Reform or Revolution, 3. Paul Mattick

The Limits of Reform

However reformable capitalism may prove to be, it cannot alter its basic wage and profit relations without eliminating itself. The age of reform is an age of spontaneous capital expansion, based on a disproportional but simultaneous increase of both wages and profits. It is an age wherein the concessions made to the working class are more tolerable to the bourgeoisie than the upheavals of the class struggle that would otherwise accompany capitalist development. As a class, the bourgeoisie does not favor minimum wages and intolerable working conditions, even though each capitalist, for whom labor is a cost of production, tries to reduce this expense to the utmost. There can be no doubt that the bourgeoisie prefers a satisfied to a dissatisfied working class and social stability to instability. In fact, it looks upon the general improvement of living standards as its own accomplishment and as the justification for its class rule. To be sure, the relative well-being of the laboring population must not be carried too far, for its absolute dependency on uninterrupted wage labor must be maintained. But within this limit, the bourgeoisie has no subjective inclinations to reduce the workers to the lowest state of existence, even where this might be objectively possible by means of appropriate measures of repression. As the inclinations and actions of the workers are determined by their dependency on wage labor, those of the bourgeoisie are rooted in the necessity to make profit and to accumulate capital, quite apart from their diverse ideological and psychological propensities.

The limited reforms possible within the capitalist system become the customary conditions of existence for those affected by them and cannot easily be undone. With a low rate of accumulation they turn into obstacles to profit production, overcoming which effect requires exceptional increases in the exploitation of labor. On the other hand, times of depression also induce various reform measures, if only to withstand the threat of serious social upheavals. Once installed, these also tend to perpetuate themselves and must be compensated for by a correspondingly greater increase in the productivity of labor. Of course attempts will be made, some of them successfully, to whittle down what has been gained by way of social legislation and better living standards, in order to restore the necessary profitability of capital. Some of these gains will remain, however, through periods of depression as well as prosperity, with the result of a general improvement of the workers' conditions through time.

The hand-to-mouth existence of the workers made it never easy to strike for higher wages and better working conditions. Only the most brutal provocations of their employers would move them to action, as a lesser evil than a state of unmitigated misery. Aware of the workers' dependence on the daily wage, the bourgeoisie answered their rebellions with lockouts, as a most efficient means to enforce the employers' will. Lost profits can be regained, lost wages not. However, the formation of trade unions and the amassing of strike funds changed this situation to some extent in favor of the workers, even though it did not always overcome their conditioned reluctance to resort to the strike weapon. For the capitalists, too, the readiness to defy their workers' demands waned with the increasing profit loss on an enlarged but unutilized capital. With a sufficient increase in productivity, concessions made to the workers could prove more profitable than their denial. The gradual elimination of cut-throat competition by way of monopolization and the generally increasing organization of capitalist production also entailed regulation of the labor market. Collective bargaining over wages and working conditions eliminated to some extent the element of spontaneity and uncertainty in the contests between labor and capital. The sporadic self-assertion of the workers made room for a more orderly confrontation and a greater “rationality” in capital-labor relations. The workers' trade union representatives turned into managers of the labor market, in the same sense as that in which their political representatives attended to their farther-reaching social interests in the parliament of bourgeois democracy.

Slowly, but relentlessly, control over working-class organizations escaped the hands of the rank and file and was centralized in those of professional labor leaders, whose power rested on a hierarchically and bureaucratically organized structure, the operation of which, short of the destruction of the organization itself, could no longer be determined by its membership. The workers' acquiescence in this state of affairs required of course that the activities of “their” organizations provide some tangible benefits, which were then associated with the increasing power of the organizations and their particular structural development. The centralized leadership now determined the character of the class struggle as a fight over wages and for limited political goals that had some chance of being realized within the confines of capitalism.

The different developmental stages of capital production in different countries, as well as the divergent rates of expansion of particular industries in each nation, were reflected in the heterogeneity of wage rates and working conditions, which stratified the working class by fostering specific group interests to the neglect of proletarian class interests. The latter were supposedly to be taken care of by way of socialist politics, and where such politics were not as yet a practical possibility – either because the bourgeoisie had already preempted the whole sphere of politics through its complete control of the state machinery, as in the Anglo-Saxon countries, or because autocratic regimes precluded any participation in the political field, as in the Eastern capitalistically undeveloped nations – there was only the economic struggle. This, while uniting some layers of the working class, divided the class itself, which tended to frustrate the development of proletarian class consciousness.

