Patrick Clawson’s analysis of the development of capitalism in Egypt (Khamsin 9) is a serious contribution to our understanding of the relationship between Egyptian capital and imperialism. It is a major advance over the conceptions prevalent on the left, which are based on the analysis of the Egyptian Marxists Anwar Abdel-Malik, Mahmoud Hussein, and Samir Amin.1
In particular, Clawson has demolished the myth that Egypt’s poverty is a product of foreign interference. In demonstrating the growth of Egyptian capital from the internationalistion of (money) capital, he has broken with the nationalist assumptions of those previous analyses that have worked within the sociology of underdevelopment. But there are major gaps in Clawson’s theoretical framework, and serious problems – and errors – in his analysis.
Since most of the anomalies in Clawson’s position are in his sections on the Nasser period, and since an understanding of this period is most crucial in grasping the political questions now posed, I shall concentrate on his account of ‘state capitalism’. However, since this cannot be taken in isolation, a few words on the preceding history are in order.
Capitalism and class struggle
‘The history of Egypt over the last two centuries is the history of class struggle – primarily, the struggle of the international capitalist class to mould the Egyptian economy to their needs. . . The history of Egypt’s economy is therefore primarily a history of capital’s advances’ (p109).2
Clawson’s history of Egyptian capitalism ‘from above’ argues that resistance to capital’s advances has not been successful. This theme, which permeates his analysis, is both theoretically and politically disorienting. It is unfortunate that few of his political conclusions are more than implicit; yet this lack of explicitness is a consequence of the focus of his analysis. Effectively, Clawson simply ignores the question of anti-capitalst struggle, whether potential or actual, on the part of the working class or the pre-capitalist classes. In part, this may be due to lack of information about the working class movement. But some information is available, and no account of the development of capital can be complete unless it recognises that capital can exist only in a context of class struggle. No country’s history presents a unilateral process of capitalist hegemonisation, and Egypt’s is no exception. If we are to arrive at strategic conclusions for a future struggle for socialism, we need to know at least as much about the working class as we do about its oppressors.3
The internationalisation of capital is certainly a valuable analytical starting point. Elsewhere Clawson has dealt in more historical detail with the way the circuits of capital are internationalised.4
But however useful his perspective is, it remains incomplete without an analysis of the precise relationship between the various circuits of international capital and pre-capitalist modes of production, and on this point he is weak. Such an extension of his outlook would provide some crucial elements lacking in his analysis of Egypt: an explanation of class alliances and an investigation of the transformation of the labour process. Clawson fails to probe the actual relationship between ‘capital’s advances’ and the reorganisation of production, and consequently fails to examine the locus of class conflict. The dynamics of capitalist production are therefore never specified, and the nature of capitalist ‘development’ in its historical totality is not conceptualised.
The Origins of Commodity Production
Clawson argues that Egyptian cotton production arose as a result of the needs of commodity capital undergoing a process of internationalisation. Long-staple cotton thus became a commodity for foreign capitalists, whilst production within Egypt remained organised along precapitalist lines. ‘The internationalisation of capital’, he writes, ‘not any conditions internal to Egypt, was the primary factor behind the growth of cotton production, and therefore of the market, in Egypt’ (p80). Yet it ought to be asked, why did the Egyptian state under Muhammad ‘Ali choose to begin commercial production of cotton for export? Marxist tradition argues that the penetration of capitalism into pre-capitalist societies requires a high degree of violence to break the resistance of traditional classes.5
Whether violence is actually necessary, of course, is debatable.6
But the least that can be said is that the state in Egypt was extraordinarily willing to serve the needs of commodity capital. His mono causal view of capitalist development prevents Clawson from even raising the question. The decision to begin long-staple cotton production and the consequent initial reorganisation of cultivation was only one of Muhammad ‘Ali’s efforts to change the economy he had inherited from the Mamluks. It was accompanied by a small-scale industrialisation programme, an extensive project of rural infrastructural development, the abolition (and later the partial recomposition) of the tax-farming system, and so on. It was not imposed on the Egyptian state, but was actively chosen. It is thus one-sided at best to attribute the origins of cotton production simply to the needs of the internationalisation of capital. That was certainly one factor, but another was the need of the Egyptian (pre-capitalist) state itself to augment a (pre-capitalist) surplus that had been enormously eroded by Mamluk/tax-farmer rule.7
Muhammad ‘Ali’s ‘modernisation’ programme was at least in part a strategy of the ruling class within Egypt (chiefly, at this point, the state) designed to extract a surplus with improved techniques. The sale of cotton was one such attempt.
It is significant that Clawson’s treatment of ‘Ali’s industrialisation programme appears to overlook the theoretical problem involved. In explaining its demise, he writes: ‘The failure of Ali’s factories was due not only to market forces. . . but also to the European powers, who imposed free trade on Egypt. . . The dominance of capitalist industry in Europe meant the internationalisation of commodity capital only.’ (P85).
But it is difficult to square the implication that ‘Ali’s factories were capitalist with Clawson’s insistence that Egypt was not capitalist at the time.8
The major reason for the failure of ‘Ali’s factories was that no capitalist dynamic sustained them. Since they were designed not to accumulate capital (‘Ali not being a capitalist), but rather to fuel a ‘modernisation’ process made requisite by pre-capitalist dynamics, machinery was not renewed and the factories simply crumbled. Far more important than the small-scale growth of non-capitalist industry in the Muhammad ‘Ali period was the phenomenal extension of corvée labour in rural ‘public’ works. The underlying dynamic is that of a precapitalist state, but Clawson’s one-sided view of capitalist penetration leads him to fail to follow through the logic of his own analysis.
