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Leo Panitch: “What does it mean to smash the state? This is our great challenge.”

Note from the LeftEast editors: Our comrades from the Serbian Left-wing portal  spoke to Marxist political economist Leo Panitch (York University) during his stay in Belgrade. There he was a guest at the conference The Return of Utopia (BCS), organized by the Center for Political Emancipation. This is the first appearance of the interview in English. Its original publication in Serbian can be accessed here. On behalf of Masina it was carried out by András Juhász.

Q: Would you publicly declare yourself to be a socialist?

A: Definitely.

Q: Why?

A: That’s a hard question to decide how to answer. In terms of the irrationality, chaos and inequality of capitalism, which becomes more irrational, more chaotic, more unequal with every passing hour, it’s hard to be a humane person and not to be a socialist.

But there is also a way to answer this question related to one’s personal formation. I come from a working class community in Canada, who’s parents where socialists, so, in a sense, am a socialist almost by birth.

Q: Since the financial crisis began there is a spreading notion about how the banks are the agents of the, as you put it, chaos, irrationality and inequality that we are facing. But like many other notions about our social and economic reality, these too tend to resonate as conspiracy theories. How significant is the influence of the financial sector on society?

A: We live in a financialised capitalism, one which facilitates the free flow and movement of capital around the world and facilitates the large structure of borrowing and of debt that is necessary both for capital to invest but also for workers to consume. There is a tendency to divorce the role of finance in this respect from the role of multinational corporations, to see them as productive and finance as speculative. Finance is speculative, but it’s necessary for globally integrated production, and it’s necessary for realising profits and for consumption.

For example, if you are Walmart and you make a contract to have blue jeans produced somewhere in China, if you don’t by a derivative on the exchange rate between the yuan or the renminbi and the American dollar, there may not be a profit if the exchange rate changes even a tiny little bit between when you signed the contract and when the product is to be delivered. So, you need derivatives which are traded most in the foreign exchange market.

Q: So this is something like insurance?

A: People are speculating all over the world on what the exchange rate will be in the future. They are buying future contracts, and you as a producer are buying in that sense an insurance policy. The production couldn’t go on without this. You know, when the US Congress wanted to put greater restrictions on the banks after the 2008-09 crisis, especially in the trading of derivatives, it was Caterpillar, the biggest American industrial multinational corporation that objected to this, because it would increase  its costs in the derivative market. So there is an illusion that finance is not connected to the kind of production we have all over the world. It’s speculative, but every capitalist speculates when he invests.

It is true that in a world of free capital movements that banks and the institutions that represent lenders, like the IMF, are disciplinarians with the concern to get repaid. So one of the reasons why there is such discipline on government deficits is to try to ensure that governments don’t default on their debts, on their government bonds, that they borrow in financial markets. The IMF, as the representative of lenders, is disciplining governments, that, for example, if they’re going to have to make a decision between giving people welfare or paying the owners of the government bonds, they decide the latter. This has always been true of capitalism in a way, but it’s all the more true in a global economy.

We need to see capitalism as an integrative, exploitive system. And one needs to recognise that there is no one unified set of bankers. They are highly competitive against each other. They are integrated, they depend on one another, they lend to one another, but they are also competing. There is no one coherent finance.

Q: When I think about our material condition which is so entwined with the financial services, the first thing that pops into my mind as serious problem is our increasingly precarious position, which makes it ever more difficult to either use financial services or to service our debt. I don’t know if you would agree that working in precarious conditions is one of the main difficulties we have to face today, but what possibilities do you see for the left to counteract this?

A: Yes, I think that this is the greatest challenge of our times. But we need to be clear that the type of people that identified the precariat as a separate class form the proletariat are, I think, very misleading. The proletariat used to be a precariat until it got organised. Until it created trade unions, socialist parties, communist parties, etc. It has become disorganised, by its own mistakes, by nationalism, by a trade-unionism that has entered into a corporatist relationship with both communist and social democratic states, and lost its ability to mobilise, to create a sense of collectivity, and the ability to be flexible. It depended too much on state laws and recognition and too little on having cadre organising people. The great challenge, therefore, is can today’s precarious proletariat – which is a much more educated precarious proletariat than it was in the 19th century – organise itself, develop it’s cadre of organisers. You know, one wants to say to the unions “you need to be taking young educated precarious people, hiring them for what they now are earning and putting them to work as organisers.” Those people, probably again like in the old days, need to be sleeping on the couches of friends, going from place to place … It’s a sacrifice also… imbedding  themselves into communities. I’m not saying it’s easy, and in some ways it’s now more difficult because those communities in the earlier world had a greater identity collectively and people are now more commodified, more individualised. It needs a lot more resources and a lot more dedication, but I’m absolutely convinced that in the 21th century we are going to see the precarious proletariat – which includes many people who in the old days  would have been defined as the intelligentsia, as the middle class – organise into unions, into new socialist parties. That’s not to say that we’ll get out of capitalism. That depends on how well we do it.

