The document discusses the strategic limitations and structural obstacles inherent in reformist socialism as a path to achieving a socialist society. It argues that reformist strategies are limited by the ideological effects of parliamentary institutions, their demobilizing effects, the formation of a parliamentary bureaucracy, and the limits of the nation state. Structural obstacles include the state's dependency on the capitalist sector for tax revenue, the economic consequences of high investment rates on profitability, the political consequences of full employment, and ecological limits to economic expansion. The rise and decline of reformism in Sweden from 1945-1990 is analyzed as corresponding to shifts in these factors according to historical context.

1. On the Limitations of Reformist Socialism
Center for Marxist Social Studies
ABF-huset, Stockholm
October 20th 2013
CMS Stockholm (ABF)
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October
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2. Goals of the talk and text
Figure : The Impossibilities of Reformism, samizdat, 2011.
Explaining rise and fall of reformism: ‘Opportunism’ and
‘leadership betrayal’ are not adequate nor fruitful.
Present a framework to grasp the limitations of reformist socialism
based on past research and debates.
Enable a structured discussion on strategy across the socialist Left.
CMS Stockholm (ABF)
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October
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3. Reformism as a strategic path
Common goal amongst socialists:
A society that does not reproduce social inequalities but rather
enables the free development of individualities.
Requires a transformation of the political economy ⇒ popular
control of the productive assets.
CMS Stockholm (ABF)
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October
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4. Reformism as a strategic path
Common goal amongst socialists:
A society that does not reproduce social inequalities but rather
enables the free development of individualities.
Requires a transformation of the political economy ⇒ popular
control of the productive assets.
Reformist socialism as a strategic path to reach the goal:
Centered on winning national-parliamentary elections to gradually
implement a series of reforms which transform the structure of the
political economy.
CMS Stockholm (ABF)
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October
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5. Reformism as a strategic path
Figure : The bearers of reformist socialism? SAP 1925 och PT 2005.
CMS Stockholm (ABF)
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6. Social-democratic conception of history
Three phases of the conceived strategy in SAP:
political democracy → social democracy → economic democracy
Figure : Bearers of reformist socialism in Sweden.
CMS Stockholm (ABF)
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7. Social-democratic conception of history
Three phases of the conceived strategy in SAP:
political democracy → social democracy → economic democracy
Understood as a cumulative process in Sweden from 1890s to 1970s...
...until a series of events derailed the movement:
OPEC oil price hike
Counter-offensive by business community
Internal traitors: Kjell-Olof Feldt, et al.
External saboteurs: Prime PR, et al.
...
CMS Stockholm (ABF)
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8. Social-democratic conception of history
In sum:
1
The collapse of reformist socialism as a project is conceived as the
outcome of contingent factors and/or leadership betrayals.
2
Consequently, dilemmas or structural problems inherent to the
reformist strategy cannot be examined and exploration of viable
alternative paths to the socialist goal is precluded.
CMS Stockholm (ABF)
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October
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9. Social-democratic conception of history
Hidden assumptions in this conception:
Parliamentary hypothesis: Societal development is primarily
determined by the character of the national-parliamentary
government. The state is a neutral instrument in the hands of
national representatives.
Stability hypothesis: Economic conditions are in the main stable
and external factors set the economy into crisis.
Distribution hypothesis: Conflicts between the working class and
bourgeoisie are primarily a struggle over distribution, not a
structural feature of the production process.
CMS Stockholm (ABF)
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October
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10. The limits of reformist socialism
Strategic limitations: Inherent limitations which tend to undermine
the strategy.
Structural obstacles: Obstacles inherent in the mode of operation of
capitalist economies that confront the strategy.
CMS Stockholm (ABF)
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11. The limits of reformist socialism
Strategic limitation #1: The ideological effects of parliamentary
institutions
Formal separation between political and economic order.
Individuals within unequal class relations are represented as
formally equal citizens.
Parliamentary institutions appear as the embodiment of abstract
general public: fictional unity which expresses the self-governance
of the people despite their separation and nonparticipation.