Recognition of the role of the pre-capitalist mode of production in Egypt’s history provides an explanation of the class alliances upon which the Egyptian state was based; the mutual interests of foreign capital and the Egyptian state, though temporary and ultimately partial underlay the transformation of Egyptian political economy in the Khedival and colonial periods. Captitalism, of course, ultimately became dominant, but the obstacles to and force of its penetration were not generated by the needs of accumulation in the advanced capitalist countries alone.
Having proposed no explanation of how the Egyptian state emerged from specific political and economic developments, Clawson can give no meaning to the expression ‘Egyptian capital’. Why did some local entrepreneurs comé to acquire nationalist ideologies? What was the basis for national antagonism between foreign and Egyptian capital?
Clawson’s optic of the internationalisation of capital can leave one bewildered as to how nationalism emerged in Egypt at.all. Likewise, his silence about the relationship between the bourgeois Wafd Party and the labour movement in the inter-war years leaves a gaping historical vacuum in any analysis of the class struggle that has shaped Egyptian capitalism.
‘State Capitalism’ and Capitalist Production
Clawson’s analysis of the Nasser period is a polemic against the conception that the regime was socialist. It was instead, he maintains, ‘state capitalist’. He creates considerable confusion by labelling the ‘socialist’ assessment as ‘radical’, a term he also applies to ‘neoMarxist’ theories, thus suggesting that all ‘radicals’ held that Nasser’s Egypt was socialist. In fact the term ‘state capitalism’ is employed far more widely by Marxists, while the designation ‘socialist’ is pretty well confined to the Nasserists themselves. Clawson’s proof that Egypt remained capitalist thus seems somewhat pointless. It is far more important to analyse how capitalism operated in Egypt, and Clawson’s position here is marred by deep ambiguities. These arise from an unspecified conception of modes of production, and of the capitalist mode of production in particular.
Clawson quite rightly rejects the absurd view of Andre Gunder Frank, Immanuel Wallerstein and others, who equate capitalism with the market.9
His analysis of the internationalisation of capital explicitly situates capital as ‘a movement, not a thing at rest’, as Marx said.10
He is therefore able to provide insights into many aspects of capitalist development. But he does not spell out its basic dynamics, and at times implies certain conceptions that could be misleading.
The basis of his claim that Nasserist Egypt was not socialist is a comparison between it and a hypothetical socialist society. ‘To demonstrate that Egypt under Nasser was not capitalist’, he writes, ‘we must set forth the features which distinguish capitalism from socialism. . . The three fundamental features of capitalism are: first, production for a market by units which are forced by competition to maximise profits; second, a large group of people, who are. . . free to work where they wish and free of any other means of making a living; and third, control over the means of production by a small group of people. All of these are compatible with state ownership of the means of production’ (p101).
These criteria are ambiguous. Capitalism is defined by generalised commodity production (labour-power and the means of production being themselves commodities) under which the drive to accumulate more capital is primary: accumulation for accumulation’s sake. The extraction of surplus-value arises from the nature of capitalist production (not from the need to compete, in the last analysis). It is not just competition on the market, but the capitalist law of value that forces capitalists to continually revolutionise the means of production in order to increase the rate of surplus-value, and so to accumulate.11
Clawson’s three criteria make no explicit reference to relations of production; arguably, the three together may amount to the same thing, but it is clear that Clawson makes no distinction between ‘socialism’ and ‘post-capitalism’ . The precise significance of relation of production thus remains problematic. Thus: ‘The direct producers had neither political power nor control over production’ in Egypt (p101). The implication is that if a society is not socialist it must be capitalist. Later he suggests that the Soviet Union, whose dynamics are quite different from those of Nasser’s Egypt, is also state capitalist (p109). This obliterates the differentia specifica of capitalist production: accumulation through the generation of surplus-value (the law of value).
A society can be post-capitalist without being socialist, or without being a healthy workers’ democracy.12
Clawson’s ambiguity about the hallmark of capitalism is not helped by his somewhat contradictory comments on the effects of state capitalism. He argues that ‘the break with state capitalism under Sadat’ was the result of an inability to obtain foreign credit to pay for imports: ‘The lack of credit was. . . the logical consequence of poor productivity and worse profitability of Egyptian industry. . . The capitalist system forces all operating within it to pursue [profit] maximisation or pay the consequences: bankruptcy’ (p108).
Despite his prior claim that Egyptian state capital always aimed for maximisation, here Clawson is obviously implying otherwise. If it did not, half his case that Egypt was capitalist collapses. If it did, then failure to have done so cannot have been a cause of bankruptcy. Either way, it would seem that ‘irrational capitalism’ would be a more apposite label than ‘state capitalism’. Perhaps this is pedantic. But it does seem that Clawson’s analysis of capitalist development ignores capitalist crisis as an intrinsic feature of the system, a consequence of the laws of accumulation. The crisis of Egyptian capitalism is seen as the result of external relations.
In fact, the argument about ‘state’ capitalism has hindered rather than helped understanding of Nasserist Egypt. It implies that it differs fundamentally from private capitalism. There is, however, only one capitalist mode of production. Moreover, it is a purely empirical and descriptive, rather than analytical, term (Clawson refers to it as a description). What we need to know is how, rather than whether, valorisation took place. But for this we need an analysis of the labour process, or more broadly of the relationship between the state and the working class. This Clawson does not provide.
