First published online in International Socialism 2 : 162.
Copied with thanks from the International Socialism Website.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Mike Kidron (1930 –2003) was a towering figure in the history of the International Socialist tradition. [1] When Mike died in 2003, Alex Callinicos wrote that he “made an enormous contribution to the Socialist Workers Party’s development during the early years of our tradition”. [2] Ian Birchall reminisced that “all of us who learned some of our Marxism from Mike Kidron will continue to be indebted to him” [3] and Chris Harman described him as “probably the most important Marxist economist of his generation”. 4
Kidron was, however, not only an economist. He was an activist, a theoretician, a teacher, a mentor and much more. His most important theoretical development may have been the “Permanent Arms Economy” (PAE) – one of the intellectual bedrocks of the IS tradition – but his work extended so much further than this. His output over almost a quarter of a century was varied, original, challenging and often provocative. Nowhere was this more true than in Mike’s contribution to the International Socialism journal’s 100th issue (of the first series) in July 1977.
That issue of the journal had a focus on “the tasks of theory today”. It started from a presumption that IS theory had, in the past, met the demands placed upon it as “an analysis of contemporary ca]pitalism in terms of its impact on working class consciousness”. [5] But it also expressed a new realisation that by 1977 the boom years of the post-war period were behind us, and the world of the late 1970s presented new problems. In short, SWP theory needed updating.
One primary area of analysis needing attention was the party’s understanding of the economic crisis; another was its understanding of the role of the state in contemporary capitalism. Callinicos, as the managing editor of the journal, explained these twin challenges thus: “We need to decipher the dynamics of the crisis, just as we did those of the boom. There are a number of trends the crisis has brought into sharp relief. One is the tendency for the state and private capital to fuse into a single national capital”. [6]
Kidron was asked to write an article and he took on the challenge with gusto in a short essay titled Two Insights Don’t Make a Theory. [7] History seems to remember the essay primarily for Mike refuting his own theory that the “Permanent Arms Economy” could explain the post-war boom. In fact, in the article, Mike describes that aspect as “the second string”. The article’s first purpose was to push forward the IS understanding of its theory of state capitalism and to make it relevant to new times and new places. In particular, Mike stated that a trend towards “state capitalism” becoming a predominant form of society was far advanced, not only in the eastern bloc, but also across the West.
To the SWP, Mike’s contribution was certainly “original, challenging and provocative”. Callinicos tells me that:
There was no prior discussion with Mike about the content of the article, which was indeed a bolt from the blue. My reaction was to consult Chris Harman and we quickly agreed we would publish the article but with a reply from Chris. I actually wrote a bit of Chris’s reply, on the differences between productive and unproductive capital – Chris wasn’t entirely happy with my formulations (I was fresh from writing the main draft of my thesis on Capital), but he went along with them. [8]
In Chris Harman’s reply titled Better a Valid Insight Than a Wrong Theory, he summarised his view of Mike’s piece in one sentence: “As usual, Mike Kidron’s article combines three things – immensely useful insights into the development of capitalism; a way of presenting these insights which is abstract in the extreme and which obscures much of what is said; and practical conclusions that do not by any means follow from the analysis and which, if taken seriously, could be very dangerous”. [9]
I do not intend forensically to analyse each contribution here. They are both available online in the Marxist Internet Archive. However, the Kidron-Harman exchange was conceived as an important SWP debate. The two contributions were published together under the title of World Capitalism Today. As Callinicos wrote:
Michael Kidron in his article in this issue argues that this tendency [for the state and private capital to fuse into a single national capital] necessitates a radical rethinking of some of the central concepts of Marxist political economy as well as the theory of the permanent arms economy and the political strategy developed from it. Some of his conclusions are controversial – for example, he now claims that the permanent arms economy cannot explain the post-war boom. Chris Harman’s reply challenges these conclusions and the analysis from which they are drawn.
Even if we share Harman’s disagreements with Kidron, it is clear that the trend towards state capitalism even in the Western capitalist bloc has many implications – for example, for explaining the mechanisms underlying the endemic inflation that has accompanied the crisis, and for the theory of productive and unproductive labour, which Marx developed on the assumption that productive capital was almost wholly private capital. These and other questions need to be explored in future issues of this journal.
Furthermore:
Today the prospects for building a revolutionary workers’ party in Britain are better than they have been for half a century. Unless theory relates itself to the problems of building such a party it condemns itself either to sterility or to the academicism and eclecticism of so many left journals today.
