Tuesday, November 17, 2009

Underconsumptionism, Kieran Allen and the SWP

"Myth 2: But the government has to borrow over €20 billion and so cutbacks are necessary. If we don’t take the ‘hard medicine’ now, it will be worse later.

The huge government deficit is a symptom but not the cause of the crisis. Before 2007, for example, there was no deficit as government revenue was €65.1 billion and spending was €64.6. The economic crash has wiped out many tax revenues. VAT rates have fallen; PAYE taxes are down, property taxes tumbled and more is being spent on social welfare payments. But the cutbacks have made matters worse. You can see this easily through simple figures.In October 2008, the government claimed that the budget deficit would rise to 6.5 percent of GDP and that cutbacks were needed. But in January 2009, the budget deficit had risen to 9.5 percent – and so more cuts were demanded in an April budget.Yet, after all these rounds of cutbacks, the budget deficit has now risen to 13 percent. In other words, all the sacrifices have been wasted because the debt is even higher.

The reason why this occurs is simple. If personal consumption is already depressed through unemployment and wage cuts, reductions in government spending only add to the slow down in the economy. There is even less money to go around and a spiral of economic depression sets in. So instead of digging a deeper hole, we need to embark on a jobs programme that puts people back to work"

The above argument was recently written by Kieran Allen and published by the SWP. It is based on underconsumptionist assumptions. The underconsumptionist ideology suggests that economic downturns are caused by a lack of demand. This means that the solution to the problem is increases in demand and thereby consumption. This,it is believed, increases demand which in turn leads to increased commodity production. Increased production means an increase, generally speaking, in the creation of value and thereby economic growth.

If this theory is correct it means that capitalism never need experience economic downturns. To prevent recessions all that is needed is continuous increases in demand (or consumption). If this theory is correct there is no need to abolish the law of value and create a communist society.

Falling demand during an economic downswing is caused by the overproduction of capital which manifests itself in the overproduction of commodities such as houses, building materials, household goods, cars etc. This overproduction is caused by falling profitability. Falling profitability is a product of the failure of capital to compensate for the fall in the general rate of profit by increasing the volume of surplus value. Capital can only overcome its crisis of overproduction by increasing the rate of surplus value through the devaluation and even destruction of capital while pushing the price of labour power below its value. This has to be done on a scale large enough to increase the general rate of profit so that there is growth in total surplus value. Success here means that as the general rate of profit rises profitability starts to rise. Under these new conditions production of commodities begins to increase. Recovery sets in and the cycle gets underway leading to recovery, boom and bust which ultimately takes things back to the overproduction of capital again. The problem is located within the capitalist production process and not in the circulation process as Kieran implies. In order to bring to an end economic crises the production process must be transformed. This means that the capitalist production process must be abolished and replaced by a process of production liberated from value relations.

In an economic crash, when profitability has fallen, artificially increasing demand cannot solve the problem. Printing more paper money as a means of increasing consumer demand abjectly fails in an economic downswing. The result is merely inflation. The more paper that is injected into the economy the more inflation rises. Rising inflation means that real demand has not increased.

On the other hand if the government can freely borrow money as a means of making up for the budget deficit then the upshot is that crashes are supefluous. If this argument is correct then the conclusion is that not excessive credit, but the lack of it, is the cause of the current crash in Ireland. Borrowing, credit, is now the panacea for all economic ills. This being so capital need no longer be concerned over both rising wages and costs. Class struggle is thereby rendered unnecessary and the objective conditions necessary for communism cease to exist.

Economic recessions are a product of the inherently limited and contradictory nature of capitalism. It is this limitation that renders borrowing at will impossible. Such borrowing was undertaken during the "Celtic Tiger" period. We see the results of that economic experiment today -- stockpiles of houses, building materials, furniture household goods, cars and a large reserve army of unemployed workers. Along with bank and factory closures this is evidence of the overproduction of capital that Marx discussed in his work on political economy.

Overall to argue, as Kieran Allen and the SWP do, that a programme of increased state spending is the solution to the national debt crisis is a misrepresentation of reality. It is a bourgeois argument that suggests that the Irish state is progressive. Kieran is suggesting that the state (that, according to him, has been taken over by the corporations) can sort out and even, based on the logic of his position, prevent the emergence of crises in the national debt. Demands made by the Socialist Workers Party calling for increased state spending are (bourgeois) nationalist demands. They are demands that obstruct the struggle for social revolution. Kieran does not seem to understand that it was that very thing, increased state spending, that played a key part in the emergence of the massive current budget deficit. How can what was a source of the problem form part of the solution? Within the framework of capitalism the only solution to the budget deficit and the economic crash, as a whole, is one that entails the devaluation of capital and the pushing of the price of labour power below its value (this must include the devaluation of labour power as variable capital too). Essentially this is the only solution available under capitalism. This is why the Irish government has beeen pursuing harsh anti-working class policies. It is not because it is an evil Party that enjoys engaging in economic sadism. These left wing parties, such as the SWP and the SP, claim that there are pro-working class solutions available to the Irish state within a capitalist paradigm. In making such reactionary claims they are merely attempting to fool the working class. There are only two solutions: a capitalist or a communist solution.
Paddy Hackett

Wednesday, November 11, 2009

Can Ireland have a successful communist revolution?

It is not possible to achieve a communist society in Ireland through social revolution. This is because, if such a society were realized, it would be easily crushed by the imperialist states that surround it. A communist Ireland is sustainable only if communism has been realized in the UK and(or) Western Europe.

So any attempts to set up a revolutionary communist party in Ireland makes no sense. It is utopian to claim that in the Irish Republic the politics of social revolution are realisable and sustainable. Consequently soi disant Marxist groups such as the Socialist Workers Party and the Socialist Party are misleading elements within the working class by claiming that a workers republic can be established and consolidated within the 26 counties of Ireland. The setting up of a workers' republic would, every bit as much an Irish communist society, be duly crushed by the forces of imperialism encircling it. This would almost certainly lead to great human suffering including the loss of many Irish lives. In the light of this James Connolly was equally utopian when he fought for a thirty two county Irish workers' republic at the beginning of the 20th century.

The conclusion is that the promotion of Marxist politics in Ireland is a utopian project that misleads the Irish working class filling it with false optimism. Communism can only be an option for the Irish working class within the context of European social revolution that eventually involves world revolution. Generally speaking communism can only be universal in character.

The most that communists in Ireland can do is create a communist organization of intellectuals that contributes to the development of communist theory. In a large country like the UK or France it makes more sense to struggle to build a communist political party within the context of building an international communist political party. The working class of a powerful country like Britain, France or the USA has a much better chance of launching a communist revolution than the weak Irish working class. Revolutions from these individual countries can serve as the basis for the successful launching of social revolution in Ireland. Generally social revolution can never begin in a small weak country such as the Irish Republic.

We now have a situation where people like Kieran Allen present themselves on radio and TV effectively clamouring for a state-capitalist solution to the problem of the Irish debt crisis. Yet the Socialist Workers Party, of which Kieran is a member, have perennially criticized the character of the former Soviet Union because of its alleged state capitalist character. A state capitalist solution is a tautology for a national solution. There is essentially no difference between this SWP position and the ambiguous position being held by ICTU bosses Jack O Connor and David Begg. Indeed there is no significant difference between the position of the SWP, the Socialist Party, the ICTU and the Fianna Fail party in relation to state indebtedness. All want a capitalist solution within a national, thereby bourgeois, framework. Differences between the different parties are rooted in mere modifications as to how wealth is to be distributed. Modifications in wealth distribution fails to render change in class relations. None of the above elements want a revolution in the character of the production process --a communist solution. This is because there cannot be a communist solution to the debt crisis except within an international framework. In short the Irish working class need the revolutionary mobilisation of the British, French and German working class if the debt crisis is to be solved through revolution. In a sense the Iris debt crisis is a problem for the entire European working class. Other than that a capitalist solution is the only solution possible. Kieran Allen and Joe Higgins mislead the Irish citizenry when they claim to have a "socialist" alternative to the policies of Fianna Fail, Fine Gael and the Labour Party. Their differences only exist in a merely distributionist context. The nationalist policies of the SWP and the Socialist Party are not sustainable. Consequently the SWP and the Socialist Party are incapable of implementing bourgeois nationalist policies nor social revolution. The essential nature of their politics dooms them to political bankruptcy which is why their political character is inherently opportunist.

Tuesday, November 3, 2009

Does the Irish working class have the leadership it deserves?

There is a big problem facing the Irish working class.It is an ideological and cultural problem.The consciousness and culture of the working class is persistently bourgeois. It sees the capitalist system as the natural society. Consequently it sees all economic and social problems as solvable within the framework of capitalism.It has been under the illusion that it can have an indefinite affluent existence under capitalism.It cannot see that most of the problems that beset the working class are a product of the inherent limits of capitalism. It thinks problems can be solved outside of the need to engage in class struggle.Indeed much of the class don't even see themselves as forming part of a class.

This is why it supports bourgeois parties such as the Fianna Fail party, the Fine Gael party and the Labour Party and their satellites such as the Green Party and others.The political and social consciousness of the Irish working class is effectively bourgeois. Irish capitalism has a bourgeois working class. This is why too the Irish,dare I say, proletariat have a trade union leadership that collaborates with the government and the state in general. Indeed the Irish state is a neo-corporate state in which the labour organisations are integrated into the state. Given the way in which developments are proceeding there is no need for fascism. The growing authoritarian neo-corporate Irish state fortified by the EU does the job well enough for capitalism. No need for fascism.