The State and State Capitalism
Clawson adheres to the ‘radical’ argument that the Nasserite regime was dominated by the petty bourgeoisie (or new petty bourgeoisie13
He differs from Hussein in particular in rejecting personal greed as a motivation. ‘The new petty bourgeoisie, he writes, ‘was transformed into a powerful political force by an ideology, an ideology that allowed them to gather the support of the proletariat and the proletarianised masses. . . Nationalisation was seen by the petty bourgeoisie as a mechanism to increase the pace of development – thoughts of personal enrichment were not uppermost in their minds’ (P102).
This petty bourgeoisie is left undefined. Clawson refers to it as an ‘academic-intellectual-military petty bourgeoisie’, which ‘seized economic power’.14
This kind of catch-all terminology is not very helpful. The precise fractions of the petty bourgeoisie that seized (economic and/or political) power (if it can be treated as a single class in this way) would need to be specified, and their relationship to the bourgeoisie proper analysed. But any such investigation inevitably leads to consideration of the role of the military: it was, after all, army officers that overthrew Faruq. And this means consideration of the role of the state apparatus.
Nasser and his colleagues were certainly of petty-bourgeois background. But some of them, Neguib for example, were high-ranking army officers, and Nasser himself was hardly an NCO. To explain their role in the state apparatus solely in terms of their social origins would make it impossible to understand the nature of the Egyptian state. The state acts in the interests of capital as a whole, in Egypt no less than elsewhere, and what was involved in 1952 was not just a few petty bourgeois usurping power but a wholesale rupture between the state’s military wing and the dominant fraction of the ruling class. The ideology of the Free Officers, which took time to coalesce, was formulated largely as pragmatic responses to particular situations. But these were state responses, not acts of ‘the petty bourgeoisie’ (although petty-bourgeois interests no doubt played a role). It was not their ideology that transformed them into a powerful political force. It would be more accurate to say that as a powerful political force, they developed an ideology involving populist, or semi-populist conceptions.
It is difficult to see what role Clawson means to attribute to ideology. One of the last things that could be said about Nasserism is that its ideology was a sustaining factor in its development (Clawson later says that ‘state capitalism never sank ideological roots in Egypt’, though this too is a half-truth), and certainly it would be difficult to identify a specific ideology as a unifying force amongst ‘the petty bourgeoisie’.
Clawson seems to suggest that what unified the new elite was its view of nationalisation ‘to increase the pace of development’, which presumably implies a shift in the class base of the state authorities after 1956 (in which case the ‘new petty bourgeoisie’ would be a yet-to-becreated class different from that which actually seized power). One other possible interpretation is that this new petty bourgeoisie is defined by its (petty-bourgeois) ideology, which, as has been pointed out elsewhere, is sheer tautology.15
An analysis of the role of the bourgeois state in a capitalist society, and of ideology in legitimating, or attempting to legitimate the role of capital, is, of course, extremely important. Clawson’s use of the term ‘petty bourgeoisie’ inevitably ignores the question of the bourgeois state in a social formation as a whole. In Egypt it seems most accurate to see events after 1952 as shaped by a shifting set of class alliances, ranging from sections of the bourgeoisie to sections of the ‘petty bourgeois’ state personnel, within which the (bourgeois) military was pivotal. The structural conditions of capital accumulation in Egypt conditioned the ideological responses of these classes or fractions of classes (see below). The military managed to remain the core of the shifting alliances, and corporate interests played some part in later developments. What was more significant in ending the initial alliance between the regime and the industrial bourgeoisie was the fear generated amongst that bourgeoisie by the state’s expropriations (even though none of them threatened Egyptian capital at first). Rising opposition intensified after 1958, particularly in Syria. Fear inhibits investment, and investment was obviously necessary for ‘development’; so the state stepped in. To a large extent, though not entirely, the ideology followed, rather than generated, statist developmental measures. The regime also had to build a power base, which it found primarily within the state bureaucracy. It is therefore not surprising to find it deepening that base prior to 1967. Combined with the dynamics of capital accumulation within the state enterprises, which were transforming the role of state bureaucrats, this served to create a powerful bourgeois class within the state apparatus. Tension between the needs of this new class and Nasserist ideology were inevitable.
State Capitalism in Crisis
Clawson is unambiguous about the causes of the economic crisis that emerged in the 1965-67 period: ‘Hansen and Nashashibi argue strenuously that the stagnation of the middle and late 1960s was not due to the foreign exchange problems alone. Certainly there were other contributing factors, such as the spreading production slowdowns caused by bureaucratic inefficiencies, but the fact remains that the crunch came when and only when Egypt ran out of foreign exchange. . . The stagnation of the 1960s was the product of a foreign exchange shortage’ (p 107).
Lacking an indigenous capital goods industry, which it could not create because of foreign competition, Egypt had to import its capital goods. It therefore needed foreign exchange to pay for them: a shortage of foreign exchange meant no capital-goods imports, and hence economic stagnation. Clawson analyses how the large reserves Egypt had in 1953 were used up, US aid fell, and economic growth had to be slowed.
This analysis remains partial. It might be suggested that behind Egyptian capitalism’s balance of payments problems lay more fundamental things (for a Marxist) than the mere shortage of foreign exchange. Clawson makes no mention of Marx’s theory of unequal exchange,16
but it would seem to be an important aspect of any explanation of the more general economic problems facing Third World countries. But Clawson does not see economic crisis as flowing from the internal dynamics of capitalism itself: a foreign-exchange shortage is an episodic, conjunctural phenomenon rather than a central feature of all capital accumulation.
