Review of Nigel Harris, "The Return of Cosmopolitan Capital"

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Draft review of Nigel Harris, "The Return of Cosmopolitan Capital" (London, 2003)
According to Nigel Harris, capitalism goes back as far as recorded history. "Trade... has a stronger claim to being the essence of capitalism than any other activity" (p.9). Trade is primeval. So is capitalism. "The class of 'businessmen'... has normally been cosmopolitan", desiring free enterprise, free trade, free roaming across the earth's surface. It has an emancipatory bent, "intrinsically subversive in terms of the state agenda" (though, being "also pragmatic", it has again and again compacted with state protection, patronage and monopoly (p.15)). Rather as William Morris had a nostalgia for the medieval craft worker, Harris has a nostalgia for the globe-trotting long-distance merchant of medieval and earlier times.

The born-in-Europe modern capitalism of the last few hundred years is special not for being capitalist, but for harnessing capitalism to the "state agenda". What was special, and what Europe then diffused to the world, was a long-lasting system of warring states in which each state tightly shaped its own society - rather than loosely latching onto it, as in older, more diffuse, systems of governance - and pumped up its own capitalist national economy in order to gain the means for war.

"One logic, that of the state, the territorial ruler, came to subordinate and completely reshape the other, that of capital..." With the rise of military technology and the increasing expense of war, "princes acquired an interest in promoting capitalism and, to ensure its growth, often invented a class of national capitalists, a client instrument... [thus] a system of warring national economies or of national capitalisms" (pp.48, 52).

Not capitalist states, but statist capital, a world order "of competing states driven by the imperative of military defence and of warfare - at a minimum, the defence of national independence" (p.50).

What is new of our days is that the capital grown up within that warring-states order is acquiring enough momentum to assert its own proper inner drives, begin to overwhelm the state order, and create for the first time "a 'capitalist society' [with] a sense of permanency and self-perpetuation" (p.14).

Gradually, and with many sticking points and setbacks, capital is making the world more cosmopolitan, loosening national government into "an immense network of dense regulation" (p.219), driving "step[s] towards rethinking the role of the state in terms of popular welfare rather than economic nationalism" (p.204), opening the way towards international disarmament (p.188). "Compared to the old order of the first half of the twentieth century, what is coming about is strikingly superior to what went before" (p.6).

Harris challenges our estimates not only of what has been, what is, and what is becoming, but also of who might act to make it better. Privatisation, for him, signifies not vice but "a full assault on the war-making state and its capital project" (p.130). "The unions... are the product of the old statist economy, and are declining with it". It is "the best unions", not as we might think the worst, that "try to recycle themselves as personal-service organisations rather than collective bargainers, as proto-NGOs..." (p.231) It is NGOs that may "embody an emerging popular conscience" (p.232).

This is a star turn pour épater les prolétaires, a suavely sustained challenge to the usually-taken-for-granted ideas of the socialist and Marxist movement where Nigel Harris had his intellectual roots.

It could be swatted aside. How can Harris argue that cosmopolitan capital is pushing towards a world without war, when we can see Iraq? How can he so blithely amortise his observation that "poverty has increased... income inequality has increased in the developed countries and between countries" with the comment that "the links to globalisation - increased trade and capital movements - are not at all clear"? (p.246).

Countries and regions which have increased their exports, or drawn large inflows of capital, have unsurprisingly had average incomes rise; so there is a specious appearance that "globalisation helps growth in poorer countries". But capitalism grew faster, in most areas, before the current ultra-cosmopolitan-capitalist phase. And the overall logic of "globalised" capitalism is for the regions of growth to develop among tracts of pauperisation and amidst increased global inequalities.

But to basics. It has to be a central part of Harris's story that the European war-making state, with capital built up and shaped within its limits, had, for a certain epoch of history, a competitive advantage which enabled it to dominate and stamp its template on the whole world. Paradoxically, he inverts the usual story whereby industrial first-comers (Britain) could develop relatively unstatified, whereas countries catching up require heavy state initiative. For him, it was a particularly intense form of statification in Europe - a long-term system of warring states - which drew capitalism from its earlier to its modern forms. Now capital has reached modern forms, it has been largely an error for ex-colonial states in the late 20th century to copy that European model.