Q: The challenge of organising the precarious proletariat seems even bigger if we look at labour-legislation. In Serbia, the state, instead of creating security and stability, is underpinning the instability, the insecureness, the precariousness of everyday life.  Every major political force in the country would say that these reforms are taking us closer to the capitalist centre and that this will eventually make things better. But is there actually a significant difference or a growing similarity between the labour legislation of countries of the capitalist centre and periphery?

A: Increasingly they are similar. Labour remains stronger in some places than in others, in Germany, Sweden, but even there we have seen a loosening of restrictions on capital’s ability to force longer hours, more informality, competition amongst workers, and above all flexibilisation. It varies in different places.

In the USA the great danger now with Trump is that a supreme court ruling, which would not have allowed the destruction of public sector unions in the US, may get overturned, you know, that there would be right to work laws introduced, which will mean that you won’t be required to join the union even if you get a job in a public school. So, I think that the general trend is similar other than different. It’s urgent that unions in the capitalist countries become organisers again and associate themselves with parties in that process which are committed to strengthening the trade unions capacities.

Q: And do you see unions having this potential?

A: Not enough, but I can give some examples.

In the Global South there is for example the National Trade Union Initiative of India, which is a remarkable inventive union, which grew out of steel industry strikes in Mumbai in the early ’90s, and they take people into the union and organise them not necessarily in their workplace. They may organise them in a neighbourhood and then engage in the attempt to secure rights for them in the workplace. They had 36 full time women organisers who organised 20.000 women working for Nokia in Chennai.

A number of unions, including the auto workers in Canada and Unite the Union in Britain, have created community branches where individuals who are members of the precariat join without being in a collective bargaining relationship already and they try to develop skills and potential to go out and organise. So you can see some examples. Also, I would recommend the fantastic book Raising Expectations and Raising Hell from Jane McAlevey on the matter of union organising. She was an organiser for the Service Employee’s Union and she organised seven hospitals in Nevada which is a right to work state, by which they mean a right not to join the union.

Q: Other than trade unions, which forms of organisation do you think the left should pursue?

A: It depends on how broadly you’re speaking to organisation. What you’re doing with your website Mašina, or what Jacobin does, is a form of organisation, a form of discursive organisation. The development of Momentum, [the movement] behind Jeremy Corbin, which has 20.000 members, has a social media mailing list of hundreds of thousands, is very good at campaigning, can identify just like a corporation can, from the location of the individual, the likes of the individual the demography they can be targeting, etc. – that too is a form of organisation. I think both of those are very important. But I also think that we should put much more time, effort and dedication into organising people as workers and as consumers.

Q: As consumers?

A: In the old days communist women used to organise picket lines in front of butcher shops in Toronto to protest the price of meat in the late 1920s. That’s a form of organisation too. And… organising the call centres, organising as best we can precarious workers is not impossible, I mean, the most precarious workers were dockers, people who would go to the dock and wouldn’t know would they be able to get work that day.

Ultimately, in order to actually get out of capitalism, alternate modes of production and consumption have to be created. Which in the ecological crisis that we are living in is all the more necessary. And that’s a form of organisation which is very important – where people will be prepared to see an alternate standard of living, will be skilled at alternate forms of production.

Q: Under our given circumstances what importance would you give to party-organisation and to seizing state power?

A: The waves of protest against neoliberalism were very much of an anti-party character. There was a syndicalist-anarchist element to it, not surprisingly, given the experience with communist parties and with social democracy, which my generation already rebelled against because of its corporatism, bureaucracy and so on. The next generation rebelled because there were so complicit in neoliberalism everywhere – Tony Blair, Clinton, the German and even the Swedish social democrats. So there was a rejection of parties. It took the form of the anti-globalisation movement until after this crisis began and then it took the form of the Occupy movement which was much more about equality, it was much more class focused. What has happened in the last few years has been an awareness that you can protest until hell freezes over and you won’t change anything, that it isn’t true that you can change the world without taking power, and we’ve seen a turn from protest to politics. That’s what was represented, for example, by SYRIZA and Podemos among the new parties, and by Corbin and Sanders in the old parties. I think that this is right, I think that it is necessary to go into the state. But if you go into the state, do you have the capacities to transform the state institutions?

Q: A problem SYRIZA faced.

A: Exactly. The old instrumental notion of the state, that it’s a machine, and you grab it and use it for your own purposes, or even more stupidly, that you smash it, are wrong. What does it mean to smash the state? This is our great challenge.

And there is a disjuncture in temporalities that I don’t have an answer for. Given the chaos, irrationality, xenophobia of contemporary neoliberal capitalism the importance to take state office in order to stop the fire is very urgent. At the same time, if you get power too quickly and you don’t know what to do with it, you enter into the state without knowing how to transform their apparatuses, you take all of your best cadre into the state and you don’t leave any to be organising in society, to develop alternate forms of production and consumption. I don’t have an answer for this. But I think this is exactly what we need to be focusing on.

panitch2Leo Panitch is Canada Research Chair in Comparative Political Economy and Distinguished Research Professor of Political Science at York University. Editor of The Socialist Register for 25 years, his many books include Working Class Politics in Crisis, A Different Kind of State, The End of Parliamentary Socialism, and American Empire and The Political Economy of Global Finance.

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