Nonetheless, theory cannot develop without critical and open debate. The exchange between Kidron and Harman in the present issue is an example. [10]
Without doubt, Mike’s article and Chris’s reply did resonate in a host of other discussions. However, for many readers today, particularly those from the post-Margaret Thatcher era, the idea of a “Western” state capitalism to the degree Mike was talking about might seem outlandish – but 1977 was a different time.
If you are a reader of International Socialism today, you might be interested in why the current (second) series of the journal was established. The introductory editorial to the first issue in July 1978 tells us that:
There are at least two main areas of Marxist theory where we lack, and urgently need, adequate answers. These are (a) the implications for the critique of political economy of the enormous growth of the state in the West, and (b) the role of the family, women’s oppression and domestic labour in the reproduction of the capitalist system as a whole ...
On the question of the role of the state, we publish an article by Colin Barker, The State as Capital. [11] Along with a number of recent German theorists, he attacks those like [Ralph] Miliband and [Nicos] Poulantzas who pose the existence of the state outside the framework of a critique of the political economy of capitalism itself. But unlike the German school, he goes on to argue that the state sector is not limited to the reproduction of the general conditions for capitalist production, but can, and increasingly does, take on the role of directly productive capital. Again, the importance of this question, both in terms of providing the necessary underpinning for debates that took place in the first series of International Socialism (such as the debate between Harman and Kidron in IS 100 on the Arms Economy and State Capitalism), and also for providing the tools to understand the state in Western capitalism today, cannot be overestimated. [12]
Regrettably, in terms of ongoing debate, what was not appreciated in July 1977 was that Kidron’s contribution was, to all intents and purposes, his last active, organisational engagement with the SWP. One consequence of this was that there would be no continuing debate on Kidron’s new ideas that involved Mike Kidron himself.
This is where this current piece of work comes in. Over his long period of activity in the IS tradition Kidron will have spoken at hundreds of meetings – but, as far as I know, only these two lectures have been captured on tape. [13] What is more, they are Mike speaking at the Marxism Festival in July 1977, around the same time as his contribution appeared in the 100th issue of the journal. Even more saliently, they are Mike speaking on the subjects of Modern Capitalism and The Crisis. Up until now, all we have had to go on regarding Mike’s new ideas in 1977 were his 4-page International Socialism article, which he said himself had: “A lot missing even in the abstract model I have pictured”. Now, at last, we have him delivering, in his own words, some meat to put on the bones.
What does some of that meat tell us? First of all, it is worth clarifying that you will not find anything new on Kidron’s controversial backtracking from his theory of the Permanent Arms Economy. To follow that you will need to refer to the Kidron-Harman debate in International Socialism. Over the course of the full three hours of Mike’s two lectures, all he has to say on PAE is: “I do not want to enter into an argument about the Permanent Arms Economy – which I have always felt a bit abstruse, has always been worrying me – but now I think I have got it.”
Of course, Kidron was not the only person to feel that PAE was abstruse, difficult to understand. Its interpretation, even within IS, was not monolithic. In the Introduction to his essay Some Notes on Capital and the State, Colin Barker agreed:
We have been identified with the theory of the “permanent arms economy”, which theory I think we have left scandalously underdeveloped and unclear. In the contributions to recent discussion by both Mike Kidron and Chris Harman in International Socialism issue 100 I detect clear signs of unease about this theory, and I want to suggest that this unease is very proper. Not because massive arms spending in the post-1945 world has not had very significant effects on the form and length of the long boom, but because we placed too much weight on that one factor, and did not properly theorise its relation to other very important developments. In a sense, we either theorised badly, in a more or less Keynesian mode, or we did not ask exactly what it was we were trying to explain with the “arms economy” analysis. The “arms economy” theory demanded that we consider a number of general theoretical problems, about capitalist crisis, about productive and unproductive labour, about the role of the capitalist nation-state in capitalist reproduction, about the place of “luxury” production, which we either ignored or actually got wrong. [14]
So, if we do not learn much extra on PAE, what can we learn from Mike’s two lectures? What are the positives? What are the negatives?
