An old argument

The arguments used to bury the class struggle and the working class usually start with the same idea: that society has changed and so has the working class. Therefore the working class can no longer be the factor for change it once was. But such arguments are hardly new. They were already used in Marx's time, by some leading figures in the German Social-Democratic Party (SPD), the first mass workers' party in history.

This happened, for instance, when Bismarck's repressive laws forced the SPD into illegality in 1878. A new generation of young middle-class intellectuals had been recruited to the party in the previous period. Suddenly they found themselves deprived of a possible political career. So a number of them began to argue in favour of a "Third Way" between confrontation against, and submission to, Bismark's dictatorial regime. Instead, they said, the party should be more accommodating, it should open itself to the liberal middle-class and forget the idea that the working class had specific interests of its own to defend, let alone a specific role to play.

At the time Marx threatened to break all relations with the SPD if it went along with these views. In the end, the party did not. In fact, it was due to this resilience that the SPD won such enormous credit, not only amongst the working class itself, but also among the lower layers of the petty-bourgeoisie who were being increasingly crushed by the rising capitalist economy.

The same current re-emerged later on, however, this time in the late 1890s. On the back of astounding electoral successes, some of the petty-bourgeois leadership sought a "Third Way" to dodge the issue of social revolution, which was a constant threat to the cosy positions acquired by so many elected SPD MPs and councillors. Instead they advocated the more comfortable (for them) path of reformism. Given the SPD's deep working class roots and tradition, Eduard Bernstein, the main spokesman of this current, felt obliged to justify this turn on the basis of anti-capitalist language. He therefore argued that capitalism had changed. Instead of the growing concentration of capitalist monopolies in fewer hands, he argued that entrepreneurship was developing and that the large monopolies were losing more and more power to a growing number of small shareholders. Therefore, said Bernstein, parliament could be used to reform capitalism by gradually reducing the legal rights of the capitalist class. Thus capitalism would eventually evolve into socialism. No wonder Peter Mandelson, the apostle of Blair's "stakeholders' society", praised Bernstein in his book, "The Blair Revolution" - not for his socialist language, of course, but for being the "first great social democrat revisionist".

However, it is worth remembering the cost of Bernstein's reformism for the German and, indeed, the international working class. By 1914, the reformists were in total control of the party. And it was the logic of their "Third Way" which led them to take the side of the German capitalist class against its European rivals in WW1. The SPD was the only workers' party strong enough to stop the war and turn it into a revolution against capitalism. As it turned out their "Third Way" was the road of capital.

Blair's and Monks' forefathers

At the turn of the century, Britain had its own version of Bernstein's current. The Fabian Society, established in 1884, was a group of middle class intellectuals who were already busy showing how much British capitalism had changed since 1845, when Engels had written his work, "The condition of the working class in England". The Webbs, together with Bernard Shaw and Graham Wallas, began to develop their own "Third Way" between Marxism and capitalism - a gradualist version of socialism, intended to deny the working class any independent role in changing society. And because such views were in tune with the deep suspicion held (already) by trade-union leaders towards workers, these ideas became the official doctrine of the Labour party leadership when it was formed.

It must be said, however, that today even such reformists as the Webbs would probably be regarded as dangerous leftists by Blair's "New Labour": after all it was Sydney Webb who formulated clause 4 of the party constitution in 1919, the same clause 4 which Blair, after some effort, managed to delete. But this is not because the Webbs were any more "socialist" than Blair. 1919 was a different period. Then the need for the spin doctors to harness the energy of Labour party supporters with socialistic-sounding phrases was much greater, no matter how empty these phrases really were. And they did so with some success. So, if Sydney Webb was alive today, Blair would probably choose to make use of such spin-doctoring talents!

It was in 1927 that yet another form of "Third Way" was put forward. This came to be known as "Mondism" - after the name of Alfred Mond, the then chairman of ICI - and was enthusiastically endorsed by TUC leader Walter Citrine. Again, it was all justified by changing circumstances - apparently rising economic prospects, although not for long, since Britain was about to be engulfed in the Great Depression. There was a move by union leaders towards a so-called "corporatist vision" of industrial organisation. Companies were to encourage trade union membership in return for the unions' co-operation in the rationalisation of industry - which meant helping to boost competition at the expense of jobs and conditions. The TUC General Council committed itself to approaching a "new industrial order...not by way of a social explosion, but by a planned reconstruction in which the unions will assume a larger share of control in directing industrial changes." However, when the Mondists spoke of control, they did not mean control by workers on the shopfloor, but the recognition of trade union officials as "managers" of a labour force disciplined by an employer-enforced closed shop!

In the end Mondism was quickly discredited, but the trade-union bureaucracy circles have held on to this idea ever since. Listening to John Monks praising the approach of the mobile phone company Mannesman after its recent takeover by Vodaphone - just because union officials sit on the board of directors of all main German conglomerates - shows how today's TUC "partnership" is nothing but a "throwback" to yesterday's Mondism. Today one could call it "Monkeyism"...

Since World War II, there have been almost as many versions of a "Third Way" as there were Labour leaders. However, the most elaborated version was proposed under Gaitskell in the late 50s. Following Labour's second election defeat, Mandelson's far more erudite forerunner, Anthony Crosland, outlined the basis of a new approach in his 1956 publication "The Future of Socialism". He argued that the "more prosperous workers" no longer classified themselves as working class and were hostile to "old Labour" ideas on the economy. As a result, to save Labour from decline, it had to remove its working class image and stop being associated with nationalisation. Douglas Jay, a former Labour treasury minister, added that the public needed a "vigorous, radical, reforming, open-minded party" and proposed changing the party's name to "Labour and Radical" or "Labour and Reform". Gaitskell, the party leader, while stepping back from a change in name, proposed to change the party's constitution by getting rid of Clause 4, arguing that: "We have long ago come to accept, we know very well, for the foreseeable future, at least in some form, a mixed economy". After the Tories won their third election in a row, in 1959, Gaitskell argued for a public relations operation to refurbish Labour's image in the eyes of the middle class voters.

In the end, nothing much came of these schemes. And it took another couple of decades before Labour began to go through the same process again, which eventually produced Blair's almost exact replica of Gaitskell's proposals under the flag of "New Labour".

