The upturn/downturn debate: an introduction

Ian A summarises a debate on the development of capitalism since 1968, and how this has impacted the working class and its struggles, in a attempt to address the question of what revolutionaries should do.

We need to get past the binary categories “upturn” or “downturn” if we are to properly understand this period. Generals always prepare for the last war; socialists for the last upturn. And that last upturn came at the end of the long boom – a historically exceptional period that should not use be used as a reference point. There is no such thing as “normal” capitalism – it is an unstable, developing, system – and capitalism certainly isn’t “normally” like the 1950s.

We should trace phases in the development of capitalism, how that has shaped the working class and its struggles, to work out what revolutionaries should do. This article summarises debate that took place over Facebook, including comrades beyond those in rs21 or in Britain.

1. The upturn: rising workers’ and liberation struggles

The upturn was a period of rising class and social struggles stretching broadly from the Tet Offensive in January 1968 to the end of the Portuguese Revolution in November 1975. It encompassed:

1. A militant response by workers in the West and more developed areas of the East (e.g. Poland) to initial attempts by capital to move against labour in response to declining profits.
2. Revolts against undemocratic states in the Mediterranean (Spain, Portugal and Greece), Eastern Europe and parts of Latin America.
3. Struggles within Stalinist regimes (above all China) over a developmental strategy, often involving subordinate groups but rarely involving them acting independently.
4. The final stages of the liberation struggle against colonialism (Portuguese Africa), semi-colonialism (Indochina) and the remaining ancien régimes (Ethiopia).
5. Liberation struggles (sexual, ethnic, student, etc) mainly in the West.

While the industrial struggles responded directly to the end of the long boom, the national liberation struggles were the climax of a process of decolonisation from the end of the First World War.

In Britain post-war workplace trade unionism took advantage of full employment to practice what the IS called “DIY reformism”. Strikes were often short, unofficial, sectional and successful. Employers wanted to settle and carry on making profits, and could afford to do so. The power of workers in the workplace was obvious to all, and directly experienced by lots of workers. As the boom ended, employers sought to push costs on to workers, but faced strong and often successful resistance from organised and confident workers.

2. The downturn starts: vanguard neoliberalism

The downturn ended the processes listed above on the bosses’ terms, except for the industrial response which continued unevenly in various countries. The IS/SWP was not the first to recognise this. Eric Hobsbawm thought workers had been decisively defeated, and drew right-wing conclusions, as did Stuart Hall. Tony Cliff focused on winning an argument (against people like Steve Jeffreys, but particularly among industrial militants) that the party must adapt to the downturn, so he emphasised British factors. We in the SWP saw the downturn as temporary and the causes appear like a shopping list:

The change in the balance of class forces in Britain has been caused by a whole number of interrelated factors: incomes policy; the massive establishment of productivity deals which has been associated with the weakening of the independence of convenors and shop stewards; the wide spread of workers’ participation in industry; the move to the right of “left” trade union leaders like Jones and Scanlon; the integration of convenors into the trade union structure; the role of the Communist Party as the main organiser of rank and file activists in industry, both in supporting workers’ participation and in supporting the left union officials; the ideological trap of the concept of “profitability”, “viability”, etc, combined with a loyalty to Labour even when Labour attacked workers’ living standards; the impact of the economic crisis – cuts, sackings, etc, etc, on all the above factors. [Cliff, 1979]

Chris Harman gave a broader, more international perspective. The permanent arms economy had run out of steam and the long boom was over, so we assumed that the capitalist crisis would be as intractable as in the 1930s and that the downturn would therefore be temporary.

Neil Davidson calls this “downturn” period of major defeats inflicting upon workers (especially under Thatcher in Britain) “vanguard neoliberalism”. At the time Cliff emphasised the Communist Party’s role in selling Labour’s social contract, aided by the rising bureaucratisation of workplace trade unionism through incorporation, facility time, full time convenors etc.

Cliff and Harman both note that the downturn preceded the social contract. The social contract could not explain the downturn internationally. Stalinism and reformism dominated labour movement politics worldwide and played key roles in derailing struggles. Cliff also identified the role of employers becoming more aggressive. It wasn’t just our side that changed.