As noted above, Clawson does not have a very clear conception of the dynamics of capital accumulation. His view of a crisis caused by scarce exchange reserves is consequently one-sided, for a number of reasons. Most fundamentally, this approach treats economic issues as essentially given policy questions: the ‘national economy’ has to cope with certain forces outside its control, but the resolution of its problems can be sorted out given the right policy. The economic crisis is not seen as flowing directly from the nature of capital accumulation itself. Of course, Clawson explains the shortage of foreign exchange in the last analysis as an inability to compete in the production of capital goods. But this in itself does not explain very much.17
Would not a ‘socialist state’ (as defined by Clawson) face similar problems? Or conversely, if the root of the problem is a shortage of foreign exchange, would not attempts to encourage foreign exchange (as under Sad at) be a good thing? Was the shift in economic policy after 1967 (contrary to Clawson, it began before Sadat came to power) merely an epiphenomenon of the quest for exchange reserves? Clawson is unclear on these questions, because of the deep ambiguities of his treatment of capital accumulation, and in particular of his treatment (or non-treatment) of the relationship between national capitals, or between capital accumulation within a particular nation state on the one hand and the internationalisation of capital on the other. The result is a serious political ambiguity: the struggle for socialism is implicitly reduced to the struggle for an alternative economic policy. Clawson’s analysis provides no indication of the precise roles of Egyptian capital and imperialism in meeting the exigencies of capitalism in crisis. As such it provides no basis for a working-class response.
I contend that the crisis in Egypt is a crisis in the accumulation of capital that requires from the Egyptian bourgeoisie a strategy to assault the living standards of the working class. It requires imperialist and Arab capitalist support, but the central contradiction in Egypt is between Egyptian capital and Egyptian labour. This crisis must be seen in the context of the international crisis of capitalism.
The Crisis of Capital Accumulation
There is a sense in which there was a ‘dual’ crisis by the mid-sixties: a chronic crisis of non-accumulation in Dept. I (the production of capital goods), and a specific crisis of profitability in industry as a whole. The two fuelled each other. But there was no unilinear causal relationship between the former and the latter.
The contribution of machine production (in itself a misleading term, since it consisted mostly of consumer durables) to gross value-added rose from 0.7% in 1952 to 4.4% in 1966-67.18
Consequently, as Clawson indicates, the Egyptian bourgeoisie had to import its capital goods, its machinery and technology. Basic raw material did not have to be imported. As Mabro and O’Brien note, , . . . Egyptian industry is essentially a producer of consumer goods. Its largest components can be viewed as the last stage of an integrated agicultural system.’19
Textile production was by far the most important section of industry, contributing 33.1% of total gross value-added in manufacturing in 1952, and 38.1% in 1966-67.20
The development of a cotton-based industry producing largely for the home market alleviated some of the tension caused by dependence on imports of capital goods. Much of the problem arose from the organic composition of capital, lower in Egyptian industry than in those producing the foreign imports. The result (given a tendency for the rate of profit to equalise) is a transfer of value out of Egypt, unequal exhcange in Marx’s sense. This transfer: of value hinders accumulation in Dept. II (production of means of consumption), though it should be noted that as the region’s most developed capitalist country, Egypt has always sought and found markets for its industrial goods where unequal exchange will probably operate in its favour. But even suffering in this way, performance in manufacturing industry has been far from abysmal. The period from 1957-65 saw average annual growth rates of 6%, depending largely on manufacturing outputs. The rate of industrial output reached a peak in 1963-64 of 12.5%, although thereafter it declined dramatically. The share of industry in GDP grew consistently in the fifties and sixties, whilst that of agriculture declined.21
Problems, exacerbated by the need to import capital goods, began to reach crisis proportions in the early 1960s. Investment had enormously increased the capital intensity of industry. In other words, there had been a substantial rise in the organic composition of capital, which would tend to alleviate the problem of unequal exchange. But this rise was not matched by an increase in the productivity of labour. Average labour productivity under the 1960-65 plan was the same as before, per person it even declined. As Hansen and Marzouk comment’ . . . it is disappointing that the big increase in industrial investment has not led to an increase in the rate of growth of labour productivity.’ In part this was the consequence of the state’s attempt to create an internal consumer market by extensive public-sector employment and relatively high wages. In a sense, Egyptian capital in the 1970s made the same policy shift as its imperialist counterparts: faced with a choice between markets and profit rates, it opted for the latter. A breakdown of income distribution shows the huge proportional scale of profits in Egypt before the crisis of the mid-sixties. .
Two-thirds of gross value-added in this period was profit. The annual net rate of return on capital in 1960 was 17-18%. Hensen and Marzouk suggest that it was higher in 1952. But by 1974, this had fallen to 2.4% in the public sector. Given the net decline in investment beginning in 1963-64 this suggests a crisis in profitability by 1965, leading to a stagnation in the accumulation of capital. In the late sixties manufacturing industry was contributing no more to national income than previously. As the rate of profit fell, existing equipment was not renewed: Egyptian capital entered a period of acute and sustained crisis. The chronic crisis of Dept. I now coexisted with a crisis of stagnation in Dept. II. In the context of the beginnings of international capitalist crisis, this spelt disaster for Egypt’s capital. Since 1965 the Egyptian state has been seeking ways to resolve this crisis.