The test of history

All past versions of the "Third Way" were designed to dismiss the class struggle once and for all, at least as a political reference within the ranks of the traditional working class organisations - since it could not be done in the real world. Yet there were never any grounds to argue that capitalism had finally overcome its fundamental contradictions and was now able to run society in a rational way - thereby making the need for social change and the overthrow of capitalism obsolete. Nor was any credible case made to back up the idea that capitalist exploitation no longer existed and that, somehow, the capitalists and their employees now had identical interests.

On the contrary, in most cases, these ideas caught on during periods when cracks in the system had become obvious - like the turn of the century in Europe, the frantic speculative years in the run up to the Great Depression of the 30s, or like the period of on-going stagnation in Britain during the 50s. Even more importantly, these were periods in which the balance of forces in society was tilted in favour of the capitalist class, with a comparatively low level of militancy in the working class or in any case, a low rate of success in the class struggle. The success of the Fabians' views owed much to the confrontational drive of the British capitalists to root the trade unions out of areas in which they had began to organise only relatively recently. Mondism took shape at a time when the working class was demoralised by its recent defeat in the 1926 General Strike and the high level of unemployment which had prevailed since the end of World War I. Gaitskell's turn took place after a decade dominated by the reactionary trends generated by Cold War politics, in which the standard of living of the working class had remained very low, despite so-called "full employment".

The two fundamental features apply to the present period as well. Despite all the promises based on "globalisation", the Internet and new technologies, the capitalist system shows cracks everywhere. The planet as a whole is still going through its longest crisis ever - since it began in the 1970s! Never has the world known such a huge gap between rich and poor countries - not even in the days when the rising great powers were gunning their way into new colonies and markets in Africa and Asia. Never has the world economy experienced anything like the series of devastating financial spasms, from the 1990 stock market crash in Japan to the 1998 crises in Russia and South America - not even in the 1930s, despite the much deeper nature of the Great Depression. Never has the working class of the rich countries experienced such a level of exploitation, unemployment and accelerated social dereliction - at least not for the past century - nor have the poor masses of the Third World gone through such extremes of poverty.

So no, the capitalist system has not overcome its contradictions. On the contrary its decay is increasingly lethal for the vast majority of the planet's population. More than ever it needs replacing.

But at the same time, today's low ebb of working class militancy, after over two decades of on-going attacks by the capitalists, allows Blair and the Labour leadership to get away with their ludicrous "Third Way" and "classlessness". As if in such an overtly unjust society there could be any question of a compromise, let alone common interests between the exploiters and the exploited!

Let us not forget, however, what happened to all past versions of the "Third Way" - they, in fact, all ended up in history's dustbin. In the first part of the 1900s, the Bernsteins and the Webbs were discredited by the October revolution in Russia. Later, Mondism was swept aside by the capitalists themselves, when they felt that the unions had become too weak, due to the Great Depression, to be of much use to them. As to Gaitskell, he died before seeing his policies put into question by the re-emergence of working class militancy in the 60s.

So why should it be different with Blair's "Third Way"? There is no doubt that it will join the others in the dustbin of history too, in due course. But the point is to ensure that it is not discarded, temporarily, as previous versions have been, but that the capitalist system itself gets dumped as well. Because, as communists, we also want to see the "end of the class struggle", once and for all. But not in the sense that the advocates of capitalism mean it, by entrenching class divisions and reducing the majority of humanity to slave labour status. We, communists, want to see the end of class divisions and therefore the end of exploitation.

The starting point - 19th century capitalism

This is where the question of the historical role of the working class formulated by Marx and denied today by most politicians and intellectuals, comes into play - that is, its capacity to be midwife of a new social order free from capitalist exploitation and parasitism.

But first things first. What was Marx's reasoning in assigning this role to the working class and why the working class?

Like many young intellectuals of his generation Marx discovered a deeply unjust and shockingly wasteful society, still dominated in most of Europe by aristocratic regimes which tolerated no opposition. For this generation, the dynamism of capitalism, which was then emerging in only Britain, seemed to point to a bright democratic future, enhanced by the wonderful promise of science and technology. Unlike others, however, Marx soon discovered that capitalism meant an even worse form of exploitation for a much larger proportion of the population - waged labour. His lifelong task became that of developing the political tools necessary for the exploited to free themselves and society of this plight.

Marx's starting point was, of course, what he saw before him - 19th century capitalism in Britain, more or less over the twenty years between 1846 and 1866. But in most decisive respects, this capitalism was not all that different from what capitalism is today.

By looking closely into the operation of the system, Marx outlined its main features, which are still as visible today as they were at the time: the ruthless character of capitalist competition, its chaotic expansionist tendencies, which, as Marx predicted, would eventually incorporate the entire planet into the capitalist market; the enormous social waste generated by this competition; the production crises caused by the constant search for maximum profit and blind production for an unpredictable market with their resultant material and human casualties; the increasing role of finance; the widening gap between the operation of capital and the satisfaction of real needs; the inbuilt requirement of the system to maintain a "permanent reserve army" of unemployed, to use Marx's phrase.

What is there to add today to this characterisation of the capitalist system? That the disorders caused by its built- in contradictions have reached a scale which Marx did not and could not have envisaged in his day? That the unpredictability of the financial sphere and its capacity to cripple the entire productive sphere has reached unprecedented heights? That the imperialist stage has turned the world into a battlefield between giant companies which are sometimes richer than some of the smaller industrialised countries? Yes, all this is true. The contradictions of capitalism have not changed - they are only much sharper today. And this makes the system even less viable than it was in Marx's time.

Unlike today's period of economic stagnation, Marx's period was one of fast economic expansion. This was illustrated, for instance, by this comment by Gladstone, the then Liberal Chancellor of the Exchequer, quoted by Marx in Capital: "From 1842 to 1852, the taxable income of the country increased by 6%.... In the 8 years from 1853 to 1861, it had increased on the basis taken in 1853 by 20%! The fact is so astonishing as to be almost incredible.. this intoxicating augmentation of wealth and power... entirely confined to classes of property... must be of indirect benefit to the labouring population, because it cheapens the commodities of general consumption. While the rich have been growing richer, the poor have been growing less poor. At any rate, whether the extremes of poverty are less, I do not presume to say." But then Gladstone himself had to admit that "human life is but, in nine cases out of ten, a struggle for existence." Proof that whether stagnant today or expanding in the 19th century, the benefits of the capitalist system rarely filtered down to the "labouring people".

