"Bourgeois Democracy": What Do Marxists Mean By This Term?

By Scott Cooper

Republished from Left Voice.

In 1947, Winston Churchill famously said that “democracy is the worst form of government except for all those other forms that have been tried from time to time.” Since he wasn’t talking about a democracy based on the organized power and rule of the great majority, perhaps he was correct. He meant what Marxists call bourgeois democracy.

Liberals have always been aligned with Churchill’s endorsement of the ruling-class version of “democracy,” but for more than a hundred years, many in the workers’ movement — including some who falsely claim the Marxist mantle — have insisted that reforming bourgeois democracy can be a way to achieve “socialism.” They are dead wrong, and the main reason is their refusal to acknowledge what genuine Marxism has always taught: all forms of government have a class character. When you look at the bourgeois form of democracy through the class lens, it’s clear that it is no pathway to overcoming the fundamental class antagonisms rooted in the capitalism system. To think otherwise is to fall into a trap.

On January 20, the U.S. government again conducted it ritual of transferring power from one president to another — each successive leader beholden to and serving the interests of capital and its bourgeois regime. Joe Biden has begun his presidency with a promise to restore bourgeois democracy and rebuild faith in its institutions. All manner of people on the Left, viewing democracy in the abstract, have already bought into Biden’s electoral victory as a counterbalance to right-wing “authoritarianism” and even incipient fascism. Like the reformists of old, they too ignore the fundamental class character of bourgeois democracy, which guides every action of those who run the system on which it is based.

The class character of a form of government is precisely why we differentiate bourgeois democracy from genuine rule by the majority that constitutes the working class. By “deceiving the people and concealing from them the bourgeois character of present-day democracy,” wrote Vladimir Lenin in late 1918, those deceivers end up doing the bidding of the ruling class — our class enemy.

Bourgeois Democracy and the Aims It Serves

In combination, the institutions of bourgeois rule the Biden administration aims to “restore” constitute a bourgeois state that exists as the governmental branch of an overall system that is predicated on capital’s exploitation of the great majority of people, who must sell their labor power to survive. As Friedrich Engels wrote in 1891, “The state is nothing but a machine for the oppression of one class by another, and indeed in the democratic republic no less than in the monarchy.”

We saw this just a few days ago, when police beat striking workers at the Hunts Point produce market in New York City. As if he were writing in 2021, Lenin had suggested, in another 1918 pamphlet, that if we want to understand the true role of a bourgeois democratic state, we should pay attention to “how the most democratic and republican bourgeoisie in America or Switzerland deal with workers on strike.”

Even the laws — indeed, the very concept of the “rule of law” in a bourgeois democracy — puts the lie to what the reformists would have us believe. Biden wants us to trust in those laws, but Lenin’s description of laws in a bourgeois democracy — which fits the United States to a tee — reveals again the trap of not seeing their class character:

Take the fundamental laws of modern states, take their administration, take freedom of assembly, freedom of the press, or “equality of all citizens before the law,” and you will see at every turn evidence of the hypocrisy of bourgeois democracy with which every honest and class-conscious worker is familiar. There is not a single state, however democratic, which has no loopholes or reservations in its constitution guaranteeing the bourgeoisie the possibility of dispatching troops against the workers, of proclaiming martial law, and so forth, in case of a “violation of public order,” and actually in case the exploited class “violates” its position of slavery and tries to behave in a non-slavish manner.

As the great German revolutionary communist Rosa Luxemburg made clear in 1902, “What presents itself to us as bourgeois legality is nothing but the violence of the ruling class, a violence raised to an obligatory norm from the outset.” [1]

In a bourgeois democracy, the operative principle is protecting the state and the bourgeois order. Everything is subordinated to that objective. We’ve had an opportunity to watch this principle unfold in the aftermath of the January 6 attack on the U.S. Capitol. Some Republican members of Congress, representing one wing of the U.S. ruling class, incited and abetted what the other wing has called an “insurrection.” And yet, on Inauguration Day only two weeks later, we saw a number of them — presumably “seditionists” against the bourgeois regime — being normalized as the traditions of the day were played out. They made speeches, presented gifts, bumped elbows, and generally reveled with Democrats. After all, they are all members of a “bourgeois party” — and thus worthy of “protection,” as Lenin wrote:

The ruling party in a bourgeois democracy extends the protection of the minority only to another bourgeois party, while the proletariat, on all serious, profound and fundamental issues, gets martial law or pogroms, instead of the “protection of the minority.” The more highly developed a democracy is, the more imminent are pogroms or civil war in connection with any profound political divergence which is dangerous to the bourgeoisie.