Very much on the positive side are some of his insights into the changed nature of capitalist crisis. In 2019 we are still living with the effects of the crisis that started in 2008. That is much longer than the traditional trade cycle of old. But that we would see prolonged crises like this was something that Mike suggested. He also talked extensively of how, in the changed conditions he saw, the system could not, effectively, get rid of its “dead wood” – the traditional method of the weaker capitalists going to the wall in order that the stronger capitalists could survive and then grow. No-one who has read a newspaper or journal over the last decade can have escaped one of the most-used words – “zombie”. We have had “zombie capitalism”, “zombie banks”, “zombie corporations” and “zombie firms”, to name just a few. What it meant in each case was that entities were living on, artificially being kept afloat well past a time when, in previous crises, they would have gone to the wall. They might have been “too big to fail” or failure might have been politically inconvenient – a host of reasons – but again it is something that Mike highlights. A third item that struck me was his description of the interweaving of the state and the banks and the ability for central banks to print money in order to prime the system. He could never have imagined Quantitative Easing, but, to contend with the current crisis, the British state has literally printed £435 billion of new money since 2016!
Some of what Mike said regarding the crisis was not terrifically controversial, even in 1977. Much was right. His major contention that there was no current answer to the crisis for the capitalists was not. Mike was, however, right in another area, where he was running against the SWP stream. Ian Birchall gives this interesting comment:
When Mike notes that “throughout the world, crisis or no crisis, the political tendency is towards a sort of social democratic centre or the liberal centre” and argues that there “are special reasons for the Chile experience”, he was right and Cliff and the rest of us were wrong. Throughout 1974 and 1975 Cliff insisted that the choices for Portugal were socialist revolution or a Chile-style solution. But a couple of months ago I was at a meeting of ex-IS comrades who had been in Portugal in 1975 and one recounted that Kidron had come to Portugal in 1975 and prophesied that there would be a social-democratic solution. [15]
Mike’s analysis rewards reading and re-reading. There is a lot of good stuff there. Turning to modern capitalism and Mike’s views on the transition to “state capitalism” as the dominant form. This was contentious in the extreme in 1977. With the passing of time it has, in large parts, been found wanting. However, there is an important point of clarification that we learn from the lectures – the fact that, in Mike’s view, state capitalism is not something that fully existed. It was a tendency that had been, and still was, ongoing. Mike explains in his second lecture that:
When I talk about state capitalism, I am not talking about something that happened Tuesday, when we had the first lecture. I am not speaking about something that is fully developed, fully rounded out, some sort of a pure model. I am talking about a tendency. A tendency which had its greatest lunge forward, the crucial lunge, the dialectical leap, in the period of the Second World War and immediately thereafter. It was with that peacetime adjustment to the destruction of the Second World War – the changes caused by the Second World War ... So what I am saying is that there is a historic continuum. That within that historic continuum, there are leaps, there are changes, that we have to take account of. The changes that occur affect every aspect of the capitalist system.
Notwithstanding this, the very thought that state capitalism in the West had reached the stage that Mike suggested found no support within the SWP. The views of Harman and Callinicos from 1977 are on record. Here is how Callinicos describes it today:
What was controversial was (i) the projected triumph of state capitalism, where Mike was completely and damagingly wrong: Chris Harman was far nearer to the mark in developing a framework in which partially contradictory tendencies towards internationalisation and statisation co-exist (this is what I was defending in my own intervention) – this allowed us to accommodate Mike’s valid points (important against the kind of argument Nigel Harris later developed) while recognising the power of the tendency towards what we’d now call globalisation; (ii) he simultaneously underestimates workers’ strength (then at its peak) and argues that capital can’t diminish it. This partly because of mistake (i) – coming were Thatcherism and the Third World debt crisis, which imposed the imperatives of globalised finance (anticipated by Chris in his reply), helping to force the restructuring of production that was made possible by, but also facilitated, all the defeats workers have suffered in the North. But it is also because Mike seems already in 1977 to have been developing the idea that we find much more developed in the piece John Rees published in 2002 that capitalist development depends on free resources and that these are running out. [16] He underestimated capital’s room for manoeuvre; this is important because the same idea is popular today, e.g. in the work of Jason W Moore. [17]
Another area of Kidron’s argument that provoked significant criticism was his seeming to downplay work in the trade unions. Birchall focuses on this aspect and refers to Tony Cliff as being “shocked”. [18] The lectures do, at least, give a slightly more nuanced view. Mike specifically says that the SWP should still be active in the unions. Importantly, he goes on to say that fighting there purely on the questions of wages and conditions is no longer sufficient – one needs to fight in the unions and the Rank and File groups on a broader range of issues that impact members. It was a point that the Cuban Marxist Sam Farber had made in a report he completed on his visit to IS in 1973. Interestingly, Kidron was one of only half a dozen people in the UK who received Sam’s report. [19] This wider activity is precisely the “political trade unionism” that the SWP espouses today.