As to the root cause of the inviability and crisis-prone nature of the capitalist system, Marx found it in the private ownership of the means of production - which certainly still pertains today. In the 1970s, some argued - wrongly - that the extent of the state-owned industrial sector made Marx's analysis obsolete. But obviously, today, no-one would consider this a meaningful objection. Nor is that other argument used by Thatcher and Mandelson, long after Bernstein, that with the shares they own, workers are as much in control of the means of production as the capitalists themselves. With more than 50% of the shares traded in the City effectively controlled by less than a dozen big fund managers, a dozen BT shares are not likely to give much in the way of ownership rights to the worker who put his savings in them! Otherwise there would be a lot fewer factory closures and a lot fewer fact cats in boardrooms too!

The midwife of history

There was no shortage of people who had every reason to want to get rid of capitalism in the 19th century - from the middle-class artisans, who were increasingly squeezed by the competition of mass-production, to those at the very bottom of the social ladder, whose lives were made up of spells in workhouses. But among this wide range of social layers, Marx put his hopes in only one of them, the working class.

This new layer had been produced by capitalism. But because it could only make a living by selling its labour to the capitalist class, it was permanently at the receiving end of capitalist exploitation. It could therefore have no illusions as to the exploitative of capitalism, nor did it have a stake in its continuation. Moreover, it was concentrated by the very process of capitalist production in increasingly large workplaces where hundreds, sometimes thousands of its members co-operated in their day-to-day work - their daily activity therefore providing a blueprint for the way society could operate more rationally, by co-operation rather than competition. Above all, the working class could only free itself by freeing the system from the one thing that held it in chains - the private ownership of the means of production - by taking command itself in the name of society at large. And in this struggle, in which the responsibility of defending the interests of society as a whole fell to the working class, its social weight was large enough to pull behind it all the social layers which are normally the reluctant, but mostly resigned, victims of capitalism.

In Marx's view, this was what made the working class a revolutionary class, in the historical sense of the word, just as much as the capitalist class had itself been revolutionary when it overthrew the remnants of the old feudal system and opened the road to an enormous development of the productive forces. By freeing the world and its productive forces of the capitalist straightjacket, the working class would not only put an end to capitalist exploitation but actually open up yet another era of fantastic progress, in the economy and in every other sphere. This, for Marx, was the only route to further progress for mankind.

What were the features of this working class in Marx's day? In terms of size, using the 1871 figures, factory workers constituted 35% of the active population, commercial workers 5% and agricultural workers 11%. Although a revolutionary class, this working class was certainly not a conscious one. The days of the Luddites, when workers smashed the machines which threatened their jobs, were still within living memory. Man, woman and child gave their labour up to spinning and weaving machines, dug and lugged coal or burnt their bodies in front of blast furnaces. Next to the relatively regularly employed working class, and intertwined with it, was a large layer of urban poor, unemployed most of the time but not necessarily throughout their lives. In 1864, for instance, out of a population of just under 24 million, the official "paupers" made up 5% of the active population. In London these "paupers" made up over 24% of the population. People died of starvation among this poor layer. All the more so as, as Engels pointed out in his study of the English working class in 1845, the rapid expansion of the urban population occurred ahead of the towns' abilities to provide for so many people. So people lived in filthy, crowded, hastily built hovels, breathed foul air and conditions came close scenes out of Dante's "Inferno".

Taken as a whole, this working class was overworked, overexploited, often irreversibly damaged by alcohol from a very early age, crippled by disease and largely illiterate. In fact, it was an extremely backward section of the population, impregnated with prejudices - religious in particular - and divided by deep hatred based on regional origin. But then Marx had never pinned his hopes on the working class because of the moral or intellectual qualities of its members or their individual consciousness. As a materialist, he thought that each individual was a product of his circumstances but also of his experience in action. Collective action was already imposed on workers by the production process itself. But, more importantly, so was the need to resist capitalist exploitation collectively. So Marx believed that through the class struggle, the working class would evolve a collective consciousness of its interests.

Working class consciousness

Marx's approach was vindicated by the test of history. But, in fact, his approach was not based on reasoning alone. Already during the Chartist movement, in the 1830s and 40s, a significant part of the working class had participated actively in the largest political movement in Britain so far. It had provided some of the best thinkers and agitators of the movement and was its real backbone in the 1840s.

But his views were further vindicated in the following decades. In Britain, the 1870s and 1880s saw the emergence of "new unionism", when non-skilled workers in their hundreds of thousands formed their own giant "general" unions, among them dockers and railworkers, on the back of militant strikes. And in France, the Paris Commune of 1871 demonstrated in practice the capacity of the urban proletariat to organise an entirely new form of state power, based on the collective control of the productive forces.

The fact that Marx's views had passed the test of history did not prevent all kinds of people from seeing "changes" in the nature of the working class. In the 1850s, the Edinburgh Review, explained the causes of the decline of Chartism thus: "..time has solved all these problems - the discovery of the gold fields in California and Australia, the absorption caused by the Crimean war, and latterly the enormous increase in our commerce... have changed the whole complexion of our labouring classes. Penury has given way to plenty, idleness to employment; disaffection to content..." Later, in 1872, Thomas Cooper, once a prominent Chartist leader, recalling the days of his Chartist youth, wrote in his autobiography: "In our Chartist time, it is true, Lancashire workmen were in rags by thousands; and many of them often lacked food. But their intelligence was demonstrated wherever you went. You would see them in groups, discussing the great doctrine of political justice - that every grown up, sane man ought to have a vote in the election of the men who were to make the laws by which he was to be governed; or they were in earnest dispute respecting the teachings of Socialism. Now, you will see no groups in Lancashire. But you will hear well-dressed working men talk, with their hands in their pockets, of co-ops, and their shares in them, or in building societies".

And yet it was these same "well-dressed working men" who played a decisive role in the series of strikes which led to the building of the general unions in the following decade! The spark to this movement was an economic crisis from the mid-70s onwards. And it was precisely this tendency of the capitalist system to crisis that Marx had pointed to, which made the argument about "well-dressed working men" irrelevant. There might well be periods in which workers have better standards of living but as sure as night follows day, recession will follow boom, and workers will suffer wage cuts, sackings and the ranks of the unemployed will be swollen once more, with all the misery but also the rebellions this brings. The very contradictions of the capitalist system would inevitably stir up the consciousness of the working class again and again.