Every sign points to these two wings of bourgeois democracy uniting to enact a new “anti-terrorist law” that will be used to go after the “profound political divergence” they most fear: the political organization of the working class against capitalist rule.

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Contrast with Workers’ Democracy

There is an alternative to bourgeois democracy. Marxists call it proletarian or workers’ democracy. History gives us a few examples.

A year after the Russian Revolution of 1917, what the great American writer John Reed described as a “highly complex political structure” had emerged in “all the cities and towns of the Russian land, which is upheld by the vast majority of the people and which is functioning as well as any newborn popular government ever functioned.” It was the Soviet state, based on councils (the word soviet means “councils” in Russian) of workers, soldiers, and peasants. They were elected by all those who “acquired the means of living through labor that is productive and useful to society” — in other words, by the very people a bourgeois state exists to exploit — and no one else, including employers, those in private business, and cops, all excluded.

These councils existed at both the workplace and municipal levels. Their decision-making was truly democratic, genuinely representing the majority — not the minority bourgeoisie, as in the United States. They decided, for instance, on what their factories would produce, based on human needs. And they were subject to popular recall at any time.

These local soviets elected representatives to a national assembly that helped guide the Bolshevik leadership as it wrestled with decisions for all of Russia, including foreign policy.

“No political body more sensitive and responsive to the popular will was ever invented,” wrote Reed of the soviets. His essay “Soviets in Action,” in which he gives examples of how they functioned, is well worth a close look.

Nearly a half century earlier, the Paris Commune had organized similar organs of workers’ self-rule. Like the Russian soviets, they were what Lenin described as “the direct organization of the working and exploited people themselves, which helps them to organize and administer their own state in every possible way.”

When workers have their own genuine democracy, the subordination of the working class to the bourgeoisie is smashed. Lenin gave a great example, drawing on one of the “rights” enshrined in the First Amendment of the U.S. Constitution: “Freedom of the press ceases to be hypocrisy, because the printing-plants and stocks of paper are taken away from the bourgeoisie.” And he described how even conducting foreign policy becomes transformed.

In no bourgeois state, not even in the most democratic, is it conducted openly. The people are deceived everywhere, and in democratic France, Switzerland, America and Britain this is done on an incomparably wider scale and in an incomparably subtler manner than in other countries. The Soviet government has torn the veil of mystery from foreign policy in a revolutionary manner [because] in the era of predatory wars and secret treaties for the “division of spheres of influence” (i.e., for the partition of the world among the capitalist bandits) this is of cardinal importance, for on it depends the question of peace, the life and death of tens of millions of people.

To revolutionary Russia’s soviets and the Paris Commune’s organs of workers’ self-rule can be added more contemporary examples. While certainly not at the state level, there are, for instance, the workers’ cooperatives that emerged in Argentina in the aftermath of a cataclysmic financial crisis in 2001, such as at the Zanon ceramic tile factory. And in Chile, during the time of the Popular Unity government, there were the cordones industriales, a grassroots movement formed by workers who occupied factories and other enterprises and ran them in the interest of the working class.

An even more recent example comes from the Mexican city of Oaxaca in 2006. When a teachers’ union went on strike, police fired on a peaceful protest and workers fought back — driving the cops out of the city. For several months, the working class and community groups, including the teachers’ union, ran the city through large, democratic assemblies as part of a broad movement known as the Popular Assembly of the Peoples of Oaxaca (APPO).

The general assemblies being held by striking workers at the Grandpuits refinery in France today, where the trade unionists are making the daily decisions about how to wage their struggle against the multinational oil and gas company Total that is trying to destroy their jobs, are the direct descendants of these earlier examples — and point the way forward for rank-and-file democracy and assemblies in unions and social movements throughout the world. 

“Proletarian democracy is a million times more democratic than any bourgeois democracy,” wrote Lenin. He continued,

Soviet power is a million times more democratic than the most democratic bourgeois republic. To fail to see this one must either deliberately serve the bourgeoisie, or be politically as dead as a doornail, unable to see real life from behind the dusty pages of bourgeois books, be thoroughly imbued with bourgeois-democratic prejudices, and thereby objectively convert oneself into a lackey of the bourgeoisie.