It is not clear to me how, in his own terms, Harris explains the competitive advantage of the European war-making states in the 16th or 17th century over the not-so-bellicose states of Asia which then were as advanced or more so, economically and culturally. His general views would suggest a competitive disadvantage. In general he suggests capital prospers best when the state interferes least. Just as capital is "subversive" for the "state agenda", so also the "state agenda" is subversive for capital.

The European war-making state's controls on trade, and its military expenses, were an economic drain. It could and did nurture some capitalists through military contracts and trade monopolies. But in Harris' logic that would surely have been at the expense of other capitalists, and, ultimately, of growth overall.

For Marx, the new factor in 16th century Europe was a new mode of production, a new prevalent method by which the surplus product was extracted from the direct producers, a new mode which in turn generated new principal social classes, new norms, and a new dynamism of technological and economic growth.

In Marx's account, the state could promote a new mode of production by forcibly pushing people into wage-labour, by forcibly concentrating wealth otherwise dispersed in smaller non-capitalist stashes into the hands of those who would use it as capital, and by harnessing or supplementing market forces to add a compulsion and urgency greater than that of spontaneous trade impulses (often trammelled by custom and poor communications) to the characteristically capitalist drive to revolutionise production.

While merchants could do business for long centuries by making accommodations with princes, but essentially constructing their own networks which cut across the borders between princes, with a fully-developed capitalist mode of production that ceases to be true. The large capitalist enterprise must interact with states at a thousand points. It has to have its headquarters embedded in a specific framework of law, market regulation, and physical and human infrastructure.

A hundred threads of personal connection and lobbyist interest tie its bosses to the public authorities, and, almost always, especially to one particular state.

That account of the interaction of capital and nation-state is ruled out for Harris by his axiom of trade as the essence of capitalism. It leaves him, I think, with no convincing way to explain why the European war-making states could outstrip the relatively pacific empires of the East, or why it did not spur them into equally war-making shape.

And it leads him astray into thinking that today's replacement of integrated-national-industrial-complex states by world-market states means a start of the state withering away altogether. Transnational corporations today have more links with states other than the definite "home" state which most of them have. But they still deal with states, unwithered states, structured in a world-market system regulated by consortia of states (G8, IMF, WTO, EU, etc.) and keystoned by one particular state (the USA). Capital needs states to regulate its social, legal, and infrastructural conditions.

It is an axiom for Harris that "trade" is "the essence of capitalism", but he does not systematically confront the alternative idea that the essence is a mode of production, or Marx's argument that merchant capital and usurer's capital could and did exist for vast periods of time before capitalism proper without generating a capitalist mode of production.

In his preface, Harris explains his thesis as in part "stretch[ing] the insight in the opposite direction, to cover the entire history of the modern state and of national capitalism", from the "permanent arms economy" thesis advocated by the Marxist current to which he formerly adhered, the SWP/IS (p.viii). But, just as the argument that the "permanent arms economy" explained the unprecedented expansion of surplus value after World War 2 never answered the objection that, whatever ingenious calculations you might do with the transformation of values into prices, arms spending consumed surplus value rather than expanding it, so Harris' new argument is not a satisfactory explanation of why European states "boomed" from the 16th century.

The flanking pillars of the "permanent arms economy" in what was SWP/IS theory in Harris' day - Tony Cliff's peculiar version of the thesis that the USSR was state-capitalist, and the idea that imperialism had been the "highest stage but one" of capitalism - also have traceable, sometimes inverted, extrapolations in Harris' new argument.

Imperialism was a bygone stage, according to the 1960s SWP/IS, because it had been about excess funds from the glutted economies of the advanced countries becoming export of capital to the colonies. With the "permanent arms economy" those excess funds went to the military instead. The ex-colonies were bereft, left in involuntary isolation, condemned to painful and largely hopeless state-driven attempts to raise themselves by their own economic bootstraps.

By the time that picture of the world had been clearly formulated, it was already becoming evident that it was false. Many ex-colonies were creating conditions for capital accumulation, and drawing in global funds. But the picture reappears in Harris' new argument, as not so much a stage in metropolitan-driven world development as an error by the governments of newly-independent countries, dazzled by the centuries-old European model of development.

Unlike all other theorists of the USSR as state-capitalist, who would make efforts good or bad to demonstrate it in terms of the mode of production or of trade, Cliff argued that the USSR was state-capitalist because of the all-shaping pressure on it of international military competition.

With Harris we have the same argument of the all-shaping effect of international military competition, now extrapolated backwards over centuries. In a curious inversion, the competition still defines the competing states, but now as not-capitalist rather than, as with Cliff, as capitalist.