The Cowan government has successfully made cut backs in the living standards of the working class on an unprecedented scale. Yet there has been little resistance from the workers. A few squeaks here and there --nothing significant. About a year later the "organised working class" looks like its going to mount mass pressure on the government.And even this was of a rather limited character.The demands,being made by the leadership of the planned protests and strikes, had a distinctly reformist ring to them. It must be remembered too that much of the working class is not even "organised" in unions.This appalling is a product of disillusionment with these bureaucratised labour organisations that,much of the time, collaborate with whatever government happens to be in power. It is also a result of the lack of political class consciousness of much of the working class.This is partly a result of the relatively generous welfare benefits and assistance that has been provided by the state.It is intended as a sop that keeps the class quiescent.Many working class families contain one or two young adults that are availing of these hand-outs by the state. Many of them have been obtaining handouts through fraud that render many of them relatively comfortable.But then you have others who have worked hard and obtain few,if any,of these handouts. Clearly they cannot feel much class solidarity for the scammers (lumpen elements) who have little or no interest in working class politics.

Many workers see the Fianna Fail government as incompetent and unscrupless.But Brian Cowan has been showing quite some leadership. He has succeeded in pushing through massive cuts in the living standards of the working class and only meeting with very marginal resistance. Generally speaking "moaning" on the Joe Duffy show is about as far as the resistance has gone. The Joe Duffy show is the modern substitute for popular resistance.Indeed the Cowan government succeeded in demobilising mass protests that were to be mounted over six months ago. He is trying it again by engaging in current talks with the trade union leadership. Don't they just luv when Brian calls them in to talk with him. How they suck up to him.

In short there is really nothing positive that can be said about the working class in the Irish Republic. It is bourgeois,egoistic and even reactionary.It has little interest in subversive politics and never really questions anything.It is not even religious. It is in many ways just nothing.It exists, in a sense, from the shoulders down.Formal education is just seen as a matter of getting a good job.

It is because of the impoverished character of the Irish working class that the radical left in Ireland is correspondingly so weak and impovershied. It is almost all cut from the same cloth --little diversity.
Paddy Hackett

Friday, October 9, 2009

Attack the state not its workers!

Attack the state not its workers!

The call from the agents of the bourgeoisie for further cuts in the pay of public employees as a means of solving the economic crisis on the grounds that they receive better pensions, pay and working conditions than the private sector is not valid.
The state extracts exchange value from the economy in the form of revenue through taxation. As revenue it is not capital but simply exchange value. It constitutes an unproductive deduction of value from the economy if it does not directly contribute to the creation of value. Now some of the tax revenue deducted from the economy is advanced by the state as capital. The state turns some of its revenue into capital by investing it in industry. In this way it makes a direct contribution to the production of surplus value. The part advanced as capital forms part of capitalism's valorisation process. This means that state capital is essentially no different from private capital. On the whole private capital has as its function the maximisation of surplus value.The special role that the state plays does not preclude the existence of state-run commodity producing companies. State run companies are driven by the profit motive too. They seek to produce surplus value at the expense of the working class. They use the exchange value obtained from taxation as capital to produce and sell commodities. This involves the state in the purchase of labour power for use in the production process. Surplus value is generated through the exploitation of labour power. In this way there is no essential difference between workers employed by the state who function as productive workers and the workers employed by private capital. Much of the labour power hired by the Irish state has been used in the valorisation process: CIE workers, ESB workers etc.

Much of the 'state's revenue is used to fund the standing army, the police the bureaucracy, social expenditure etc. While not directly participating in value creation, revenue used in this way supports the capitalist system and thereby the valorisation process. Revenue largely collected in the form of taxation by the state is required to pay for services that ultimately serve the interests of the capitalist class. The maintenance of transport in one way or another, the management of water and sewage, the education of the working class etc. Many of these services are necessary to provide the infrastructure necessary if capital is to function --if it is to sustain and develop itself. Workers need to be available and goods need to be transported and distributed. Otherwise the market for commodities, instead of expanding, contracts and even collapses. Apart from its oppressive role capitalist society would collapse if the state did not provide services, including social services, on the scale apppropriate to its needs. One of the contradictions of capital, as a private social form, is its inability to spontaneously provide public community outside the economic process itself. Hence the need for the political state.

State revenue that fails to contribute to the sustenance of capitalism such as excessive remuneration to the tops of the bureaucracy and other excess constitutes mere waste. It serves no useful purpose neither economically, ideologically nor culturally. Revenue that funds waste constitutes a useless deduction from the value created by a capitalist economy. It tends to put valorisation under greater pressure in the effort to counteract the law of the tendency of the rate of profit to fall. It is in capitalism's ultimate interest to prevent the growth of waste. However it is not always easy to identify waste. Because of its contradictory nature capitalist social relations tend to produce waste --even inordinate amounts of it.

The public sector is very diverse in terms of pension, pay and conditions of work. To lump the public sector workers together on the basis that they all share these conditions is invalid. Public employees range from porters to electronic engineers, architects, departmental secretaries, judges and generals. As to be expected under capitalism the pay and conditions of work between these different categories of state employees is very different.

Neither can the private sector be reduced to one entity for the purpose of comparing pensions, pay and working conditions between the state and non state employees. The non-state sector is even more diverse. Private employees can be employed by different kinds of employers under diverse conditions. Some capitalist may be extremely large, other less large and then others very small.

To make a distinction between public sector employees and private sector employees in terms of job security, pay and conditions of work is not acceptable. It is not valid to conclude that state employees have better job security, pay and conditions of work than the latter. There are employees in the private sector with much better job security, pay and conditions of work than in the public sector --senior managers and professionals such as engineers and marketing people. Furthermore they are two qualitatively distinct spheres and cannot be validly compared with each other.

It is constantly been claimed across the bourgeois mass media that state employees have better pensions, pay and conditions of work. But this is an unsupported simplification. Within individual companies these conditions are diverse. Senior management are not employed on the same basis as other employees. Along with this some companies based in Ireland have beeen affected more adversely by the depression than others. Some, if not many, of these companies pay relatively higher wages and provide better conditions of work. This is because they are relatively very capital intensive. Many of their employees would have spent most if not all of their adult life working for such companies. These employees have better conditions than many public employees. Many of these differences are due to the power of the market. The law of value can determine how workers are treated by employers. Given the market conditions it can suit oligopolies to provide their workers with relatively better pay and conditions of work than are found elsewhere. The private sector is a diverse sector. It consists of diverse branches of production. Indeed as with public sector employees many private sector employees are non-productive workers too. It consists of strong and weak enterprises and big and small. Conditions concerning pensions, pay and conditions are correspondingly diverse. Many private employees have better pensions, pay and working conditions than many public employees. Just because many private employees have lost their jobs and suffered pay reductions does not mean that all private employees are suffering the same fate. Many parts of the private sector are still cushioned from the more acute effects of the economic crisis. Yet there is no campaign calling for further pay reductions against employees in these sectors. The populist campaign leveled against public sector employees is a campaign grounded in irrationalist reactionary ideology.

The working class is constantly being bombarded with bourgeois propaganda. It is told that the state is living way beyond its means in its day-to-day spending. Therefore, it is concluded, that the state has to cutback on expenditure to keep the Irish economy solvent. The conclusion drawn is that by cutting back on pay as opposed to services the services can be maintained. Public workers are to
be forced to pay for the economic crisis. Many state and non state employees live within the same family or household. In many of these cases the non-state employees suffering income falls may indirectly adversely affect the state employees belonging to the same family or household. The reverse situation is also true. It is said that there is no choice but to make public workers pay for for the state deficit. But apologists for capitalism are not calling on the super-paid higly affluent public/private employees annually earning hundreds of thousands of Euros to pay for it. This tactic represents the thin end of the wedge. It constitutes part of a sustained attack on the working class as a whole. The target is the defeat of the entire working class. It is hoped that this approach will deal such a blow to the more organized section of the working class that it will lead to the implosion of the working class thereby rendering a general assault on the entire working class much easier to achieve.

The call from the agents of the bourgeoisie for further cuts in the pay of public employees as a means of solving the economic crisis on the grounds that they receive better pensions, pay and working conditions than the private sector is not valid. As I have indicated the private cannot be compared with the public because like is not being compared with like.The private sector consists of diverse enterprises: large and small capitalists; small retail outlets; non-capitalist farmers; sub-contractors; landlords; celebs; publicans; trade unions charities; political parties and artists. Many of the aforementioned are non-capitalist entrprises. Furthermore the heterogeneity of conditions of employment within the state sector makes such generalizations concerning pay determination invalid.

The world capitalist crisis that has hit Ireland is a result of the inherent limited nature of the capitalist mode of production. Capitalism of necessity produces crises. The only way to put an end to such crises is by eliminating capitalism and replacing it with a communist society. There are only two options facing the Irish working class. One is a solution to the crisis at the expense of the working class. The other is a social revolution at the expense of the capitalist class. Compromise is an impossibility. The workers have no choice but to choose one or the other. This choice will determine the character of the Irish economy for years into the future.

Paddy Hackett

Monday, October 5, 2009

Communism and the nationalisation of Irish banks

The nationalization of the banks of the economy of a country is basically a nationalist policy. Nationalism and the nationalization of the banks are one and the same. This is why the Eire Nua programme of Provisional Sinn Fein, if my memory serves me right, could happily call for the nationalization of the banks. It is not a revolutionary communist position.

Communists are internationalists and thereby support the socialization of the forces of production on a world basis. Consequently they don't support nationalist solutions to what are global problems. Nationalizing the banks is a policy that can be realised within the context of capitalism. It is not a communist policy. Bank nationalisation does not necessarily solve the problems of the working class. Banks may be nationalised and yet fail to meet the most basic and obvious needs of the working class. Nationalised banks can be just as ruthless and merciless in their relations with their working class clients as any private bank. There have been state companies that produce commodities yet fail miserably to show compassion towards the working class. This because, like all capitalist enterprises they are the subjects of the law of value.