Parliamentary elections in and of themselves tend to ideologically
affirm a liberal conception of society. Counter-tendency possible
only through class-polarizing and conflict-based mobilization.
CMS Stockholm (ABF)
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October
10 / 27

12. The limits of reformist socialism
Strategic limitation #2: The demobilizing effects of parliamentary
strategies
The MP:s of the movement are transformed into representatives in
an institution that is based on nonparticipation of membership.
Within parliamentary-oriented movements the activity of the
representatives tends to displace the activity of the movement.
In order to garner votes beyond the movement, the potential MP:s
need to be responsive to nonmember voters, rather than the
movement. Incentives subordinate the movement to the party
leadership.
CMS Stockholm (ABF)
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October
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13. The limits of reformist socialism
Strategic limitation #3: Formation of a parliamentary bureaucracy
The political profession secures economic privileges and the
parliamentary system tends to select people based on status and
formal education.
The professional politicians of the party tend to be dominated by
people who systematically distort the goals of the labour
movement.
CMS Stockholm (ABF)
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October
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14. The limits of reformist socialism
Strategic limitation #4: The limits of the nation state
Focus on the national parliament affirms the nation ideologically
as the natural political unit. But capital accumulation proceeds
beyond these boundaries.
Lacking a coordinated political strategy the reformist parties
cripple when the possibilities of ‘reformism in one country’ vanish.
CMS Stockholm (ABF)
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15. The limits of reformist socialism
Strategic limitations
1
The ideological effects of parliamentary institutions
2
The demobilizing effects of parliamentary strategies
3
Formation of a parliamentary bureaucracy
4
The limits of the nation state
⇒ Demobilization of the labour movement
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16. The limits of reformist socialism
Structural obstacle #1: The dependency on the capitalist sector
The state provides the capitalist sector a legal system etc., but is
in turn dependent on tax revenues from the sector.
State managers must ensure that economic activity is maintained.
This is largely determined by the level of investments within the
sector.
Potential investment strikes and capital flight constitute a
structural mechanism which disciplines states to pursue policies
which do not harm the business confidence.
CMS Stockholm (ABF)
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October
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17. The limits of reformist socialism
Structural obstacle #1: The dependency on the capitalist sector
The state provides the capitalist sector a legal system etc., but is
in turn dependent on tax revenues from the sector.
State managers must ensure that economic activity is maintained.
This is largely determined by the level of investments within the
sector.
Potential investment strikes and capital flight constitute a
structural mechanism which disciplines states to pursue policies
which do not harm the business confidence.
Contra the parliamentary hypothesis
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18. The limits of reformist socialism
Structural obstacle #2: Economic consequences of high rate of
investment
Average rate of return on invested capital stock is determined by the
balance of three factors
⇑ Growth rate of total labour-time
⇑ Growth rate of productivity
⇓ Investment level
CMS Stockholm (ABF)
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October
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19. The limits of reformist socialism
Structural obstacle #2: Economic consequences of high rate of
investment
Average rate of return on invested capital stock is determined by the
balance of three factors
⇑ Growth rate of total labour-time
⇑ Growth rate of productivity
⇓ Investment level
The reformist strategy strives for high levels of investment, but if this
balance is not favourable the result is a crisis of profitability.
Contra the stability hypothesis
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20. The limits of reformist socialism
Structural obstacle #3: Political consequences of high rate of
investment
Class configuration which enables high investment levels and full
employment unravels due to shifting balance of forces.
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21. The limits of reformist socialism
Structural obstacle #3: Political consequences of high rate of
investment
Class configuration which enables high investment levels and full
employment unravels due to shifting balance of forces.
Indeed, under a regime of permanent full employment, the
‘sack’ would cease to play its role as a disciplinary measure.
The social position of the boss would be undermined, and the
self-assurance and class-consciousness of the working class
would grow. Strikes for wage increases and improvements in
conditions of work would create political tension.
(M. Kalecki, 1943)
Contra the distribution hypothesis
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22. The limits of reformist socialism
Structural obstacle #4: Ecological limits to economic expansion
rate
High investment level is required for a transition to resource- and
labour-saving technologies.