The test of the Russian revolution

The October 1917 revolution in Russia was the most decisive demonstration of the correctness of Marx's perspective. But it took place where and when it was least expected to happen. The working class of Russia was a relatively small class, concentrated in a few industrial centres. Russia was still semi-feudal, more like today's Third World countries. The majority of the population were peasantry, scattered over the vast Czarist empire.

Indeed, in 1897 the proletariat, including its dependent family members comprised 27.6% of the total population of Russia, of which only a small proportion worked in large factories. Perhaps by 1917 this had reached one third. But even then, the working class itself was numerically weak. By contrast, it was faced with one of the strongest and most repressive states in Europe. It is simplistic to think of Czarism as "mere" feudalism. By the beginning of the 20th century, as Trotsky observed: "the autocracy, aided by European technology and European capital, had already transformed itself into the largest capitalist entrepreneur, the largest banker, the monopoly owner of the railways and of the liquor retail shops. In this it was supported by the centralised bureaucratic apparatus, which was in no way suited for regulation of the new relations, but was perfectly capable of applying systematic repression with considerable energy. (...) Neither the government of France in the old days nor the European governments prior to 1848 had anything comparable to the Russian army of 1908- 9." Indeed the peacetime army was one million strong. But as Trotsky pointed out, this power which enabled it to continue existing against all social development, not only did not exclude the possibility of its fall by revolution, but actually made revolution the only possible way for development to take place.

Nevertheless it was exceptional circumstances which led the Russian working class to power in 1917. World War I had led to disastrous defeats, heavy losses and drastic deprivation making conditions ripe for revolution. But most importantly, a revolutionary party existed in the shape of the Bolsheviks, which was capable of steering the working class through and beyond the pitfalls of reformism all the way to the seizure of power, thus avoiding the defeat experienced by the far mightier working class of Germany, the following year.

As a result, the least literate, most backward, and in relative terms, the smallest working class in Europe, proved capable not only of overthrowing the most powerful dictatorship of that time, but also of resisting a wholesale attack against itself by all the imperialist powers allied for the occasion, shortly afterwards. But even more significant is the fact that these same workers proved capable of eradicating the parasitism of capitalist private property and building the basis of an economy which pulled even the most remote regions of the country out of the medieval stagnation which had blighted them under the Czar.

The society that emerged out of this revolution, in an embryonic form, still provides a blueprint for what can be built today on a world scale, only using hugely more powerful resources. What did it look like before it began to degenerate under Stalin? An example was provided by the British writer, Arthur Ransome, who visited the textile factory Centro-Textile in 1919: "Nationalisation has made possible the rational regrouping of factories so that the complete process is carried out in one place, consequently saving transport. There are 23 complete groups of this kind, and in the textile industry generally about 50 groups in all. There has been a similar concentration of control. In the old days there were hundreds of different competitive firms with their buildings and offices in the Ilyinka, the Varvarka and the Nikolskaya. The Chinese town was a mass of little offices of different textile firms. The whole of that mass of struggling competitive units of direction had now been concentrated in the house in which were talking. The control of the workers had been carried through in such a way that the technical experts had proper weight. There were periodical conferences of elected representatives of all the factories ..."

Asking about the fate of the old textile manufacturers, Ransome was told that many had gone abroad, but many too were working in the nationalised factories. The engineering staff which had mostly struck work against the revolution at the beginning had now without exception returned, the younger engineers in particular realising the new possibilities opening before the industry, the continual need of new improvements and the immediate welcome given to originality of any kind.

Of course it was one thing to decree new freedoms and another to implement them in the context of the postwar economic collapse. Yet Soviet Russia was the first country to allow women free abortion on demand, to ban discrimination of individuals on grounds of ethnicity or sexuality, to welcome the far-flung republics into its fold and allow them autonomy. The soviets as bodies of workers' government provided a framework for the full participation of ordinary people in controlling society. Not only was this an entirely new type of society, but it was a truly "classless" one, despite the unbearable burden of under-development. Or at least it remained that way until the hardships suffered during and after the civil war eroded the consciousness of the working class and spread demoralisation in its ranks. Then and only then was Stalin able to lead the drive of the new state's bureaucrats to free themselves from the control of the soviets, by establishing their own dictatorship "in the name of communism".

That the degeneration of the Soviet Union was a defeat for the working class, in Russia and worldwide, is obvious. But the fact that the society set up by the October revolution resisted for so long against the pressures of imperialism to restore capitalism - and still resists in its own degenerate way today - is testimony to the depth of the transformations carried out by the working class in the few years following the revolution. And far from proving the "inability" of the working class to change society, the degeneration and breakup of the Soviet Union, only vindicates Marx's views, buried later by Stalin - that communism could only develop on the basis of the highest stage of development offered by capitalism on an international scale - something that an isolated backward Russia had had to do without.

A changed capitalism?

According to the so-called economic "experts", capitalism has changed dramatically since the time of the October revolution and even more so since WW2. And the conclusions they draw from these changes fall into two different categories.

Some say that capitalism is now entering a new era of development and affluence and that it should be left alone, without any interference with what they call "market forces". US economists have even found a name for this new stage of capitalism: stealing Blair's favourite term, they called it the "New Economy" - proof that while the wealth of billionaires may be increasing, the imaginations of their economists are becoming utterly depleted.

Others, on the other hand, admit that the world market has been wildly out of control over the past period, to the point where it has become dangerously intolerable for a large section of the world's population. And they argue that the system therefore should and could be more tightly and better regulated, so as to contain its most objectionable consequences.

However, there is one thing over which these experts agree - that this "changed" capitalism has rendered obsolete the need for social transformation.

Yet so far, as was already mentioned, capitalism has shown no signs of any new ability to overcome its contradictions - rather the contrary. Today, if anything, it is more unstable than ever and even less capable of providing for the needs of the planet's population. True, the form of its crises has changed. We now have the dubious privilege of living through a permanent crisis instead of the periodic ones that used to create havoc in Marx's day. But the mechanisms and the consequences of the crisis are still the same. The main difference is that these consequences are far more profound and widespread than anything seen in the past.

This is not to say that capitalism has not changed at all over the past century. From the point of view of the planet's population as a whole, standards of living have increased - although this average increase does conceal the absolute impoverishment of entire regions of Africa, for instance. But as to the changes in the system itself, they consist of a return to past practices which had previously been abandoned for circumstantial reasons and of a deepening of trends which already existed.