Even with the nationalisation of the banking system the banks must still observe the laws of capitalism. Otherwise they go out of business. They cannot, simply because they are nationalised, transcend the law of value. Nationalised banking is sometimes the preferred policy of the bourgeoisie or at least sections of it. Even if nationalised banks are still involved with the money-form --with capital in the form of money. Likewise they they are subsumed under credit relations.The latter are inseparably based on the money relation.The money relation is based on the circulation of commodities and in particular the circulation of capital in the form of commodities. The circulation of commodity capital is in turn rooted in the valorisation process. This being so the banking system implies the capitalist reproduction process.

State banks under workers control is a paradox. Because of their very nature state banks can never be authentically under workers' control. It is like saying that capitalism can be under workers' control. If banks can be subjected to the democratic control of the working class then so too can capitalism. Then communism cannot be a historical necessity. Capital by its very nature precludes its subjection to the control of workers. Trotskyism, inspired by Trotsky's 1938 transitional programme, has made nationalisation under workers' control a important plank in its programme. The 1938 transitional programme attempts to go beyond the minimum/maximum programmatic framework. But the former is a flawed programme that merely reinforces confusion within the working class movement. There can be only be communist programmes. Communist programmes always make it clear that communism is the aim --not socialism. Communism necessarily entails a state-free classless society.

Communists can only logically promote communist social relations. Communists social relations by definition transcend the relations of capital: bank relations, money relations and of course value relations in general. Communist relations preclude the existence of banks and the exchange value they express. Communist relations constitute the antithesis to bank relations whether private or public. The former are directly visible relations while the later are relations of reification. Consequently commodities cannot exist under communism. Products cannot assume the form of commodities under communist relations. They are just products. Consequently money and banks are superfluous. Goods are produced and distributed according to the popular democratic decisions of the community.

Even some figures within Stalinism and Trotskyism are aware that any nationalisation of banks carried by the Irish government under current conditions is not nationalisation in the sense that Lenin and Trotsky would have meant. Some call it a phony nationalisation.Dan La Botz writing for Monthly Review says that

"Bank nationalizations in reality, however, have usually just been a stage in the boom-bust cycles of modern economies, a period when the state lends its strength to finance to see it through hard times, and once finance has recuperated, the state returns it to its private owners so they can continue to reap the benefits of wealth plus interest."

I shall end this piece with a quotation from Engels:

"But of late, since Bismarck went in for state ownership of industrial establishments, a kind of spurious socialism has arisen, degenerating now, and again, into something of flunkeyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic. Certainly, if the taking over by the state of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of socialism."

Paddy Hackett

Friday, September 4, 2009

NAMA or Nationalisation

For the working class the debate over whether to nationalize Irish banks or support NAMA is a false debate. It is a debate that has been whipped up by the bourgeois media and a substantial component of the bourgeois political establishment together with sections of the radical left. Neither NAMA nor nationalisation can serve the class interests of the working class. Either policy is essentially bourgeois in character. Consequently the debate is really a debate within the bourgeoisie as to what option best suits its class interests. Much of the Irish Left support nationalization. Some with the qualification of nationalization under workers' control. But such qualifications make little difference to the essential nature of the policy of nationalization as a bourgeois policy. Under capitalism the workers can never control the banks. It is a contradiction to suggest that banks can be controlled by the working class. By definition workers can never nationalise the banks under workers' control. They can only annihilate them by destroying capitalism without which banks cannot exist.

The planned march for the month of September against NAMA is an attempt to organize the working class around the wrong issues --an issue from which the working class have nothing ultimately to gain. It is similar to organising a march against the Fianna Fail party and for the Fine Gael party. The left that promotes this march are playing the working class right into the hands of capitalism by rallying the workers around an issue that is about the class interests of the bourgeoisie and thereby against the class interests of workers. There is a strategy afoot by People before Profits and the Socialist Party to misdirect the working class into a struggle against itself. The prospective NAMA march is just this. Mass marches should have been held months ago against the income levy --admittedly there was the odd isolated protest in the absence of the general active support from the trade union leadership as a whole. The ICTU and other elements within the labour movement successfully obstructed attempts to organise a mass strike and demonstration. This was a decisive piece of treachery. It has seriously weakened the working class struggle. There need to be rallies and other forms of mass activity against the cut back in the living standards of the working class. A gigantic rally is needed to express popular opposition to the forthcoming slash and burn budget. Protests, rallies and strikes need to be linked into each other to create a continuum of struggle culminating in mass opposition to the forthcoming budget. Slogans expressing the class interests of the working class are needed.

If old age pensioners can "successfully" organize against the abolition of the free medical cards for OAPs swiftly then the labour organizations can surely organize at least as swiftly against the income levy and many other class issues. So far the Irish state and its bourgeoisie have had an easy run. There has been minimal resistance to the crassly anti-working class policies of Fianna Fail and the Greens. If anything the bourgeois left have been at most fertilising the conditions for alternate capitalist parties gaining power -Fine Gael and Labour et al.

Paddy Hackett

Thursday, August 20, 2009

David McWilliams and Money

Sunday, 9 December 2007
David McWilliams and Money
by Paddy Hackett

David McWilliams: Far from committing too much money to public projects, (as
much of the typically predictable commentary suggested this morning), he
didn't commit enough. He told us he was going to be ambitious, but he
bottled it (against his political instincts).

Yesterday was the day to tell the cautious mandarins of the Department of
Finance where to go. It was time to borrow heavily. This is particularly
logical given his view that the housing recession will not spill over into
the real economy in any worrying way. If that is the case, than now is the
best time to borrow to fund desperately needed new infrastructure...

Paddy Hackett: David has repeatedly made claims that the national economy of
the Irish Republic will suffer a hard landing yet he appears to be ironically
claiming in this current piece of his that the choices made by the Minister for
Finance can make a difference to the future state of the economy --hard or
soft landing.

It is questionable as to whether the Government should have taken up the
slack, as David would have it, by borrowing money on a significantly larger
scale to pour into the economy for capital projects. At the moment it is not
clear as to what the condition of the world economy is. Furthermore even if
this were clear the world economy (including here the Irish economy) may not
have progressed along its cycle sufficiently to render appropriate a very
large injection of funds into the national economy. Timing is of the utmost
importance here. If the economic downturn is far from bottoming out then a
mega injection of capital may not create the conditions for recovery. Then
too there are the constraints that the European Commission may impose
on the small Irish economy.

Generally it is just not clear as to what is the current condition of the
world economy particularly its more powerful components (the US). How then
can it be said what kind of interventionism is appropriate by the Irish
state? Given the uncertainities prevailing the present budget was probably
the best action the Irish bourgeois state could take as a means of coping
with the current economic contraction.

If it was a matter of throwing copious volumes of money at the problem of
economic downturns, recessions and depressions then it would follow
that they need never, in effect, exist anywhere in the capitalist world. But
this cannot be since the nature of economic downturn has a deeper and
more complex cause located in the contradictory nature of the valorisation
process of capital itself.

Overall the coalition government has probably done, budgetwise, as best
a job as they could concerning the immediate present in expressing the
interests of the capitalist class and capitalism itself.

Paddy Hackett

Should the Irish banks be nationalised?

Many economic commentators call for the nationalization of Irish banks.
They claim that it will reduce costs to the state. It is suggested by some
commentators such as SIPTU's Manus O Riordan and Brian Lucey that Fianna
Fail's policy concerning the refusal to nationalise is ideologically driven.
This cannot be true especially given its history of past nationalisations
and its generally populist character. They miss a sigificant political
point. It is the Fianna Fail party's intention to maximise protection to the
developers and their allies, the Irish banks. This Fianna Fail hopes to
achieve by buying toxic assets at a higher price than is necessary. In this
way revenue will have been transferred from one section of the capitalist to
another --to the bankers and developers. The acute nature of the Irish
Republic's economic crisis is exposing the degree to which the existence of
the Fianna Fail party depended on the financial support of Irish property
developers. Fianna Fail cannot turn on the developers. To do so would be to
turn on itself. This, in a sense, is the basis for the Irish property bubble
and the Fianna Fail government's procrastination wirth regard to its

It must be also remembered that not all Irish developers are going to
ultimately suffer from the property market collapse. Many of the weaker
property developers will be squeezed out to the advantage of the stronger
capitalist developers. In this way they can increase their profits. Indeed
the present depression is all about the need to squeeze weaker capitalists
out of the system to the advantage of bigger ones. If there is not a social
revolution then there will be a consolidation of finance capital at the
expense of weaker capitalists and the working class.

If there is not a global revolution the working class are in for a hard
time. This is why I have written that things, in the wake of the current
depression, are never going to be the same again. The working class, to
defend its class interests, must strengthen itself organisationally and
politically against the consolidation of capitalism. The worker is going to
be made pay for the billions that Washington, London, Paris etc., have
recently injected into the financial sector to help slow down and arrest the
downturn. But this massive unprecedented injection of funds into the system
is merely going to create a new "bubble" that leads to a new collapse.
Capitalism is afraid to let the depression go its full course to thereby
cleanse the system because of the potential threat from the working class.
Indeed capitalism has become so contradictory that even a very deep downturn
may not save it from deep stagnation. The cyclical downturn is now no longer
sufficient as it would have been in the 19th century. Now capitalism needs
cyclical inter-imperialist wars.

Paddy Hackett

Saturday, July 25, 2009

Is "The Irish Economic Crash" Good?