Ultimately the logical option was that which began to emerge in the late sixties and which Sadat was eventually to embrace wholeheartedly. Its core was ‘infitah’ (Opening), an economic liberalisation, and eventual privatisation based on the encouragement of foreign capital. The statist strategy, having failed, had to be terminated. The class structure it had generated remained (the ‘new’, ‘state’, or ‘bureaucratic’ bourgeoisie, as it had variously been described; a petty bourgeoisie and a working class employed by the state), but as conditions changed, so too did the strategic requirements of Egyptan capital.
This was facilitated by the onset of a major international crisis of capitalism at the beginning of 1974. The promise of high profits was potentially an attractive lure for foreign companies facing a crisis in profitability. To embellish the lure, the Egyptian bourgeoisie had to secure its own stability. A drive towards peace with Israel thus became inevitable.
The Working Class in Egypt
Clawson’s comments on the working class are brief and intended largely as a polemic against Amin’s and Hussein’s view of ‘proletariani’sed masses’. He writes: ‘ . .. the picture is quite different from that painted by Amin and Hussein. The proletariat (in the strict sense) was a large social force in Egypt, at least 30 per cent of the population. The proletariat broadly speaking includes another 50 per cent (7 million) for a total of 80 per cent’ (P98).
This proletariat, ‘broadly speaking’, includes rural temporary labourers, as well as small farmers and marginalised urban masses who depend ‘primarily on wage income’. Apart from demonstrating the supposed size of the working class, this actually tells us little. Even empirically it is highly questionable, because Clawson plays down the socio-political effects of differentiation within the working class. He does not distinguish between small and large-scale production (merging at times into a distinction between capitalist and petty-commodity production), between the social effects of different kinds of labour, and between fully formed classes and those (or sections of those) only in the process of formation. For Clawson, the size of the proletariat is only a further proof that Egypt is capitalist. Its composition, formation, and organisation – not to mention its history – are not even considered, for they add nothing to the proof.
The problem with Amin’s and Hussein’s analysis of the working class is underestimation not so much of its size as of its political centrality.
They subsume the working class into the ‘masses’, who all ‘act’ on the ‘popular stage’ in much the same undifferentiated, ‘patriotic’ way.22
In a sense, Clawson makes a similar mistake: instead of undifferentiated ‘masses’ we have an undifferentiated ‘proletariat’ but we are none the wiser.
To understand the Egyptian working class it is necessary to know more than how many worked for wages for all or part of the year. The structure of the working class, the relationship between different labour processes, and in particular such questions as the sexual division of labour need to be examined.
First of all, we must disentangle the strands of the wage-earning mass presented by Clawson.
By 1970 manufacturing and mining employed about 11% of the total labour force. Obviously the total number of wage earners would be larger than this, but precise analysis is not possible. Abdel-Fadil suggests that the total number of salaried employees and wage earners in 1962 was 63% of the labour force and in 1972 was 66%.23
It is therefore probably safe to assume that in the 1960s about half the urban labour force were wage workers of one sort or another.
This proletariat was quite diffuse. More than 50% were employed in establishments with fewer than ten workers. Of the rest, by the late sixties the majority worked in establishments with more than 500 workers. But many of these were small by the standards of advanced capitalism.
The predominance of small-scale industry has had important consequences for the structure of the urban working class. Low levels of capital accumulation and concentration of workers have limited the development of the industrial proletariat as a powerful class ‘for itself’ . Some sections of the working class, notably in petroleum extraction (and since the late sixties at Helwan and other big plants) have transcended thjs limitation to a certain extent. Comparative wage rates reveal a differentiation due at least in part to the varying strengths of labour unions: the Federation of Petroleum Syndicates has been strong enough to enforce high wage rates and low hours.24
State Capitalism in Egypt: a critique of Patrick Clawson A more detailed breakdown of manufacturing industries reveals that far the highest wagees prevailed in transport equipment production.25
Wages for women were, predictably, much lower than for men. The averages in manufacturing were as follows (piastres):
The pattern of national wage rates suggests high increases in the early years of the ‘Revolution’, followed by a levelling out before 1960. Then, during the first Five Year Plan, wages rose at rates substantially in excess of the rise in labour productivity:26
given the crisis arising from the generally non-productive rise in the organic composition of capital, these wage rises will have contributed to the collapse in the rate of profit by the mid-sixties.
The sparse and not altogether reliable statistics tend to suggest that the chronic inability of Egyptian capital to increase labour productivity despite significant investment – a vital necessity in overcoming unequal exchange – was not offset by an ability sufficiently to reduce the wages of workers in relatively large-scale industry (in other words, to increase the rate of surplus-value). The period in which the current crisis took root – roughly speaking that of the first Five Year Plan – was thus one of intensified class struggles over basic issues, which Egyptian capital was not able to win. This was a formative period for the renascent workers movement, preparation for big explosions to come. The defeat in 1967 was the catalyst for these explosions, which were intensified by the effect of the regime’s post-1965 deflationary policies (a decline in real wages) and the working-class resistance provoked by these policies.
As we have seen, relatively low levels of capital accumulation have led to low levels of worker concentration. The few big complexes, such as the Helwan Iron and Steel Works, are surrounded by myriad small factories, some of which are little more than workshops. In 1967, a total of 144,090 manufacturing establishments employing fewer than ten people averaged two workers each. Some 36% of small-scale industrial activity was carried out in rural areas, but 29.6% took place in Cairo and Alexandria alone. A vast number of wage earners are thus involved in very small-scale production.27
Far more are involved in nonproductive work of various kinds (the so-called informal sector). The structure of this section of the labour force has changed a little in the past thirty years. But it has greatly increased in size, and constitutes the vast bulk of the urban population: it is here that most of the rural migrants end up.