What Can Our Class Do with Bourgeois Democracy?

As in most other countries with such a system, the manifestation of bourgeois democracy in the United States is a tapestry of rights won through struggle — always subject to being denied by force or being taken away altogether — and explicitly undemocratic laws and conventions. These are “always hemmed in by the narrow limits set by capitalist exploitation,” as Lenin wrote. Socialists, and the working class more broadly, have a responsibility to protect those rights and seek to expand them, while at the same time advancing democracy — even in its bourgeois context — by fighting those narrow limits.

In this country, many of those limits are most explicit in the electoral sphere — and they provide a list of what we ought to be fighting for locally and nationally. This includes abolishing the racist Electoral College and the U.S. Senate, which gives disproportionate power to a small minority of the U.S. population. It includes demanding the end to the atrocious restrictions on the ability to vote (a right not even enshrined in the U.S. Constitution) and outright voter suppression. It includes fighting to dismantle all the obstacles to ballot access that make it nearly impossible for any party other than those of the bourgeoisie to run candidates. Together, these limits reveal the truly undemocratic nature of the U.S. bourgeois regime. It all adds up, as Marx is said to have noted, to a “democracy” in which “the oppressed are allowed once every few years to decide which particular representatives of the oppressing class shall represent and repress them in parliament!”

Today, living in a bourgeois-democratic country is the backdrop to all of our struggles. That is no less a fact in our daily fights against the ongoing social and economic assault of capitalism than it is when the bourgeois regime unleashes police brutality or helps throw us out of our jobs to protect the profits of the minority class. But that doesn’t mean we cannot use bourgeois democracy to our advantage, not only in the immediate sense but even to build a revolutionary movement. It depends on clarity and on not buying into the notion that reforming bourgeois democracy is the path to our liberation from capitalist oppression. As Leon Trotsky wrote in 1932:

In the course of many decades, the workers have built up within the bourgeois democracy, by utilizing it, by fighting against it, their own strongholds and bases of proletarian democracy: the trade unions, the political parties, the educational and sport clubs, the co-operatives, etc. The proletariat cannot attain power within the formal limits of bourgeois democracy, but can do so only by taking the road of revolution: this has been proved both by theory and experience. And these bulwarks of workers’ democracy within the bourgeois state are absolutely essential for the taking of the revolutionary road.

Lenin wrote in 1918 that bourgeois democracy “always remains, and under capitalism is bound to remain, restricted, truncated, false and hypocritical, a paradise for the rich and a snare and deception for the exploited, for the poor.” Anyone who tells you otherwise is, as Lenin noted, is “in practice” abandoning the proletariat and standing on the side of the bourgeoisie. Here, in the pages of Left Voice, we do our best to draw the distinction every time and stand firmly on the side of workers’ democracy. It is part of taking up the task that Trotsky spelled out for our time: take the road of revolution.

Notes

[1] Rosa Luxemburg, “Yet a Third Time on the Belgian Experiment,” Die Neue Zeit, May 14, 1902.

Juneteenth: A Marxist Perspective

By Scott Cooper

Republished from Left Voice.

The United States, like all of the Americas, was built on the backs of enslaved labor, by the labor of people ripped from their homelands and brought to stolen lands. On Juneteenth, we celebrate the emancipation of the last of the enslaved Black people in the United States, as well as remember and commit to fight against the legacy of slavery. In the midst of the current uprising, this is more important than ever.

Socialists have a long history of fighting against slavery. Karl Marx, who wrote extensively about the Civil War and slavery in the United States, made it abundantly clear that enslaved Black people in North America had to be free before all the wage slaves of the working class could be free of exploitation.

Marx and the Abolition of Slavery

The materialist conception of history developed by Marx explains that human society progresses through different stages that are characterized by the material conditions of production. The Union states represented a more progressive stage in which capitalism was developing the productive forces and in which Black people were not held in bondage. The Confederacy remained in a backward stage, with vestiges of property relations that had long been overturned in Europe. The capitalists waging a war to free slaves from their bondage, with the support of the Northern working class, was to Marx, therefore, progressive.

In a letter from London dated December 10, 1861, Marx made clear that the “slavery question” was “the question underlying the whole Civil War.” Marx was a staunch supporter of a Union victory in the Civil War, and not because he supported the Northern capitalists. He argued against those who advocated simply letting the South’s secession stand and letting the Confederacy constitute itself as a new country. Marx vehemently opposed the Southern slavocracy, which profited from the hyper-exploitation of Black people and worsened conditions for workers and oppressed people as a whole. Slavery’s place was the dustbin of history. To Marx, there could be no emancipation for the proletariat while slavery continued to exist. 