In capitalism, high investment levels result in growth of output per
capita, but in general lacking counterbalancing reduction of finite
resource extraction.
CMS Stockholm (ABF)
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October
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23. The limits of reformist socialism
Structural obstacle #4: Ecological limits to economic expansion
rate
High investment level is required for a transition to resource- and
labour-saving technologies.
In capitalism, high investment levels result in growth of output per
capita, but in general lacking counterbalancing reduction of finite
resource extraction.
High investment levels for advancing reformism or sustainable
development?
Dilemma inherent to strategy
CMS Stockholm (ABF)
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October
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24. The limits of reformist socialism
Strategic limitations
1
The ideological effects of parliamentary institutions
2
The demobilising effects of parliamentary strategies
3
Formation of a parliamentary bureaucracy
4
The limits of the nation state
⇒ Demobilization of the labour movement
Structural obstacles
1
Dependency on the capitalist sector
2
Economic consequences of high investment rate
3
Political consequences of high investment rate
4
Ecological limits to economic expansion
⇒ Dependency on capitalists’ investments
CMS Stockholm (ABF)
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25. The rise of reformism in historical context
1
The preconditions for the parliamentary strength of Social
Democracy were given by the structure of the political economy.
CMS Stockholm (ABF)
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26. The rise of reformism in historical context
1
The preconditions for the parliamentary strength of Social
Democracy were given by the structure of the political economy.
2
Despite exceptional parliamentary strength of Social Democracy in
Norway and Sweden, comparable quantitative development of
welfare-state policies and employment in several other advanced
economies.
CMS Stockholm (ABF)
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October
20 / 27

27. The rise of reformism in historical context
1
The preconditions for the parliamentary strength of Social
Democracy were given by the structure of the political economy.
2
Despite exceptional parliamentary strength of Social Democracy in
Norway and Sweden, comparable quantitative development of
welfare-state policies and employment in several other advanced
economies.
3
SAP 1920-2012 shifted between administrative versus reformist
periods depending on the politico-economic conjuncture.
4
Establishment of welfare states and full employment policies only
after Second World War.
CMS Stockholm (ABF)
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October
20 / 27

28. The rise of reformism in historical context
1
The preconditions for the parliamentary strength of Social
Democracy were given by the structure of the political economy.
2
Despite exceptional parliamentary strength of Social Democracy in
Norway and Sweden, comparable quantitative development of
welfare-state policies and employment in several other advanced
economies.
3
SAP 1920-2012 shifted between administrative versus reformist
periods depending on the politico-economic conjuncture.
4
Establishment of welfare states and full employment policies only
after Second World War.
5
Destruction of the Great Depression and the outcome of WWII
altered the balance of forces between state apparatuses, workers,
capitalists, and peasants in Europe, and enabled therefore the
breakthrough of the reformist project.
CMS Stockholm (ABF)
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29. The rise of reformism 1945-1975
Industrial capital
Workers
Finance capital
Figure : Balance of forces circa 1890.
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30. The rise of reformism 1945-1975
Industrial capital
Workers
Finance capital
Figure : Balance of forces circa 1950.
CMS Stockholm (ABF)
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31. The rise of reformism 1945-1975
Industrial capital
Workers
Finance capital
Figure : Balance of forces circa 1950.
New balance of forces with high levels of investment:
High rates of capita growth
Full employment
Implementation of welfare-state policies
Rising real wages
Initially proceeding without the collapse of business confidence.
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32. The rise of reformism 1945-1975
SWE
Profitkvot (% per år)
20
15
10
5
1965
1970
1975
1980
1985
1990
1995
Figure : Decline in average profitability...
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33. The rise of reformism 1945-1975
SWE
Profitkvot (% per år)
20
15
10
5
1965
1970
1975
1980
1985
1990
1995
Figure : ... as a consequence of high level of investment
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34. The rise of reformism 1945-1975
High investment level ⇒ full employment
90
ArbetsInställelser per miljon anställda
80
70
60
50
40
30
20
10
0
1940
1950
1960
1970
1980
1990
2000
Figure : Sweden is a part of an international wave of labour militancy
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35. The decline of reformism 1983-1990
1
⇒ Crisis of profitability and confidence for owners of capital.
