BOOK REVIEW.

THE SILENT TAKEOVER.

Global Capitalism and the Death of Democracy.

NOREENA HERTZ.

Reviewed by T. Clark.

This work by Noreena Hertz, who teaches business at Cambridge, is about how the big corporations are invading all aspects of social life in face of the retreat of the State.

Hertz reassures her readers by announcing

'My argument is not intended to be anti-capitalist. Capitalism is clearly the best system for generating wealth, and free trade and open capital markets have brought unprecedented economic growth to most if not all the world. Nor is this book intended to be anti-business. Corporations are not amoral, but I will argue, they are morally ambivalent'. (p. 10)

It is hard to determine what Hertz actually understands by capitalism. However, she is right when she says that the system generates great wealth. But has this anything to do with capitalism, or markets. The giant monopolistic corporations, which dominate economic life, are all based on highly socialised production and directed by a plan. This is as far away from capitalism you can get within capitalism. It is obvious that the wealth produced by the enormous concentration and centralisation of capital has nothing to do with private ownership of production as such. Society has outgrown capitalist ownership of the means of production. All the basic problems we face in the world today are a reflection of this fact. This is something that Hertz does not even deal with in 'The Silent Takeover'. The true picture presented by capitalism today is one of the production of masses of wealth based on socialised production on the one hand, and on the other, world poverty, even in the advanced capitalist countries.

What Hertz sets out to show is how the big corporations, all of them with a global reach, increasingly have begun, in many cases, to play a new role, assuming all kinds of functions which were formerly the preserve of the State.

This development she traces to the rise of Thatcherism and Reaganism from 1979/80 onwards.

'We can date the beginning of this world, the world of the Silent Takeover, from Margaret Thatcher's ascendancy'. (P.3-4)

Hertz argues, and this is what worries her most, that this development where business corporations are taking over areas of activity formerly reserved for the State is a negation of democracy. In other words, she suggests, power is shifting away from our elected representatives to unelected business leaders. Increasingly, Hertz explains, business leaders command more respect than 'our' political leaders, indeed, politics, she says, has fallen into disrepute, increasingly viewed by the public as a corrupt and sleazy world.

Hertz creates a picture of the downfall of the politician and the rise of the business leaders who are unelected and hence global capitalism poses the question of the death of democracy.

Hertz explains that

'Corporations have become behemoths, huge global giants that wield immense political power'. (P.6)

True, but one gets the distinct impression that Hertz has never read Lenin's Imperialism, the highest stage of capitalism.

Whether she has or not, Hertz still found it necessary to write an exposure of the current state of affairs regarding the new role corporations are playing. 'Economics', she writes, 'is the new politics, and business is in the driving seat.' In this new world of the 'Silent Takeover', consumers, according to Hertz, will need to use their purchasing power to reward or punish companies according to their behaviour.

As for business being in the driving seat, was this not always the case to one degree or another. This has come more to the fore with the end of the post-war social democratic consensus and the rise of the New Right. The struggle between the two schools of thought, i.e., free market capitalism versus state intervention, was resolved in favour of the former, at least ideologically.

Tax and spend was out. Cutting back State spending was the road to economic prosperity, the new right argued. However, Hertz is aware that if businesses replace the state in providing services to people, that can work only under conditions of boom.

In any case, whatever new mask the corporations are donning, the issue of democracy is the most important one for Hertz, and she warns that

'A world in which Rupert Murdoch has more power than Tony Blair, and corporations set the political agenda, is frightening and undemocratic'. (p. 12)

A pertinent question for Hertz to ask would be: how long have corporations been setting the agenda, and how long have bourgeois politicians been on the take? In all capitalist societies, politics is the servant of economics; for a Marxist there is nothing new in this thought.

What about the relationship between the monopolies and the State?

In the late 1970s, precisely around the time when the New Right started their struggle for ideological hegemony in economics, certain ultra-leftist groups were attacking the Marxist-Leninist theory of State Monopoly Capitalism (SMC, for short).

It was claimed that this theory was a revisionist theory of the State advanced by Stalin and formed the theoretical basis for revisionism in what the ultra-left called the 'official communist movement'. The argument was that Stalin had revised the Marxist theory of the State, because whereas Marx had claimed that the State was a committee representing the capitalist class in general, Stalin now claimed that the State was an instrument of monopoly capital. Indeed, Stalin had argued, in his economic problems of socialism in the USSR, that there was not only a convergence between the State and the monopolies, but the monopolies sought to subjugate the State to themselves.

This Marxist-Leninist theory that in the period of imperialism, the capitalist state became a tool of imperialist monopolies was denounced as Stalinist heresy by certain Trotskyists.

These Trotskyists failed to understand that there was no contradiction in the State being the tool of the monopolies and representing capital in general. As Lenin showed in his 1916 work, the new dominant form of capitalism is monopoly. Monopoly capitalism seeks to subjugate all things to itself, including the State.

Thus, Stalin was denounced as a revisionist for no reason at all.

Stalin was not responsible for revisionist elements in the communist movement using the theory of State Monopoly Capitalism to promote revisionist theories about a parliamentary road to socialism based on an anti-monopoly alliance.

An anti-monopoly alliance does not equal the parliamentary road to socialism, as put forward by the revisionist camp in Britain for instance. While the revisionist camp misuses the theory of State Monopoly capitalism, the Trotskyist camp denounces it as revisionist.

On the question of the relationship between the State and the monopolies, Stalin was right.

In the theory of State Monopoly Capitalism, Stalin was defending Marxism-Leninism and developing it.

The monopolies strive to subjugate the State to themselves. This is imperialism, and it would be strange, indeed, if the monopolies did not behave in this way.

In Hertz's The Silent Takeover we learn that the monopolies do not simply want to subjugate the State; given the chance they would want to replace most of its functions. Those who want to know what big business is up to will find this work useful although it does not go beyond a bourgeois reformist perspective.


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