A review of "Ireland's Economic Crash"

Paddy Hackett

Kieran Allen's recently published book is called Ireland's Economic Crash. It
is a book cobbled together from a variety of sources. The book has a
sprinkling of tables and graphs to lend it an authority it does not have.
Indeed the question of the reliability and accuracy of bourgeois statistics
is not even raised in the book notwithstanding the fact that there is much
use made of them. For instance he claims that "today manufacturing
represents just 13 per cent of the Irish workforce.". (Ireland's Economic
Crash; page 37) Kieran's statistics are drawn from a bourgeois source. What
these bourgeois statistics cannot tell us is that although the manufacturing
sector constitutes 13 per cent of the work force it has a very high
technical and organic composition of capital. This means that its labour
power is very highly exploited which means its contribution to the
Republican economy cannot be simply based on the size of its labour force.
INTEL located in the Irish Republic is probably a classic example of such a
highly productive corporation,

The services sector uncritically referred to by Kieran in the book a
frequent number of times is a rather ambiguous bourgeois category. This is
because many of the services are commodity producing sectors while other are
not. This means that many of these services are engaged directly in the
valorisation process and thereby are direct sources of value. This means
that their status is no different to that of the manufacturing sector. There
are other more obvious problems with Kieran's use of statistics which I shan't
go into now. But, en passant, I understand that John Fitzgerald is Garret
Fitzgerald's nephew and not his son as Kieran suggests. (ibid. page 126)

The principal underlying assumption in Kieran Allen's book is that there has
been a corporate takeover of Ireland. This thesis is elaborated in a
previous book of Kieran's called The Corporate takeover of Ireland (Irish
Academic Press; 2007).

Kieran's understanding of the nature of the corporation dominated state
stems from a false instrumentalist and voluntarist theory of the state.
According to this theory of the state because the various lobbies and
committees are dominated by personnel from the corporate sector because it
has more economic power than other interest groups such as farming and trade
union interest groups. In that way the minority interests of the corporate
capitalists are promoted more by the state. This means that to be effective
against the minority interests of the corporate capitalists it is necessary
for a radical left wing government to be supported by a mass
extra-parliamentary movement. This movement, Kieran would claim, would
counter the economic power of the corporate dominated lobbyists, committees
and whatever else.

However it is not correct to suggest, as Kieran does, that there has been a
corporate takeover of the Irish state because parts of that state are
dominated, even if increasingly, by significant members of corporations and
their satraps. Even though not correct concerning other matters, Nicos
Poulantzas was correct when he argued that the state can be capitalist
without the capitalist class having to act as the ruling political class.
The real situation is that the state is capitalist by virtue of the fact
that the state can only act within certain limits determined by the
capitalist mode of production. The state can only function if it has power
to raise taxes and command material resources. So long as the material
reproduction of society is the capitalist mode of production, this power
ultimately depends on the success of capitalist accumulation. If the state
persistently acts against the interests of capital then sooner or later the
conditions of capital accumulation will be undermined and the economy thrown
into crisis. The state, then, would find it increasingly difficult to secure
the material resources it needs to function. Insofar as society is
structured by the capitalist mode of production, the state is always
determined, in the last instance, by the need to sustain capitalist
accumulation. Yet within such structural limits there is always a large
degree of relative autonomy for state policy and political action

Now if capital in the form of corporate capital is the leading and dominant
form of capital it will come as no surprise that the state is determined, in
the last instance, by the need to sustain corporate capital. Yet within
these corporate structural limits there is always a large degree of relative
autonomy for state policy and political action. This provides a space
whereby the state may or may not bear corporate dominated committees within
itself. The upshot is that whether a state contains or does not contain
corporate or non-corporate dominated bodies is not necessarily conclusive
evidence as to whether there has been a corporate takeover of the state. The
personnel engaged in aspects of the state will depend more on the specific
conditions prevailing at any particular time. This means that even in the
absence of any corporate personnel occupying any state agencies the state
itself may have undergone a corporate takeover. Kieran, then, cannot use
corporate personnel as the criterion as to whether political states are
corporate or not. In short his position shares a lot in common with the
theory of State Monopoly Capitalism according to which there is said to be
close personal relations between the monopolies and the members of the
apparatus of the state. The state and the monopolies, it is thereby claimed,
are fused into a single system.

But the larger and more powerful section of corporate capital in Ireland is
foreign. This means, for Kieran, that corporate Ireland has been taken over
by foreign corporate capital. It is a claim suggesting that corporate
capitalism is generally more oppressive on the working class than
non-corporate capitalism. There is then progressive and non-progressive
capitalism and the politics that goes with it. Clearly Kieran and the SWP
want to be on the side of the little man, "the little progressive capitalist".
This had been Sinn Fein's position too until they decided to make British
imperialism its paramour. The SWP are catching up on Sinn Fein.

This can only mean that the Fianna Fail led government no longer represent
the class interests of the non-corporate Irish bourgeoisie. This is because
it is not possible for a corporate state to exclusively represent the
interests of corporate capitalism while serving the interests of
non-corporate capital. Since this corporate state cannot by definition
represent the class interests of the Irish working class the conditions for
an alliance between the non-corporate capitalist class and working class now
exists. Such an alliance can only but be nationalist in character. But
nationalism and communism share nothing in common. This being so Ireland's
Economic Crash is a nationalist work sharing nothing in common with

When it comes to Kieran's use of Marx's work on political economy we are
subjected to conceptual and analytical distortion of Marx's thought. Kieran
claims that ".this is a systemic crisis which arose from a search for higher
rates of profit. Those pressures led to over-production and a speculative
wave of madness in the financial sector, so even if the system revives
again, the same pressures will re-emerge in the future." (ibid. page 157)

But the above is just not true. It is only when the total amount of surplus
value produced fails to compensate for the falling general rate of profit
that an economic crisis breaks out. This is of significance in relation to
outlining the character of the crisis. The falling rate of profit then does
not necessarily spell economic stagnation or crisis. Instead it means the
relentless drive of capitalism towards more and more accumulation of
capital. This is the hidden dynamic that leads to enormous economic
development. It is only when the amount of surplus value produced fails to
make up for the fall in the general rate of profit that the expanding
accumulation starts to breakdown. Incidentally Kieran in his book concludes
that the possible current crisis is unique because it hit's the core of the
global system. But all economic crisis hit the core of the global system. It
is just that that make them economic crises.

Then there is Kieran's under-consumptionist ideology. Underconsumptionism is
the ideology of reformist politics. It falsely suggests that capitalism is
potentially capable of serving the interests of the people.

"The more people loose their jobs, the less money there is to buy goods
produced by other workers. A government that actively intervened could
alleviate this suffering by stepping in where private businesses are
unwilling.The whole economy has entered a downward spiral because of the
cuts, levies and sackings." (ibid. pages 7 and 8)

"But the more they succeed, the more they reduce the buying power of workers
and feed into the problem of over-production. And when profit rates are only
partially restored, this can also lead to reluctance by capitalists to
invest in new plant and equipment. The slowing of investment then lead to
"excess savings" and this, too, feeds into the wider problem of reduced
markets for others" (ibid.page 97)

For him taking demand out of the economy by cutting wages further reinforces
economic decline. Now the logic of this false position is that if, on the
other hand, wages are increased sufficiently demand can be raised to such a
degree that they precludes the outbreak of recession. Underconsumptionism
and reformism are inseparably related to each other. Much of the leadership
of the current trade union movement in Ireland is underconsumptionist in its
conception of solutions to unemployment, economic crises or . So Kieran will
not be lost for company. Underconsumptionism suggests that capital can be
gradually reformed by incrementally increasing demand through wage increases
and expansion of social spending beneficial to the working class and "the
underclass". But capitalism cannot be reformed into a system that serves the
class interests of the working class. It is an historically limited
obsolescent social system that must be replaced by communist society if the
needs of humanity are to be minimally met.

It is asserted in his book that because of this falling rate of profit
capitalism must generate a bubble sequence as compensation: "As economic
performance has declined, the system has needed periodic bubbles to add
vitality and growth. From the 1990s onwards, these bubbles played an
increasingly important and disruptive role. There was a stock market bubble
and then a dot com bubble when absurd prices were paid for internet firms."
(ibid page 89)

But Kieran never shows how these bubbles are a product of falling profit
rates. To at least render his unfounded assertion plausible an outline as to
how they occur is required. "As economic performance has declined, the
system has needed periodic bubbles to add vitality and growth." Then if this
is the case capitalism has found a solution to its problems. There is
nothing for capitalism to do but produce continuous bubbles since these
buttress up the system. If these bubbles have been adding vitality and
growth then how can they inevitably burst. If, as Kieran is, an
underconsumptionist then increasing demand through state action should
indefinitely sustain non-collapsible bubbles. But then they are not bubbles.

Kieran informs us that neo-liberalism has failed. Indeed the title of one of
his chapter is called The failure of Neo-Liberalism. "Today this whole
edifice is in tatters, as neo-liberals recant and proclaim themselves
converts to regulation." (ibid. page 71) But one could as much say that
Keynesianism has failed or classicalism has failed. One could say too that
capitalism has failed because of the outbreak of depressions and even large
scale wars. But again this is to misunderstand the nature of the capitalist
system of reproduction. It is through the medium of periodic economic
depressions, and even wars, that capitalism perpetuates itself. Without
recessions or depressions there can be no economic development under
capitalism. Neo-liberalism is merely another form in the history of
capitalism irrespective of its existence as an imperialist ideology.
Capitalist production organised in the form of corporations is just another
aspect of capitalism's economic history. Neo-liberalism or globalisation
never meant the end of depressions. Indeed the present economic depression,
if there is no social revolution, will lead to the consolidation of
neo-liberalism. Those reformist ideologues repeatedly declaring that
neo-liberalism is at an end completely misrepresent the character of
contemporary events.

According to Kieran "it is no longer possible to draw a neat dividing line
between financial speculators and the wider capitalist class. The division
between finance capital and industrial capital broke down a long time ago
and now all corporations engage in 'financial engineering'." (p. 87)

Kieran is falsely suggesting in the above quoted comments that financial and
industrial capital are inseparably integrated with each other. If his claim
was correct then General Motors which has its own financial arm would not be
experiencing acute financial and sales problems. Indeed if finance and
industry were integrated into a unity there would have been no financial nor
general economic crisis.