Marx also made clear that the fight to free enslaved Black people in America was inextricably linked to the fight to free the entire working class from what he called wage slavery — working people having to sell their labor for 8, 10, 12 hours a day in order to survive. The fight to crush the Confederacy, for Marx, was not about the “dissolution of the Union,” but against what he saw as the true objective of the slavocracy: 

[R]eorganization on the basis of slavery, under the recognized control of the slaveholding oligarchy … The slave system would infect the whole Union. In the Northern states, where Negro slavery is in practice unworkable, the white working class would gradually be forced down to the level of helotry. This would fully accord with the loudly proclaimed principle that only certain races are capable of freedom, and as the actual labor is the lot of the Negro in the South, so in the North it is the lot of the German and the Irishman, or their direct descendants.

Revolutionary socialists view Juneteenth through the prism of Marx’s analysis. Abolishing slavery was a revolutionary act to free Black people from the most brutal bondage. It was also a victory for the working class as a whole. Marx said it directly:

The present struggle between the South and North is, therefore, nothing but a struggle between two social systems, the system of slavery and the system of free labor. The struggle has broken out because the two systems can no longer live peacefully side-by-side on the North American continent. It can only be ended by the victory of one system or the other.

Marx saw the defeat of the slave system as a prerequisite for building a revolutionary struggle to overturn capitalism. If humanity was to advance, a social and economic order based on slavery had to be destroyed everywhere.

The Road to Juneteenth

Before the Civil War broke out, there had already been numerous slave rebellions and insurrections in the United States. Documentary evidence suggests at least 250 uprisings or attempted uprisings involving 10 or more slaves, beginning in the 16th century. In 1800, an enslaved man by the name of Gabriel (now known as Gabriel Prosser) planned a large slave rebellion in the area of Richmond, Virginia — but news got out and he and 25 of his followers were hanged. Prosser had learned to read, and the Virginia legislature henceforth prohibited educating slaves who might, like Gabriel, be inclined to use their skills for similar purposes. Another enslaved man in Charleston, South Carolina named Denmark Vesey was executed in 1822 for planning a slave revolt in that city. In 1831, a rebellion of fugitive slaves led by Nat Turner in Southampton, Virginia, killed more than 50 white people but was put down after a few days; Turner went into hiding but was discovered more than two months later. Some 21 of the rebels were hanged and another 16 were sold away from the region.

Such slave insurrections were a prelude to the Civil War. The war itself was full of Black soldiers and sailors. In fact, by war’s end, roughly 179,000 Black men had served as soldiers in the U.S. Army — accounting for about 10 percent of the total forces — and another 19,000 served in the Navy. The Civil War took the lives of nearly 40,000 soldiers, three-fourths of whom died not in combat but from infections or disease.

These combatants served bravely and were clearly a vital component of the Union war effort. Among them were the enlisted members of the famous 54th Regiment Massachusetts Volunteer Infantry. Many enslaved Black people who ran away from Southern plantations to Union encampments enlisted in the Army to fight against their former owners — with weapons supplied to them by the U.S. government. These actions by Black slaves forced President Abraham Lincoln’s hand. Originally, Lincoln insisted the war was not about slavery — despite every document of the Confederacy making clear the exact opposite — but an effort to save the Union. But as former slaves rose up against their masters and joined the war effort, Lincoln could either embrace them as allies in the war or continue to risk both a bloody war and a more widespread slave rebellion. Due to the actions of runaway slaves, Lincoln chose the former. 

Over a year into the war, on September 22, 1862, Lincoln issued the Emancipation Proclamation, which would go into effect on the following January 1. It declared that enslaved Black peoples in the Confederate states were free. If they escaped across Union lines or were liberated by the advancing Union Army, they were permanently free. Of course, the Union went on to defeat the Confederacy — at the cost of between 620,000 and 750,000 lives. 

The proclamation wasn’t a full emancipation, even formally. It applied only to the 3.5 million slaves in the 10 states of the Confederacy and to all segments of the executive branch of the U.S. government, including the Army and Navy. It excluded the border slave states. It left a half-million enslaved people in bondage. But the fact that the proclamation was issued encouraged all those in slavery to rise up and fight, as well as to join the Union forces. This depleted the Confederacy’s labor force, which hurt the production of arms for the South’s rebellion.

