The “1% vs 99%” analysis is not a class analysis

Many first world communist parties have attached themselves to the “1% vs 99%” analysis of capitalist society. However, they have done so uncritically. A 99% v 1% analysis is fundamentally too vague to be useful as an analytical tool when looking at how policy is formulated and carried out in any political system.

This is reflected by occupy’s focus on campaign financing and relatively inconsequential legal fictions like corporate personhood. One example of this is a Democracy Now interview with an occupier:

The focus on corporate personhood and campaign financing is a result of using a pluralist analysis of society. Pluralism says that policy is formulated by a bunch of different groups in society (corporations, unions, women’s advocacy groups, universities, civil rights organizations etc) competing and eventually compromising based on their power and influence within political institutions. The view of pluralists is that the political system can be fixed by increasing the power of the “99%” institutions relative to the “1%” institutions. They see one of the primary problems with the American political system is that the “1%” institutions have more money to spend on influencing lawmakers and buying their elections, and propose that a way of fixing this would be public campaign financing and spending limits on campaigns. The problem is that pluralism is a load of shit.

The pluralist analysis only looks at the overt methods of capitalist domination of society, while a class analysis understands that even with affordable elections and public financing, it doesn’t affect capitalist hegemony. In fact, it adds a legitimizing factor to capitalist domination of society, like in Western Europe. A class analysis recognizes that capitalist control of society is direct and indirect. The main direct methods of capitalist control are the selection of officials and lobbying. The indirect methods of control are far more powerful, because socialists and communists elected to office are still controlled by them. The four main methods of indirect capitalist control are explained in Al Szymanski’s The Capitalist State and the Politics of Class :

1. Capitalist values permeate the society and are propagated through the schools, military, media, and churches. Officials typically accept capitalist ideology as their own and authentically act as if capitalist rationality were the only rationality. Attempts by state officials to enact measures that would violate capitalist ideology would generate considerable opposition, even from the oppressed, as long as they accept capitalist ideas.

2. If the state attempts to follow policies that business doesn’t like, businesses can move to other countries or they may curtail production, lay off workers, or follow other restrictive policies, thereby promoting an economic crisis for which the state would be blamed. Businesses can refuse to invest unless the state follows probusiness policies. Banks have the special advantage of refusing to make loans to the state unless the state follows policies directed by them. Such actions by business might not be malicious, but might be merely economically rational and dictated by the necessity of maximizing profits.

3. States that attempt anticapitalist policies are subjected to the threat of military intervention, either by foreign states that want to prevent the abolition of capitalism, or by their own military, which may well be closely tied to the capitalist class.

4. Officials who follow anticapitalist policies may be cut off from campaign financing, slandered in the capitalist-class-controlled media, and forced to face well-financed and promoted opponents in their campaigns for reelection as well as being confronted with embarrassing demonstrations, disruptions,  and possible social and political crises.

By looking at policy merely as a result of different groups compromising, it gives a distorted view of the role of the state. It sees the state as a place to mediate the interests of different interest groups in society, and doesn’t have the depth, richness, and explanatory power that a class analysis has. Again, from The Capitalist State and the Politics of Class :

The capitalist state has five basic functions for capitalism: 1) the state operates to preserve the existing class relations in society through guaranteeing private property and law and order; 2) the state makes continual capital accumulation and profitability possible through regulating the labor force, ensuring sufficient buying power in the economy, regulating the economy, and otherwise helping business; 3) the state secures the legitimacy of capitalist society through its control over the schools, its management of the cult of patriotism, and the ideological function of voting to persuade people that the state is being run by and for them, when the reality is quite different; 4) the state operates to “aggregate” the diverse interests and wills of the different segments of the capitalist class – that is, form the capitalist class will – so that the state can implement unified compromise policies tempered by the demands of other classes (this is the function of the Congress and the various regulatory and administrative agencies); 5) the state raises money to fund the bureaucracy and otherwise acts to maintain the apparatus to perform the first four functions.

One of the clearest examples of capitalist class domination was the pressure put on New York city in 1975 when a cabal of bankers, led by Citigroup, refused to roll over the debt of NYC.  Capitalist restructuring and deindustrialization eroded the economic base of the city and suburbanization left it impoverished. What happened was essentially a financial coup, the bail out package mandated that bondholders be paid off first, and essential services would come second. The city’s economy was reconstructed around creating financial and cultural centers geared towards the elites. This management was a pioneering battle in the neoliberal project, and this neoliberal approach to crisis has been repeated numerous times by the IMF and by the European Central Bank’s handling of Greece today.

Lobbying and corporate donations have to be seen as one tool in the vast toolbox of capitalist control of society. While many people use the “99% vs 1%” analysis as a sort of watered down class analysis, the pluralist usage of it is inadequate to deal with the realities of capitalist control of society.


7 thoughts on “The “1% vs 99%” analysis is not a class analysis

  1. I think that pluralism and class analysis are compatible. It is true that the state (in a broad sense) is an instrument of capitalist hegemony. It is also true that simple process-oriented reforms like restricting money in politics have limited merit. But it is true that progressive social movements build blocs that can force changes in the structure of capitalist society. These gains are tentative but important.