The breaking up of the potential unity of the working class by way of wage differentials, nationally as well as internationally, was not the result of a conscious application of the ages-old principle of divide and rule to secure the reign of the bourgeois minority, but the outcome of the supply and demand relations of the labor market, as determined by the course of social production as the accumulation of capital. Occupations privileged by this trend tried to maintain their prerogatives through their monopolization, by restricting the labor supply in particular trades not only to the detriment of their capitalistic adversaries but also to that of the great mass of unskilled labor operating under more competitive conditions. Trade unions, once considered instruments for a developing class consciousness, turned out to be organizations concerned with no more than their special interests defined by the capitalist division of labor and its effects upon the labor market. In time, of course, trade organizations were superseded by industrial unions, incorporating a number of trades and uniting skilled with unskilled labor, but only to reproduce the strictly economic aspirations of the union membership on an enlarged organizational base. In addition to wage differentials, which are a general feature of the system, wage discrimination was (and is) widely cultivated by individual firms and industries in the attempt to break the homogeneity of their labor force and to impair their ability for concerted action. Discrimination may be based on sex, race, or nationality, in accordance with the peculiarities of a given labor market. Persistent prejudices associated with the ruling ideology are utilized to weaken workers' solidarity and with it their bargaining power. In principle, it is of course immaterial to the capitalists to what particular race or nationality its labor force belongs, so long as their skill and propensity to work does not fall below the average, but in practice a mixed labor force with unequal, or even with equal, wage scales engenders or accentuates already existing racial or national antagonisms and impairs the growth of class consciousness. For instance, by reserving the better paid or less obnoxious jobs for a favored race or nationality, one group of workers is pitted against another to the detriment of both. Like job competition in general, discrimination lowers the general wage rate and increases the profitability of capital. Its use is as old as capitalism itself; the history of labor is also the history of competition and discrimination within the working class, dividing the Irish from the British workers, the Algerian, from the French, the black from the white, new immigrants from early settlers, and so on, almost universally.

While this is a consequence of the prevalence of bourgeois nationalism and racism in response to the imperialistic imperative, it affects the working class not only ideologically but also through their competition on the labor market. It strengthens the divisive as against the unifying elements of the class struggle and offsets the revolutionary implications of proletarian class consciousness. At any rate, it carries the social stratification of capitalism into the working class. Its economic struggles and organizations are designed to serve particular groups of workers, without regard to general class interests, and the confrontations between labor and capital remain necessarily within the frame of market and price relations.

Far-reaching wage differentials allow for different living standards, and it is by the latter, not by the labor done, that workers prefer to assess their status within capitalist society. If they can afford to live like the petite bourgeoisie, or come close to doing so, they tend to feel more akin to this class than to the working class proper. Whereas the working class as a whole can only escape its class position through the elimination of all classes, individual workers will try to break away from their own class to enter another, or to adopt the lifestyle of the middle class. An expanding capitalism offers some upward social mobility, just as it submerges individuals of the dominating or the middle class into the proletariat. But such individual movements do not affect the social class structure; they merely allow for the illusion of an equality of opportunity, which can serve as an argument against criticism of the unchangeable class structure of capitalist production.

In prosperous times, and because of the increase in families with more than one wage earner, better paid workers can save some of their income and thus draw interest as well as receive wages from their work. This gives rise to the delusion of a gradual breakdown of the class-determined distribution of the national income, as workers partake in it not only as wage earners but also as recipients of interest out of surplus value, or even as stockholders in the form of dividends. Whatever this may mean in terms of class consciousness for those thus favored, it is quite meaningless from a social point of view, as it does not affect the basic relationship between value and surplus value, wages and profits. It merely means that some workers realize an increase of their income out of the profit and interest produced by the working class as a whole. While this may influence the distribution of income among the workers, accentuating the already existing wage differentials, it does not affect in any way the social division of wages and profits represented by the rate of exploitation and the accumulation of capital. The rate of profit remains the same, whatever part of the mass of profit may reach some workers through their savings. The number of shares held by workers is not known, but judging by the number of shareholders in any particular country and by prevailing average wage rates, it could only be a negligible one. Interest on savings, as part of profit, is of course compensated for by the fact that while some workers save, others borrow. Interest thus increases but also reduces wages. With the great increase of consumer credit, it is most likely that, on balance, the interest received by some workers is more than equaled by the interest paid by others.