As is clear, the mass of petty traders has been swelled by rural migrants, whilst the number of domestic servants declined following the July coup. Of migrants aged between 10 and 29, women outnumbered men, and many of them continued to find work as domestic servants (particularly those from Upper Egypt).
Even those opportunities open to women, then, amount to highly exploitative extensions of their familial role. The vast bulk of women, however, remain confined to their own homes.28
Vast numbers of the urban poor find no stable employment at all. In 1972, a total of 224,000 people or 6.4% of the total urban labour force, were unemployed or not classified by any occupation. Of these, 54,000 were women (14.7% of the total female urban labour force). In Cairo 7.0% of the total were in this situation; in Alexandria 11%.
The work-force of the ‘informal’ sector is itself highly differentiated, ranging from self-employed artisans to sellers of cigarette butts. It is thus not a single class, but a somewhat open-ended amalgam of classes, ranging from the traditional petty bourgeois to the modern proletarian, with large numbers constituting a sub-proletariat. Abdel-Fadil has calculated the following figures for the urban traditional petty bourgeoisie, proletariat, and sub-proletariat.
Although Abdel-Fadel’s categorisation inay be debatable, permanent proletarians clearly constitute the largest group, but are nevertheless an overall minority.
Failure to recognise the complexity of the working class in Egypt is most apparent in Clawson’s bland comments on the rural population. Noting that ‘the 2.5 million farmers with less than 5 acres… depend primarily on wage income’ (p98), he misses the significant fact that they are nevertheless farmers and not unambiguously proletarian: the small fellahin are engaged in two separate labour processes.
In both town and countryside the role of subsistence labour, often performed within the family, is crucial for the accumulation of capital. If labour-power can be reproduced outside the capitalist mode of production as such, its value will be lower, and the rate of surplus-value higher. The growth of the ‘informal’ sector and the preservation of subsistence production thus serve an objective function for capital.
What is more, the people on whom the bulk of this work falls are women. Clawson says nothing whatever about the position of women in Egypt, yet their role in production is vital for capitalism, in three respects. First there is their role in reproduction, of both people and labour-power, within the family. Second, within the wage-labour force itself, they perform particular jobs with lower incomes, acting as a reserve army of labour and doing kinds of work men shun. Third, since many Egyptian men have migrated to seek work overseas, the role of women in maintaining production (particularly in agriculture) has been enhanced. As Mona Hammam notes: ‘Women, otherwise constrained from entering the formal wage sector, are compelled to seek access to income in the informal, sporadic, unregulated sector in order to supplement a husband’s earnings, or even as the only source of cash for the household. In Egypt. . . it is common for a working class husband to take on a second job in the informal sector while his wife raises chickens. . . for the family’s direct consumption and for exchange.’29
In rural areas 82% of working women do unpaid family labour, and dependence upon them increases as families become unable to hire farm labour. The percentage of the economically active population who were women was 5.3% in 1977.30
Of course, the participation of women in the work-force has increased, predominantly in the textile, paper, and chamicals industries. But significantly, it is only in domestic services that women constitute a majority of the labour force.31
It is quite clear, then, that whether or not most of Egypt’s population depends upon wage income, the majority are not involved in large-scale modern industry. The labour process is by no means uniformly that of advanced capitalism, the ‘real subsumption of labour to capital’, as Marx put it, in which capital dominates every moment of production.32
Instead, the predominant activity is either only formally subsumed under capital (that is, the labour process itself is artisanal) or not strictly capitalist production, but petty commodity production, whether traditional or the outgrowth of rural migrants’ eking out a living by setting up shop.
This has deep implications for the structure of capitalism, and reflects the general backwardness of Egyptian industry, obvious exceptions as at Helwan notwithstanding. Clawson seems oblivious to this, as shown by his comments on the agricultural co-operatives: , . . . actual power rested in the hands of a supervisor [who] exercised almost complete control over the cotton production process. . . he sold the cotton, with the peasants getting little. . . from the receipts. . . The peasants lost control over the means of production, over the product, and over the production process. They had, in essence, become a rural proletariat’ (P95).
Yet this formal subordination of peasant labour to capital is distinct from the increasingly real subordination of landless wage-labourers proper.33
The distinction is vital in grasping the composition of the, wòrking class. It also has important ideological consequences (preservation of conservative peasant values as against the consciousness of the landless worker), and affects the forms of struggle in which the direct producers are involved. Again, the penetration of capital into the countryside is not unilinear; it is a complex historical process that moulds and remoulds the labour processes. of various sections of a working class that is by no means homogeneous.
Nasserism and the Working Class
Bent Hansen has commented that Nasserist economics consisted of following ‘the line of least popular dissatisfaction’. The welfare system guaranteed that, within certain limits, ‘social peace was maintained: nearly everyone was able to draw a little something from the system’.34
Today, in the days of de-Nasserisation, and the attempted dismantling of the welfare system, the left in Egypt has responded by calling for the intensification of the Egyptian ‘socialist experiment’. Influenced at least intellectually by the Marxist intelligentsia that liquidated itself into the Arab Socialist Union in 1965, the official Nasserist left has centred its propaganda in the last decade and a half on the need to ‘defend the principles of the July 23 Revolution’.