2
No coherent strategy to address the declining scope of reformist
policies that follow from the dependency on investments in the
capitalist sector.
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36. The decline of reformism 1983-1990
1
⇒ Crisis of profitability and confidence for owners of capital.
2
No coherent strategy to address the declining scope of reformist
policies that follow from the dependency on investments in the
capitalist sector.
3
Two most ambitious attempts: LO:s wage-earner fund proposal
(1976) and the reform offensive by the French Socialist party
(1981) fail due to the demobilizing effects of the strategy.
CMS Stockholm (ABF)
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October
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37. The decline of reformism 1983-1990
1
⇒ Crisis of profitability and confidence for owners of capital.
2
No coherent strategy to address the declining scope of reformist
policies that follow from the dependency on investments in the
capitalist sector.
3
Two most ambitious attempts: LO:s wage-earner fund proposal
(1976) and the reform offensive by the French Socialist party
(1981) fail due to the demobilizing effects of the strategy.
Organized representatives of financial capital take the lead:
4
Low inflation and high real interest rates are prioritized
Capital mobility and labour reserves in the East are opened up
Privatization and cuts in tax-financed services
...
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38. The decline of reformism 1983-1990
Industrial capital
Workers
Finance capital
Figure : Balance of forces circa 1990.
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39. The decline of reformism 1983-1990
Industrial capital
Workers
Finance capital
Figure : Balance of forces circa 1990.
Social-democratic parties carry on with same objectives: win
national-parliamentary elections, but now in the context of
Internationally weakened labour movement
Declining scope of reformist policies
Abandonment of any alternative political economy
What remains is therefore their role as state managers and an
orientation towards profit-led capitalist recovery.
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40. The return of reformist socialism?
Historical changes that weaken the strategy:
The decreasing autonomy of individual nation states
The trend towards smaller workplace units
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41. The return of reformist socialism?
Historical changes that weaken the strategy:
The decreasing autonomy of individual nation states
The trend towards smaller workplace units
Rising structural obstacles:
1
Return to high levels of investments lacking a balancing
technological pattern will reproduce crisis tendency.
2
Welfare policies become increasingly contested due to the
labour-intensive character of services and growing social needs.
3
Exponential growth required for reformist policies increasingly
incompatible with sustainable development.
⇑ Dependency on the capitalist sector
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42. Conclusions
1
The strategic limitations and structural obstacles of reformist
socialism:
Demobilization of the labour movement
Dependency on investments in capitalist sector
2
The crisis of European Social Democracy as a long-term result of
clinging to the objective of winning parliamentary elections while
lacking a set of strategies to circumvent the obstacles on the
parliamentary road.
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43. Conclusions
1
The strategic limitations and structural obstacles of reformist
socialism:
Demobilization of the labour movement
Dependency on investments in capitalist sector
2
3
4
The crisis of European Social Democracy as a long-term result of
clinging to the objective of winning parliamentary elections while
lacking a set of strategies to circumvent the obstacles on the
parliamentary road.
Each parliamentary advance must be used to strengthen and
expand the extra-parliamentary strength of the labour movement.
The question of control of investments and the structure of the
political economy must therefore become the central issue in
practical politics.
CMS Stockholm (ABF)
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October
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44. Conclusions
1
The strategic limitations and structural obstacles of reformist
socialism:
Demobilization of the labour movement
Dependency on investments in capitalist sector
2
3
4
The crisis of European Social Democracy as a long-term result of
clinging to the objective of winning parliamentary elections while
lacking a set of strategies to circumvent the obstacles on the
parliamentary road.
Each parliamentary advance must be used to strengthen and
expand the extra-parliamentary strength of the labour movement.
The question of control of investments and the structure of the
political economy must therefore become the central issue in
practical politics.
If the primary goal is to be a ‘party of government’ then all that
remains is the role as state managers and, out of necessity, as
guardians of a class-divided society.
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