Thus, the "free-trade" principles advocated today by the World Trade Organisation were common practice in the second part of the 19th century. Then, just as today, they were only a cover for the richest bourgeoisies to plunder poorer countries. On the other hand, the development of gigantic worldwide companies had already begun at the turn of the century as a result of the capitalists' attempts to protect returns on their investments - the rate of profit, as it is called - against increasing competition. Likewise the so-called "globalisation" of the economy began even earlier, when the industrial production of the rich countries became larger than the needs of their domestic markets and they began to look for new markets or for sources of cheaper raw materials. As to the enormous growth of the financial sector, it has also been also a permanent trend since the last decades of the 19th century. The difference today is that due to the return of the crisis in the early 1970s, the proportion of capital which is invested permanently in productive activities has shrunk enormously, as capitalists shifted to more short-term financial investments. It is this latter development which accounts for the speculative bubble on stock markets over recent years.

It is ironical that the advocates of the "New Economy" should see this on-going speculation as a sign of future affluence. After all, one might have thought that the 1998 financial crisis in South East Asia or even the collapse of the speculative bubble in Japan in 1990 would have made them wiser. However there is a certain logic to their views. These "experts" have their eyes set on profit charts and since they see profits going up, that is all that really counts for them. An economy which is profitable for the bosses is a "healthy" economy, by definition. Except that today, the main and only reason why profits are going up has nothing to do with fancy developments such as IT, computers or the Internet. It is entirely the result of screwing more value out of lower paid workers. Behind the new technology smokescreen is the growth of a low-productivity sweatshop economy. And there is a limit to how much can be squeezed out of human labour, which, unlike high tech machinery, cannot be switched on and off at will....

As to those who are advocating tighter and better regulation of capitalism, what do they really expect? That the same governments which have removed all regulations in the spheres of trade, finance, labour laws, etc.. in order to help companies to increase profits, will restore these regulations? But why would they, when the job they have undertaken, whatever their political badge might be, is to defend the interests of their domestic capitalists? And if they did bring in regulations, would not they, at the same time, seek ways of helping their capitalists to make up for the profits lost, necessarily at the expense of the working class?

Not only has capitalism not resolved its fundamental contradictions, but its evolution over the past century has in fact sharpened these contradictions even more. It offers no more future today than yesterday, nor is it any more reformable. It can only be overthrown and replaced.

A weak working class?

In rich countries like Britain, there are many myths about the working class today, which all boil down to a denial of its ability to change society.

One of these myths, of course, is that the working class no longer exists as such. According to this argument, the transformation of the rich countries into an industrial desert over the past two decades has left a service-orientated economy in which the manual working class is an isolated and tiny minority.

As one might expect, such arguments have been used about the USA, the stronghold of the so-called "New Economy". And this is what an article published in January 1998 in the magazine American Demographics had to say about it: "As recently as two years ago, leading newspapers were announcing the death of the working class. That obituary now seems premature. Although the structure of the working class is shifting, its spirit is thriving. What's changing is the working class stereotype of a hard-hatted, blue-collared white man. As the industrial age becomes more of a dim memory, the image of the group of people who drive the economy is changing too. Indicators suggest that the working core of Americans is becoming younger, more ethnically diverse, more female, more educated and more alienated from its employers." So even for the author of this article, who clearly believes that the industrial working class is becoming a negligible factor, it does not follow that the working class as such has disappeared.

Now let us look more closely at the situation in Britain. According to the latest figures available, leaving out those who are inactive out of choice or age, there are 24.1m wage workers, 3.4m self-employed and 4m unemployed, for a total of 31.5m active or potentially active workers - although one might argue that some of the categories included should really be left out as they cannot be considered in any way as socially productive, such as the army, the police, the church, politicians and quite a few others.

So what about the manual working class according to these figures? Manufacturing jobs make up 16.5% of all jobs - around 4m workers. Power workers, water, gas and electricity workers, sewage and refuse workers, telecommunication and post office workers, construction workers and miners total an additional 2.7m, which brings the total of manual workers to 6.7m or 28% of the total workforce.

As to white-collar jobs, which are supposed to dominate society today, they number 10m or 41% of wage workers. Then comes a non-descript "other business activities" with 10%, health with another 10% and education with 8%.

It is difficult to draw a very precise picture from these figures. For instance, mechanics working in garages are put in the same category as salesmen. Manual workers in supermarkets or wholesale storage are included in retail. Doctors and highly-qualified nurses are in the same category as NHS ancillary staff. The non-descript "all other business activities" mentioned before includes many casual and temporary workers and neither the government nor the bosses want to give precise data on their real occupations. Likewise, in certain industries employers prefer to hire self-employed workers, to avoid taxes or labour regulations. So a significant number of the 3.4m "self-employed" are in fact disguised waged workers. But of course this is nowhere to be found in the statistics, nor is it possible to know in what branch they actually work. How many manual workers are not counted in the official statistics is therefore impossible to say, but certainly there must be a large number.

But even with these figures as they are, the fact is that 6.7m manual workers represent a colossal force. Even if this number is proportionally smaller than a century ago, its absolute size is much greater. Moreover, the evolution of society has produced a new phenomenon which would have been unthinkable a century ago: a highly concentrated low-paid white-collar workforce, which does not see itself as being socially above the manual working class. Recent TUC statistics show that over half of all waged workers in the private sector work on sites employing 250 workers or more. This may not be the size of the old British Leyland factory at Longbridge thirty years ago, but this is the scale of concentration that Marx alluded to when he said that capitalism was organising the working class on a collective basis - indeed a 250-strong workplace was a large one in the 1840s, when he wrote the Communist Manifesto.

In other words, the manual working class still remains, potentially in any case, a major factor in society due to its size and concentration. And by the way, this is something the bosses know so well that every time there has been the slightest industrial action by line workers in a factory like Ford-Dagenham over the past decades, it has made the headlines of the papers. But in addition, this manual working class is now reinforced by a broader contingent of low-paid white-collar workers. These workers may have less economic clout as such in the class struggle (although bank workers, for instance, could easily put the capitalists in a real mess) but they have the weapon of their numbers and concentration in large workplaces. All this makes the working class much stronger and less isolated than it was a century ago.

A "middle-class society"?

Of course in "New Labour"'s language, everyone is middle class because everyone is supposed to have a "stake" in the system. And to support this argument, politicians point to the many workers who own a few shares, own their homes or a have private pension. Of course given a different choice, like comfortable council housing and proper state pension provision, they may not have acquired any of these. But does this make these workers "middle class"?

