Human Rights, the Global Economy, and the Arab World, Part 4

Ali Kadri

This is the fourth of a five-part series by regular Triple Crisis contributor Ali Kadri, Senior Research Fellow at the Middle East Institute, National University of Singapore, and author of Arab Development Denied: Dynamics of Accumulation by Wars of Encroachment (Anthem Press).

The series is based on an interview he granted to the Center for the Study of Human Rights at the London School of Economics (LSE). The full interview is available here.

Is “Arab socialism” viable? And if so, is it desirable?

One must critically analyse “Arab socialism” within its historical context. In times of immediate post-independence autonomy (the 1960s to the late 1970s), state dirigisme, high public investment rates, and more egalitarian redistribution characterised all Arab states. A particular set of Arab states followed the path of “Arab socialism”—they nationalised industry and finance and implemented agrarian reform as in Egypt, Iraq, Algeria, Libya, and Syria—which resulted in significant welfare gains. However, half-hearted Arab socialist egalitarian processes, initiated from the top down, excluded the working class from participating actively in defending their gains, deepened labour-process regimentation, suppressed autonomous labour representation, and exacted differential gains accrued to the state bourgeoisie via wage system exploitation.

On the opposite side of Arab socialism, in the monarchic Arab states—the Gulf, Morocco and Jordan—regime stability was ordained by the extension of U.S.-tailored security arrangements and the not-so-hidden fact that the monarchs practically owned national resources and managed redistribution solely for the purpose of stabilisation in relation to the U.S.’s anti-Soviet positioning. In Arab socialist states, which sided with the USSR, a colonially-weakened national bourgeoisie that was short on financing and cornered into commercial practices, could not deliver in terms of development. Moreover, its tainted reputation as a colonial subsidiary had not provided it with the necessary ideological support to govern. Single-party Arab socialist regimes rose to power and supplanted the rise of bourgeois democratic governments. The Arab socialist state, through populist appeal and the capacity to generate its own finance, acted as a surrogate industrial bourgeoisie in handling capital’s production and appropriation measures. The state rose as the principal owner of the means of production and appropriator/distributor of the social product. The private sector shrank but still absorbed a significant chunk of the labour force in artisanal and petty farming undertakings. State ownership existed side-by-side with a constrained private sector. In hindsight, it was inevitable that private sector expansion would recommence when the state bourgeois class required more economic space to grow and the political climate ripened for ‘free market’ policies and openness—as happened since the early 1980s, or more conclusively, in the early 1990s as the Soviet Union fell.

The key stratum that initiated the conversion from colonial to the Arab socialist state was an alliance between the military and professionals that commandeered the state apparatus. This state bourgeois class controlled or indirectly owned the means of production not as individual stakes as the bourgeoisie does, but collectively via the state. The state bourgeois class consisted of party bosses, the upper level of the state bureaucracy, the senior management of economic enterprises, and the top ranks of the military and police forces. This class is what Prof. James Petras calls the “intermediate strata.” Petras defined the intermediate strata as a class-conscious and independent social stratum, distinct both from workers and from traditional landowners, that is horizontally and vertically linked to the salaried middle class. This class has its own political and economic projects, and initially aimed at the fulfilment of egalitarian ends, incorporating within it the demands of the working class in combining development with anti-imperialist resistance. In its early stages, it favoured agrarian reforms that tallied with the aspirations of the mass of non-owning peasants and the less property-endowed working class.

As ideological and military defeats gripped Arab society, the state bourgeois class underwent a volte-face. It promoted free markets under the shadow of state enterprises. At the intersection where state-led development was transmuted into privately led development (the beginning of the neoliberal phase), there was an avalanche of private and state propaganda peddling the soundness of U.S.-like free markets and pragmatism as opposed to banality of old-style revolutionary struggle. Pragmatism, the name given by Charles Peirce to his neo-positivist philosophy, became the ideological veneer for submissiveness to imperialist diktat. Behind a surface of calculated risks lurked the subtle politics of a state-restrained bourgeois class itching to grow into the wider financial dollar space. Their motto was that they can win in peace what they lost in wars. Not that wars have ever stopped, the drainage of resources and the losses of the so-called peace have exceeded anything that could have been lost in wars. Defeat generated defeatism that served as an alibi for the national bourgeoisie to converge with its international counterpart. Being pragmatic when the alternative of resistance is written off by the ideological vortex of imperialism, means that there is no limit to how much of national assets could be set aside or pawned.

One cannot overstate the fact that two principal military defeats in wars with Israel (June 1967 and October 1973), several open and implicit aggressions against Arab countries, and the 1979 Camp David Accords by which Egypt joined the U.S. constellation, gravely weakened Arab and African national and joint security. In due course and under neoliberalism, many of the passed-down working-class benefits were lost to the old ruling classes or their reconstituted variants without effective resistance from below. Recall that autonomous labour organisations were prohibited under Arab socialism, a factor that weakened working class resistance when neoliberal change came about. One ought to clarify: the discourse faulting import-substitution policies is misplaced. Policies do not go wrong. They serve interests. The first casualty of import-substitution policies was the regulated capital account protecting the exchange rates. Party bosses and bureaucrats hauled tons of the national currency to exchange for dollars abroad. It is not the policies that stopped delivering development, but it is the class in charge, which as the state faltered, shifted its allegiance away from the national working class towards foreign capital.