Even so, it is hard not to conclude that the historic continuum has, since 1977, been moving in a direction that Mike did not foresee. Thatcher and her frontal assault on the trade unions, globalisation, neoliberalism, privatisation, the move of social democracy ever further towards the centre ground, state emasculation of trade unions via restrictive legislation, the gig economy and the change in the nature of work are all aspects that have, indeed, changed the capitalist system – but not always in Mike’s expected direction.
All that said, we should not throw the baby out with the bathwater. Globalisation and a form of state capitalism are certainly not incompatible. As Harman argues in his 2009 book Zombie Capitalism: Global Crisis and the Relevance of Marx:
All the advanced capitalist states still maintain historically very high levels of state expenditure, only surpassed historically during the time of total war. And although business often complains about the level of taxation, it never seriously suggests going back to the level of expenditure of a century ago. The reason is that capitals today, far from not needing states, require them as much as – if not more than – ever before.
They need them first because the continued concentration of capitals, in particular geographical locations, necessitates facilities that are not automatically provided by the operation of the market: police, judicial systems; a framework to limit the defrauding of some capitals by others; at least minimal regulation of the credit system; the provision of a more or less stable currency. Along with these they also need some of the functions fulfilled by the state during the period of the state-directed economy: regulation of the labour market; ensuring the reproduction of the next generation of labour power; the provision of an infrastructure for transport, communication, water and power; the supply of military contracts. Even the big multinationals, with half or more of their production and sales located abroad, still rely for much of their basic profitability on their operations in their home base, and therefore on what a state can provide for them.
The overall conclusion has to be that corporations, whether multinational or other, do not regard a state that will defend their interests as an afterthought based on nostalgia for the past, but an urgent necessity flowing from their present-day competitive situation.
The successor to the state capitalism of the mid-20th century has not been some non-state capitalism but rather a system in which capitals rely on “their” state as much as ever, but try to spread out beyond it to form links with capitals tied to other states. In the process, the system as a whole has become more chaotic. [20]
Whatever one thinks, one could never say that the state capitalist element of Mike’s argument is of no value just because it did not come to pass. As Harman wrote, it contains, “immensely useful insights into the development of capitalism”.
The debate at Marxism 1977 was itself, I think, also extremely important. Callinicos has a section in his 1982 book Is There a Future for Marxism? called The Theory of State Capitalism, part of which, in my eyes at least, leans heavily on some of what Kidron had to say at Marxism. In fact, I could not help noticing that on page 211 of the book, Alex gives us a re-run of the “billiard balls colliding” simile that he used in his own contribution to the debate in Mike’s first lecture. [21]
We have discussed whether Mike was right or wrong. It is an important question, but not the only question. I personally believe that a Marxist theory is not a destination – it is a bus stop on the way to somewhere else – and I think Mike would have agreed with me. Take these three extracts from the start, the middle and the end of Mike’s 1977 essay:
It is thirty years since Cliff set out the state capitalist analysis which has been the main theoretical nutrient of International Socialism, its forerunners and its heirs. In these thirty years capitalism has re-modelled itself so radically that only the freest and most daring imagination of the time could have sensed what was to emerge ...
In its day, to depict Russia and the eastern bloc countries as state capitalist was a profound insight, of critical importance to IS and to the revolutionary left at large. But the analysis was never a general theory. It was incapable of incorporating “state capitalism” into a broader picture of capitalism as it was evolving, incapable too of itself evolving to take account of the changing structure of capitalism ...
In retrospect there were a disturbing number of loose ends left by IS’s originally illuminating but unconnected insights into contemporary capitalism. They need not remain loose ends. They can be woven into a general theory; and they need to be. For without theory no organisation can do more than ride the tides of working class consciousness, which might be exhilarating as sport but is irrelevant as revolutionary politics.
To continue with the analogy, we might say that Mike got on the bus and it moved forward one stop. Harman, Barker, Callinicos and others climbed aboard for the onward journey – but, unfortunately, Mike got off. Had Mike stayed aboard the “SWP bus”, it would only have been a matter of time before his active mind and practical instinct saw the need to move forward once again.