As their class is not homogeneous as regards income, but only with respect to its position in the social production relations, wage workers are apt to pay more attention to their immediate economic needs and opportunities than to the production relations themselves, which, in any case, appear to be unshakeable in a capitalism on the ascendant. Their economic interests involve, of course, not only the privileges enjoyed by special layers of the working class but also the general need of the great mass of workers to maintain, or to raise, their living standards. Higher wages and better working conditions presuppose increased exploitation, or the reduction of the value of labor power, thus assuring the continuous reproduction of the class struggle within the accumulation process. It is the objective possibility of the latter which nullifies the workers' economic struggle as a medium for the development of revolutionary class consciousness. There is no evidence that the last hundred years of labor strife have led to the revolutionizing of the working class in the sense of a growing willingness to do away with the capitalist system. The strike patterns in all capitalist nations vary with the business cycle, which is to say that the number of strikes, and the number of workers involved in them, decline in periods of depression and increase with every upward trend of economic activity. It is the accumulation of capital, not the lack of it, that determines the workers' militancy with regard to their wage struggles and their organizations.

Obviously, a serious downward trend of the economy, which reduces the total number of workers, also reduces the working time lost through strikes and lockouts, not only because of the smaller number of workers employed but also because of their greater reluctance to go on strike despite deteriorating working conditions. Likewise, trade or industrial unions decline not only because of the rising unemployment but also because they are less able, or not able at all, to provide the workers with sufficient benefits to warrant their existence. In times of depression no less than those of prosperity, the continuing confrontations of labor and capital have led not to a political radicalization of the working class, but to an intensified insistence upon better accommodations within the capitalist system. The unemployed have demanded their “right to work,” not the abolition of wage labor, while those still employed have been willing to accept some sacrifices to halt the capitalist decline. The rhetoric of the existing, or newly founded, labor organizations no doubt has become more threatening, but their concrete demands, whether realizable or not, have been for a better functioning capitalism, not its abolition.

Every strike, moreover, is either a localized affair with a limited number of workers engaged in it, or an industry-wide struggle involving large numbers of workers spread over various localities. In either case, it concerns only the time-conditioned special interests of small sections of the working class and seldom affects society as a whole to any important extent. Every strike must end in the defeat of one or the other side, or in a compromise suitable to the opponents. In every case it must leave the capitalist enterprises profitable enough to produce and to expand. Strikes leading to bankruptcies of capitalist firms would also defeat the goals of the workers, which presuppose the continued existence of their employers. The strike weapon as such is a reformist weapon; it could only become a revolutionary instrument through its generalization and extension over the whole society. It was for this reason that revolutionary syndicalism advocated the General Strike as the lever to overthrow capitalist society, and it is for the same reason that the reformist labor movement opposes the General Strike, save as an extraordinary and controlled political weapon to safeguard its own existence. (1) Perhaps the only fully successful nationwide general strike was that called by the German government itself in order to defeat the reactionary Kapp Putsch of 1920.

Unless a mass strike turns into civil war and a contest for political power, sooner or later it is bound to come to an end whether or not the workers win their demands. It was of course expected that the critical situations brought about by such strikes, and the reactions to them on the part of capital and its state, would lead to a growing recognition of the unbridgeable antagonism of labor and capital and thus make the workers increasingly more susceptible to the idea of socialism. This was not an unreasonable assumption but it failed to be substantiated by the actual course of events. No doubt the turmoil of a strike itself brings with it a sharpened awareness of the full meaning of class society and its exploitative nature, but this, by itself, does not change reality. The exceptional situation degenerates again into the routinism of every life and its immediate necessities. What class consciousness awakened turns once more into apathy and submission to things as they are.

The class struggle involves the bourgeoisie no less than the workers, and it will not do to consider exclusively the latter with regard to the evolution of their consciousness. The ruling bourgeois ideology will be reformulated and greatly modified in order to counteract noticeable changes in working-class attitudes and aspirations. The early open contempt of the bourgeoisie for the laboring population makes way for an apparent concern for their well-being and an appreciation for their contributions to the “quality of social life.” Minor concessions are made before they are forced upon the bourgeoisie by independent working-class actions. Collaboration is made to appear beneficial to all social classes, and the road to harmonious social relations. The class struggle itself is turned to capitalist account, through the reforms thrust upon the ruling class and the resulting expectations of a possible internal transformation of capitalist society.