The Free Officers came to power during some of the most intense class conflicts in Egypt’s history. Mass strikes, including general strikes, demonstrations, and peasant revolts had racked the country since the end of the Second World War. The class bloc in power, expressed by the Wafd, was unable to maintain social peace; as in many such situations, the army then stepped in. Less than a week after the ‘Revolution’ a major strike and occupation erupted in the textile works at Kafr al-Dawwar. The leaders of the workers’ unions, Mustafa Khamis and Hassan al-Bakany, were arrested and hanged. The new regime wasted no time in establishing its anti-working class credentials.
An Advisory Council for Labour was reconstituted, the basic intention of which was to establish a trade-union movement fully incorporated into the state. The Council, which included union representation, established control over union finances. At the same time, it legalised agricultural unions and enforced a closed shop in any company in which at least 60% of the work-force were already union members. It also strengthened protection against dismissal and raised the minimum wage. But strikes were to be illegal, and unions were barred from political activity.
The primary role of the unions in the view of the state was to increase productivity. The labour code of 1959 established tripartite boards of government officials, employers” and workers, whose duties, among other things, included improving standards of productivity.
The establishment of an incorporated trade-union movement was central to the political-economic imperatives of Nasserism at all stages in its development. Its incorporation was able to be achieved institutionally only in part; the Nasserist state was never able to create simple state syndicates. But Egyptian capital desperately needed some form of ‘social contract’ with labour in order to overcome the problems of backward capitalism. We have already seen that an increase in the organic composition of capital had not generated an equivalent productivity increase. That would have to come from a rise in the intensity of labour: workers would have to work harder. If the ‘Nation’ was to rally around the ‘development’ of Egyptian capital, an obedient labour movement was vital.
Ideologically, the exigencies of heighening the intensity of labour are central to Nasserism. A casual glance through Nasser’s speeches reveals how concerned he and his idealogues were with ‘increasing productivity’. The motto of the Liberation Rally was ‘unity, discipline, work’.35
And later, ‘ASU functionaries in Popular Units (i.e. industry) worked towards increasing output and reducing costs; increasing workers’ awareness of the need to economise at the plant.36
The National Charter of 1962 is quite explicit: labour organisations ‘no longer remain a mere counterpart of management in the production operation, but become the leading vanguard of development. Labour unions can exercise their leading responsibilities through serious contribution to intellectual and scientific efficiency and thus increase productivity among labour.’37
The worsening dual crisis of capital accumulation conditioned this incorporationist productivism in the official ideology of the state. But at all stages the state failed to achieve sufficient incorporation of the labour movement or to establish a coherent legitimating ideology: intensity of labour was not sufficiently augmented; productivity did not, after all, rise. The organisation of labour process was thus predominantly bureaucratic: there was neither a developed incorporation of labour, nor the conditions for a more ‘normal’ bourgeois ideology. ‘Arab Socialism’ was not primarily socialist rhetoric to buy off the masses, and certainly not a genuine quasi-populist ideology generated by the regime’s anti-imperialist experience, but an incoherent, largely unsuccessful, and highly bureaucratic attempt to effect the subordination of labour to capital through incorporation. The rapidity with which the workers movement was re-kindled under the impact of capitalist crisis after 1967 is an index of its failure.
Low levels of concentration limited the ability of the working class to defend its interests. ,But as we have seen, in some sectors (petroleum extraction and mining, quarrying, transport and transport equipment) labour action could secure significantly improved wages and conditions even within the semi-incorporated trade-union system. Class struggles persisted within the production process, albeit at a relatively low level. The number of workers involved in industrial disputes tended to be quite small: but industrial action was certainly taking place in the fifties and sixties.
The state’s ability to increase productivity was not hindered by working-class resistance alone, of course. The regime’s need to incorporate labour and to create an internal consumer market forced it to employ far more workers than it would otherwise have done. Bureaucratic inefficiency (and to a small extent disease) exacerbated the state’s underlying problems.
The period of the first Five Year Plan, which coincided with the onset of serious difficulties in capital accumulation, was the time of the regime’s ‘socialist’ stage. It represented a further step in an incorporationist strategy (profit-sharing, reduced working hours, increases in manual wages) which failed (if it ever had any hope of success) because capitalist crisis destroyed its base. Government interference in the labour market at various levels reduced the overall capacity of capital to discipline the work-force,38
and this no doubt afforded the labour movement some room for manoeuvre, contrary to the intention of its incorporation. By the crisis point of 1965-67, the working class, which had resisted the valorisation process throughout the Nasser period, was well prepared to move into action.
But several factors undermined the capacity of the working class to resist the depredations of capital in crisis. At the most general level, the decisive factor deflecting working-class struggle has been the role of the left.
Significantly, it was in 1965 that the Egyptian Communist Party disbanded, its members joining the ASU as individuals. Several old Communists and fellow travellers have been official left ideologues ever since. It was also in that year that ‘Ali Sabri was appointed Secretary General of the ASU. In the mid-sixties, Sabri, the left Nasserist dismissed by Sadat in 1971, had stood at the centre of a national political debate about the role of the ASU in Egyptian social and political life.
At this point, faced with the emerging crisis, the political representatives of Egyptian capital began to splinter into warring factions, a right, centre, and left that persist today. In its first stages, the conflict centred on the related questions of parliamentary democracy and the role of the political ‘vanguard’. The argument started around 1965, but it was after June 1967 that it grew into a full-scale national exchange.
