By its own recent report’s framing and that of the Washington Post’s Howard Schneider (“Communists Have Seized the IMF,” February 26), the International Monetary Fund has apparently gone soft on “redistribution.” But that framing is wrong.
Both the IMF report (“Redistribution, Inequality, and Growth,” IMF Discussion Note SDN/14/02, February 2014) and Schneider’s write-up of it conflate “redistribution” with “equality”: They operate from the unstated assumption that inequality is the spontaneous outcome of “the market,” while achieving greater equality requires government intervention in the market to redistribute income counter to this natural market tendency.
These unstated assumptions are of course unremarkable, constituting as they do the core of the official ideology of the big-business, big-government nexus defining the existing capitalist system. The corporate economy’s dominant players have a vested interest in promoting the erroneous assumption that their concentrated wealth and economic power are legitimate because they result from superior performance in “our free market economy” or “our free enterprise system.” And advocates for the regulatory state have a similar vested interest in promoting the equally erroneous assumption that state intervention is necessary to prevent rising concentrations of economic power and disparities of wealth.
But these assumptions are not true. State action to redistribute wealth downward isn’t a corrective to a normal market tendency of inequality — rather, inequality is the result of continual state intervention in the market to distribute wealth upward. The primary function of the state is to enforce the artificial scarcities, artificial property rights, monopolies, entry barriers and cartels by which the economic ruling class extracts its rents — and not only that, but to directly subsidize the operating costs of big business at taxpayer expense. The overwhelming bulk of land rent and corporate profit, and of the plutocracy’s income, are rents on such monopolies enforced by the state.
What’s normally called “redistribution” is entirely secondary. Because these rents tend to shift income from the classes that must spend money to live to the classes that invest it or save it, corporate capitalism is plagued with a chronic and growing tendency towards overinvestment, excess production capacity and underconsumption. As a result the system is threatened by steadily worsening economic crises and by political radicalization of the lower orders resulting from economic insecurity or outright homelessness and starvation.
Progressive taxation and the welfare state — to the modest extent that they actually exist — involve taking a small fraction of the income that’s redistributed upward, and shifting it back downward to prevent politically destabilizing levels of poverty among the poorest of the underclass and increase popular purchasing power enough to reduce idle industrial capacity. Income “redistributed” through food stamps, welfare and the like is an order of magnitude (at least) less than that originally redistributed upward by the state to landlords, capitalists, usurers, holders of “intellectual property” and other monopolies, and senior corporate management and the administrative classes. It’s the equivalent of a mugger hand his victim cab fare so she can get home safely, keep working and make more money for future muggings.
So so-called downward “redistribution” is just a secondary corrective to the state’s previous upward redistribution of income. The only truly just solution is to eliminate the upward redistribution in the first place, letting market competition and voluntary cooperation destroy the rentier incomes of our corporate ruling class.
The following article was written by Colin Ward and originally appeared in Freedom, June-July 1992.
That minority of children in any European country who were given the opportunity of studying the history of Europe as well as that of their own nations, learned that there were two great events in the last century: the unification of Germany, achieved by Bismarck and Emperor Wilhelm I, and the unification of Italy, achieved by Cavour, Mazzini, Garibaldi and Vittorio Emanuale II.
The whole world, which in those days meant the European world, welcomed these triumphs. Germany and Italy had left behind all those little principalities, republics and city states and papal provinces, to become nation states and empires and conquerors. They had become like France, whose little local despots were finally unified by force first by Louis XIV with his majestic slogan `L’Etat c’est moi’, and then by Napoleon, heir to the Grande Revolution, just like Stalin in the twentieth century who build the administrative machinery to ensure that it was true. Or they had become like England, whose kings (and its one republican ruler Oliver Cromwell) had successfully conquered the Welsh, Scots and Irish, and went on to dominate the rest of the world outside Europe. The same thing was happening at the other end of Europe. Ivan IV, correctly named `The Terrible’, conquered central Asia as far as the Pacific, and Peter I, known as `The Great’, using the techniques he learned in France and Britain, took over the Baltic, most of Poland and the west Ukraine.
Advanced opinion throughout Europe welcomed the fact that Germany and Italy had joined the gentlemen’s club of national and imperialist powers. The eventual results in the present century were appalling adventures in conquest, the devastating loss of life among young men from the villages of Europe in the two world wars, and the rise of populist demagogues like Hitler and Mussolini, as well as their imitators, to this day, who claim that `L’Etat c’est moi’.
