[Marxism] Trotsky on New Deal

["Gary MacLennan" <gary.maclennan1@xxxxxxxxx>]

The title of this thread is something of a misnomer and I apologize for that
in advance.  But I have been intending to do some research for a piece on
the Australian Rudd govt and also to make a little contribution to the
revival of New Deal mythology and what could be termed FDRism.  By that last
expression I mean the belief that there is someone at the top in charge who
cares deeply about us down at the bottom. I think the trick here is to
realise that the "caring thang" is even more important than belief that the
leader knows what to do.  Those who subsist at the bottom of society are
amazingly tolerant and forgiving of their leaders' blunders if they think
they care.

Our former leader George Bush was blessed with the twin gifts of ignorance
and indifference as the whole Katrina catastrophe showed.  He neither knew
what should be done nor did he care the slightest.  This immediate period we
are going into is marked I think by what might be termed the return of the
Caring Leader motif.  Enough said on that score.

Let me now try and justify at least to some extent the title of this post.
In his introduction to *The Living Thoughts of Karl Marx: Based on Capital:
A critique of Political Economy *(Cassell, [1940] 3rd ed 1946) Trotsky
writes of how two methods have emerged to save historically doomed
capitalism - Fascism and the New Deal.  The difference between them is that
Fascism aims to destroy the proletariat in order to save the Reich or the
nation, while the New Deal aims to save 'imperialist democracy' by providing
sops to the farmer and Labour aristocracy (pp24-5).

We will leave aside the fascism part of the equation for another day -
hopefully a distant day at that.  But it is on these sentences that I wish
to concentrate;   'The policy of the New Deal....is in its broad compass
accessible only to the very wealthy nations, and so in that sense it is
American policy *par excellence' *. The American government has attempted to
shift a part of the costs of that policy to the shoulders of the
monopolists, exhorting them to raise wages and shorten the labour day and
thus increase the purchasing power of the population and extend production
(p25).

As far as I can see there is nothing comparable being envisaged or put in
place at present. The whole impulse of the bail-outs has been really to
shift power even more decisively to the monopolists. It will take I would
imagine a much greater deterioration of the financial situation to get any
meaningful pressure placed on the American elites.

Now another switch.  Trotsky as quoted above argued that the New Deal was an
essentially American phenomenon.in his analysis of the American New Deal.
He has nothing but scorn for Leon Blum's attempts to imitate FDR's New
Deal.  He quotes with approval a commentator's characterization of the
Popular Front as 'an adaptation of the New Deal "for Lilliputians" (p40)
There are two other points which need to be made here and perhaps we will
return to them in another post.  Trotsky firstly emphases the New Deal had
failed. Secondly he stresses that as its purpose was to save capitalism, it
would 'culminate in ferocious capitalist reaction and a devastating
explosion of imperialism' (p26).

So onwards to Oztralia and the Policies of the Rudd Labor Govt .  The big
news here was the  A$10.4 billion stimulus package that pensioners, families
and other lower earning groups got before Chrismas. Something like two
million Australians were affected.  Rudd came on TV urging people to spend,
spend, spend.    Well the first point to be made here is that $10 billion is
truly a Lilliputian gesture.  It is too little and too late.  Just a little
over a year ago the Reserve bank was still committed to Volckerism - raising
interest rates to fight the "main enemy" inflation.  This despite all the
evidence the world was heading for a deep recession.  The reserve bank later
panicked and lowered interest rates by 1%.  Then came the Rudd package.
*
* I will take up later  the quite bizarre reaction in some quarters to the
command to "spend". But what it did and this is of course why there was some
debate about the matter was to expose a fundamental contradiction within
capitalism.  The best analysis of this is as far as I know in Grundrisse
(1973, Penguin).  There Marx first makes the point that workers are supposed
to save so that they do not become a burden on the capitalists in old age or
illness. So much is made of the virtue of thrift and piggy banks for
children etc.  However Marx also points out that if the working-class as a
class saves that will lead to an enormous collapse which would 'degrade the
workers 'to the level of the Irish' (p285). Besides as Marx points out the
capitalists  is trapped between the contradiction of wanting his own workers
to save, but not the remaining world of workers. They are supposed to
consume and the capitalist searches for means to make them increase their
consumption.

There occurs then another sentence which is truly worth a seminar all on its
own.  Marx claims that it is the attempts by capital to increase the
consumption of the working class "which is an essential civilising moment
and on which the historic justification, but also the contemporary power of
capital rests' (p287).  So here I think we have something of a clue to
explain why the backbenches of the British Labour Party erupted in joy when
Chancellor Darling urged the British to spend.  Similar animal spirits now
have hold of the Australian Labor Party as they too urge on spending.  It
would seem for the moment that the true believers in the Labour & Labor
Party can have it all.  They can serve the Capitalist class and also do the
working class a favour by encouraging them to consume.

The resulting spike in consumer confidence here in Oz and also the leap in
Labor Party approval are all signs the deepest of all illusions, that
Capitalism is not a zero-sum game, is strengthening and that those who serve
under the banner of this illusion are doing very well.  But as always the
remorseless dialectic will show that what we are dealing with here is a dead
cat bounce.  The crisis will deepen and then there will be a real show down
with all those who serve capital, including those demanding unity and
sacrifice.
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