Cliff's original argument was embedded in a perspective by no means idiosyncratically his, that capitalism was in any case inexorably becoming more and more more and more state-clustered (Cliff 1974, p.212).

It was not so. The last 20-odd years prove it. Some species of close connection of states and capitals is still operating, but capital is not moving towards clustering more and more in relatively-integrated state-centred complexes. In the 1940s all the essential dynamics of capital had not in fact become subsumed into the processes of international military competition between integrated state-centred economic complexes. Capital had other dynamics, different from the demands of military competition between states, and developed and promoted through world trade.

Rebounding from the view he once shared of capitalist dynamics as, once sufficiently advanced, becoming essentially identical with the dynamics of military competition between states, Harris has now ventured to the opposite pole. The dynamics of military competition contradict the dynamics of capitalism, despite compromise and collaboration in particular times and places. Globalisation signifies capital developing far enough that the dynamics and imperatives of trade can begin to overwhelm the dynamics of military competition.

Even more than might be inevitable in a book covering so wide a terrain, Harris relies for evidence for his assertions on clipped-out summary sentences from other authors, many of which cannot stand as solid evidence for anything.

A first example. Harris argues that the 19th century order of warring states in Europe corralled people into loyalty to authority (the state) where previously they "had... regarded [their] rulers with fear, not to say terror" (p.76). And as evidence he cites Josef Schumpeter writing: "At the time of the Boer War there was not a beggar [in London]... who did not speak of 'our' rebellious subjects" (p.77).

That was Schumpeter writing 25 years later. At the time of the Boer War he had been a 16 to 19 year old student in Austria. What did he know of the thinking of London beggars? In fact, whatever beggars said to the prosperous gentlemen from whom they sought alms, both organised workers and a large section of British bourgeois opinion reacted to the Boer War not just with weariness and fear (as of previous epochs) but with conscious political opposition to it as "imperialist".

To argue that enthusiasm for authority is an artefact of the modern nation-state defies much evidence. Take, for example, Norman Cohn's description of the way the first Crusades "intoxicated the masses of the poor" in a Europe well before the modern state system, and inspired them to huge "massacres of the infidel" (Cohn 1970, pp. 63, 67). When the rage which surely always simmered under the masses' deference and reverence to lord, priest and emperor exploded in open revolt, it was usually under the leadership of a supposed "lost" hierarch who would now oust the usurper, as in the archetypal story of Pseudo-Baldwin, who briefly made himself a European power in 1224-5 by convincing the masses that he was the lost Emperor of Constantinople.

The consolidation of the modern nation-state, by contrast, went together with the emergence of currents of thought, and eventually movements, built round conscious schemes for how the people themselves, not some sleeping emperor, could make a more just and peaceful society.

Harris inverts the schematic-Marxist idea according to which the bourgeois revolutions of earlier modern capitalism were progressive, but the mature bourgeoisie brings regression. For him, the inauguration of modern capitalism (in 17th century Europe, on his dating) and of the "prototype of warring state... founded upon the idea of a popular war" by the Dutch, English and American revolutions took humanity into a dark tunnel of bellicose blind nationalism (p.64-79). Only now has the bourgeoisie become strong enough to be decisively progressive and drag us out again into the light that once shown over the wandering merchants of pre-modern times.

Second example: to sustain the argument that war-making shaped everything in the modern state, Harris quotes Alan Milward that "what emerged" in Britain in World War 2, "was almost as far from democracy as the government of Germany or Italy" (p.118). Such a sentence can hardly outweigh the obvious difference between a Britain where strikes, opposition speeches, contested elections, and Trotskyist newspapers continued with minor harassment, and Nazi Germany.

Downplaying its specificity and exceptionalness, Harris uses Nazi Germany as the epitome of the modern state, a fusion and concentration of the essential traits of two archetypes, Frederick the Great's Prussia and Napoleon's France. In his view Nazi Germany is the case that "tests to the limits the thesis that capitalism as a system... controlled the state, that Germany was in any sense a 'capitalist state'" (p.109). Hitler was able to overrule capitalists whenever they tried to rein him in, for example in his drive for autarky. Germany was not a capitalist state. It was a war-making state.