Consequently every nation has had a harvest of politicians of every persuasion who have argued for European unity, from every point of view: economic, social, administrative and, of course, political.
Needless to say, in efforts for unification promoted by politicians we have a multitude of administrators in Bruxelles issuing edicts about which varieties of vegetable seeds or what constituents of beefburgers or ice cream may be sold in the shops of the member-nations. The newspapers joyfully report all this trivia. The press gives far less attention to another undercurrent of pan-European opinion, evolving from the views expressed in Strasbourg from people with every kind of opinion on the political spectrum, claiming the existence of a Europe of the Regions, and daring to argue that the Nation State was a phenomenon of the sixteenth to nineteenth centuries, which will not have any useful future in the twenty-first century. The forthcoming history of administration in the federated Europe they are struggling to discover is a link between, let us say, Calabria, Wales, Andalusia, Aquitaine, Galicia or Saxony, as regions rather than as nations, seeking their regional identity, economically and culturally, which had been lost in their incorporation in nation states, where the centre of gravity is elsewhere.
In the great tide of nationalism in the nineteenth century, there was a handful of prophetic and dissenting voices, urging a different style of federalism. It is interesting, at the least, that the ones whose names survive were the three best known anarchist thinkers of that century: Pierre-Joseph Proudhon, Michael Bakunin and Peter Kropotkin. The actual evolution of the political left in the twentieth century has dismissed their legacy as irrelevant. So much the worse for the left, since the road has been emptied in favour of the political right, which has been able to set out its own agenda for both federalism and regionalism. Let us listen, just for a few minutes, to these anarchist precursors.
First there was Proudhon, who devoted two of his voluminous works to the idea of federation in opposition to that of the nation state. They were La Federation et l’Unite en Italie of 1862, and in the following year, his book Du Principe Federatif.
Proudhon was a citizen of a unified, centralised nation state, with the result that he was obliged to escape to Belgium. And he feared the unification of Italy on several different levels. In his book De la Justice of 1858, he claimed that the creation of the German Empire would bring only trouble to the Germans and to the rest of Europe, and he pursued this argument into the politics of Italy.
On the bottom level was history, where natural factors like geology and climate had shaped local customs and attitudes. “Italy” he claimed, “is federal by the constitution of her territory; by the diversity of her inhabitants; in the nature of her genius; in her mores; in her history. She is federal in all her being and has been since all eternity … And by federation you will make her as many times free as you give her independent states”. Now it is not for me to defend the hyperbole of Proudhon’s language, but he had other objections. He understood how Cavour and Napoleon III had agreed to turn Italy into a federation of states, but he also understood that, per esempio, the House of Savoy would settle for nothing less than a centralised constitutional monarchy. And beyond this, he profoundly mistrusted the liberal anti-clericalism of Mazzini, not through any love of the Papacy but because he recognised that Mazzini’s slogan, `Dio e popolo’, could be exploited by any demagogue who could seize the machinery of a centralised state. He claimed that the existence of this administrative machinery was an absolute threat to personal and local liberty. Proudhon was almost alone among nineteenth century political theorists to perceive this:
“Liberal today under a liberal government, it will tomorrow become the formidable engine of a usurping despot It is a perpetual temptation to the executive power, a perpetual threat to the people’s liberties. No rights, individual or collective, can be sure of a future. Centralisation might, then, be called the disarming of a nation for the profit of its government …”
Everything we now know about the twentieth century history of Europe, Asia, Latin America or Africa supports this perception. Nor does the North American style of federalism, so lovingly conceived by Thomas Jefferson, guarantee the removal of this threat. One of Proudhon’s English biographers, Edward Hyams, comments that: “It has become apparent since the Second World War that United States Presidents can and do make use of the Federal administrative machine in a way which makes a mockery of democracy”. And his Canadian translator paraphrases Proudhon’s conclusion thus:
“Solicit men’s view in the mass, and they will return stupid, fickle and violent answers; solicit their views as members of definite groups with real solidarity and a distinctive character, and their answers will be responsible and wise. Expose them to the political `language’ of mass democracy, which represents `the people’ as unitary and undivided and minorities as traitors, and they will give birth to tyranny; expose them to the political language of federalism, in which the people figures as a diversified aggregate of real associations, and they will resist tyranny to the end.”
