Tony Cliff

Economic roots of reformism

(June 1957)

From Socialist Review, Vol. 6 No. 9, June 1957.
Also published in New International, Vol. 24 No. 1, Winter 1958.
Reprinted in Tony Cliff, Neither Washington nor Moscow, London 1982, pp. 108–117.
Downloaded from Rolf Vorhaug’s Homepage with thanks.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

We live in a critical period for civilisation. During the last half century humanity has suffered two terrible wars and is now living in the shadow of total annihilation. The present generation has witnessed mass unemployment and hunger, fascism and the gas chamber, barbarous murders of colonial peoples in Kenya and Malaya, Algeria and Korea.

However, in the midst of these terrible convulsions, the working class in a number of countries in the West – the United States, Britain, Canada, Norway, Sweden, Holland, Denmark, Germany and others show a stubborn adherence to Reformism, a belief in the possibility of major improvement in conditions under capitalism, and a rejection of the revolutionary overthrow of capitalism. Why is this so? Why the general political apathy and rejection of revolutionary changes in society, when humanity as a whole is in the grip of life and death struggles?

Only if we find the correct answer to this question can we answer a further one: For how long can Reformism push aside revolutionary aspirations in the working class? There can scarcely be a question more vital for Socialists in the West and hence for the world Socialist movement. The present article IS an attempt to contribute something towards the clarification of these problems.

Lenin’s theory

The most important Marxist to define the roots of Reformism was Lenin.

In 1915, in an article entitled The Collapse of the International, Lenin explained Reformism, or to use the term he coined, Opportunism, thus: “The period of imperialism is the period in which the distribution of the world amongst the ‘great’ and privileged nations, by whom all other nations are oppressed, is completed. Scraps of the booty enjoyed by the privileged as a result of this oppression undoubtedly fall to the lot of certain sections of the petty-bourgeoisie and the aristocracy and bureaucracy of the working class.”

How big was the section of the working class which received these “scraps of booty”? Lenin says: “... these sections ... represent an infinitesimal minority of the proletariat and the working masses.”

And in line with this analysis Lenin defines Reformism as “the adherence of a section of the working class with the bourgeoisie against the mass of the proletariat”.

The economic foundation of the small “aristocracy of labour” is to be found, according to Lenin, in imperialism and its super-profits. He writes in a preface dated 6 July, 1920, to his book Imperialism, the Highest Stage of Capitalism:

Obviously, out of such enormous super-profits (since they are obtained over and above the profits which capitalists squeeze out of the workers of their “own” country) it is possible to bribe their labour leaders and an upper stratum of the labour aristocracy. And the capitalists of the “advanced” countries do bribe them: they bribe them in a thousand different ways, direct and indirect, overt and covert.

This stratum of bourgeoisified workers or “labour aristocracy”, who have become completely petty-bourgeois in their mode of life, in the amount of their earnings, and in their point of view, serve as the main support of the Second International and, in our day, the principal social (not military) support of the bourgeoisie. They are the real agents of the bourgeoisie in the labour movement, the labour lieutenants of the capitalist class, the real carriers of reformism and chauvinism.

Conclusion vs. facts

An inevitable conclusion following upon Lenin’s analysis of Reformism is that a small thin crust of conservatism hides the revolutionary urges of the mass of the workers. Any break through this crust would reveal a surging revolutionary lava. The role of the revolutionary party is simply to show the mass of the workers that their interests are betrayed by the “infinitesimal minority” of “aristocracy of labour”.

This conclusion, however, is not confirmed by the history of Reformism in Britain, the United States and elsewhere over the past half century: its solidity, its spread throughout the working class, frustrating and largely isolating all revolutionary minorities, makes it abundantly clear that the economic, social roots of Reformism are not in “an infinitesimal minority of the proletariat and the working masses” as Lenin argued.

Showing where Lenin’s analysis went wrong will help us to see more clearly the real economic, social and historical foundations of Reformism.