Jonathan Neale’s book What’s Wrong With America argues that the downturn involved a global neoliberal offensive and highlights four defeats of global significance: the British miners’ strike (1984), the US air traffic controllers’ strike (1981), the Mumbai textile workers’ strike (1980), the urban uprisings in China (1989). There were exceptions to the general picture of a decline in strikes: South Africa, Turkey, Greece, Finland, Canada, South Korea.

The downturn analysis helped protect the SWP, but its causes received inadequate attention. The notion that it heralded a new phase of capitalism was never seriously considered. We discussed the changing working class, but not how changes might shape future struggle.

This silence over why the downturn had happened and how it might end was unusual. Our theories of state capitalism and permanent arms economy both identified internal contradictions that would limit their effective life span. The SWP recognised a “political upturn” from 1979 to 1983 running alongside the “industrial downturn”. But the party was brutally realistic in its assessment that radical politics could not sustain victories in the context of industrial defeat.

State capitalism can be more dynamic than free market capitalism in certain periods. The Eastern bloc once had higher growth, because states could direct more capital at particular markets more efficiently than private companies could. But this ended with the dominance of multinational firms marshalling capital on an even greater scale.

Privatisation changed the relationship between state and capital. The state moved from production to the purchasing, oversight, regulation and policing of production – an important development within capitalism itself.

3. Outside the boom: viability

Harman explained the ideological trap of “viability” arguments mentioned by Cliff:

These make the individual worker feel that his or her job depends upon the viability of the particular chunk of the system in which they find themselves. Protecting their living standards and working conditions, they are told, will increase the crisis that besets their factory, firm or nation and destroy its ability to provide jobs. The same argument is presented as a more general ideological argument by the media: such is the crisis in society that any sustained struggle over wages, working conditions or hours will push it over the edge into an abyss.

Workers can resist this argument. But only if either they have a general political understanding that a viable alternative exists to the present crisis-prone set-up; or if they are so embittered that they are prepared to struggle no matter what the odds are so long as there is some prospect of success.

Viability arguments had had little purchase during postwar full employment, but they now returned with a vengeance. No one would write today as Cliff did of the victorious 1966-67 Roberts Arundel strike: “The manager went into bankruptcy and the factory was closed. At least there was no non-union factory in Stockport and the principle of trade unionism had won”. Contrast this with the concessions offered by Unite when faced with the threat of closure at Grangemouth in 2013, or routinely in the car industry where employers threaten to relocate work away from sites with good terms.

Workers are encouraged to see things from their bosses’ perspective rather than their own, to be more concerned about their employer’s profitability than paying their own bills, to fear winning more than their boss can “afford”. Viability ideology encourages worker participation, partnership, concession bargaining – and helplessness.

Simon Joyce has an ISJ article forthcoming on the viability argument. He recommends Dave Lyddon who studied viability and participation at British Leyland. Concerns emerged in IS over a strike at Chrysler Linwood in the mid-1970s when a stewards committee (including IS members) voted for concessions to avoid closure. There is more material on viability in early IBs, and Dave R recommends Nigel Harris writing in 1980.

Cliff highlighted the importance of politics in struggles that take place in capitalist crisis:

So long as capitalism was expanding and by and large prosperous, industrial militancy in itself could achieve quite significant results. Today, when world capitalism is in deep general crisis, industrial militancy alone is quite ineffective. General social and political questions have to be faced. The battle of ideas becomes crucial. To build a bridge between industrial militancy, rank and file activity and socialism, we must relate the immediate struggles to the final struggle – the struggles inside capitalism to the struggle against capitalism.

Viability arguments have less purchase where employment is growing and capital investing, or in industries less vulnerable to closure (eg economically strategic workplaces, essential services, geographically fixed services such as transport).

Does viability ideology help explain the difference between strike patterns in industrialising countries and to those where established organised industries are shedding workers? Why has private sector organisation been hit harder than public? Why privatisation and marketisation is key to spreading that industrial weakness into the public sector?

In one of Jonathan Neale’s books on naval revolts he argues that in each era militancy tends to centre on key sectors of the economy: maritime trade, later automotive.