Under Arab socialism, USSR-style industrialisation and rising productivity meant that there was more wealth being produced as compared to the colonial era. In any case, it is not difficult to exceed colonially imposed economic development; the issue is that the Arab socialist performance, which combined egalitarian development with resistance, remains the best so far despite its many faults. This higher productivity generated income was more equally distributed and living standards improved when compared to the neoliberal era. Moneyed and non-moneyed resources that had been transferred to the colonialists earlier were recirculated in national production. Industrialisation drove up the rate of exploitation, but there were higher employment and wages, and reinvestment in the social infrastructure. This period also saw the introduction of radical social reforms, including the integration of knowledge into the national culture through Arabisation, free health, compulsory education for boys and girls, and constitutions that put rights before obligations. These constitutions also enshrined the equal rights of women. While the Arab socialist experience partially reversed the postcolonial debacle, its relative success piggybacked on security relationships with the Soviet Union. However, it is worth noting that significant progress was made but not to the point of fundamental transformations that bridge the gap between the legal/constitutional ideal and the weight of hardened traditions. Fundamental transformations require not only changes to constitutions and forms of ownership, but also a cultural and civilizational transformation whereby social responsibility for social property is manifested in social behaviour. Contrasting improvement in living standards under Arab socialism against some utopian condition is to assume that there is an ideal social state that would immediately ensue from socialisation or the nationalisation of the means of production. Utopia may be impossible because it is hypothetical, but it is imperative to speak of it because change, the actual development of events, is a compromise between the real and the ideal. So, with the standards set so high, insofar as free health, education, national financing of agriculture and industry, and land reforms were concerned, Arab socialist policies have had a lasting positive impact.

At the latter stages of neoliberalism, the neoliberally inclined Arab ruling class intensified coercion in the labour process and began gradually to reverse the socialisation of assets (began to privatise). Since the eighties, the Arab working classes faced the daunting task of combating a local ruling class backed by the military power of U.S.-led imperialism. The ruling Arab merchant classes have continued to funnel resources away from the national economy despite the retrogression at home. In a way, arresting the flow of resources from the national economy at cheap prices or by grab should have been their policy choice in order to reverse the damage. However, their historical end was no longer determined by their own national underpinnings, but by the tendencies of international finance that requires them to set aside their industrial capabilities and self-destruct along with their states.

Anyhow, it should be obvious that the policy choice to stem resource outflow at cheap prices or by grab will depend on the class nature of the state. So, if a labour component/representation becomes significant within the state, working people would want their resources to work for them and to reproduce their living standards in better shape time and time again. This means that in accounting terms, the capital and trade accounts have to be regulated, certain imports that undermine national industry would have to be blacklisted, and luxury consumption and income would have to be taxed much like they were under Arab socialism. In dynamic terms, however, a massive redistribution is necessary, redressing the concentration of wealth that the Arab merchant classes undertook when they hijacked the state. It is very likely that given the very low purchasing power of the working class, it would not be possible to generate significant demand to kick-start any of these economies without significant land and asset redistribution.

Historical comparisons, like all comparisons, are lame. The past cannot be re-enacted. The sixties and seventies exhibited higher growth rates, productivity and employment generation, but were no ages of popular democracy. There were many prisoners of conscience, but these were individuals whose consciousness issued from the values of the leading global capitalist class that later brought about neoliberalism. Their desired neoliberal age was characterized by lower growth rates, rising poverty, inequality, civil wars and abjection in Yemen, Syria, Iraq, Sudan and Libya, and repression to boot. The rights of the few trampled the rights of humanity. The politics of political Islam exceeded the avarice of unrestrained capitalism as it placed obligations above the necessity to provide the historically determined rights-based level of subsistence to the working class. People had the right to be presidents, but they were dying in wars, repressed or hungry. Seen from the broader context, their liberalising policies were not economics. The buying and selling with the hungry amounts to a pittance. Their policies were insidious security-stripping measures that unravelled states, leaving U.S.-led capital, especially its militarised side, ever more powerful against would be contenders for the seat of empire.

In the post-Arab Spring phase, there was no redistribution. As to whether there will be redistribution or not depends on the construction of a social programme, which is itself contingent on the power and civil liberties afforded to the working class and the peasantry. The hype from left quarters that the post-Arab Spring masses now know that they are capable of toppling regimes and that if the course of reform flounders the revolution will rear its head again, may not hold as the dismay from the lack of revolutionary programmes instills a sense of despondency.

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