So Hitler's overruling of the chief personal representatives of capitalism disproves the thesis that "capitalism as a system... controlled the state"? But Hitler also overruled the chief personal representatives of war-making, the army top brass. Many of them opposed Hitler at critical points - maybe more of them, and more boldly, than businessmen did. They failed too. If the evidence proves that Nazi Germany was not a capitalist state, then also it was not a military state.

It was Hitler's personal dictatorship. Even bourgeois democracies where the capitalist character of the state is arguable in the simplest terms of personal connections of, and lobbyist influence on, state personnel, depend for their course significantly on the individual leader. (Thatcher. Bush). Those leaders are not just ventriloquists' dummies for a conclave of top capitalists placed just behind the scenes.

Any materialist theory argues that the choice of leader, the leader's perception of possible options, and so on, are all shaped by broader material circumstances. "Extreme" leaders arise when powerful interests sense an impasse, feel a need to abridge normal consensus methods, and give a free hand to forces willing and able to do the drastic, even if maybe it will not be the exact sort of drastic they prefer (because those forces have been shaped by a multitude of circumstances, not just the top classes - for example, by the "petty bourgeoisie run amok" in Germany).

Arguing that modern European states were and are capitalist states, we point to the power in society of the capitalists and the close personal connection in normal times between rulers and capitalists. The economic system has structural constraints which makes the state "capitalist", but not automatically, without human agency. We recognise capitalist states where the ruling group is sharply separate from the capitalist class but explain them as aberrations generated by peculiar social or historical tension, and generally unstable.

Harris's seems to be a theory with structural imperatives but no clear agency. Who is the actor of what he calls "the state agenda"? If what we call a modern capitalist state was and is in fact a "war state" (p.74), who were and are the active agents of the war imperative? It seems to me that Harris should show that the states have been in normal times run by top military people or their close proxies or associates, and that exceptional cases of clearly civilian rule are generated by peculiar tensions yet still decisively constrained by the structural imperatives of the general system of warring states. He does not.

Harris makes Frederick the Great, Napoleon, and Hitler the normal cases that establish the general law of the modern state system, while others are the exceptions which we can discount. Why? He himself concedes that Prussian militarism "did not have the same [capital-stimulating] effects as occurred in Britain and France" (p.66) and that Napoleon left France with its "development retarded for a long into the future" (p.74).

Britain and the USA were more successful states, more obviously "capitalist" and less militarised, although of course they waged wars. The USA has never been involved in total war. Its nearest approach was its own civil war. World Wars One and Two engulfed its society much less than other states'.

Today, even under George W Bush, US casualties in Iraq tiny compared to those of previous wars and occupations in history have within months led a large section of the population to question the whole project. Despite its panoply of "smart" death-machines, the USA, by broad historical standards, is not a highly war-geared society. Yet it has a far better claim to be considered the standard for a successful industrial capitalist order than Prussia or France.

Hitler's "twin star", Stalin, less cited by Harris, also disturbs his thesis. Stalin constructed a heavily militarised state. He was also able to purge most of his top generals, in 1937. The essentials of the Stalinist structure would later be replicated in many other states far less heavily militarised.

One of the most surprising things about the post-Stalinist states in the ex-USSR and Eastern Europe is how quietly the military have accepted being cut down. In 1989-91 there was good reason to see military dictatorships as the most likely medium-term prospect in those states. With the implosion of the old ruling parties which had systematically stifled all political alternatives, the military was the only cohesive institution around which to build a new order. Yet it has not happened that way.

World-wide and in history, military dictatorships have usually not been simply a matter of the existing army high command directly taking that governmental power which, on Harris's thesis, they already dominated indirectly. Often they have been created by groups of officers, sometimes well below the top ranks, making an essentially political coup and then subordinating the old top military command as well as the governmental power to themselves.

Historically, on the evidence, the military establishment has generally been a specialised appendage of the capitalist class, rather than an agency for a contrary historical-structural imperative.

Harris "stretches" backwards, over a vast sweep of history, extrapolations from one clear fact of the last 20 years: the move of capital away from the state-clustering which Marxist (and other) conventional wisdom had reckoned to be its inexorable tendency. Reject his wholesale inversion of Marxist conventional wisdom, and we still have to ask what we should correct from the old schemes.