The Emancipation Proclamation also brought to a halt the Confederacy’s campaign to win recognition from European countries, particularly England and France — both countries that were officially anti-slavery. But English textile mills needed Southern cotton; consequently capitalist pressure to recognize the Confederate States of America and open full trade was strong. Lincoln’s proclamation made it impossible for anyone to pretend that the war was about anything other than slavery, and the mill owners were forced to back down.

Put simply, the Emancipation Proclamation was a public commitment by the United States to end slavery. It killed the Fugitive Slave Laws and outlawed the return of escaped slaves to the South. It was a manifestation of the slave revolt, with Northern support, the South had always feared.

Of course, enforcement depended in large part on Union advances through the Confederate states — which brings us to Juneteenth.

June 19, 1865

Texas was the westernmost part of the Confederacy, having been stolen from Mexico just 20 years before. Its geographic isolation largely shielded it from the battles of the Civil War, and over the course of the war Texas filled with slaveholders who moved to escape the fighting across the Deep South. They brought their human property with them — some to work on newly acquired or established farms, but others to be domestic servants in cities such as Houston and Galveston. There were about 250,000 people in enslavement in Texas by 1865.

It took many weeks for news of the April 9, 1865 surrender by Robert E. Lee to reach Texas, and even longer — until June 2 — for the Confederate Army of the Trans-Mississippi to surrender. On June 18, 2,000 U.S. troops arrived at Galveston Island to occupy Texas for the federal government, under the command of Union Army General Gordon Granger. The next day, he stood on the balcony of the Ashton Villa and read aloud General Order No. 3:

The people of Texas are informed that, in accordance with a proclamation from the Executive of the United States, all slaves are free. This involves an absolute equality of personal rights and rights of property between former masters and slaves, and the connection heretofore existing between them becomes that between employer and hired labor. The freedmen are advised to remain quietly at their present homes and work for wages. They are informed that they will not be allowed to collect at military posts and that they will not be supported in idleness either there or elsewhere.

This was the first news of the Emancipation Proclamation that those enslaved in Galveston had heard. Likely, few if any Texas slaves had heard that they had been officially freed more than two years earlier. A celebration broke out, and the next year, in 1866, the freedmen of Texas held on June 19 what became an annual celebration — Jubilee Day. These early celebrations became political rallies centered on registering newly freed slaves as voters. They helped spark the advances of the Reconstruction Era.

The Civil War had not, obviously, destroyed racism. White Texans, for instance, did everything they could to keep these June 19 celebrations from happening. Landowners would interrupt with demands that their laborers return to work. Cities and towns would bar Black people from using public parks, for instance, which were segregated. So, freed slaves across Texas began to pool their resources and purchase land where they could celebrate Juneteenth. Emancipation Park, 10 acres of land in Houston purchased in 1872 by a group of Black ministers and business owners, is one such location still in use today. It was established expressly for the city’s annual Juneteenth celebration.

Black people taking control of a part of their lives that the racists could not take from them — including just celebrating Juneteenth — so upset the white power structure that they created whatever obstacles they could devise. Eventually, between 1890 and 1908, every one of the former Confederate states, Texas included, passed new laws or revised their constitutions to disenfranchise Black voters, exclude them from public facilities, and enshrine the racist Jim Crow system as a new form of the old plantation.

Since then, Juneteenth has been associated with many of the struggles of Black people against racist and economic oppression. And it has taken up broader social issues as well. In 1968, for instance, the Poor People’s Campaign — organized by Martin Luther King, Jr. and then carried out under the leadership of Ralph Abernathy after King’s assassination, raised demands for economic and human rights for all poor Americans. As part of that campaign, Juneteenth was designated Solidarity Day, and 100,000 people — including many whites — marched in Washington. That day, Coretta Scott King spoke out against the Vietnam War.

Today, with the urgency of the fight against racism as strong as ever, Juneteenth stands as a reminder of the emancipation of slaves and the destruction of the South’s backward socioeconomic system. It is also a reminder of how much more work there is to do. While U.S. military bases are named for Confederate officers and statues to “heroes of the Confederacy” dot the Southern landscape, efforts to make Juneteenth a national holiday in the United States have been thwarted every time. 