When he died, Mike left behind an unpublished manuscript that he had been working on for some years. A small extract was published in International Socialism in 2002 in which he had formulated a new understanding. He described the “market system” as having a second phase which he called its “middle, national economy or state capitalist phase” and he continued by saying that this second phase had reached its limits “in the third (and fourth) quarters of the last century”. [22] He had, indeed, already moved on, developing and building on his theory.
Over the years, Harman and Kidron had huge areas of agreement – Chris always made it clear how much he learned from Mike. However, they also had a whole number of differences. It is therefore appropriate to leave the last word to Chris, who wrote: “About the importance of Mike’s contributions to Marxist theory we never had any doubt. No adequate analysis of world capitalism in the 21st century can succeed without building on them”. [23]
1. Thanks are due to Colin Barker, Nina Kidron, Richard Kuper, Amelia Barratt, Ian Birchall, Alex Callinicos and Sam Farber for their kind assistance. I dedicate this piece to Colin Barker who has assisted me over the years with kindness, consideration and astute political guidance. Nothing was ever too much trouble and he will be greatly missed.
2. Callinicos, 2003.
3. Birchall, 2003.
4. Harman, 2003.
5. Callinicos, 1977.
6. Callinicos, 1977.
7. Kidron, 1977.
8. Personal communication.
9. Harman, 1977.
10. Callinicos, 1977.
11. A fuller version of this article appears online – Barker 2019a, b and c. This version includes discussion of Kidron’s article on Waste.
12. Binns, 1978.
13. I should say a few words about how the recordings of Kidron’s two 1977 lectures have been made available. The original audio recordings were made by Colin Barker; I have transcribed and edited the recordings, but with the intention of keeping them as close to the originals as possible. Mike clearly did not read directly from a pre-prepared script so I have attempted to remove repeated remarks, mis-speaking etc, as far as possible. I have not, knowingly, changed any of Mike’s meanings.
In the Open Forum sections some questions were inaudible. Fortunately, Mike had the happy knack of repeating a question before answering it. In these instances I have inserted an appropriate question in the text. Questions and contributions were taken in batches and answered in batches. I have re-ordered proceedings so that questions and answers follow each other directly. Those asking questions or making contributions were not generally identified by name. I have inserted a name only when the identity is obvious. Finally, and unfortunately, the tape of the first talk ends abruptly in the middle of Mike speaking so we have no record of his response to some important contributions.
14. Barker, 2019a.
15. Personal communication.
16. Kidron, 2002 (published while Rees was editor of this journal).
17. Personal communication.
18. Birchall, 2011.
19. Rudge, 2018.
20. Harman, 2009, pp. 263 and 266.
21. Callinicos, 1982.
22. Kidron, 2002.
23. Harman, 2003.
Barker, Colin, 2019a, Notes on Capital and the State: part 1 (25 January).
Barker, Colin, 2019b, Notes on Capital and the State: part 2 (8 February).
Barker, Colin, 2019c, Notes on Capital and the State: part 3 (22 February).
Binns, Peter, 1978, Editorial, International Socialism 1 (summer).
Birchall, Ian, 2003, Michael Kidron (1930–2003), Revolutionary History, volume 8, number 3.
Birchall, Ian, 2011, Tony Cliff: A Marxist for his Time (Bookmarks).
Braverman, Harry, 1974, Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century (Monthly Review Press).
Callinicos, Alex, 1977, Editorial, International Socialism 100 (1st series, July).
Callinicos, Alex, 2003, Mike Kidron (1930–2003), Socialist Worker (5 April).
Callinicos, Alex, 1982, Is There a Future for Marxism? (Palgrave Macmillan).
Harman, Chris, 1977, Better a Valid Insight than a Wrong Theory, International Socialism 100 (1st series, July).
Harman, Chris, 2003, Permanent Legacy: Michael Kidron (1930–2003), Socialist Review (April).
Harman, Chris, 2009, Zombie Capitalism: Global Crisis and the Relevance of Marx (Bookmarks).
Kidron, Michael, 1977, Two Insights Don’t Make a Theory, International Socialism 100 (1st series, July).
Kidron, Michael, 2002, Failing Growth and Rampant Costs: Two Ghosts in the Machine of Modern Capitalism, International Socialism 96 (winter).
Rudge, John, 2018, Sam Farber and IS: The 1973 Visit and Beyond, Grim and Dim (14 May).
Last updated on 10 May 2022