Engels wrote in Anti-Dühring: "This rebellion of the productive forces, as they grow more and more powerful, against their quality as capital... forces the capitalist class itself to treat them more and more as social productive forces, so far as this is possible under capitalist conditions.... that form of the socialisation of great masses of means of production which we meet with in the different kinds of joint-stock companies... At a further stage... the official representative of capitalist society - the state - will ultimately have to undertake the direction of production... All the social functions of the capitalist are now performed by salaried employees. The capitalist has no further social function than... gambling on the Stock Exchange..." (Engels 1947, p.328-30).

Events in the next decades confirmed Engels' predictions. (Still do confirm them, up to a point). So, to Kautsky, Luxemburg, Hilferding, Lenin, Bukharin and other Marxists of the next generation, it seemed straightforward to read off the increasing "organisation" of capitalism into state-centred clusters at the end of the 19th century and the beginning of the 20th - statism, militarism, regulation, protectionism, managerialism, bureaucratisation - as a direct product of the rise of monopoly capital and finance capital.

A hundred years later, we have vaster-than-ever corporations, and vaster-than-ever finance capital - with states fanatically deregulating, privatising, and free-trading, and, sometimes, shareholders brusquely sacking managers or decimating managerial hierarchies. The relation is more complicated than it seemed.

The rise of oligopolo-financial capital surely required the "organisation" of the capitalist world in one way or another. We now know that "organisation" through a more-or-less free-trade world, regulated by cartels of leading states, with each individual state regulating its own economy in order to best to integrate it into the world market, is an option.

It was not an option in the late 19th century. Then, the rising capitalist powers faced incumbent leading states which had large colonial empires (the Netherlands, France, Russia, Austria, Spain, Portugal, Britain). Those empires were expanding, even in the heyday of the "imperialism of free trade" (in Australia and Canada, settler dynamics; elsewhere, desire to clinch sources of revenue, and lack of available docile local bourgeois regimes which would guarantee integration of territories into world free trade). The choice for the rising powers was either to jump in and grab something for themselves, or be closed out. They jumped in. Each state strove to organise its own integrated industrial-military complex, in order to hold its own in the high-imperialist world.

Other options began to emerge - and to be pushed forward for consideration by the liberation struggles of the colonial peoples - after 1945. What evolved in the Western side of the Cold War was something more like cartel-organised "imperialism of free trade" than the old high imperialism.

In the early stages of enforcing mass proletarianisation, concentrating funds, and applying pressure for innovation which relatively sparse, localised or custom-bound markets cannot, excess statism can help capitalist development, or at least bring benefits for it comparable with its costs. But beyond those stages, the hypertrophied state stifles.

It clogs up change, inhibits innovation, sucks resources into bureaucratic waste. As Marx wrote: "The rate of profit... is particularly important for all new offshoots of capital that organise themselves independently. And if capital formation of capital were to fall exclusively into the hands of a few existing big capitals, for whom the mass of profit outweighs the rate, the animating fire of production would be totally extinguished" (Marx 1981, p.368).

That happened on the hyper-statist, Stalinist side of the Cold War divide. On the other, moderately-statist, side, the gradual globalisation of markets generated an apparent paradox which we see in full flower today: the simultaneous intensification both of oligopoly and of competition (Semmler 1982). Also, the simultaneous strengthening of states - their resilience and elasticity, their ability to drive through measures contrary to the perceived immediate interests of very large numbers of their citizens - and of their adaptation to the world market and their ability to collaborate with other states in an increasingly dense web of international institutions and agencies.

With these combinations, the inbuilt tendencies of capital, both constructive and destructive, have been able to work themselves out with great vigour - simultaneously creating vast new swathes of capitalist enterprise (and proletariat) and pauperising whole populations.

Nigel Harris argues that hard edges of state authority are being blurred into a web of "governance" increasingly dense both at "supranational" and "subnational" level. It is true. But four qualifications need to be made, and they undermine Harris's sanguine deductions.

First, as a more prudent advocate of the same thesis of governance puts it, "sovereign states... are still by far the most potent distillations of economic and political power in the modern world" (Scott 1998, p.139). And their potency against their own populations, to impose privatisations, deregulations, and tax changes which degrade social conditions and increase inequality and insecurity, but are suitable to world-market integration, is indispensable to the new order. It is statist. A different sort of statist, but statist.

Second, Scott should have written "economic, political and military power", not just "economic and political power".

Third, that though, for now, for the last decade, and for the foreseeable near future, the web of collaboration dominates, there are conflicts and clashes between the big capitalist-state centres. The possibility of them tearing apart the web of collaboration is unextinguished.

