercapitalized, low in technology, and demograph- ically overloadedwith a distinctive social structure to match.

Such societies had specialized industrial sectors that were usually con- centrated around the capital cities, a few mining centers, rural manufac- turing, and the major ports. But these industrial enclaves were dwarfed by agricultural populations and authoritarian polities. Urban middle classes were chronically factionalized between state-dependent and entrepreneurial sectors as well as by ethnicity and religion. Building multiclass political alliances was hopelessly complex. Consensus building in these societies proved fragile. Most reverted to authoritarianism, either in counterrevo- lutionary response to postwar democratic uprisings or by incremental at- tacks on democratic life such as banning parties, restricting the franchise, and attacking civil liberties. By the time ofa coup detatPoland and Lith- uania in 1926, Yugoslavia in 1929, Bulgaria, Estonia, and Latvia in 1934, Greece in 1936democracy was already hollowed out.¹²

The Lefts prevailing pattern in southern and eastern Europe had three elements. First, Communist parties, as rallying points for committed revo- lutionaries among worker militants, dissident intellectuals, and Moscow- trained professional cadres, were either banned or persecuted. Second, rad- icalism in these overwhelmingly agrarian societies involved peasants. After suppressing urban revolutionary organizations and targeting known indi- viduals, authoritarian regimes isolated and controlled the countryside via policing, paternalist social discipline, legal discrimination, and restricted franchise. And finally, if social democrats repudiated Communists and avoided the countryside, authoritarian regimes sometimes allowed them back.¹³

This authoritarianism differed from fascism. After immediate counter- revolutionary brutalities, eastern European dictatorships observed limited constitutional forms, allowing elections and some legalities for organized labor. By contrast, labor movements in Italy and north-central Europe were incomparably stronger. They were larger, better organized, and deeply in- tegrated into the social life and public culture of their countries. Uprooting the Left from this historic embeddedness in complex civil societies required a comprehensive assault on the status quo. Thus fascism was vastly more radical as it faced an immensely stronger working-class adversary. It

sought to disenfranchise, in the fullest sense, the working classes, and to destroy political and labor market gains that had been generations in the making. This required a different kind of regime, one that systematically attacked the given bases of political life. Accordingly, fascism knew no restraints.¹⁴

But despite the fascist extremes, a new system of politics was fashioned in 191423 in western Europe that not only resolved the political break- downs occurring at the end ofthe First World War but delivered the lasting bases of stabilization for western European capitalism after 1945.¹⁵ Cor- poratism, institutionalized cooperation between employers and unions mediated by the state, crystallized from the postwar crises. It required con- taining labors challenge in the factories as well as blocking larger-scale plans for socialization. The path was then freed for rationalizationmech- anization and enlargement ofcapacity; Taylorization, scientific manage- ment, and deskilling ofwork; control ofthe labor process, the production line, and the shedding ofredundant labor. But this also allowed limited collective bargaining, regulated ideally on national, industrywide bases. This doubled quality was crucial to the stabilizationnot only repression ofthe working-class insurgency and its revolutionary desires but also cal- culated concessions to some categories ofworkers, explicitly furthering em- ployers control. Even fascism devised these forms of corporatist recogni- tion.

More than this, stabilization sustained a general political settlement, redesigning relations among government, economy, and parliamentary are- nas. Faced with both the insurgencies of191723 and dysfunctions ofthe international economy and fresh from wartime interventionism, western European governments claimed an expanding responsibility for managing the national economy. But parliaments couldnt handle the central prob- lems ofthe crisisthe crucial disputes through which the basic distribu- tions ofpower were contested or exposed: conflicts over nationalization, taxes, and inflation; relations between capital and labor; reparation quar- rels; tariff negotiations. They were being displaced by a new system of

constant brokerage between the state and major organized interests.