Racism Cannot Be Eradicated without Eradicating Capitalism

This year, Juneteenth comes just as the fight against racism in the United States and around the world has taken a new turn. The murder of George Floyd by Minneapolis cops has sparked an uprising against the structural racism that was begun in 1619, when the first Africans were brought as slaves to Virginia. This structural racism was not resolved with the Civil War.

For weeks, in the midst of a global pandemic, the streets of cities across the country have been filled with people of all races, ages, genders, and socioeconomic statuses, demanding change. These protests, by calling the police as an institution into question, are questioning a key component of capitalism  — since the police are the armed force of the capitalist state and serve to uphold capitalist property relations.

Capitalism is inherently racist. In the United States, structural racism is the direct legacy of slavery. Once slaves were freed, the Southerners who were no longer able to enslave people legally, as well as the Northern industrial capitalists, began a systematic recreation of Black oppression to guarantee their profits throughout the United States. Black people became the bottom rung of a growing working class. They were unable to unionize, paid the lowest wages, and kept out of key jobs. Attempts at Black capitalism were systematically crushed, like the Tulsa white supremacist uprising that burned Black small businesses.

After the Thirteenth Amendment to the U.S. Constitution was enacted in 1865, formally abolishing slavery and involuntary servitude in the entire United States (and thus going further than the Emancipation Proclamation), Black Codes, state-sanctioned white supremacist violence, and the growth of the Ku Klux Klan all began. Black people were subjected to involuntary labor throughout the South as states and their cops refused to enforce statutes meant to prevent such circumstances. And then there are prisons.

The United States incarcerates more people than any other country, and more than one-third of the prison population is Black people — who are incarcerated at more than five times the rate of whites. Capitalism uses this imprisoned population as slave labor, doing all sorts of work at pennies on the dollar or for no pay at all to feed the capitalist profit-making machine.

Racism is a tool the capitalists wield with great skill; they enforce it with laws and the police. As long as capitalism exists, the capitalists will seek to elevate some people and denigrate others, sowing divisions to deflect attention away from a common enemy.

Thus, the fight to eradicate capitalism is inextricably linked with the fight against racism, and vice versa: the anti-racist struggle is the struggle for socialism. 

Lenin saw the Civil War as a revolutionary war. In a “Letter to American Workers” in 1918, he wrote words that resonate with as much relevance today as they did less than a year after the Russian Revolution. He began by celebrating the “revolutionary tradition” of the American proletariat, and pointed to “the immense, world-historic, progressive and revolutionary significance of the American Civil War of 1863-65!” And like Marx before him, he explained that the fight against the enslavement of Black people in the United States is linked to the fight against wage slavery.

The representatives of the bourgeoisie understand that for the sake of overthrowing Negro slavery, of overthrowing the rule of the slaveowners, it was worth letting the country go through long years of civil war … But now, when we are confronted with the vastly greater task of overthrowing capitalist wage-slavery, of overthrowing the rule of the bourgeoisie — now, the representatives and defenders of the bourgeoisie, and also the reformist socialists who have been frightened by the bourgeoisie and are shunning the revolution, cannot and do not want to understand that civil war is necessary and legitimate.

The American workers will not follow the bourgeoisie. They will be with us, for civil war against the bourgeoisie. The whole history of the world and of the American labor movement strengthens my conviction that this is so. 

We can honor Juneteenth in 2020 by taking deliberate steps to liberate humanity from capitalism and the institutional racism that feeds its profits.

No, We Are Not Going to Beat Capitalism on the Stock Market

By Nathaniel Flakin

Republished from Left Voice.

Given the news over the past week, you would be forgiven for thinking that Occupy Wall Street had come back with a vengeance. Back in 2011, activists occupied a small park in front of a Lower Manhattan bank — now they seem to be “occupying the stock market” itself. Ten years ago, the bankers and brokers could just get their cops to arrest the pesky occupiers — but now, with the loss of billions of dollars at stake, armed thugs in blue are not going to do the trick.

The stock surge for GameStop has rattled financial markets. A motley horde of Internet users have been giving hedge fund managers a run for their money. Those who bet that shares of the retail chain GameStop would lose value (short sellers) have been thrashed as the stock price surged higher and higher, thanks to the targeted actions of thousands of small investors.

The bankers, who for more than a generation have been praising deregulation and the “invisible hand of the market,” are now calling on the government to protect them from losses. So have “little guys” taken over the stock market? Will the revolution be organized on Reddit?