Fourth, that probably decisive in maintaining the web of collaboration is the hyper-supremacy of the USA. No other state can foreseeably hope to match it; every other state, therefore, does better to participate in the web of collaboration, on terms which it knows are biased by US supremacy, than to cut away. The rallying of Britain, Italy, Spain and the Netherlands to the USA over the Iraq war shows how very far the European Union is from rivalling the USA as a central node in the web.

And with the hyper-supremacy of the USA goes the role of the USA as "globocop", policing the world order. The USA's wars in the Gulf (1991 and 2003), Kosova (1999) and Afghanistan (2001) are not throwbacks, or products of the residues of dwindling old structures. They are 21st-century wars.

Also 21st century are the Taliban's war in Afghanistan, Al Qaeda's war for the illusory aim of re-establishing an Islamic empire, and episodes like Saddam Hussein's invasions of Iran and Kuwait: opportunist grabs by regional powers on the edges of the US-policed world order, and reactionary backlashes generated by the arrogance of that world order and hollowing-out of local secular, forward-looking, bourgeois populisms.

In short, cosmopolitan capital is indeed flourishing: but it does not annul states, wars, pauperisation or inequality.

Harris's hope for progress brought by cosmopolitan capital is not just a satisfaction with the status quo. It is also the flipside of a loss of hope for the workers' movement. If Harris is wrong about capital, but right about the irremediable decline of the workers' movement, maybe the essence of his conclusions still stands: all we can do is try to accentuate the liberalising, opening-out tendencies of cosmopolitan capital, and limit its horrors by such means as are available, mainly the lobbying of NGOs.

Harris leaves his statement that "the unions... are the product of the old statist economy, and are declining with it" as a bald assertion. Worldwide there are probably more workers organised in genuine trade unions (not the state-run "trade unions" typical of the Stalinist states) than at any time before 1989. But let us examine the strongest case that can be made for Harris's thesis, the one made by France over the last eight years or so.

The mass strike movements of 2003 and 1995 in France have been larger, in terms of numbers of workers actively involved over a period in organising and extending the struggle, than May-June 1968. Larger, also, in terms of numbers of workers mobilised on street demonstrations.

Yet trade-union membership continues to decline. It is now 10% overall, only 5% in the private sector. The Trotskyist left has won some good election results and new recruits. But the activist strength of the radical left, as well as of the mass labour movement, remains smaller than it was in the period immediately following 1968.

We see a working class still existing, still capable of waging very large struggles - but diminished in its capacity to define and to organise continuously and massively for positive social changes.

Why? In the first place, the terrain for trade-unionism is more difficult. Back in 1938, Leon Trotsky considered it an inevitable consequence of capitalist social structure that trade unions could reach no more than about 20 to 25 per cent of the working class, mainly the more skilled and better-paid.

Between the 1940s and the 1980s, we became accustomed to considering much higher levels of unionisation as normal. What had changed? Primarily, war, and the inertia of institutions established during the war or soon after the war. The previous big upturn of trade-union numbers had come primarily around World War 1. In 1912, even Britain, "the classic country of trade unionism", had only 2.2 million trade union members. The German working class, famously the world's best organised, had 1.8 million unionists.

Industry-wide or nationwide collective bargaining was not primarily something won by working-class struggles. Generally it was something instituted in wartime, which persisted for a long time after wars.

In wartime, market competition between capitalists is at a minimum, and markets are tight. It is in the collective interest of the capitalist class to institute some national system of wage regulation, for if bargaining is left to individual capitalist units the result will be a leapfrogging of wage rises.

In conditions where competition remains limited, markets relatively safe, and unemployment low, it is good sense for capitalists to continue that collective bargaining.

When competition sharpens, the calculus changes. All capitalists are under great competitive pressure to cut costs. Fail to cut costs, and they lose their markets. Each capitalist unit must be free to respond to its own conditions of competition. Sometimes it will make competitive sense for a capitalist to pay a big wage rise. But he wants to do that only if it makes sense in terms of the conditions of his unit and his sector, not if it is just a flow-on from a much broader system of bargaining.

The intensification of capitalist competition, the world-wide slide into "ruinous competition" chronicled and discussed by Robert Brenner, thus creates a strong pressure against the large-scale collective bargaining, the processes of cautiously-adjusted compromise, on which reformist trade unionism thrives.

I do not believe that slide into "ruinous competition" explains all the things Brenner claims it explains. But for certain it implies a greater capitalist incentive to fragment bargaining.