This observation reveals a profound understanding of the psychology of politics. Proudhon was extrapolating from the evolution of the Swiss Confederation, but Europe has other examples in a whole series of specialist fields. The Netherlands has a reputation for its mild or lenient penal policy. The official explanation of this is the replacement in 1886 of the Code Napoleon by “a genuine Dutch criminal code” based upon cultural traditions like “the well-known Dutch `tolerance’ and tendency to accept deviant minorities”. I am quoting the Netherlands criminologist Dr Willem de Haan, who cites the explanation that Dutch society `has traditionally been based upon religious, political and ideological rather than class lines. The important denominational groupings created their own social institutions in all major public spheres. This process … is responsible for transporting a pragmatic, tolerant general attitude into an absolute social must”.
In other words, it is diversity and not unity, which creates the kind of society in which you and I can most comfortably live. And modern Dutch attitudes are rooted in the diversity of the medieval city states of Holland and Zeeland, which explained, as much as Proudhon’s regionalism, that a desirable future for all Europe is in accommodation of local differences.
Proudhon listened, in the 1860s, to the talk of a European confederation or a United States of Europe. His comment was that:
“By this they seem to understand nothing but an alliance of all the states which presently exist in Europe, great and small, presided over by a permanent congress. It is taken for granted that each state will retain the form of government that suits it best. Now, since each state will have votes in the congress in proportion to its population and territory, the small states in this so-called confederation will soon be incorporated into the large ones …”
The second of my nineteenth century mentors, Michael Bakunin, claims our attention for a variety of reasons. He was almost alone among that century’s political thinkers in foreseeing the horrors of the clash of modern twentieth century nation-states in the First and Second World Wars, as well as predicting the fate of centralising Marxism in the Russian Empire. In 1867 Prussia and France seemed to be poised for a war about which empire should control Luxemburg and this, through the network of interests and alliances, “threatened to engulf all Europe”. A League for Peace and Freedom held its congress in Geneva, sponsored by prominent people from various countries like Giuseppe Garibaldi, Victor Hugo and John Stuart Mill. Bakunin seized the opportunity to address this audience, and published his opinions under the title Federalisme, Socialisme et Anti-Theologisme. This document set out thirteen points on which, according to Bakunin, the Geneva Congress was unanimous.
The first of these proclaimed: “That in order to achieve the triumph of liberty, justice and peace in the international relations of Europe, and to render civil war impossible among the various peoples which make up the European family, only a single course lies open: to constitute the United States of Europe”. His second point argued that this aim implied that states must be replaced by regions, for it observed: “That the formation of these States of Europe can never come about between the States as constituted at present, in view of the monstrous disparity which exists between their various powers.” His fourth point claimed: “That not even if it called itself a republic could an centralised bureaucratic and by the same token militarist States enter seriously and genuinely into an international federation. By virtue of its constitution, which will always be an explicit or implicit denial of domestic liberty, it would necessarily imply a declaration of permanent war and a threat to the existence of neighbouring countries”. Consequently his fifth point demanded: “That all the supporters of the League should therefore bend all their energies towards the reconstruction of their various countries in order to replace the old organisation founded throughout upon violence and the principle of authority by a new organisation based solely upon the interests needs and inclinations of the populace, and owning no principle other than that of the free federation of individuals into communes communes into provinces, provinces into nations, and the latter into the United States, first of Europe, then of the whole world.
The vision thus became bigger and bigger, but Bakunin was careful to include the acceptance of secession. His eighth point declared that: “Just because a region has formed part of a State, even by voluntary accession, it by no means follows that it incurs any obligation to remain tied to it forever. No obligation in perpetuity is acceptable to human justice … The right of free union and equally free secession comes first and foremost among all political rights; without it, confederation would be nothing but centralisation in disguise.
Bakunin refers admiringly to the Swiss Confederation “practising federation so successfully today”, as he puts it and Proudhon, too, explicitly took as a model the Swiss supremacy of the commune as the unit of social organisation, linked by the canton, with a purely administrative federal council. But both remembered the events of 1848, when the Sonderbund of secessionist cantons were compelled by war to accept the new constitution of the majority. So Proudhon and Bakunin were agreed in condemning the subversion of federalism by the unitary principle. In other words, there must be a right of secession.
Switzerland, precisely because of its decentralised constitution, was a refuge for endless political refugees from the Austro-Hungarian, German and Russian empires. One Russian anarchist was even expelled from Switzerland. He was too much, even for the Swiss Federal Council. He was Peter Kropotkin, who connects nineteenth century federalism with twentieth century regional geography.