Several people recommended Beverly J Silver’s 2003 book which traces labour unrest globally from the 1970s to the 1990s. Labour unrest followed flows of investment round the world. Worker militancy followed car production to developing countries. But when Nissan and Toyota opened plants in Britain, we didn’t see the same effect, because the workers’ movement here was recently defeated. This is uneven and combined development. Silver also distinguishes between different sources of power for workers, a concept taken from Erik Wright.

Neil recommended two “uneven but useful” books: Gary Daniels and John McIlroy (eds), Trade Unions in a Neoliberal World (Abingdon: Routledge, 2009); Gregor Gall, Adrian Wilkinson and Richard Hurd (eds) The International Handbook of Labour Unions: Responses to Neoliberalism (Cheltenham: Edward Elgar, 2011). Deindustrialisation in the Global North was triggered at least as much by productivity increases as by production moving offshore. Industrialisation in the Global South relied on migration of rural populations to cities.

4. After the downturn: neoliberal consolidation

After the period of vanguard neoliberalism, Davidson describes a shift to neoliberal consolidation. In Britain this coincides with what the SWP called the end of the downturn in the late 1980s or early 1990s. Harman in 2004 illustrates how we expected strike levels to recover.

Comrades offered a number of explanations for the failure of workers to recover from the downturn:

1. The defeats inflicted in the 1970s and 1980s by vanguard neoliberalism.
2. Anti-union and repressive legislation in the wake of those defeats that instilled fear and low confidence among union officials and workers.
3. New workplaces reflecting significant changes in the economy, established without effective worker organisation or even informal controls and protections from supervision.
4. Weak workers looking to left electoral parties for help when traditional alternatives to the free market (Stalinism, Keynesianism) had been discredited. Left electoral parties bought into neoliberalism’s “there is no alternative” consensus and further undermined workers’ confidence.
5. Persistent high unemployment, welfare cuts and the collapse of ideological alternatives to the market made workers vulnerable to viability arguments.
6. The collapse of Stalinism came in the context of a defeated workers’ movement. The main political and ideological beneficiaries were therefore the free market right, not Marxists.

The SWP’s explanation focused on the role of the trade union bureaucracy. But this brake on militancy does not affect all workers equally. Organised workers in smaller private sector workplaces can typically strike when they wish, because such action does not threaten the union bureaucracy or the Labour leadership. Yet strikes have remained low even there, despite harsh pressure on workers. So there must be a significant ideological and/or political component to the explanation for low strike levels.

Hal Draper argues: “The basic strategy for building a socialist movement lies in fusing two movements – the class movement for this-or-that step which gets a decisive sector of the class into collision with the established powers of state and bourgeoisie, a collision on whatever scale possible; and the work of permeating this class movement with educational propaganda for social revolution, which integrates the two.” Ray also argues we need to focus on class consciousness (IB3 November 2013, p110), and recommends Wilhelm Reich on this question.

Paul K notes the contrast between struggles in the developed western countries and elsewhere, highlighting: the emergence of new unionism in South Korea; miners and fall of apartheid; miners and fall of Stalinism; the overthrow of Suharto and new unionism in Indonesia; the mass upsurge to stop the coup in Venezuela; the breakthrough in Bolivia around cocaleros, water wars and gas wars that seriously damaging Global North interests there; the Arab Spring.

Some on the left use a labour aristocracy theory to explain the low level of strikes in the West – we aren’t fighting back because we are relatively privileged. This doesn’t fit. Total employment keeps rising in Britain, and in those parts of the economy where employment is rising, viability arguments have less of a hold. But these parts do not overlap much with sectors that were well organised in the last upturn (exceptions would include parts of the public sector and public transport). Manufacturing was at the heart of British private sector trade unionism in the 1970s but has been cowed by viability since. Viability pacifies by making workers feel vulnerable — the opposite of the passivity stemming from privilege. Higher wages in developed countries come from higher investment, higher productivity, and often higher rates of labour exploitation.