Again his ignorance of Marx's Capital is demonstrated here. Within the
system as a whole there is a necessary distinction between industrial and
financial capital. Each form pays a distinctly different function within the
economic system. The former is located within the production process while
the latter is located in the circulation process. It is the very distinction
between these two forms within the general unity of the system that renders
economic crises possible.

Towards the end of the book we are presented with the 9-Step programme for
change. The wording may be apt to remind readers of AA's 12 -Step Programme
to alcoholic recovery. In this chapter Kieran wants to have his cake and eat
it. He wants to support revolution and yet support nine major demands that,
he indicates, are realisable under capitalism. If such an 9-Step Programme
is realisable under capitalism then the entire justification for communism
collapses. Either the class interests of the working class can be realised
under capitalism or not. They cannot as Kieran seems to believe sort of be
realisable under contemporary conditions.

Kieran's nine steps to reform is a nationalist opportunist plan. Given the
growing global nature of capitalism today a national plan cannot solve the
economic depression that has engulfed Ireland. The solution to the economic
crisis that has ripped through the Irish economy must be global in character
either from the perspective of capitalism or communism. It is not possible
to introduce a national plan, such as Kieran's, as a solution to Irish
economic problems. Given that the Irish economy is merely a minuscule
component of the world capitalist system radical solutions within a national
framework cannot be realised. There must be a global challenge to capital
from the world's working class. This means that workers in Ireland must
struggle for a united communist federation of England, Scotland, Wales and
Ireland as a platform for the global communist revolution. Despite the
fundamental weakness of the politics of Trotsky he was spot on when he made
the following remarks:

"The forces of production which capitalism has evolved have outgrown the
limits of nation and state. The national state, the present political form,
is too narrow for the exploitation of these productive forces. The natural
tendency of our economic system, therefore, is to seek to break through the
state boundaries. The whole globe, the land and the sea, the surface as well
as the anterior has become one economic workshop, the different parts of
which are inseparably connected with each other. This work was accomplished
by capitalism. But in accomplishing it the capitalist states were led to
struggle for the subjection of the world-embracing economic system to the
profit interests of the bourgeoisie of each country. What the politics of
imperialism has demonstrated more than anything else is that the old
national state was created in the revolutions and the wars of 1789-1815,
1848-1859, 1864-1866, and 1870 has outlived itself, and is now an
intolerable hindrance to economic development." (Leon Trotsky. The War and
the International ; Author's Preface vii)

Nation states promoted the development of capitalism in the past and
constituted the framework, in a sense, for the solution to economic and even
social problems. Today the nation state is an obsolescent political form
that reinforces economic problems while obstructing their solution. The
solution to the present general crisis of capitalism can only be solved
globally whether on the basis of capitalism or communism.

To finish: Kieran Allen's book exposes the opportunism of his politics and
that of the SWM of which he is a leading member. It is an obscurantist book
in which he likes to have things both ways. This allows him to be a winner
irrespective of what side wins. He advances a plan of action which he
suggests is realisable under capitalism while at the same time he seems to
mildly suggest that it may not be quite realisable under capitalism. He
claims that neoliberalism has failed while hinting that it has worked. His
aims are thereby rendered ambiguous which confuses workers rather than help
provide them with clarity. He follows the same approach in his economic
analysis. He claims at one moment that the falling rate of profit is the
cause of the crisis and then at another time hints that some other factor.
At another point he bellows out that a tiny minority of bankers, developers
builders and the Irish government are responsible for the latest crash while
he contradictorily hints that other factors may have played a role. Although
his book is a source of great confusion it is clear too that Kieran may
himself be the unfortunate victim of great confusion. In his book Kieran is
all over the place making it difficult to pin down what it is he is really

Paddy Hackett

Monday, June 8, 2009

Do taxpayers own tax revenue?

Do taxpayers own the revenue from taxation
By Paddy Hackett

We are constantly bombarded with the sound byte -- "taxpayers money". This
contains the assumption that the revenue collected by the capitalist state
in the form of taxation is the money of taxpayers. This obviously implies
that the taxpayer in some way owns this money. In the first place the
taxpayer is a category that can include all classes since each of the social
classes pays taxes. This constitutes an attempt to suggest that there
obtains a deep unity between the classes. Assuming that this basis exists
then there is only a short way to go towards politically creating an all
class alliance.

But the point is that state revenue in the form of taxation is just
that --state revenue. It is revenue owned and controllled by the state. It
is not the revenue of the taxpayers. This is why the expression "taxpayers
money" is so misleading in the struggle against capitalism. It misrepresents
the class interests of the working class and seeks to subordinate those
interests to that of the capitalist class in an all class alliance. The
point is that taxation is extracted from the working class by the force of
the state. The working class have no choice in the matter within the context
of capitalism. The working class has only choice with the context of an
alternative --the alternative between capitalism and communism. This means
that the workers, to challenge this imposition of tax on it, must mount an
attack on the political state as part of an integral programme to attack and
detroy capitalism.

Paddy Hackett

Wednesday, March 25, 2009

Ireland and Economic Depression

Ireland and Economic Depression
Paddy Hackett

The world capitalist economy has plunged into a sustained economic depression. The signs are that this depression shall be deep and prolonged. The principal way by which capitalism can come out of the depression is by reducing both the living standards and employment conditions of the working class. The only other solution is social revolution involving the seizure of power by the working class from the capitalist class necessitating the establishment of a world communist federation. Because of the peculiarities of the Irish situation: booms powered by bubbles and a Fianna Fail dominated government that instead of storing up its surplus revenue, in anticipation of future contingencies, largely squandered it. These funds were largely used to bribe the electorate into voting the Fianna Fail party back into power. It was also used to support its capitalist friends such as Irish property developers and bankers.

Since the outset of the depression the same Irish government has been engaged in a sustained attack on the working class. It endeavours to achieve this by splitting the working class --pitting worker against worker. By maximising the fragmentation of the working class it is rendered more vulnerable to a crushing defeat. Immigrant workers are split from indigenous workers; public workers from private workers; female workers from male workers; unskilled workers from skilled workers etc. In its current attack the government has singled out the public sector workers. To achieve a cutback in the income of these workers it has actively led a sustained campaign against them entailing the polarisation of pubic and private worker. This is the basis from which it has imposed a substantial pension levy on the public worker. Success here will render it easier for the state to reinforce this cutback with follow up cutbacks in the incomes of the entire working class. Its declared intention of widening and further increasing income tax within the next month is irrefutable evidence of this. The government also hopes to continue the reorganisation of the public sector work force. "An Bord Snip" with its mandate to focus on slashing employee numbers and spending within the public service forms part of this plan. The consequent reorganisation and diminution of the public service will lead to a weaker and harder pressed workforce. It is hoped to ultimately reduce the public service worker more or less to the same condition as that of the average factory or shop worker. Then capitalism will have a cheaper and more docile workforce. The European bourgeoisie is watching this conflict with keen interest. Cowan will be Europe’s new hero should he succeed in defeating the public sector workers and indeed the working class in Ireland as a whole. His success may provide them with encouragement to attempt to impose similar conditions on their own public sector. The present struggle in Ireland is not just a local matter. It also has a European dimension that may influence events in the European Union.

In view of this it is imperative that the working class meet this capitalist onslaught, led by its state, with stiff resistance and the correct politics. Working class action must involve strikes culminating in the general strike together with the setting up of workers' councils for the organisation and administration of economic, social and political life. In the struggle the conservative unions must be replaced by communist unions. In connection with this communists must struggle to set up workplace committees as a means of organising against the bosses and the leadership of the conservative trade unions. In solidarity with the working class in Ireland the European working class must strenuously resist their own ruling class too in the struggle for power.

The government has been actively encouraging the mass immigration of workers into the Irish Republic on an unprecedented scale. This is but a further way of promoting more division within the working class. Immigration is a social engineering device intended to drive down the price of labour power through competition. It is also intended to hinder the prospects of the working class in Ireland evolving into a unified revolutionary class force. The working class based in Ireland must overcome this division by endeavouring to create unity among migrant and indigenous sections of the working class in Ireland on a principled revolutionary basis.

None of the political elements represented in the Oireachtas can offer a solution other than essentially the same solution as that of the Fianna Fail Party. They are each bourgeois in character including the Labour Party, the Green Party and Sinn Fein. They simply attempt to dress the same solution up in different clothes. They all actively support a solution to the capitalist crisis at the expense of the working class. The leader of the Labour Party, Eamon Gilmore, has expressed his opposition to strike action and does not reject a pension levy in principle. Neither is he, in principle, against increased taxation being imposed on the working class. He merely calls for “fairness” in taxation. The Labour Party and Fine Gael claim that cutbacks in the living standards of the working class are necessary and correct. Their difficulty with Fianna Fail is their alleged lack of fairness together with the unscrupulous way in which they are imposed. The opposition of Fine Gael and Labour hinges on matters of ethics. Fine Gael and Labour like to present themselves as corruption free in contrast to Fianna Fail. They oppose the form as opposed to the substance of Fianna Fail's politics. They thereby present a false opposition since ethically there can be no essential difference between the parties. If Fine Gael and Labour were in power as much as Fianna Fail they would exude just as strong a smell as the latter. Again this is a rather derivative difference of no real significance. In effect the main party in power and the opposition are similar. Consequently the Dail opposition concentrates its opposition largely around matters of corruption, ethics and competence. These constitute matters of secondary importance that obstruct the healthy development of class politics.

The voluntary reduction of salaries of high profile figures from the business and media world is merely a ploy designed to exert further pressure on the working class to accept living standards.

The growing army of the unemployed means that the production of surplus value, total profits, has diminished. This means that fewer resources exist from which to pay for state expenditure. This forces the state to cut spending, increase taxes and borrowing. Borrowing is a form of future taxation with a difference. Interest must be paid which amounts to an addition to future taxation. This constitutes a further deduction from total profits which further adversely affects investment conditions. This tends to bring about a downwards spiral. Consequently the Irish economy is forced to further contract in order to reproduce the conditions for recovery. Spending cuts, taxation and borrowing must be further increased.