His youth was spent as an army officer in geological expeditions in the Far Eastern provinces of the Russian Empire, and his autobiography tells of the outrage he felt at seeing how central administration and funding destroyed any improvement of local conditions, through ignorance, incompetence and universal corruption, and through the destruction of ancient communal institutions which might have enabled people to change their own lives. The rich got richer, the poor got poorer, and the administrative machinery was suffocated by boredom and embezzlement.
There is a similar literature from any empire or nation-state: the British Empire, the Austro-Hungarian Empire, and you can read identical conclusions in the writings of Carlo Levi or Danilo Dolci. In 1872, Kropotkin made his first visit to Western Europe and in Switzerland was intoxicated by the air of a democracy, even a bourgeois one. In the Jura hills he stayed with the watch-case makers. His biographer Martin Miller explains how this was the turning point in his life:
“Kropotkin’s meetings and talks with the workers on their jobs revealed the kind of spontaneous freedom without authority or direction from above that he had dreamed about. Isolated and self-sufficient, the Jura watchmakers impressed Kropotkin as an example that could transform society if such a community were allowed to develop on a large scale. There was no doubt in his mind that this community would work because it was not a matter of imposing an artificial `system’ such as Muraviev had attempted in Siberia but of permitting the natural activity of the workers to function according to their own interests.”
It was the turning point of his life. The rest of his life was, in a sense, devoted to gathering the evidence for anarchism, federalism and regionalism.
It would be a mistake to think that the approach he developed is simply a matter of academic history. To prove this, I need only refer you to the study that Camillo Berneri published in 1922 on `Un federaliste Russo, Pietro Kropotkine’. Berneri quotes the `Letter to the Workers of Western Europe’ that Kropotkin handed to the British Labour Party politician Margaret Bondfield in June 1920. In the course of it he declared:
“Imperial Russia is dead and will never be revived. The future of the various provinces which composed the Empire will be directed towards a large federation. The natural territories of the different sections of this federation are in no way distinct from those with which we are familiar in the history of Russia, of its ethnography and economic life. All the attempts to bring together the constituent parts of the Russian Empire, such as Finland, the Baltic provinces, Lithuania, Ukraine, Georgia, Armenia, Siberia and others’ under a central authority are doomed to certain failure. The future of what was the Russian Empire is directed towards a federalism of independent units.”
You and I today can see the relevance of this opinion, even though it was ignored as totally irrelevant for seventy years. As an exile in Western Europe, he had instant contact with a range of pioneers of regional thinking. The relationship between regionalism and anarchism has been handsomely, even extravagantly, delineated by Peter Hall, the geographer who is director of the Institute of Urban and Regional Development at Berkeley, California, in his book Cities of Tomorrow (1988). There was Kropotkin’s fellow-anarchist geographer, Elisee Reclus, arguing for small-scale human societies based on the ecology of their regions. There was Paul Vidal de la Blache, another founder of French geography, who argued that “the region was more than an object of survey; it was to provide the basis for the total reconstruction of social and political life.” For Vidal, as Professor Hall explains, the region, not the nation, which “as the motor force of human development: the almost sensual reciprocity between men and women and their surroundings, was the seat of comprehensible liberty and the mainspring of cultural evolution, which were being attacked and eroded by the centralised nation-state and by large-scale machine industry.”
Finally there was the extraordinary Scottish biologist Patrick Geddes, who tried to encapsulate all these regionalist ideas, whether geographical, social, historical, political or economic, into an ideology of reasons for regions, known to most of us through the work of his disciple Lewis Mumford. Professor Hall argued that:
“Many, though by no means all, of the early visions of the planning movement stemmed from the anarchist movement, which flourished in the last decades of the nineteenth century and the first years of the twentieth … The vision of these anarchist pioneers was not merely of an alternative built form, but of an alternative society, neither capitalist nor bureaucratic-socialistic: a society based on voluntary co-operation among men and women, working and living in small self-governing communities.”
Now in the last years of the twentieth century, I share this vision. Those nineteenth century anarchist thinkers were a century in advance of their contemporaries in warning the peoples of Europe of the consequences of not adopting a regionalist and federalist approach. Among survivors of every kind of disastrous experience in the twentieth century the rulers of the nation states of Europe have directed policy towards several types of supranational existence. The crucial issue that faces them is the question of whether to conceive of a Europe of States or a Europe of Regions.