    The main issue is that actually existing socialism was largely a failure. Critiques of reformism are often premised on bracketing the issue of a planned economy, imagining that it could work simply because it logically must. But comprehensive planning has immense problems, which is why it has always been abandoned almost immediately. This is unfortunate but it has strong explanatory power as to why we don’t currently live in an advanced communist society. If it were easy, we’d already have done it.

    Of course, if I’m wrong about then remember the story Marx (and Hegel) related: There was a man in ancient times who would go around telling companions that he had once jumped a great distance when he was in Rhodes. Finally, one day, a companion turned to him and said, “Rhodes is here! Jump here!”

    If certain theories are so correct, then implement them! Be less unhappy!

  2. While I didn’t emphasize the role that other classes have in a class analysis, I did mention that the demands of the producing classes do have an effect on state policy:

    “4) the state operates to “aggregate” the diverse interests and wills of the different segments of the capitalist class – that is, form the capitalist class will – so that the state can implement unified compromise policies tempered by the demands of other classes (this is the function of the Congress and the various regulatory and administrative agencies)”

    A class analysis of society doesn’t say that the capitalists can do what they want, the drive to accumulate is constantly fought against by those doing the producing.

    I disagree that the argument against reformism primarily comes a central planning perspective, the most common arguments against reformism deal with how reformism is unable to address the indirect methods of capitalist control. Even radical reformist measures that directly attack capitalist accumulation like the Swedish Rehn-Meidner model were unable to resist the capitalist counterattack and were unable to break out of the needs and contradictions of capitalism.

    • “Even radical reformist measures that directly attack capitalist accumulation like the Swedish Rehn-Meidner model were unable to resist the capitalist counterattack and were unable to break out of the needs and contradictions of capitalism.”

      There are no examples of any country successfully being able to break out of the needs and contradictions of capitalism. There were a few I’d characterize as socialist that tried planning, almost immediately found it didn’t work all that well, and then reformed away from planning as soon as it became politically possible to do so. Countries that combined strong state leadership with markets seem to do pretty well.

      • There were several societies that weren’t subject to the contradictions of capitalism, the USSR while it was around and the PRC until the 70s are both examples. In an earlier post (Socialism Seminar #2), I went over the causes of the collapse of the Soviet Union, and central planning wasn’t the core issue.

        While the modernization strategy in the USSR was horribly flawed, the planning system wasn’t at fault. As long as the USSR stuck to a greenfield development strategy (building new factories, electrical generation plants, etc) rather than trying to modernize old ones, it was more efficient than capitalist greenfield development.

      • “In an earlier post (Socialism Seminar #2), I went over the causes of the collapse of the Soviet Union, and central planning wasn’t the core issue.”

        This is because you lean on that book by the CPUSA, which is deeply flawed. The USSR attempted comprehensive physical planning for only a few moments in its history – War Communism and for some moments in the pre-war Stalinist period. These attempts at moving beyond autonomous competing firms failed so thoroughly, and largely only worked because the people involved broke many rules and also traded illegally, that most economists in the USSR quickly moved away from this model.

        Almost as soon as Stalin died, Khrushchev moved towards firm autonomy, which is essentially capitalist in nature. This is why many Marxist-Leninists call post-1956 Soviets a “state capitalist society”, although that might be confusing things a bit. For almost all of the USSR’s history, competing companies operated on a sort of market framework. Even the book you lean on suggests that market features never disappeared. China tried a deeper strike against this capitalist tendency, which they recognized, and it contributed to incredible death and disorder.

        Once you allow competing autonomous firms with prices set largely by costs, it becomes very difficult to insist that private capital be banned, and it also becomes difficult to control these state-owned firms. This is part of the reason why only a small percentage of the world population lives in countries that rely centrally on state-owned firms for commodity production to generate state revenues. China, for example, has moved almost completely to a taxation model instead of a simple planning model.

        This narrative seems useful because it does not rely heavily on some immense betrayal by greedy elites to explain events. State officials tried earnestly to build a middle way between comprehensive physical planning and free market capitalism that centered on competing state-owned firms. This strategy failed. It might work in the future. Hopefully it will.

    • While things were distributed by markets in many cases, the markets were structured by plans and not by their own autonomous logic. If the logic and contradictions of market forces were in command, then there would have been a much greater variation in the rates of growth pre-Kosygin reforms and post-Kosygin reforms, but that isn’t the case. There are several areas where the USSR broke out of the needs and contradictions of capitalism

      1) there wasn’t a tendency for the organic composition of capitalism to rise more rapidly than justified by technological considerations

      2) there wasnt any competitive pressure to reinvest profits at a rate more rapid than required by pure criteria of efficiency

      3) Prices were not based on value, prices were meant to encourage or discourage consumption and were basically accounting tools

      4) labor power was not a commodity

  3. I’m not suggesting that the USSR was completely determined by capitalist logic. I’m saying the attempts to move towards physical planning largely failed. The result was a hybrid model which was often riddled with absurdities.

    For example, economists tried to introduce advanced transport control systems that would have optimized routes and so on, but the overall planning for this sector tended to be regulated by ton-mileage (a physical indicator, in other words), so they were underutilized.

    Insofar as market logic did not determine outcomes, there tended to be what was called a “dictatorship over needs.” For example, a Soviet economist talked about how the Soviet Union boasted that it made far more pairs of shoes than the USA, and the economist pointed out that this was a dubious indicator, because the shoes were often of poor quality, were poorly distributed across needed sizes, were often mismatched for needs and so on.

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