The present depression is a result of the bourgeoisie's refusal to let the economic system follow its "natural" cyclical downswing whereby capitalism cleanses itself of less profitable forms of capital. This leads to a restoration of profitability and greater sustained economic activity. Instead the capitalist class through the medium of its state modified the downswings through counter-cyclical interventionist activity. The ruling class fear a generalised depression because its destabilising consequences may lead to revolution. In general the more the cyclical behaviour of capitalism is modified and prevented from completing its "natural" cycle the greater, more intense the crisis. The evidence suggests that the capitalist social system has plunged into depression. No amount of state intervention can prevent it from assuming an acute form this time round. We have now entered a new historical epoch. Politics can never be the same again. Under these new conditions of sustained and deep stagnation the class struggle sharpens. Consequently capitalism's obsolescent character becomes increasingly visible and thereby the need to abolish it.

At present the leadership of the working class (trade union and political leadership) has been offering solutions intended to rescue capitalism from its demise. Capitalism can only be rescued at the expense of the working class. There exist no significant political forces advocating a solution necessitating the transcendence of capitalism. Communists must endeavour to create a communist current within the working class. This can begin by organising circles of communist intellectuals. Such a communist intelligentsia conducts an intellectual struggle to propagate communist doctrine. As this intelligentsia develops and spreads its influence it has the basis for linking into the more advanced sections of the working class to form a communist strand within the working class. This is the basis on which a revolutionary communist movement can be built.

Under the present critical conditions a communist movement would draw up an action plan as the basis for struggle against this sustained attack on the working class.

Economic Depression and Fianna Fail

Economic Depression and Fianna Fail
Paddy Hackett

The following is my opinion:The Fianna Fail party has a strategy. It is my opinion that Brian Cowan, as Taoiseach, is being increasingly viewed by the Fianna Fail Party as a transitory leader of the Party. The Party will sacrifice him to save its skin. He will be saddled, so it hopes, with all the blame concerning the harsh decisions that are currently being made by the Fianna Fail led government. Consequently, in true Stalinist fashion, he will be eventually sacrificed to "the masses" to save the Party.

When he has done the “dirty work” he will be shouldered with the blame for Fianna Fail’s lack of popularity. He will then be replaced by a new and “shining” leader. Since many of the nasty decisions will have already been taken by Cowan, the new leader will appear as free from such blame --a smiling and kinder figure –a people’s person.

It is hoped in this way that any popular support lost by the party will be recovered as a result of the election of its new leader. The mass media will give her/him the customary honeymoon period. In this way it is hoped that the party will win the next general election. Fianna Fail hopes to be able to claim too that it saved the nation from collapse under very adverse global economic conditions. In this way Cowan, as a figure from Greek tragedy, will have fallen on his own sword. The Party, by distancing itself from Brian Cowan, will have saved the day by exclusively holding Cowan responsible for having imposed harsh policies on the working class.

There is no better party than Fianna Fail to successfully appeal to patriotism as a device for rallying the Irish people behind it.Paddy Hackett

Money Printing

Money Pumping
Paddy Hackett

“It is crucial now that the world - and Ireland- creates inflation, not deflation. If we haven’t the stomach to print money(which would be by far the easiest exit route), we need to turn on the taps through government borrowing” (This Is Not The Time ToPanic by David McWilliams: Sunday Business Post 15th March, 2009)

In his comments on current economic conditions David McWilliams suggests that under the present economic downswing the Irish state can liberally borrow funds to compensate for the steep fall-off in revenue from taxation. It also suggests that this wholesale borrowing will largely relieve the Irish economy of the problems it has been experiencing as a result of the economic downturn. He also claims that this mass borrowing will prepare the Irish economy for taking advantage of the pickup in the global economywhen it comes.

David is a victim of the illusory way in which capitalismpresents itself. He seems to think that the Irish economy can essentiallyavoid the effects of the global economic downturn by borrowing. If this is the case then there need never be recessions since economies can merely borrow their way out of them. Borrowing thenis the the agency that prevents economic recession. But it is just this borrowing that has largely helped turn boom into bubble withits current deflation. The very borrowing of the banks and privatecompanies in Ireland and elsewhere was a factor in intensifyingthe economic conditions that created speculative practices. It is only at a particular stage in the downswing that the injection of cash into the economy can precipitate recovery. At this stage the economic slump has effectively bottomed outrendering it ready for take off. If it was as easy as David suggests there would never be recessions and there would be no need toabolish capitalism and replace it with communism.

Little Confidence left in the Unions

Little confidence left in the Unions
Paddy Hackett

The rejection of strike action by the membership of IMPACT is a reflection of at least one thing.The action was voted down because many of its members are unhappy witht the way in which the IMPACT official leadership and the official leadership of the trade union movement as a whole is leading its membership. There is little confidence in the existing union leadership. The character of the trade union leadership is such as to obstruct the working class in the struggle to defend living standards. They have failed miserably to effectively engage in the propaganda war against the working class. Trade union representatives hardly exploit the media to get the correct message across. Consequently they let diverse opposition elemeents take over tv, radio and print. Just listen to the Joe Duffy show to get a evidence of this.Leading up to the big march in Dublin the ICTU had hardly did much to actively publicise and encourage attendance at the march. They prefer to engage in secret talks with government and employer representatives concerning so called social partnership. Social partnership is merely a means to restrain wages and force workers to work more intensively. The union leadership has been deliberately damping down opposition against the government in the hope that it will reward them with a privately negotiated deal to effectively betray workers.Neither Fianna Fail, the Green Party, Fine Gael nor The Labour Party are against making workers pay for the economic depression. Each only differ as to how to make them pay. Even the trade union leadership is not against the imposition of taxes on workers nor cuts in wages. They merely call for fairness. But "fairness" means nothing. It is merely a word designed to fool the workers into accepting cuts in living standards.The working class needs to break with the union leadership replacing it with a leadership that advances its class interests.Paddy Hackett

The Colonisation of Sinn Fein/IRA

The Colonisation of Sinn Fein/IRA
Paddy Hackett

Contrary to what Kieran Allen claims in his article, The Death of Radical Republicanism, the conflict within the six counties of Ireland led to the strengthening rather than the weakening of the Northern state. It was the ongoing strengthening of the six county state that shaped the conditions facilitating the making of The Good Friday Agreement (The Sunningdale Agreement dusted down). The IRA bombing campaign provided the reactionary environment for the promotion of the growing strength of the six countystate. The Orange state, an integral part of the British state, constituteda decisive obstacle standing in the way of the radicalisation of the massesin the North, in Ireland and Britain itself. The Provos played a key role incontributing to the fortification of that very obstacle. Instead of helpingto shrink and abolish it, the Provos helped make it stronger. In generaltheir theory, programme, strategy and tactics strengthened the six countystatelet, the 26 county state and the and the British state itself. Had theNorth/ South talks between Lemass and O Neill been free to proceed in theearly seventies, who knows, there may by now exist an independent 32 countydemocratic Irish republic. It has been the very strengthening of thenorthern state, as an integral part of the UK state, that has facilitatedthe reaching of The Good Friday Agreement and prevention of theestablishment of a formally independent 32 county Irish Republic. In thatsense the politics of the Provos promoted the sustenance of the Orange statewhile preventing the evolution of a 32 county bourgeois democratic republic.The strengthening of the two states North and South of the border renderedthe emergence of a formally independent 32 county democratic Republicimpossible. The result was victory for British Imperialism over the nativeIrish bourgeoisie. The IRA had become so weak in relation to British imperialism's six county state that it had no alternative but to surrenderin the form of TGFA. The Good Friday Agreement constitutes a definitivedefeat for the Provos. The only distinction between Trimble and Paisley isthat the latter was able to extract the maximum terms of surrender from theProvos. What was a defeat for the Provos has been paraded as their victory.The Provo movement had become so weakened and demoralised that McGuinnessand Adams were able, with ease, to win the vast bulk of its rank and fileover to a position of surrender. Indeed the Provos had become so weakenedthat the British ruling class itself had turned the Provos into a colonyserving the class interests of imperialism.What was imperialism's (the British state's) strategy for surrender of theProvos was presented as the IRA's brainchild (TGFA). Indeed so much had the colonisation of the IRA by the British ruling class progressed that it was increasingly difficult to ascertain whether significant elements in the leadership ofthe IRA were agents of British intelligence. The Donaldson affair is an indicator ofthis.There is an entire history here that has yet to be made public. Indeed thehistory of the Provos is the history of its take-over by the British state. Her majesty's Sinn Fein/IRA has been transformed from a petit bourgeois republican movement to a reactionary bourgeois party.Incidentally I was once a very active member of Sinn Fein who believed SinnFein could be turned into a Marxist party. However my experience of therepublican movement and growing political consciousness taught me that thiscould never be. There were others, within Sinn Fein at the time, who hadentertained a similar utopianism.