Classical parliamentarism was shifting toward patterns of interest group representation.¹⁶

Labor movements became drawn into the managerial structures ofna- tional economies in this way. But the interaction ofparliamentary politics and corporatism was complex. This was no zero-sum game, where the new brokerage ofinterests required the decline ofparliaments and the rise of one was the loss ofthe other. Instead, social democracy became simulta- neously constitutionalized. Just as unions were entering new partnerships with employers and government in systems ofcorporatist negotiation over wages and workplace authority, social democratic parties were also com- mitting themselves to visions ofparliamentary reform. Existing parliamen- tary arenas were less the obstacle to corporatist solutions than a comple- mentary source oflegitimation. Ifcorporatist arrangements helped discipline rank-and-file militancy by breaking the shopfloor accountability ofunion leaders and using them to police their own members, then parlia- mentary democracy could focus popular political hopes. Corporatism de-

veloped from a crisis of political representation, in which working-class mobilization took avowedly revolutionary forms. But if it was to work, working-class expectations still needed a credible political arena.

Stabilization in the 1920s needed both the new corporatism and the strengthening ofparliaments. In Britain, Labour became the voice ofreform in a two-party system only amid wider democratic ferment in 191026, when a gradualist or constitutionalist perspective wasnt yet assured. Join- ing the patriotic consensus of191418 certainly privileged moderate union leaders and Labour parliamentarians, while the 1918 Representation ofthe People Act (votes for men over 21 and women over 30) lent this dominance popular electoral momentum. But Labour also faced the British version of the European working-class insurgency of191721. What became a taken- for-granted constitutionalism had to be bitterly secured against more rad- ical socialist perspectives. The Labour Partys new constitution in 1918 linked socialisms achievement to public ownership (clause 4) but by an exclusively parliamentary road that repudiated the direct-action militancy ofmany ofits strongest working-class supporters.

Ramsay MacDonald and the Labour leadership discovered a common interest with Conservatives in securing Labours status as the second party, because the more radical forms of the democracy could only be defeated by ensuring that the masses were properly and moderately represented within the councils ofstate. As the Conservative leader Stanley Baldwin said, the first goal was the disappearance ofthe Liberal Party. . . . The next step must be the elimination ofthe Communists by Labour. Then we shall have two parties, the Party ofthe Right and the Party ofthe Left.¹⁷

The dual purposes ofthe democratic reform of1918the stabilizing of capitalism, the cohesion ofsocietywere vital. New arrangements for run- ning the capitalist economy, via representation ofcorporately organized interests, was one dimension. But corporatism per se contributed little to other political needsthe competition ofideas in the public sphere, the building ofbroader social coalitions, and the winning ofpopular consent for the defense or critique of existing political arrangements.¹⁸

PATTERNS OF STABILIZATION

From 1917 to the early 1920s, the Lefts challenge placed democracy onto the European agenda in the most radical socialist and participatory ways. The 1920s also framed a longer epoch, through which two vital constitution-making conjunctures (185971, 191723) ordered and reor- dered state-society relations democratically. The framing events of this ep- och in Britain were the 1867 Reform Act and the Representation of the People Act of 1928, which created for the first time a fully-fledged, formal, mass democracy, inside a broader transition to collectivist ideas ofstate and society.¹⁹ Here the constitutionalizing ofLabours vision remained

decisive, as it ruled out the extraparliamentary direct action that might have expanded citizenship and the constitution. Holding the parliamentary line and complementary corporatist arrangementsmeant disavowing other types ofagency, from councils ofaction, rent strikes, and protests ofthe unemployed to Poplarism and imaginative local socialisms. Above all, it meant repudiating unconstitutional political confrontations, like the ill- fated General Strike of May 1926.²⁰

The strength or weakness ofparliaments was the key variable shaping successful corporatisms, and British distinctiveness emerges when compared to weaker parliamentary systems. In Italy, for example, the confrontational politics ofthe PSIwhich in 191722 rejected being constitutionalized exhausted the liberal states intermediary capacities and drove the dominant classes to Fascism. Corporatist innovation occurred in both countries, but while the Lefts defeat in Italy led to Mussolinis March on Rome, its defeat in Britain through the 1926 General Strike led to the 1929 election ofa Labour government. Thus in Britain parliamentary and corporatist fields werent incompatible but on the contrary were complementary. Parliamen- tarism legitimized corporatism for the masses. The stability promised by corporatism presupposed a constitutional framework that guaranteed the juridical rights of citizenship and enabled the populace to feel itself free. Like the Italian, Weimar Germanys corporatism lacked the firm machinery ofparliamentary legitimation, in contrast, and the eclipse ofparliamentar- ism after 1930 was a symptom of German corporatisms instability, not its strength.²¹

Europes patterns ofpolitical stabilization ranged from authoritarian dictatorships in the east and south to relatively stable liberal democracies in western Europe. Full-scale recourse to fascism came in Italy, Germany, and Spain, where working-class mobilizations outgrew liberal democracys capacities for containment. Finally, the Scandinavian pattern of state- incorporated social democracy, based on cross-class coalitions, in the dou- bled context ofeconomic corporatism and functioning parliamentarism that I have emphasized earlier, was the strongest case ofreform.