It is therefore worth while for capitalists to make the extra effort, and devote the extra resources, to bargain unit-by-unit. Government departments simulate or artificially evoke competition in order not to be left behind in the push to limit costs.

This means harder struggles, and worse consequences of working-class defeat. It does not mean necessarily an organic weakening of working-class capacity. On the contrary, one implication of increased competition and tighter supply chains is that at least some sections of workers have more economic power than ever before (and, therefore, that the employers are more anxious to fragment them).

An easy return to the days of majority trade unionism is unlikely. And the changed structure also implies that a higher political temperature of ignition is needed for large working-class struggles to develop and win.

Simultaneously, however, the old anti-capitalist political culture of the working class has been imploding, with the debacle and discrediting of Stalinism. This hits particularly hard in France, where for decades Communist Party members were the activist backbone of the labour movement. The moral and political collapse of the Communist Party has proceeded faster than impulses towards revival from the recent struggles.

Almost everywhere, the old Stalinist parties have collapsed or withered. The Social-Democratic parties continue, but in a much more bourgeoisified, bureaucratised form. Those old parties have been "exposed", as between the 1930s and 1970s we so hoped they would be. But the "exposure" has not worked not in favour of their mass activist bases switching over tidily to Marxist politics. It came in the course of the working-class defeats and disillusionments of the late 1970s and early 1980s, and led to a clearing of the ground for the rise of authentic communist politics, but by way of the erosion and dissipation of the old generation. There are a lot of political corpses around, and the noxious fumes of the political plagues that struck them down still poison the terrain.

With the emergence of a new radical generation through the new anti-capitalist and anti-war movements, and the growth of new workers' movement in Indonesia, China, Korea and many other countries, the basis for revival is being laid.

But thinking through the strongest case that can be made for Harris' thesis should warn us against too simplistic a view of revival. It is very unlikely that it will simply float the left and the labour movement back up to where we were, in western Europe, in the 1970s, and then let us proceed from there without making the mistakes we made then. The history that became dark farce in the 1980s will not repeat as light comedy tomorrow.

Reborn working-class socialism will be different from the dominant left culture of the 1970s. Today it has to be a strictly capitalist anti-capitalism, so to speak: one exclusively based on contradictions, tendencies, "new passions and forces" generated within capitalism itself. In the era of "organised capitalism" its statist tendencies appeared to demonstrate the invading socialist society. With hindsight they appear shaped more by contingencies.

There is a sort of quasi-fractality about the contradictions of capitalism: they operate, with some similarities of structure, both at the global level exemplified by the activities of the IMF and the multinationals, and at the "germ-cell" level of the commodity.

Thus we have the strange quasi-fractality of the new radicalism today. The individual in rebellion against capital at all levels, from the IMF down to the fast-food french-fries portion, faces a kaleidoscopic reality, and the response is kaleidoscopic too.

Marx wrote in the Communist Manifesto that communism was "a spectre haunting Europe". The quasi-fractality today, the curious contradiction between mass diffuse anti-capitalist sentiment and the continuing weakness of organised labour movements, reprises that spectrality. With hindsight, the Communist League, with its Marxian ideas, appears to us as the core and pivot of the communist "movement of movements" of the late 1840s. But only with hindsight. That appearance-from-hindsight would not have been available until about forty years later.

If this is right, the main conclusion for radical activists would be the centrality of regenerating working-class socialist culture and politics. We think - or used to think, anyway - that just round the corner is a new burst of strike or demonstration activity which will, at least, bring the condition of the left and the labour movement back to what it was in the 1970s, so that we can continue the efforts of those days interrupted by the defeats of the 1980s. But that is an illusion.

Working-class regeneration in the era of cosmopolitan capital is no illusion. But it will not come by remaking the epoch gone by.

Cliff, Tony 1974, State capitalism in Russia, London: Pluto

Cohn, Norman 1970, The pursuit of the millennium, London: Paladin

Engels, Friedrich 1947, Anti-Dühring: Herr Eugen Dühring's revolution in science, Moscow: Progress

Harris, Nigel 2003, The return of cosmopolitan capital, London: I B Tauris

Marx Karl 1981, Capital volume 3, London: Penguin

Scott, Allen 1998, Regions and the world economy, Oxford: OUP

Semmler, Willi 1982, 'Theories of competition and monopoly', Capital and Class 18: 91-116

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