The neoliberal era in Britain has seen rising employment alongside a permanently high level of unemployment, in contrast to “full employment” enjoyed between 1941 and 1970, and to the cyclical unemployment patterns before that. You have to go back to the period from 1919 to 1940 to see worse levels:

Permanent mass unemployment has come alongside attacks on the welfare state that increase fear of losing your job. The establishment often exaggerates the precariousness of work to stoke this fear and strengthen viability ideology. There is no mainstream political backing for nationalisation (one of the traditional answers to the threat of workplace closure).

5. The Centrality of Politics

In capitalist crisis, in a declining corner of the global economy, with permanent mass unemployment and the welfare state under attack, workers in Britain can only overcome “viability” to wage serious resistance when they are desperate or when they have confidence in a political alternative to the market.

The collapse of Stalinism pulled out the ideological spine of much of the left, far beyond the official Communist Parties. The SWP never saw the Eastern Bloc as socialist and reacted differently – we felt vindicated and hoped events would accelerate our attempts to replace the Stalinists as the main left-of-Labour force.

But the context was a defeated working class. Workers in the East looked to Thatcher not revolutionary socialism. With Stalin and Keynes discredited there was reason enough to think “there is no alternative”. The removal of Stalinist dictatorships was a necessary step to regenerating a healthy left. But the immediate negative impact, ideologically and organisationally, on the activist layer in the working class was greater than we anticipated, accelerating the embrace of neoliberalism by reformist parties.

Reformist parties adopted and implemented neoliberal policies. In doing so they eroded their own base without fixing any fundamental problems of the system. There is little working class support for the neoliberal agenda, but no established political vehicles to shape social resistance: hence anti-politics. This rejection of establishment politics can be radical or passive, left or right wing.

Keynes was the second major ideological influence on reformism, but this too was widely discredited in the 1970s. Len McCluskey sees his CLASS initiative as means of cohering a Keynesian argument against neoliberalism and giving workers confidence. Would even a half-baked reformist or Stalinist ideological alternative help give workers the confidence to resist (even if it let them down later)?

In the rest of Europe, countries where left reformism has retained a substantial social base are often those with higher levels of struggle. In Greece and Spain the crisis is acute and struggle has been high. They have seen big defensive battles with mass participation in many forms of struggle. Mostly they have suffered defeats, but the radicalisation is real and lasting. In the context of capitalist crisis, strikes in individual workplaces may not win much. General strikes, political movements, occupations etc may appear more credible to workers.

Class struggle comprises and combines individual and collective action; industrial, political and ideological elements. Workplace struggle is not always the predominant form: community campaigns, riots, demonstrations, political campaigns, rent strikes etc can also take centre stage.

Most major struggles since the early 1990s – including successful ones like the anti poll tax movement – have not been based primarily upon workplaces or industrial action. Is this is a permanent change? This is what lies behind arguments among socialists on whether to orient on struggles beyond the workplace strategically, or merely as a tactic to hasten the revival of workplace struggle? There were important industrial disputes in the same period as the poll tax, eg ambulance workers. That strike, like the miners’ strike, involved community organising.

Strike patterns in the postwar boom were historically exceptional. Strikes have always been part of our arsenal but not our only weapon. Their centrality in the postwar period may have led us to underplay the role of other forms in developing workers and the socialist movement. We may have lost sight of a wider notion of class struggle held by Marx and other socialists before this period. Seeing a particular form of struggle as more significant than its political content can slide into economism. The workplace is central to how capitalism makes workers collective, and collective action in the workplace does have particular power. Orienting on the working class (including but not just in the workplace) is one of the things Marxists bring to movements – class politics.

Nor is class consciousness formed in the workplace alone. Changes in wider society – the decline of council housing and rise of private home ownership, the general commoditisation of life – also have an impact, as do political organisations articulating different positions. Unite’s community unionism and the work Syriza has been doing with food banks through Solidarity4All are attempts to relate to this.

Other reading recommended by comrades included: Kim Moody, “Workers in a Lean World: Unions in the International Economy”, “From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present”; Stathis Kouvelakis on France’s turning point in 1977; Neil Davidson’s forthcoming book What Was Neoliberalism?, Chris Harman’s The Fire Last Time.