Proudhon, 130 years ago, related the issue to the idea of a European balance of power, the aim of statesmen and politician theorists, and argued that this was “impossible to realise among great powers with unitary constitutions”. He had argued in La Federation et l’Unite’ en Italie that “the first step towards the reform of public law in Europe” was “the restoration of the confederations of Italy, Greece, the Netherlands, Scandinavia and the Danube, as a prelude to the decentralisation of the large states and hence to general disarmament”. And in Du Principe Federatif he noted that “Among French democrats there has been much talk of, European confederation, or a United States of Europe. By this they seem to understand nothing but an alliance of all the states which presently exist in Europe, great and small, presided over by a permanent congress.” He claimed that such a federation would either be a trap or would have no meaning, for the obvious reason that the big states would dominate the small ones.
A century later, the economist Leopold Kohr (Austrian by birth, British by nationality, Welsh by choice), who also describes himself as an anarchist, published his book The Breakdown of Nations, glorifying the virtues of small-scale societies and arguing, once again, that Europe’s problems arise from the existence of the nation state. Praising, once again, the Swiss Confederation, he claimed, with the use of maps, that “Europe’s problem — as that of any federation — is one of division, not of union.”
Now to do them justice, the advocates of a United Europe have developed a doctrine of `subsidiarity’, arguing that governmental decisions should not be taken by the supra-nation institutions of the European Community, but preferably by regional or local levels of administration, rather than by national governments. This particular principle has been adopted by the Council of Europe, calling for national governments to adopt its Charter for Local Self-Government “to formalise commitment to the principle that government functions should be carried out at the lowest level possible and only transferred to higher government by consent.”
This principle is an extraordinary tribute to Proudhon, Bakunin and Kropotkin, and the opinions which they were alone in voicing (apart from some absorbing Spanish thinkers like Pi y Margall or Joaquin Costa), but of course it is one of the first aspects of pan-European ideology which national governments will choose to ignore. There are obvious differences between various nation states in this respect. In many of them — for example Germany, Italy, Spain and even France — the machinery of government is infinitely more devolved than it was fifty years ago. The same may soon be true of the Soviet Union. This devolution may not have proceeded at the pace that you or I would want, and I will happily agree than the founders of the European Community have succeeded in their original aim of ending old national antagonisms and have made future wars in Western Europe inconceivable. But we are still very far from a Europe of the Regions.
I live in what is now the most centralised state in Western Europe, and the dominance of central government there has immeasurably increased, not diminished, during the last ten years. Some people here will remember the rhetoric of the then British Prime Minister in 1988:
“We have not successfully rolled back the frontiers of the State in Britain, only to see them reimposed at a European level, with a European super-state exercising a new dominance from Brussels”.
This is the language of delusion. It does not relate to reality. And you do not have to be a supporter of the European Commission to perceive this. But it does illustrate how far some of us are from conceiving the truth of Proudhon’s comment that: “Even Europe would be too large to form a single confederation; it could form only a confederation of confederations.”
The anarchist warning is precisely that the obstacle to a Europe of the Regions is the nation state. If you and I have any influence on political thinking in the next century, we should be promoting the reasons for regions. “Think globally — act locally” is one of the useful slogans of the international Green movement. The nation state occupied a small segment of European history. We have to free ourselves from national ideologies in order to act locally and think regionally. Both will enable us to become citizens of the whole world, not of nations nor of trans-national super-states.
Pierre-Joseph Proudhon, Selected Writings, edited by Stewart Edwards (London, Macmillan, 1970)
Pierre-Joseph Proudhon, The Principle of Federation, translated by Richard Vernon (University of Toronto Press, 1979)
Edward Hyams, Pierre-Joseph Proudhon (London, John Murray, 1979)
Michael Bakunin, Selected Writings, edited by Arthur Lehning (London, Jonathan Cape, 1973)
Willem de Haan, The Politics of Redress (London, Unwin Hyman, 1990)
Martin Miller, Kropotkin, (University of Chicago Press, 1976)
Camillo Berneri, Peter Kropotkin: His Federalist Ideas (1922) (London, Freedom Press, 1942)
Peter Hall, Cities of Tomorrow: an intellectual history of urban planning and design in the twentieth century (Oxford, Basil Blackwell, 1988)
Leopold Kohr, The Breakdown of Nations (London, Routledge, 1957)
Ernest Wistnch, After 1982: The United States of Europe (London, Routledge, 1989)
Council of Europe, The Impact of the Completion of the Internal Market on Local and Regional Autonomy (Council of Europe Studies and Texts, Series no. 12, 1990)
Margaret Thatcher, address to the College of Europe, Bruges, 20th September 1988.