How to throw crumbs

The first question one has to ask in tackling Lenin’s analysis is this: How did the super-profits of, say, British companies in the colonies, lead to the “throwing of crumbs” to the “aristocracy of labour” in Britain? The answer to this question invalidates the whole of Lenin’s analysis of Reformism.

To take an example, the Anglo-lranian Oil Company has been drawing magnificent super-profits over decades. How does this lead to crumbs being thrown to the aristocracy of Labour? First of all, this company employs only a small number of workers in Britain. And even these are certainly not given higher wages simply because its rate of profit is high. No capitalist says to the workers: “I have made high profits this year, so I am ready to give you higher wages.”

Imperialism, and the export of capital, can of course greatly affect the wages level in the industrial country by giving employment to many workers who produce the machines, rails, locomotives, etc., which make up the real content of the capital exported. This influence on the level of employment, obviously affects the wages level generally. But why should it affect only the real wages of an “infinitesimal minority”? Does the increase of employment possibilities, and decline in unemployment, lead to the rise of a small “aristocracy of labour” while the conditions of the mass of the working class is hardly affected at all? Are conditions of more or less full employment conducive to increasing differentials between skilled and unskilled workers? They are certainly not.

One may argue that the high super-profits of the capitalists on their investments in the colonies led to a rise of wages in another way: that the capitalists do not oppose labour laws defending workers’ conditions as strongly as they would do if profits were low. This is so. But these laws cannot be said to lead to an increasing differentiation of living standards between the different layers of the working class.

We go up together

Look at simple examples like the prohibition of child labour or limitations on female labour in certain industries. This does not affect the supply, and hence wages, in the skilled labour market more than in the unskilled. The limitation of the workday also does not affect the skilled labour market more than the unskilled. Indeed, everything that raises the standard of living of the mass of the workers, unskilled and semi-skilled, diminishes the difference between their standards and those of the skilled workers. The higher the general standard of living, including the educational level, the easier is it for unskilled workers to become semi-skilled or skilled. The financial burden of apprenticeship is more easily borne by better-off workers. And the easier it is for workers to learn a skill, the smaller is the wage differential between skilled and unskilled workers.

Again, one can argue that imperialism throws “crumbs” to workers through the fact that it gets foodstuffs (and raw materials) extremely cheaply from the backward, colonial countries. But this factor, again, affects the standard of living not only of a minority of “aristocracy of labour” but the whole of the working class of the industrial countries. To this extent, by raising general living standards, it diminishes differences between sections of this same working class.

The effect of trade unions and the political activity of the labour movement on the whole is similar. The better the general conditions of ‘the workers the less is the income differentiation between its sections. (This was only partly counteracted when the trade unions consisted only of skilled workers.)

In fact, all historical experience testifies that the fewer the workers’ rights and the more downtrodden they are, the greater are the differentials especially between skilled and unskilled workers. This is clearly illustrated by the following table comparing the wages of skilled and unskilled workers between the two world wars in an economically advanced country like Britain and a backward one like Rumania:

Skilled Wages as Percentage of Unskilled
	Pattern Makers	Fitters & Turners	Iron Moulders	Plumbers	Electricians	Carpenters	Painters
Britain	131	127	130	147	152	147	146
Rumania	200	210	252	300	182	223	275

(Clark, Conditions of Economic Progress, London 1950, p. 460)

Or to take another example: “... a locomotive engineer of ordinary length of service and rating receives 3.3 times the wages of an unskilled man of ordinary length of service in Spain, while in New Zealand the ratio is only 1 : 2” (Ibid., p.461).

It can be shown statistically that in the last century the differentiation in the working class of Britain (as well as in many other industrial countries) has become smaller, and that not only an “infinitesimal minority”, but the whole of the working class, benefited from increasing living standards. To prove this one last point, one need but compare present conditions in Britain with the conditions of the workers described in 1845 by Engels in The Conditions of the Working Class in England.

Where we came from

This is his description of typical housing conditions:

In the parishes of St. John and St. Margaret there lived in 1840, according to the Journal of the Statistical Society, 5,366 working-men’s families in 5,294 “dwellings” (if they deserve the name!), men, women, and children thrown together without distinction of age or sex, 26,830 persons all told; and of these families three-fourths possessed but one room.