The argument on share-ownership is a very old argument and is indeed hardly worth taking seriously. After all, only 16% of British households actually own any shares at all. And in most cases this is simply a way for people to protect what little savings they have from inflation - something that bank and building society accounts no longer allow these days - and most workers do not own enough of these shares to make a significant profit even if the stock market went mad.

When it comes to home ownership, only 26% of all homes today are owned outright, despite the selling-off of council homes by Thatcher, which left tenants with very little choice but to buy and those looking for a new home no option but to take a mortgage. Mortgagees today constitute 43% of households. It is true that this proportion has increased since 1979, when more than a third of the population lived in council housing as against 20% today. But those with mortgages very often find them a burden they ill afford. They cannot maintain their homes and are stuck when they need to move. The mortgage has proved, more often than not, a noose around the neck of many working class families which they resent rather than feel proud of. It is sometimes claimed by middle-class journalists that workers no longer go on strike because, as mortgagees, they are now on "the other side of the fence". But these middle-class journalists obviously do not know what a repossession means for a working class family - it means losing everything - and workers know that. How can they feel "on the other side of the fence" with such a permanent threat hanging over their heads?

As for the private pensions argument, the scandal over the mis-selling of private pensions to low-paid employees says it all. The administrative cost of such pensions was so high that it absorbed what little people could pay every month, so that in the end they got nothing in return. In fact this is why Blair has now come up with his stakeholder pensions scheme. It is a way of subsidising the insurance companies' costs so that they can capture workers' savings, but at a slightly lower premium. Even then the low-paid will be excluded because the scheme would be too expensive for them. In other words, a large section of the working class will still have to survive on starvation level state pensions and without the benefit of the occupational pensions they might have had in the past, if they worked in a large enough company. And the so-called "privileged" who will opt, or be forced to opt, for this new scheme, will find that their pensions are now dependent on the ups and downs of a mad financial system over which they have no control. Not an enviable situation and certainly not one which will make them feel secure!

So all this stakeholder nonsense amounts to very little. The working class remains just as deprived as it ever was. In fact it is even more deprived today. Due to the permanent unemployment of the past decades and the erosion of wages, its share of the national income has been going down continuously. Today, Britain's poorest 20% receive 7% of the national income while the richest 20% get 41%. 30% of all households have no savings at all. This is how "middle-class" the working class is!

Those who imagine that workers have become capitalist-minded because they look up the price of their handful of shares in the Financial Times are in fact hoping that their own dream of a middle class utopia has at last come true. But instead of the working class being gradually swallowed into the ranks of the middle-class, it is the lower middle-class which is either swallowed into the ranks of the working class through job losses and downgrading or alienated by the system which no longer bothers to respect their dignity. Into this category, fit senior nurses, teachers and other "professions".

Have workers lost their economic clout?

But who produces the most value, or for that matter any direct value at all? In terms of output, expressed as a percentage of Gross Domestic Product, the manual working class as defined above produces over 40%, despite representing only 28% of the workforce. And if nothing else, this illustrates the fact that the value produced by manual workers in Britain still represents a major source of income for the bosses, as well as, of course, the only domestic source of goods, fuel, transportation, etc.. for the population as a whole.

It is true, on the other hand, that 1m workers in financial services "produce" 22% of the same GDP. But how? Partly by playing on financial markets with the money left by workers in their bank accounts and partly by moving around capital belonging to capitalists and companies from all over the world. But where does this capital come from in the first place, if not from accumulated profits which originated in the production sphere and were never reinvested? In other words, it is the product of the past labour of the working class, in Britain or abroad.

So the myth which says that somehow the economy could survive on "finance" alone is an obvious nonsense. If it could, why would Blair and his ministers put so much effort into using their political weight with foreign governments to get contracts for British manufacturers? Obviously Britain's manufacturing capitalists know that neither they nor the enormous profits that the manual working class makes for them are "redundant".

But besides, what will the financial capitalists do the day power workers decide to pull the plug on their computers? Of course all large companies have now got their own emergency power supplies and procedures to store sensitive data by phone on a remote site by means of fast telephone links. But what if electrical maintenance and telecom workers decide to join ranks with power workers? Billions of pounds worth of financial dealings could be lost forever in a split second and the whole casino machine of the financial markets brought to a halt, should manual workers decide to go for it.

Some argue that technology will change working patterns so much that there will be no more large concentrations of workers and everyone will be working in tiny workplaces or even at home. It is hard to imagine large-scale manufacturing, such as car production, without a large concentration of workers in this society, but let us leave this aside for the time being.

The idea of an atomised working class is not a new one. At the end of the 19th century, capitalists were so terrified by the growing concentration of workers that in 1880, they enthusiastically welcomed the production of the first electrical motor. The newspapers were full of articles predicting a society of small workshops, each with sophisticated electric machines which could be a lot smaller and more productive than steam or petrol-powered ones. Production processes would just have to be reduced to a series of small operations each carried out by small workshops and most of the large factories would just close down. Except that it did not work. The companies which produced the new motors were determined to make as much profit as possible while they had a monopoly on their production and the motors turned out to be too expensive for small workshops. Most big factories, on the other hand, quickly switched to the use of these electric motors for fear that their competitors might do so before them. And the dream of a harmless working class deprived of its industrial muscle had to be forgotten altogether.

Today, we are presented with a slightly different story. Soon, we are told, most white-collar jobs will be done over the Internet. Yet this is exactly the same fairy tale that became fashionable a decade ago with the development of communications between micro-computers over telephone lines. It was said at the time that tele-working would come to dominate the white-collar sector. Typists, accountants, salesmen, etc.. would work from home and report to their companies via a telephone link. Except that the immediate result was a fast drop in productivity. When they were at home, workers had a tendency to find other things to do than working for their employers, especially since there were no supervisors to breathe down their necks. Most companies gave up as a result, except in the case of certain better-paid professional jobs where it was advantageous to turn full-time employees into occasional free-lance collaborators. And today, when you hear about the Internet fairy tale, just think about the hundreds of thousands of workers who are slaving away in Britain's call centres under the combined watchful eyes of supervisors, cameras and computer-aided surveillance to monitor their performance.