Of course not. This was never going to take down the hedge fund system. At best, its greatest “hope” was to do some short-term mischief and maybe kill one small fund. Melvin Capital Investment is losing billions and might collapse — but Reuters has reported that Blackrock, the biggest asset management in the world, stands to earn $2.4 billion from the rising stock price. As Derek Thompson has explained in The Atlantic, Melvin Capital Investment was betting on GameStop’s stock to fall — and that was always a risky bet:

[GameStop’s] stock had already fallen from $56 a share in 2013 to about $5 in 2019. GameStop’s short sellers were essentially betting that a company publicly valued as “horrendous” should really be valued at a level commensurate with the notion of “truly horrendous.” They risked billions of dollars on the financial equivalent of a qualifying adverb. It’s really risky to aggressively short a company whose stock, having fallen 95 percent, is floating around $5; there just aren’t a lot of numbers under five.

A Rigged System

The discussion around GameStop has shown that the system is hopelessly rigged: even when small investors manage to exploit the rules to their advantage, those rules are simply changed to prop up the big capitalists.

But that’s only the beginning of how it is rigged. Virtually all stocks are controlled by a tiny minority of capitalists. How are all the working people in the world, even if they invested all their savings into the stock market, supposed to compete with the gargantuan sums owned by the likes of Elon Musk, Jeff Bezos, and their wealthy corporate cronies?

The rumblings have led Democratic Party “progressives” such as Elizabeth Warren to call for new regulations. She wants action to “ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders.” Those “highly leveraged” traders,” by the way, are the hedge funds. Warren is worried about someone inflicting damage on them. 

How Capitalism Works

The entire episode is making lots of people wonder: Is this any way to organize an economic system? After all, as the back-and-forth trading has unfolded through these rather absurd machinations, who has been thinking about the effect on the livelihoods of tens of thousands of GameStop employees?

But this casino is how all decisions are made in the capitalist system. Where is housing built, and who gets to live in it? Which medical breakthroughs get funding? Which wars are waged? The same rules deciding the future of GameStop decide all these questions as well.

The stock market and its fictitious capital which condenses all the absurdities of the capitalist system into one small space. So much of the market is about “fictitious capital” — money lacking any material basis in actual commodities or productive activity. As the Marxist economist Rudolf Hilferding explained:

On the stock exchange, capitalist property appears in its pure form, as a title to the yield, and the relation of exploitation, the appropriation of surplus labour, upon which it rests, becomes conceptually lost. Property ceases to express any specific relation of production and becomes a claim to the yield, apparently unconnected with any particular activity. Property is divorced from any connection with production, with use value. The value of any property seems to be determined by its yield, a purely quantitative relationship. Number is everything; the thing itself is nothing! The number alone is real, and since what is real is not a number, the relationship is more mystical than the doctrine of the Pythagoreans.

A Way Forward

Within this absurd system, thousands of working-class people, investing their stimulus checks, might be able to steal a little something back from Wall Street — with the help of an app cynically named Robinhood. 

Yes, the ruling class is pissed that normal people are disrupting their casino. But the market remains their casino. The experience of this kind of “activism” will lead people to draw the wrong conclusions. We’re already seeing calls for more “democratic” and “fair” rules for the stock market, rather than for toppling the stock market itself.

And what happens if small investors are successful? Then some of them might become big investors. So, this kind of activism may create some new capitalists — but it’s no way to beat the capitalist class. In a fight over stocks, the rulers will always have an advantage.

But you’re in luck: Marxism is a 150-year-old science of how to eliminate the bourgeoisie and its exploitation and oppression. If we pool our money, we shouldn’t invest it in stocks; — we should use it to build up organizations that will fight for our interests —, not by trading stocks, but by organizing our strength in terms of material force.

A Problematic Ally

If you’re not convinced, consider one troubling figure who has been cheering on the small investors against the short sellers: pandemic profiteer and Internet troll Elon Musk. He understands the giant casino that passes for a global economy. After all, he has leveraged a small, almost completely unprofitable car company into a personal fortune of $180 billion. Musk is obviously not trying to bring down the system that is rewarding him with such vast wealth, nor does he have some personal vendetta against short sellers. Instead, Musk understands that this is capitalism at work.

Musk might have several hundreds of billions of dollars, but he’s a small part of the global capitalist system. We don’t need to buy him out, or beat his ilk at the stock market game. We can use our strength to take power and expropriate them. A workers’ government can put all those riches at the service of all humanity. Now that’s a project worth “investing” in.