Terrorism and Leftism

Terrorism and Leftism
Paddy Hackett

The prevalent view within left liberal to radical left circles is that the Mujahadeen and later the Taliban including Bin Laden are a product of the CIA, Pakistani ISI and Saudia Arabia. These facts are used to morally discredit Washington and its so called war against terrorism. They also suggest that a large scale intensive war involving bombing will do more harm than good. It will, they argue, lead to further terrorism and even increase regional and perhaps even global instability. They claim that the civilian population will suffer most --thousands to die from bombs, guns, starvation and disease. They argue that instead of seeking revenge through mass terror Washington should seek to identify the conditions that determine terrorism. Washington, they say, must learn that its foreign policy is the source of this terrorism. By eliminating these conditions they eliminate terrorism and many other problems.The above leftist/liberal conception constitutes a rather utopian notion of capitalism. It suggests that imperialism can adopt a rational procedure that will lead to the elimination of terrorism within capitalist society. Such is an anti-communist position. It is clear that if it is possible, under capitalism, to eliminate the conditions that breed terrorism then communism is superfluous and not a historical necessity. It also implies that terrorism is a problem for capitalism and that it will benefit from terrorism's demise.This utopian perception also suggests that the issue of terrorism is a moral question as opposed to a political question --a class question. It is a perception that tacitly suggests that US imperialism's war against terrorism is morally questionable given that it created the very terrorist leader, Bin Laden, it now wants to eliminate.This argument of liberal and left intellectuals ignores the significant fact that the spurious war against terrorism is merely a hegemonic figleaf for imperialism's attempt to enhance itself geopolitically in its relentless struggle to both defend and advance its class interests. The latter is the essential morality underlying its policies.
In other words it possesses no real concerns over the morality of terrorism. It merely deploys moral ideology as a means of disguising its real aims and the politics that flow from them. It will create an Osama Bin Laden today and eliminate one tomorrow. Its actions merely exist in the context of money relations --the maximisation of profit. It exploits Sebtember 11th within the same (monetary) context. It cares no more nor less about the conduct of a Bin Laden than it does about this or that fireman killed in the collapse of the WTC skyscraper. Each is viewed within the perspective of exploitation, profit and its geopolitical conditions.Capitalism, as a system of exploitation and oppression, inevitably produces the conditions that lead to terrorism. Consequently to eliminate the conditions that breed terrorism is to eliminate capitalism. Capitalism is the condition that leads to terrorism. Capitalism cannot eliminate itself.Since it will not eliminate itself it is left with no alternative but the use of force in its attempt to eliminate terrorism. Its use of force is somewhat successful in containing terrorism. If it were not Washignton would not use it.Clearly its limited success has a contradictory character. While it contains terrorism it also breeds it. The genesis of Taliban constitutes the concentrated essence of that contradiction. While capitalism wilfully created the Taliban it now seeks to contain it and even crush it. Even if it succeeds in this it will need future Talibans of one sort or another. A similar situation can repeat itself again. This is in the nature of capitalism. Capitalism both creates and destroys terrorism. This is capitalism inherently contradictory character --its albatross.The crucial point is that terrorism is not essentially a problem for capitalism. Capitalism produces terrorism because it needs it. Its validity is viewed within a functionalist logic -- this is its morality. Capitalism, in itself, is not concerned if terrorism is responsible for the deaths of over 6000 people in the US. Indeed sometimes it exploits such atrocities. These deceased mean no more to it than the deaths of a similar number in any third world country. This is why the argument from the liberal/left intelligentsia that a US worker has more value than a third world worker is false. To capitalism one is of no more significance than the other --their significance is their insignificance. Capitalism is only concerned about them from the standpoint of its exploitation of their labour power. Any stronger response by the US bourgeoisie concerning US deaths is merely an appearance designed to deceive in the interests of maintaining and increasing its exploitation and oppression of the world working class.Capitalism needs terrorism to obstruct the development of a communist working class that can effectively challenge and overthrow capitalist relations. Terrorism is an expression of the absence of communism within the working class. As communism grows within the working class terrorism will tend to correspondingly diminishes. However under conditions of a growing communist movement the bourgeoisie deliberately fosters terrorism as a device to disarm and undermine the growing communist movement. Consequently Bush's declaration of war on terrorism is a war that he cannot and does not want to win. If anything what Washington seeks is the control of terrorism in the interests of capital. His politics has been the protection of Washington regulatated terrorism by attacking terrorism antagonistic to his imperialist interests.To conclude: The only way terrorism can be eliminated is by replacing capitalist social relations with communist ones. This means social revolution. I care about the thousands of workers killed and injured in Afghanistan and Manhattan. This is why I am a communist.