They who have some kind of shelter are fortunate, fortunate in comparison with the utterly homeless. In London fifty thousand human beings get up every morning, not knowing where they are to lay their heads at night. The luckiest of this multitude, those who succeed in keeping a penny or two until evening, enter a lodging-house, such as abound in every great city, where they find a bed. But what a bed! These houses are filled with beds from cellar to garret, four, five, six beds in a room: as many as can be crowded in. Into every bed four, five, or six human beings are piled, as many as can be packed in, sick and well, young and old, drunk and sober, men and women, just as they come, indiscriminately. Then come strife, blows, wounds, or if these bedfellows agree, so much the worse; thefts are arranged and things done which our language, grown more humane than our deeds, refuses to record. And those who cannot pay for such a refuge? They sleep where they find a place, in passages, arcades, in corners where the police and the owners leave them undisturbed.

Health, clothing, sanitation, education were all of the same standard. One scarcely needs further proof that the conditions of the working class as a whole, and not only of a small minority, have improved radically under capitalism this last century.

Imperialism and reformism

As we have seen, there has been a close connection between the imperialist expansion of capitalism and the rise of Reformism. Risking some repetition, we think it is worth while summing up the connection between the two.

The markets of the backward colonial countries, by increasing demand for goods from the industrial countries, weaken the tendency for over-production there, decrease the reserve army of unemployed, and so bring about an improvement in the wages of workers in the industrial countries.
The increase in wages brought about in this way has a cumulative effect. By increasing the internal market in the industrial countries, the tendency for over-production is weakened, unemployment decreases, wages rise.
The export of capital adds to the prosperity of the industrial countries as it creates a market for their goods – at least temporarily. The export of cotton goods from Britain to India pre-supposes that India is able to pay for it straight away, by exporting cotton, for instance. On the other hand, the export of capital for the building of a railway presupposes an export of goods – rails, locomotives, etc. – beyond the immediate purchasing power, or exporting power, of India. In other words, for a time, the export of capital is an important factor in enlarging markets for the industries of the advanced countries.

Boomerang effect

However, in time, this factor turns into its opposite: capital once exported puts the brake on the export of goods from the “mother” country after the colonial countries start to pay profit or interest on it. In order to pay a profit of £10 million to Britain (on British capital invested in India), India has to import less than it exports, and thus save the money needed to the tune of £10 million. In other words, the act of exporting capital from Britain to India expands the market for British goods: the payment of interest and profit on existing British capital in India restricts the markets for British goods.

Hence the existence of great British capital investments abroad does not at all exclude over-production and mass unemployment in Britain. Contrary to Lenin’s view, the high profit from capital invested abroad may well be not a concomitant of capitalist prosperity and stabilisation in the Imperialist country, but a factor of mass unemployment and depression.

The export of capital to the colonies affects the whole capital market in the Imperialist country. Even if the surplus of capital looking vainly for investment were very small, its cumulative influence could be tremendous, as it would create pressure in the capital markets, and strengthen the downward trend of the rate of profit. This in turn would have a cumulative effect of its own of the activity of capital, on the entire economic activity, on employment, and so on the purchasing power of the masses, and so again in a vicious circle, on the markets.

The export of surplus capital can obviate these difficulties and can thus be of great importance to the whole capitalist prosperity, and thus to Reformism.

By thus relieving pressure in capital markets the export of capital diminishes competition between different enterprises, and so diminishes the need of each to rationalise and modernise its equipment. (This to some extent explains the technical backwardness of British industry, the pioneer of the industrial revolution, as compared with that of Germany today, for example.) This weakens the tendencies to over-production and unemployment, wage cuts, etc. (Of course, in changed circumstances, in which Britain has ceased to have a virtual monopoly in the industrial world, this factor may well cause the defeat of British industry in the world market, unemployment and cuts in wages.)