The most important of all the reforms of capitalism was of course the rise of the labor movement itself. The continuous extension of the franchise until it covered the whole adult population, and the legalization and protection of trade unionism, integrated the labor movement into the market structure and the political institutions of bourgeois society. The movement was now part and parcel of the system, as long as the latter lasted, at any rate, and it seemed to last just because it was able to mitigate its class contradictions by way of reforms. On the other hand, these reforms presupposed stable economic conditions and an orderly development, to be achieved through increasing organization, of which the reforms themselves were an integral part. This possibility had of course been denied by Marxian theory; the justification of a consistent reformist policy thus required abandonment of this theory. The revisionists in the labor movement were able to convince themselves that, contrary to Marx, the capitalist economy had no inherent tendency toward collapse, while those who upheld the Marxian theory insisted upon the system's objective limitations. But as regards the immediately given situation, the latter too had no choice but to struggle for economic and political reforms. They differed from the revisionists in their assumption that, due to the objective limits of capitalism, the fight for reforms will have different meanings at different times. On this view, it was possible to wage the class struggle in both the parliaments and in the streets, not only through political parties and trade unions, but with the unorganized workers as well. The legal foothold gained within bourgeois democracy was to be secured by the direct actions of the masses in their wage struggles, and the parliamentary activities were supposed to support these efforts. While this would have no revolutionary implications in periods of prosperity, it would be otherwise in crisis situations, particularly in a capitalism on the decline. As capitalism finds a barrier in itself, the fight for reforms would turn into revolutionary struggles as soon as the bourgeoisie was no longer able to make concessions to the working class.

Just as the capitalists are (with some exceptions) not economists but business people, the workers also are not concerned with economic theory. Quite aside from the question as to whether or not capitalism is destined to collapse, they must attend to their immediate needs by way of wage struggles, either to defend or to improve their living standards. If they are convinced of the decline and fall of capitalism, it is because they already adhere to the socialist ideology, even though they might not be able to prove their point "scientifically.” It is hard, indeed, to imagine that an asocial system such as capitalism could last for very long, unless, of course, one were totally indifferent to the chaotic conditions of capital production and to its total corruption. However, such indifference is only another name for bourgeois individualism, which is not only an ideology but also a condition of the market relations as social relations. But even under its spell the workers' indifference does not spare them the class struggle, although it is at times only one-sidedly waged through the violent repression of all independent working class actions.

Thus far, reformism has nowhere led to an evolutionary transformation of capitalism into a more palatable social system, nor to revolutions and socialism. It may, on the other hand, require political revolutions in order to achieve some social reforms. Recent history provides numerous examples of political revolutions which exhausted themselves in the overthrow of a nation's despised governmental structure, without affecting its social production relations. Such revolutionary upheavals, insofar as they are not mere revolutions, which exchange one dictatorial regime with an aim at institutional changes and, by implication, economic reforms. Political revolutions are here a precondition for any kind reformist activity and not an outcome of the latter. They are not socialist revolutions, in the Marxian sense, even if they are predominantly initiated and carried through by the working classes, but reformist activities by more direct political means.

The possibility of revolutionary change cannot be questioned, for there have been political revolutions that altered social production relations and displaced the rule of one class by that of another. Bourgeois revolutions secured the triumph of the middle class and the capitalist mode of production. A proletarian revolution-that is, a revolution to end all class relations in the social production process – has not as yet taken place, although attempts in this direction have been made within and outside the framework of bourgeois politics. Whereas social reform is a substitute for social revolution and the latter may dissipate into mere capitalist reforms, or nothing at all, a proletarian revolution can only win or lose. It cannot be based on any kind of class compromise, as it is its function to eliminate all social class relations. It will thus find all classes outside the proletarian class arrayed against itself and no allies in its attempts to realize its socialist goals. It is this special character of proletarian revolution that accounts for the exceptional difficulties in its way.


1. In his book In Place of Fear (New York, 1952, pp. 21-23), Aneurin Bevan relates that in 1919 – with the British trade unions threatening a nationwide strike – the then Prime Minister David Lloyd George told the labor leaders that they must be aware of the full consequences of such an action, for “if a force arises in the State which is stronger than the State itself, then it must be ready to take on the functions of the State, or withdraw and accept the authority of the State.” From that moment on, one of the labor leaders said, “we were beaten and we knew we were.” After this, Bevan continues, “the General Strike of 1926 was really an anticlimax. The leaders in 1926 ... had never worked out the revolutionary implications of direct action on such a scale. Nor were they anxious to do so. ... It was not so much the coercive power of the State that restrained the full use of the workers' industrial power. ...The workers and their leaders paused even when their coercive power was greater than that of the State. ... The opportunity for power is not enough when the will to seize it is absent, and that will is attendant upon the traditional attitude of the people toward the political institutions that form part of their historical heritage.” This may be so, but actually, in this particular case, it was not the attitude of the workers with regard to their historical heritage, but merely their submission to their own organizations and their leaderships that allowed the latter to call off the General Strike, out of fear that it might lead to revolutionary upheavals because of the government's apparently intractable determination to break the strike by force.