The State and Capital

The State and Capital
Paddy Hackett

There is a tendency to divorce the capitalist state from the economic system that corresponds to it. Although there may appear to be justification for this as a theoretical device it can only be justified in a very qualified sense. The point is that it is a false abstraction to create such a theoretical divorce on the whole and especially ideological to create such a divorce inside social reality itself.Although Marx produced a critique of political economy based on value relations capital has never existed independently of the political state whether that state had an absolutist, liberal democratic or fascist form. It is impossible for capital to exist in any serious way independently of the state. Consequently we cannot justifiably discuss and succeed in understanding both the real nature of the state and capital independently of each other --the one cannot exist without the other. This being so the wage worker can be analysed in the context of the contradictory unity of citizen and wage worker.The legal relations assume the existence of the state. The exchange between labour power and variable capital is impossible outside a legal framework. This same legal framework is indispensable for the operation of the laws of capital. Consequently the operation of the law of value under capitalism presupposes the existence of the state. This being so it makes no sense to analyse either capital or the state independently of each other. To produce an analysis of the state on a stand alone basis make no sense and simply misrepresents both the real nature of the state and indeed capital itself.This being so any attempt to promote the view, neo-conservatism, that market relations can serve as regulator in the distribution of wealth makes no sense. If the law of value, as is commonly believed by many Marxists, is the regulator of the reproduction of wealth then the need for a state is superfluous and at best merely supplementary --a mere luxury. The operation of the law of value cannot be explained outside the context of the state. The problem is that communism has not been able to achieve an analysis or critique of the state in the context of the contradictory unity between capital and state. Probably the nearest thing to it has been Marx --Lenin here, we can completely ignore. The latter added nothing new to Marx/Engels understanding of the state and indeed virtually ignored its contradictory relation to the laws of capital.The law of value means that commodities must sell at their values. In the absence of a state and its legal system this law could not exist in any real sense. In the absence of a state the use values in question would never become commodities since the sellers, if anything, would have their products stolen at gun or sword point. Similarly under modern capitalism in the absence of a state the supermarkets would not be able to sell at market prices since the potential buyers would simply liberate the goods from the supermarkets. In short the equalisation of the rate of profit would be inapplicable. Consequently the law of value in the form of the laws of capital could not exist and neither too could capital. Without the state capitalism could be. Indeed, except for the opprobrium with which the term is associated, it might be incorrect to describe all capitalist societies as state capitalism.Instead of the laws of capital anarchy would obtain whereby society would reduce itself to one of perpetual conflict between different elements within the population.This being so it is incorrect to suggest that industrial capitalism emerged as a result of the development of commodity production. To posit economic history in this way is to suggest that economic development and transformation is a history that takes place essentially within the framework of economics. The decisive point is that the development of commodity circulation proceeds within the indispensable context of the state. Implicit then in the development of capitalism and the operation of its laws is the existence of the legal system underlined by state force. Implicit in capital is force and violence. Capital contains within itself violence. It is this aspect of capital that is omitted from analysis of capital through the confining of analysis to the context of economics and even political economy. Political economy is a bourgeois category that mystifies the relation in capital that implies violence. Political economy is a bourgeois mystifying category. It is the traditional position of Marxism to invest the category political economy with an objective scientific neutral category. Lets remember that Marx's Capital was intended as a critique of political economy. The bourgeois category political economy must be critiqued. As I indicated there has been traditionally a tendency to assume, despite Marx's Capital, that political economy is a neutral category and that the problem is the specific form of political economy (Ricardo, Malthus etc.). What is ignored is that Marx's Capital was not political economy but a critique of it as, perhaps, an ideology. The category political as are the categories value, commodity, capital, prices etc are reifications.What is particularly ignored is that the category political economy contains a violent aspect. It is this violent aspect that must be explicated since it is this aspect that is largely ignored by both left and right. The traditional tendency has been to regard the political economy as clean and at most merely an ideological construct in need of theoretical correction. In short critique of political economy is experienced as an exercise in mere pedagogy in which its ideological character is misconceived as one of mere distorted thought requiring rational adjustment.Capital, then, implies the political state. As capital develops the state is correspondingly developed. There obtains an internal unity between capital and state. Buried within capital is the state –state capital. As capital develops the state issues out of it. It is a mistaken abstraction to focus on capitalist development to the exclusion of the state.Capital as a specific social relation of production contains within it a relation of violence to develop out of it in the form of the state. However this dialectical relationship is not simply a logical one –the capital logic school. History is of decisive importance here. The form of the state has its source in the capital relation . However how that form specifically develops is a function of history and thereby the class struggle. Capital then implies a specific form of violence, of force, in the form of the political state. Capital then implies relations of violence and consequently creates an entire structure of violence in the context of politics --the state. Social relations in the form of capital are violent in character, are state in character, are political in character. Capital is a necessarily violent social relation. The mistake is made of presenting capital as essentially a violent-free relation observing economic laws that are equally violent free. Economics is consequently viewed as a violent free zone --a merely academic exercise in need of theoretical transformation (Althusser).Since economics has a violent aspect to it and is concerned with inherently violent social relations the character of that violence and its form of development must be made explicit. The violence residing in economics must be highlighted. In short capital and economics are forms of violence –reified forms of violence. One might go as far as to assert that the state and capital are a form of the class struggle.Consequently the only way to transcend political economy is by abolishing the violence inherent in it. This entails the abolition of the violence inhering in social relations in the form of capital. Such a process of abolition constitutes the class struggle. This means that the abolition of this violence by abolishing state capital is a historical process rather than a logical (capital logic) process. However the abolition of violence is tantamount to the abolition of the class struggle. This being so the violence inhering in capital must be analysed and highlighted every bit as much as is value character and what that represents. But we must immediately correct ourselves: The analysis of the value form is simultaneously an analysis of its violent aspect too. Capital cannot be correctly analysed without a corresponding analysis of its violent aspect including its development in the form of the state. It is not so much the content or the function of the state that we are concerned with here. Instead we are chiefly concerned with the form of the state. We establish the form in which the state appears under state capital before we can investigate its content and corresponding functions. Indeed the content of political states may tend to be of a universal nature.Traditionally capital and even the state has been analysed in this violent free way –in a form that is free of the class struggle. Capital tends to be analysed as if it exists independently of the class struggle. Indeed capital is a product of the way in which the class struggle specifically developed in Europe. Indeed in so far as violence and class struggle is introduced into the discussion this is done in a marginal, external almost incidental way.Capitalism, then, is a violent conflict ridden system of production. Consequently many of its problems are resolved in the form of violent class struggle --chiefly by way of political violence. Under capitalism the form chiefly assumed by violent struggle is politics. Politics is a fetishised form of violent struggle. At the same time it must not be forgotten that economics is a form of violent struggle too. Economic development is a systemic form of violence and struggle.Capitalism, then, is a form of organised violence. The development of capitalism is the form of development of organised violence which expresses itself in the form of the development of the state –the form of development of the class struggle. Given that capitalism is essentially a form of organised violence it follows that despite its positive aspect it is still by definition a primitive savage system of the reproduction of wealth.History in general then has entailed the development of violence. History has been the history of violent class struggle. Violence is the history of its development. Auschwitz and Hiroshima are expressions as to what new forms violence has been developed under capitalist society. Under capitalism violent struggle is both endemic and systemic taking on a dazzling spectrum of forms: from verbal abuse to physical abuse to genocide.Given the inherently violent character of capitalism it follows that the study of the state is central to the study of capitalism. It is here that violence achieves its quintessentially capitalist character and its chief form --its political form. Violence, then, assumes the political form. Politics constitutes the mystification of violent struggle. Violent class struggle as politics as the state achieves a highly developed, mystifying and veiled form. Consequently violence under daily capitalist existence is not recognised. Its source in capitalism is especially not recognised.Despite saying this capital assumes the existence of the state. Capital could not come into being in the absence of the state --in the absence of violence. Capitalism requires violence -organised violence- for its existence. However having established itself capital is then the form by which violence is organised and further developed. Under capitalism violence assumes an alienated form which mystifies it and makes it more difficult to highlight. Capitalism is shot through with violence. Capitalism can go no where without holding hands with violence. Capital both assumes and is the source of its development. Capitalism is the dynamic underlying both the development of both violence and the state. Law is the mystified form assumed by violence under capitalism. The state is the mystified form assumed by violence under capitalism.The state is an abstraction. (The state is the class struggle in abstract form.) The state is a form of alienation from society as community. The state is community abstracted from society. The state is the form in which relations between people assume the form of a thing; relations between people (the class struggle) assume the form of relations between things.Capital is an abstract social relation that stands independently of people. It is community in the form of an abstraction. Capital, as abstract social relation, implies organised violence in the form of the state. It implies organised force in the form of an abstraction. Capital assumed the existence of the state. Capital cannot exist without a state. It is therefore quite mistaken to view the state as a structure that is articulated onto capital in an external fashion. There is an internal unity between the capital and the state.Capital can never operate freely --freed from the trammels of the state. if capital were able to operate freely strictly according to its own laws it would undermine its existence as capital. This is why those who say that the market should be the regulator so that capital is state free are presenting a false negative utopia. This is a bourgeois ideology that in a mystified way seeks improve the conditions for profit maximisation at the expense of the working class. It is an ideology that pretends to seek the eliminate the state from capitalist reproduction when its aim is nothing of the sort. It simply seeks the restructuring and reorganising of the state in such a way as to improve conditions for profit maximisation at the expense of the masses. It at most seeks to downsize the state where it is not to the advantage of capital to preserve a bigger state.The impression is given too that the laws of capital operate purely according to a logic of their own. This in general can never be the case even in the absence of social welfarism. The law of the equalisation of profit and tendency of the rate of profit to fall can never act in unadulterated form. There will always be state elements at play that prevent the free-play of these laws. This is because the development of capital is not a logical process as the capital logic people believe. This is because the development of the capital relation is historical and not a forms of functionalism. The necessary existence of state elements mixed in with capital is an expression of the existence of capital as an historical matter thereby entailing specificity and even contingency. The development of capital is not a logical or rational process freed from the complexities of the class struggle with history and thereby specificity stick all over it. Even in the 1929 crisis the state modified the free play of these laws of capitalism. Despite this fact it must be borne in mind that the laws still work their way through in the last instance. However they operate as tendencies that work there way through more thoroughly at one time than at another. There can then be no simplified description that accurately depicts the operation of the laws of capitalism in their pure form. Any account of what is happening in the real world will tend to be complicated by a manifold of facts all impinging on the situation as a conjunctural one. This is why it is so difficult to explain what is happening in the contemporary world and partly why there are a manifold of conflicting accounts of how the situation developed. It is a very difficult task to analyse and provide an account of the contemporary situation in the world today. Failure by communism to produce an accurate account of the world today is not necessarily a reflection on the bankruptcy of communism. It must be remembered that in the past no such account was ever provided of life under industrial capitalism. All we can strive to do is get close to such an account. It is the incapacity to provide an all embracing account that makes it so difficult to provide the correct strategies and programmes. It also helps explain why there is a manifold of conflicting tendencies within the radical left. Indeed a complete explanation would imply closure and thereby the absence of history.In every conjunctural situation, besides the basic prevailing tendencies of capital accumulation, there obtain a multitude of factors internally related to these tendencies at work that complicate the situation and render it a daunting task to provide an accurate account of the situation in all its ramifications. This is what make the process historical and not logical or functionalism. However the laws of capital provide a basic thread that makes this task more achievable. It is this thread that the bourgeoisie are incapable of picking up.The state is necessary for capital’s existence. Capital cannot exist in the absence of legal relations. Law and justice are necessary for capital’s existence. Consequently the judiciary, the courts, the lawyers, the police and the prisons are necessary aspects of its existence. Without these features of the state capital could not exist. Consequently the legislature is necessary in order to create laws. The army is necessary to protect one capitalist country against another –to protect one capital against another and against the masses. The bureaucracy is necessary to organise these various structures and relations guaranteeing their forming an integrated whole. The more apparently benevolent social aspects of the state are designed to assist in the maintenance of the working class in a condition that suits capital’s interests and to promote passivity in the more oppressed strata of the working class. This has all to do with the specific character of the class struggle and the corresponding balance of class forces. Other aspects of the state are designed to generally preserve an environment that allows individual capitals to operate on a level playing field, so to speak –to contain capitalist fraud, cheating and robbing which when not contained can prove detrimental to capital as a whole and even lead to the destruction of capital.All these functions of the state are necessary aspects of the existence of capital. Capital cannot exist without them. Capital cannot exist without this kind of state, the capitalist state. Capital as a social form logical and historically entails the form of the state. Capital, as a social relation of production, produces the class struggle, violence, in the form of the state. The task is to investigate the specific form of the capitalist the state. The more capital develops the more the political state develops. This state is a sophisticated form of organised violence necessary to capital’s existence –indeed a necessary aspect of capital’s existence. The state is a pervasive form of organised violence transformed into a vast structure of alienated (sublimated) violence existing in diffuse mystified form. The capitalist state is a vast structure of hidden or veiled violence.The character of the capitalist economic system is such as to present appearances that contradict its essential nature. Its essential nature is mystified. Consequently appearances are mistaken for reality. This means that the mass of the population misunderstand the real nature of capital and its political state. Consequently they mistakenly perceive capitalism as a natural rational, even logical, system that makes sense. This ideology that capital spontaneously generates reinforces the masses acceptance of the system including the state. Spontaneously produced bourgeois ideology further veils the hidden violence of the state –further mystifies that organised violence in the form of the state. Consequently it reinforces the active participation of the masses in their own violent oppression; the active participation of the masses in the perpetuation of the capital relation and organised violence in the form of the state. This produces a situation whereby the masses actually actively participate in their own oppression through the medium of the state. It may even go as far as some elements of the masses even occupying active oppressive positions within the state itself. The state form as a form of the class struggle is a fetishised form of that struggle. As the state it hides the class struggle by actively seeking to present class struggle in a form that obscures it by presenting the members of the working class as citizens. Citizen is a reified category that conceals the existence of class.Given appearances contradicting and concealing the essence of things under capitalism it follows that capital is a concealing or veiling of being –of social being and thereby social being in the form of the class struggle. But capital’s characteristic of veiling social being simultaneously provides the form by which being is unveiled, highlighted or unconcealed. Capital then while concealing also unconceals through this concealing. Capital yields truth by lying. This is its contradiction. Social being then through capital conceals and at the same time reveals its essence –its truth. The truth or essence of social being is revealed through the development of capital.Both the state and ideology are forms or aspects of capital.Just as the capital relations spontaneously produces an ideology that sustains its existence it correspondingly produces a state form that equally sustains its existence. Indeed the state is a form of the capital relation. It exists in the context of the capital relation. Capital then contains within itself organised violence in the form of the state together with a corresponding ideology. Capital, as a social relation of production, contains within itself both violence and ideology –the forms by which its perpetuation and development is guaranteed. As capital develops violence and ideology correspondingly develop. They maintain a dialectical unity with each other. In the course of their contradictory development they take on the appearance of separation from each other in different ways. However in critical situations their unity is reconstructed and they appear as an explicit unity. Perhaps in periods of continuous development these aspects of capital grow apart from each other only to be forcibly reunited in periods of crisis.The capital relation is both valorisation, organised violence and ideology. These contradictory aspects of capital develop within the form of capital and are eventually externalised in a form that more adequately accommodates the contradictory unity: the contradiction is externalised. Under this form the state, ideology and value assume a fetishised existence independent of each other. Under this form appearance contradicts essence. What appears to be separate is in fact a unity. However this appearance of separation is what further develops bourgeois ideology giving the appearance of separation with all that that entails ideologically and politically.Given that capital is a reified social relation of production the way in which social relations in general manifest themselves will have a correspondingly reified or twisted form. This expresses itself in consciousness and communal relations taking on the form of ideology and state respectively.