As to the atomisation of the working class through the closure of all big factories, this could happen in several ways. A high level of automation could be introduced so that only a few maintenance workers are needed. This would not be all that easy for some kinds of production, like the final assembly of cars, where many tricky parts that don't quite fit must be fitted regardless - something that no robot can do to date. But more importantly it would require enormous investment on the part of large companies, which is precisely what they have been avoiding for the past thirty years. Another way to fragment the working class is to resort, on a much larger scale, to subcontracting. But due to the poor quality of the products made by subcontractors who pay their workers low wages, big companies like Ford end up making plans to build special industrial parks for their subcontractors on sites next to their assembly plants, so as to be able to keep an eye on them. In other words, workers will be shifted from a Ford plant to the subcontractors' "park", where conditions would be worse, but a similar concentration of workers would be necessary.

Finally, by shifting the entire production abroad, the bosses can eliminate the need for any workers at all in the home country. Some industries have been able to do this on a large scale - such as the textile industry. But then the factories were mostly small with a low-skilled workforce and jobs which were already entirely automated. For most engineering it would be a lot more difficult to shift production because of the difficulty in finding a skilled workforce abroad, but also because of the political risk involved in closing a large factory. One never knows what the reaction of the workforce will be, and this worries both the bosses and the politicians - enough in any case for them to have refrained from too many abrupt closures since the early 1980s.

But above all, the fact is that all large companies still depend on the British market for a large part of, if not most of their profits, and on the subsidies of the British state. They will not risk losing either of these. So even in the industrial field, the working class will retain its economic clout for the foreseeable future - that is, if it chooses to use it.

The working class of the poor countries

Unlike in Marx's day, or even the days of the Russian revolution, the working class is no longer confined to a handful of industrialised or semi-industrialised countries. It is a truly international class in terms of its presence in every part of the world, including in the Third World. Indeed this has been one of the consequences of the development of the world market over the past century.

If course its development has been very uneven. Given that the world market has been divided and redivided during this period between the rich countries into their competing spheres of interest, it has meant that some Third World countries underwent a degree of development and industrialisation and others very little or none. This depended very much on the availability of the kind of resources, like oil and minerals or agricultural produce, which Western multinationals wished to exploit. But even so, because of the expansion of multinational agribusiness, even those countries which have remained largely as agricultural suppliers have seen a transformation of their previously self-sufficient peasantry into wage labourers.

Take India for example. It now has a population of 1bn. Only 16% of the labour force works in manufacturing, but this 16% comprises nearly 69m workers! Of the rest of the total labour force, which constitutes about 43% of the total population, 64% work in agriculture and 20% in service industry. In other words, India today has a very large working class - much larger, indeed, than Russia had on the eve of its proletarian revolution.

In today's Russia, despite the on-going disintegration of what is left of the old workers' state, the industrial working class, which was the majority in soviet society, still comprises 30m workers, with another 32m employed in services. Of course how many actually still receive a regular wage is another question, which puts them in the same bracket as many public sector workers in Africa and the rest of the poorer Third World countries.

The example of Brazil and South Africa, both relatively more industrialised than other countries on their continents, show a different distribution of the labour force - with South Africa still having 32% of its workers concentrated in manufacturing and Brazil 23%. China, a different example, given its past decades of isolation from the world market, still has only 15% of its workers registered as "industrial", in manufacturing. But that percentage represents 185m workers. And this excludes the majority employed in village-based factories who are categorised as part of the agricultural economy.

These figures demonstrate the enormous reinforcement that the growth of the working class in the Third World has brought to workers of the industrialised countries.

Moreover, beyond the Third World working class, there are the even larger battalions of the urban poor. In the last fifty years, the urban centres of the Third World have been swollen by an additional population of one billion people. Cities in poor countries now exceed in total population the cities of the industrialised countries. 23 of the world's 27 biggest cities are in the Third World - mega cities, with populations greater than 10m or more. London, by comparison, today has a population of around 8m. By 2015, these gigantic poor cities will hold three-quarters of the urban population of the world.

The conditions of these urban poor are comparable to those in Victorian Britain. 30 to 70% of these cities' populations live in shanty towns, with no piped water or the odd standpipe at best, no electricity unless they can get on-line illegally and no sewerage systems. They form the pool of manual labour used by the so-called "informal economy" - a sector in which there is no labour regulation to protect workers and no law except the law of the jungle. In Latin America, in 1995, this sector constituted 56% of the economically active population. In sub-Saharan Africa it constituted 75% of the labour force - some 314m workers, 16 million of them children aged between 10 and 14 years.

This informal sector is really an integral part of the formal, or regulated sector which is dependent on it. It provides the means by which large multinationals gain access to what amounts to near-slave labour. An unofficial subcontractor in Bombay for instance, will go into the shanty-town and find workers to make toothbrushes, assemble toys, put together packaging etc.., on a pathetic piece rate or even in exchange for the right to protection of their living space. Their products end up in the consignments for export of companies like Unilever. Of course this does not provide regular work for shanty-town dwellers. And the precarious nature of their existence means that they are often on the verge of starvation. But over the years, what has emerged, despite and because of this, are spontaneous organisations of self-protection amongst these slum-dwellers, and certain forms of self-government, as in the townships of South Africa, or the slums of Calcutta, preventing the demolition of their dwellings, organising water supplies and drains, protection from criminal gangs, etc. These impoverished workers are the natural ally of the industrial working class of these countries and could become a major base of support for them, indeed will have to.

A fighting tradition

What is more, the Third World working classes have a very long fighting tradition dating back to the inter-war period or even further, to the beginning of the 20th century. This flies in the face of the patronising attitude of Western trade union leaders whose only "contribution" to the Third World working class movement has been to export their bureaucratic methods.

One only has to think of the great strikes amongst copper and saltpetre workers in Chile, who in 1904, after forming a union which was 20,000 strong, had US weapons turned against them in a massacre in which 2,500 workers died. Or the 1926 strike of railworkers, in Sierra Leone, which lasted six weeks with the support of the entire capital's population. Or the African workers across Senegal and Niger who struck on the Dakar-Niger railway in 1947-48 and won a victory. Or the work of ITA Wallace-Johnson, a Marxist from Sierra Leone, who founded the West African Youth League and some of the first unions which organised workers across West African borders in 1939, and who ended up in prison for sedition after a wave of strikes.