Buying cheap raw materials and foodstuffs in the colonies allows real wages in the industrial countries to be increased without cutting into the rate of profit. This increase of wages means widened domestic markets without a decrease in the rate and amount of profit, i.e. without weakening the motive power of capitalist production.

The period during which the agrarian colonial countries serve to broaden markets for the industrial countries will be longer in proportion to (a) the size of the colonial world compared with the productive power of the advanced industrial countries, and (b) the extent that the industrialisation of the former is postponed.

Vested interest in nationalism

All the beneficial effects of Imperialism on capitalist prosperity would disappear if there were no national boundaries between the industrial Imperialist countries and their colonies.

Britain exported goods and capital to India and imported cheap raw materials and foodstuffs, but it did not let the unemployed of India – increased by the invasion of British capitalism – enter Britain’s labour market. If not for the barrier (a financial one) to mass Indian immigration into Britain, wages in Britain would not have risen throughout the last century. The crisis of capitalism would have got deeper and deeper. Reformism would not have been able to replace revolutionary Chartism.

Here again the weakness of Lenin’s theory of the aristocracy of labour is shown clearly. According to Lenin, Reformism is a creature of the period of what he called “the highest stage of capitalism” – the period of the export of capital which earns a high rate of profit and allows for crumbs from this profit to fall into the hands of the “aristocracy of labour”. This period of big export of capital began in Britain in the last decade or so of the nineteenth century

Wages rise before Empire

As a matter of fact a tremendous rise in workers’ wages took place long before: in 1890 real wages of industrial workers in Britain were some 66 per cent higher than in 1850 (Layton and Crowther, A Study of Prices). The reason was quite obvious: the most important factor in improving real wages in Britain was the expansion of work opportunities – the expansion of production – based on an enlargement of the market for the industrial goods. And this took place long before the period of export of capital.

To put it roughly, between 1750 and 1850, when the expanding output of British industry was accompanied by the ruin of many British artisans and Irish peasants, these went into the British labour market and so kept wages very low. But since the middle of the nineteenth century, British artisans and, after the “Hungry Forties”, the surplus agricultural population of Ireland, were either absorbed into British industry, or emigrated. From then on it was the Indian artisan and peasant who were ruined by the competition of British industry – but they did not enter the British labour market to depress wages.

That the turning point in the British wages trend took place long before the end of the nineteenth century, and actually at the time when indigenous unemployed artisans and peasants were already absorbed into industry while the colonial unemployed were prevented from entering the British labour market, i.e. during the ’30s and ’50s of the nineteenth century, is clear from the following interesting table:

Real Wages, 1759 to 1903 (1900: 100)
Decades and Trade Cycles		Index
1759–68		62
1769–78		60
1779–88		60
1789–98		58
1799–1808		50
1809–18		43
1819–28		47
1820–26		47
1827–32		48
1833–42		51
1843–49		53
1849–58		57
1859–68		63
1869–79		74
1880–86		80
1887–95		91
1895–1903		99

(J. Kuczynski, A Short History of Labour Conditions in Great Britain 1750 to the Present Day, London 1947, p. 54)

The effects of Imperialism on capitalist prosperity, and thus on Reformism, do not limit themselves to the Imperialist Powers proper, but spread to a greater or lesser degree into all developed capitalist countries. Thus a prosperous Britain, for instance, can offer a wide market to Danish butter, and so spread the benefits derived by British capitalism from the exploitation of the Empire to Danish capitalism.

Economic basis of the Right

The expansion of capitalism through imperialism made it possible for the trade unions and Labour Parties to wrest concessions for the workers from capitalism without overthrowing it. This gives rise to a large Reformist bureaucracy which in its turn becomes a brake on the revolutionary development of the working class. The major function of this bureaucracy is to serve as a go-between the workers and the bosses, to mediate, negotiate agreements between them, and “keep the peace” between the classes.

This bureaucracy aims at prosperous capitalism, not its overthrow. It wants the workers’ organisations to be not a revolutionary force, but Reformist pressure groups. This bureaucracy is a major disciplinary officer of the working class in the interests of capitalism. It is a major conservative force in modern capitalism.