Some countries are admittedly hard to place in this typology. A domi- nant clericalism, organized around confessional parties and unions, marked the Belgian and Dutch polities. Czechoslovakia, eastern Europes surviving parliamentary democracy, showed signs ofthe Scandinavian pattern in the mid-1930s, brutally interrupted by the countrys dismemberment in 1938

39. Austria fell somewhere between authoritarian dictatorship and fascism, given the radicalized right-wing assault on the labor movements highly mobilized socialist culture.

Finally, this typology maps interestingly onto the main pre-1914 pat- tern, that ofthe north-central European social democratic core, which con- tained the strongest labor movements. Here, the division runs down the middle. In Germany, the SPD failed to institutionalize the Scandinavian success story ofsocial democratic corporatism, as the consensus-sustaining

capacities ofthe Weimar parliamentary system collapsed in 193033. In Czechoslovakia, a putative Scandinavian trajectory was terminated by Franco-British acquiescence in Nazi Germanys imperialist aggression. In Austria, the German experience ofsuspended parliamentary government was replicated in 192734, while any pragmatic arrangement between the post-1934 authoritarian regime and the socialists was precluded by the formers international dependence on Fascist Italy and the Third Reich. The key difference, dividing the Scandinavian experience from these cases, was the labor movements ability to sustain a larger crossclass coalition. Neither the ineffectuality of the SPDs coalition building nor the Scan- dinavian success story were inevitable. In France, the chances offascist- driven polarization in the 1930s were stronger, and the parliamentary sys- tem more fragile, than is often assumed. But in the stable democracies of the western European cluster, the settlement endured. These countries were governed continuously between the wars by the center-right. In Britain, apart from two Labour interludes in 1924 and 192931, Conservatives were permanently in office, either alone or in coalition. In France, the center-right also dominated, with short-lived breaks for center-left and Pop- ular Front governments in 192425 and 193638. In Switzerland, a similar center-right formula reigned in 191843. In each case, this system was directed against the socialist Left. The corollary was related subordination ofnational trade unionism, secured via the climacteric ofa defeated general strikein Switzerland (November 1918), France (May 1920), and Britain

(May 1926). Socialist weakness also resulted from an absence of major cleavages, like language, region, religion, which had previously divided the middle-class parties, thereby delivering the socialists potential allies, and enabling lib-lab coalition. The very primacy ofclass politics after 1918 placed labor movements in permanent electoral isolation, forever the losers in a clear-cut choice between a working-class party and an anti-socialist party or coalition.²²

In the fascist cases, neither condition obtained. Before the fascist victory, German, Italian, and Spanish labor movements were not marginalized but embedded in national, regional, and local government; and the middle-class sector was not unified but split. While implying left positions of strength, these contexts actually produced catastrophic defeat. Left institutional strengths werent converted into control ofthe state. Middle-class fragmen- tation was overcome not via democratic coalition building to the left but through fascist concentration in a triumph of the radical Right.

Fascism succeeded where it became feasible for dominant classes to take such extreme solutions seriously. Turning to fascism became most likely where the Left made inroads into state administration and private capitalist prerogatives, even when excluded from national government. In Italy and Germany, combinations of entrenched reformism and defensive militancy blocked the resolution ofeconomic crisis and the restoration oforder. The post-1930 crisis ofWeimar resulted from the persistence ofsocial demo-

cratic corporatism in trade union law, the Ministry ofLabor, compulsory arbitration procedures, unemployment insurance, and other welfare legis- lation, which angered the Right into leaving the constitutional framework ofpluralism behind. The more labor defended its post-1918 gains, the more determined the Rights recourse to extrademocratic means became. When we add the Lefts strengths in regional and local government (the PSI in