In South Africa, unions started being built in the first quarter of the century, and gained impetus after the launch of the Communist party in 1921. From this point onwards, the South African working class was again and again at the forefront of the political scene. Sometimes they went through bitter defeats like the strike by 75,000 miners from 21 Anglo-American-owned mines in 1946, which was smashed after 1,000 miners were arrested, 1,250 injured and at least 13 killed. The militancy of the black working class by the 1980s made it impossible for the apartheid regime to survive. Today, having been deprived of a victory that was really theirs, by their own leaders, they continue to fight against the austerity and privatisations imposed by these same leaders.

In almost all Third World countries, the trade unions played a central role in the struggle against the colonial powers. But after independence they have all had to fight the nationalist politicians who they helped to power, indeed from the word go. To quote the Central African Mail from 1962 "thus with the solid voice of people demanding better wages and conditions and the courting of nationalist politicians behind it, the trade union movement has risen to power ahead of political development. It had a start, as it were, on nationalist politics. But now we find a twist in the scene. With the abdication of colonialism, nationalist politicians are beginning to attain power. And they are finding the self-same trade unions they used and courted on their way up are now a threat and barrier to their control and authority."

Today, strikes in Third World countries take place on a scale not seen in Britain for many years. And given that one argument for not taking strike action over wages in the rich countries has been that there is "no more money on the table", one wonders how Western trade union leaders would survive in Third World countries where there is normally next to nothing on the table? Spectacular strikes have just been taking place in India, to give an example, over threatened privatisation of the electricity industry. In Uttar Pradesh, skilled engineers and manual workers took the initiative, with 87,000 workers going on indefinite strike and calling on workers in the other states to support them. Workers in 7 other states joined them in day-long solidarity strikes. 6,000 "activists" were arrested including the strike leaders of the two unions involved. 400 workers were immediately sacked. After 11 days the government agreed to defer privatisation. While this strike was taking place 100,000 dockers and port workers were also involved in a 5-day strike over wage agreements - demanding that they should be 5-yearly instead of 10-yearly, as were local government workers.

But these examples are not given merely to demonstrate that the working class is alive and kicking in the Third World. It is the case that, ultimately, workers in Third World countries are being exploited by the same capitalist system, and often the same companies, as workers in the developed world. They have common social interests which are being made more obvious by the ever-growing integration of the world market. Moreover, they are linked by millions of individual and family ties that imperialism has sown unwittingly, and which will, some day, backfire on those who went out of their way to import cheap labour to the rich countries, sometimes, by force.

Is the class struggle over?

The class struggle is of course not only expressed by big strikes. It goes on day to day, in the form of stoppages and other forms of resistance against petty attacks against workers. Besides, strikes continue to take place in Britain. But they are not high profile news and often they are not even reported by the media. For instance who has heard about the successful, unofficial strike involving 2,500 postal workers in Edinburgh, Lothian and Fife sorting centres over the sacking of a shop steward last December? But others have been reported, such as the strike by BT Call Centre workers which actually caused the company so much embarrassment when conditions were made public that they agreed to the union's demands. Likewise Connex drivers just forced their management to back down after just one day's strike action. There again, the fact that even an overtime ban by drivers had led to the company having to suspend half its services meant that they had no way of hiding the fact that they were undermanned and therefore pushing drivers to unsafe limits in working hours. Public sympathy inevitably went to the strikers. So even with today's conciliatory union leadership, it has proved possible for some sections of workers to defend conditions and make a few gains.

It is true that there has been a generalised weakening of the working class right across the developed world over the past decades, though. But this was not due to the workers' unwillingness or inability to fight. It was due to the failure of the trade union leadership to organise anything to defend even the most basic material interests of their members. In the context of rising unemployment this failure has swung the balance of forces against workers. And this is the situation the working class has to deal with now.

There is no shortage of energy nor is there a shortage of militancy in the working class today. What there is a shortage of, is the confidence that action will achieve something, given the fact that workers who have struggled have been betrayed more often than not by their own union officials. It is this confidence that needs to be rebuilt.

Today, however the working class is short on political tradition. Of course, despite the efforts of Thatcher and Blair, the working class has certainly not lost its class identity. But what it no longer has the habit of, is to voice its own class interests on the political scene. This is what we mean by political tradition. These class interests have nothing to do with the narrow sectional and often nationalist outlook which is proposed by the left of the Labour party and trade union movement. On the contrary, the interests of the British working class are indistinguishable from those of the international working class, just as they are indistinguishable from those of society as a whole. That tradition too, has to be rebuilt.

The only revolutionary force in society

What is vital today is not only that the working class again finds the confidence in its own strength that it needs in order to regain the ground lost. It is also vital that it rediscovers the political ideas which presided over the development of its first organisations in the 19th century - and particularly the idea of the need for social change as formulated by Marx in the Communist Manifesto.

Implementing the idea of a rationally organised economy through a democratically-controlled system of central planning was an overwhelming task in the context of Russia's backwardness in 1917, with hardly any means of communicating, scarcely any means of transportation and a ruined industry. But for instance, in today's context, the "communication revolution" as the media calls it, could become something other than just a money- spinner for speculators. It could become a means to implement immediately, at the touch of a button, what involved so much effort and sacrifice for the Russian working class. It would make it possible to gather data on production, needs and resources instantly, consult all those concerned, and make rapidly the necessary adjustments in the production and distribution programmes - and all this on a world scale. Human knowledge in science and technology has now reached such a level of development that many of the practical problems which would need to be resolved in order to satisfy the needs of the planet's population as a whole have already been resolved. The only obstacle is the survival of this outdated social organisation.

What is lacking today amongst the working class is the consciousness of these realities, and a political party which, instead of seeking its integration within the existing social order, sets itself the task to change it from top to bottom. Of course, the working class does not today act as a revolutionary force. But throughout its history, it has never been revolutionary except for very short periods, if only because it has to bear the brunt of capitalist exploitation and the ideological pressures of a society in which everything, from education and culture to the media, is controlled by its exploiters. It is difficult to break free from this grip. The working class can only do so in periods of deep social crisis - which occur only a few times in a century. For us, Marxists, the working class is the only revolutionary force in society because it is the only force capable of using the opportunity of such a social crisis to overthrow the foundation of the capitalist system - that is the private ownership of the means of production in which it has no stake - in Britain and on a world scale.

Today no political party offers such a perspective. Those parties which claim to represent working people, here or abroad, aim only for acceptance into government as loyal trustees for interests of the capitalist class. But with a party of its own, prepared to fight for the perspective of a new society, the working class will have the equipment it needs to achieve this aim, and no obstacle will be great enough to stand in its way.

February 2000