But the trade union and Labour Party bureaucracy are effective in disciplining the working class in the long run only to the extent that the economic conditions of the workers themselves are tolerable. In the final analysis the base of Reformism is in capitalist prosperity.

Labour imperialism

If Reformism is rooted in Imperialism, it becomes also an important shield for it, supporting its “own” national Imperialism against its Imperialist competitors and against the rising colonial movements.

Reformism reflects the immediate, day-to-day, narrow national interests of the whole of the working class in Western capitalist countries under conditions of general economic prosperity. These immediate interests are in contradiction with the historical and international interests of the working class, of Socialism.

As capitalist prosperity, together with relatively favourable conditions in the labour market, can be helped by Imperialist expansion, by the exploitation of the colonies, Reformism has been to a large extent the expression of the Imperialist domination over backward countries.

As, however, Prosperity with more or less full employment and relatively tolerable wages, may be induced at least for a time by the conditions of the permanent war economy (see my article Perspectives of the Permanent War Economy, Socialist Review, May 1957), Reformism has economic roots also where the Imperialist war economy takes the place of Imperialist expansion.

The war economy

During the thirties, in face of the deep world slump, unemployment and Fascism, it looked as if the foundations of Reformism were undermined for good. Writing in that period and prognosticating the future, Trotsky wrote: “in (the) epoch of decaying capitalism, in general, there can be no discussion of systematic social reforms and the raising of the masses’ living standards, when every serious demand of the proletariat and even every serious demand of the petty bourgeoisie inevitably reaches beyond the limits of capitalist property relations and of the bourgeois state.” The Death Agony of Capitalism.

If serious reforms are no longer possible under capitalism, then the knell of bourgeois parliamentary democracy is sounded and the end of Reformism is at hand.

The war, as a sharpener of contradictions in capitalism, would lead to the acceleration of these processes, according to Trotsky.

However, Trotsky’s prognosis was belied by life. The war, and the permanent war economy gave a new lease of life to capitalism and hence to Reformism in many of the Western capitalist countries.

In itself, the increasing dependence of Reformism on the permanent war economy shows its bankruptcy and the need for a revolutionary overthrow of capitalism with its twins – the permanent war economy and Reformism. However, this bankruptcy of Reformism is not yet apparent to every worker through his daily experience. As I tried to show in my article in the May issue of Socialist Review, it will be a matter of some years till the permanent war economy leads to a big deterioration of workers’ conditions, and thus to a withering away of the roots of Reformism.

For this to happen it is not necessary, of course, that the standard of living of workers should be cut to the bone. An American worker would react very strongly to a threat to his car and television set, even if workers elsewhere look at these things as undreamt-of luxuries. To the extent that past reforms are accepted as necessities, a series of new reforms becomes the expected course of events. With the eating comes the appetite. When capitalism, however, decays to the extent that any serious demands of the working class reach beyond its limits, the bell will toll for Reformism.

A realistic understanding of the foundations of Reformism, its strength and depth, as well as the factors undermining it, is necessary to an understanding of the future of the Socialist movement. As Engels put it more than a hundred years ago: “The condition of the working class is the real basis and point of departure of all social movements at present ... A knowledge of proletarian conditions is absolutely necessary to be able to provide solid ground for socialist theories ...” (Preface to The Condition of the Working Class in England)

Of course, even when the economic roots of Reformism wither away, Reformisrn will not die by itself. Many an idea lingers on long after the disappearance of the material conditions which brought it forth. The overthrow of Reformism will be brought about by conscious revolutionary action, by the propaganda and agitation of consistent Socialists. Their job will be facilitated by a future sharpening of the contradictions in capitalism.

Every struggle of the working class, however limited it may be, by increasing its self-confidence and education, undermines Reformism. “In every strike one sees the hydra head of the Revolution.” The main task of real, consistent Socialists is to unite and generalise the lessons drawn from the day-to-day struggles. Thus can it fight Reformism.

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