191920, the SPD up to 193233), the impressive militancy ofits rank and file, and the vitality ofa Marxist vision among the party intelligentsia, the attractions ofradical authoritarianism for the dominant classes become all the clearer. It seemed the only means ofclearing the way. Fascisms rise as a credible mass movement then delivered the popular basis for extra- systemic solutions.²³

Finally, the Scandinavian pattern ofstate-incorporated social democracy gave socialists unique national leadership via long-lasting governments in Denmark (from 1929), Sweden (from 1932), and Norway (from 1935). Successfully centralized industrial relations, institutionalized around na- tional federations of employers and unions very early before 1914, an- chored the Scandinavian social settlements ofthe 1930s. Business acknowl- edged the legitimacy ofsocial democratic government, with its commitment to high wages, social welfare, and full employment, while socialists con- ceded the sanctity ofprivate property, guaranteed private control ofcapital markets, and restrained union militancy in the interests ofsocial peace. Nationalization and public ownership were dropped in favor of redistrib- utive strategies using taxation and public spending, easing both corporatist resolution ofindustrial conflicts and working-class social gains. A state- backed compact ofemployers and unions was the centerpiecethe Kan- slergade Agreement in Denmark (1933), a similar bargain in Norway

(1935), and the Saltsjo baden Agreement in Sweden (1938).

This corporatist centerpiece also needed political foundations in a par- liamentary coalition. A constructive politics ofthe countryside was decisive here. The relative absence ofagricultural wage-earners encouraged more flexible socialist policies and rural coalition building, while farm-based par- ties proved receptive to socialist alliance. In contrast to Italy, where the PSI mobilized laborers but alienated smallholding farmers, and Germany, where the countryside was dominated by anti socialist movements even- tually feeding into Nazism, Scandinavia supported a distinctive farm-labor coalition.

In both dimensionscorporatist detente with nationally organized em- ployers, political trade-off with the countrysideScandinavian social dem- ocrats marked their distance from the reformisms imagined by socialists in Germany, Austria, and Belgium. Public ownership, in the sense ofnation- alization, production planning, and the command economy, receded before more flexible proto-Keynesian and redistributive ideas ofpublic control. Rather than entering a direct confrontation with private interests in the economy, whether over ownership in industry, small business, or the land,

Scandinavian socialists preferred a different approach, joining corporatist pragmatics to fiscal steering, redistributive taxation, and an active social policy. This strategya detente with, rather than a takeover of, the pri- vate economyhad distinct benefits, shifting economic conflicts into the political arena, where socialists could maximize the use oftheir principal assetstate powerand thus their control over the labor movement and economy.²⁴

during 191721, the left became perma- nently split between those who joined the Third International and those who did not. For Communists, Soviet events played an ever more decisive part, proceeding from the power struggle surrounding Lenins illness and death in 192324. The factional maneu- veringwhich first isolated Trotsky and then broke the authority ofKamenev and Zinov- iev, while relentlessly concentrating power around Stalinprofoundly influenced how Communism elsewhere would be shaped. In particular, Stalin produced the new thesis of

Socialism in One Country, which claimed, for the first time, that socialism could be built without revolution in the West. This line was taken up by others, hardening into a system within the year. As Stalin pronounced in Problems of Leninism in January 1926: We mean . . . the possibility ofthe proletariat as- suming power and using that power to build a complete socialist society in our country, with the sympathy and the support ofthe pro- letariats ofother countries, but without the preliminary victory ofthe proletarian revolu- tion in other countries.¹

This insistence on the primacy ofbuilding socialism in Russia imparted a new tone to international socialist discussion. From being seen as the first spark ofa general European conflagration, the Russian Revolution became its main flame. Soviet socialism under Stalin came to be increasingly celebrated as the foundation for socialism elsewhere, rather than the reverse. This demoted the importance ofother Communist parties and redefined their roles. Henceforth, they were to defend the Soviet Union and harness their strengths

to its needs. In this new perspective, Soviet survival had become decisive for the prospects of revolution in the West; it was the foundation, the mainstay, the refuge for the revolutionary movement of the whole world.²