The right favoured political liberalisation and a parliamentary system. The left, led by Sabri, Khalid Muhieddin, and others, insisted on carrying forward the ‘socialist revolution’, intensifying the vanguardist role of the ASU and developing a more coherent socialist ideology.39
So it was the left that stood for aggravated incorporation. It was the left that opposed democratic liberalisation, that waved the flag of subordinating all political initiative to the existing party of Egyptian capital – in the name of socialism. The ‘Marxist’ intellectuals provided the theory. Unable to recognise the ASU as an integral part of the bourgeois state apparatus, the left was incapable of developing a strategy that would challenge capitalism in any sense. As living standards deteriorated and Sadat moved to the right, a radical response from the labour movement was needed. Only the left Nasserists were there to fill the gap. The official left was thus able to consolidate a hitherto unattained hegemony within the labour movement. Some of the leftist ideologues abandoned their anti-democratic positions of the sixties. But acting only as theorists for the left Nasserists, they proved incapable of taking the workers with them. In 1974 Sad at organised a series of meetings to discuss a move to a multiparty system. The meeting of labour unions ‘vociferously rejected a multi-party system and accused named forces. . . of wanting to abolish not only worker representation but the very principles of the July 23 Revolution… unidentified voices attacked their own union leaders as puppets of the regime. . . At this stage it was abundantly clear that the intellectual Marxists. . . calling for multipartyism, were overruled by the workers themselves, who remained loyal to the ASU.’40
But given its need for an economic ‘opening’, Egyptian capital as a whole was not able to take advantage of this. By the late sixties the days of the incorporation strategy were over as far as the bourgeoisie as a whole was concerned. This cemented left-Nasserism as an oppositional ideology within the Egyptian labour movement. The deepening crisis of the 1970s, however, shook even this hegemony. As class struggle sharpened, the inability of the tame Nasserist old-guard left to propose even partial solutions to the aggravated misery of the workers and urban and rural poor paved the way for the shattering of the ‘social contract’ between them and the labour movement. The rise of mass strikes began the process; the riots of January 1977 signalled the ignominious demise of social contract. The late seventies were consequently marked by a crisis in hegemony: no section of capital, no political off-shoot of bourgeois nationalism, could maintain its domination of the workers movement. Open repression became the only option.
The Transition from State Capitalism
It is a common, though false, view, which Clawson evidently shares, that Sadat’s post-1974 infitah policy represented a radical break with the ‘state’ capitalist past. This view is false at a number of levels: most particularly because Egypt remains heavily statist even now, and because the changes that came about in 1974 have their origins in the capitalist crisis of the mid-sixties. There is a fundamental continuity between Nasserism and post-Nasserism, reflecting the fact that infÎtah represents not a transfer of power from the state bourgeoisie to private capital, but a different political-economic strategy of the same ruling class. It is particularly important to recognise this because the view is widespread that there is something progressive about state capitalism.
Clawson obviously does not hol,d this view; but the notion of a ‘break with state capitalism’ under Sadat is easily lent to it.41
The first murmurs of Egyptian capital’s search for a way out of the crisis began in 1965. After the June War, political crisis made a new strategy requisite. Announced in Nasser’s March 30 Programme of 1968, it involved a reorientiation at two levels: economically, an attempt to rebuild foreign exchange; at the level of the labour process, an organisational and ideological shift. This went hand in hand with a recomposition of the regime’s power-base, and ultimately a drive for peace with Israel (in the form of the Rogers Plan), which prefigured Sadat’s initiatives.
The keystone of Nasser’s programme was the emphasis on ‘scientific management’, ‘… the placing of the right man [sic] in the right position’.42
The aim was to place the technocracy in control of production, to de-politicise Egypt’s political economy: to move away from the incorporationist strategy of the past to a more ‘efficient’ method of valorisation. Thus began the attacks on worker representation and all the populist values of the pre-1967 period. As Cooper puts it, there was a’ . . . shift from the aggressive, ideological affirmation of the worker input, to the administrative scheme to remove it.’43
Reactivating the private sector was vital to this strategy, not because of a conflict between the state and private capital, but because of the need to shed the incorporationist legacy in a sphere in which economic efficiency had to be primary. The policy of redistribution of ‘national wealth’ was reversed in an effort to extract a higher rate of surplusvalue by means of ‘scientific’ managerial techniques. “Infitah” was the logical corollary: boost the valorisation capacity of the ‘Egyptian economy’ by means of foreign investment.
Inevitably, the working class began to resist, but almost equally inevitably, resistance was defensive: incorporation seemed preferable to suppression. The consequences have. been noted above.
A final factor of crucial importance is the attempt to find a new integration of Egyptian capital into the network of Arab capitalism.
Beginning in 1967, Egypt began to rely on Arab oil money in the form of capital loans and aid. From 1975-77 this reliance increased. As Said Marei put it, ‘Western technology and Arab ,capital and Egyptian labour = economic growth’.44
Since the oil producers demanded both skilled and unskilled labour, this has meant an internationalisation of labour.
Since 1975 the number of Egyptian migrants may have grown to as many as two million.45
Abroad, these workers are exploited heavily.
The effects of migrant labour on the Egyptian capitalist economy, however, are complex. In some cases new groups have to fill the places of migrants, particularly women, who can be paid less. The subsidisation of the subsistence of workers in Egypt by remittances can also lower the value of labour-power. It completes a picture of the Egyptian bourgeoisie’s attempts to restore its rate of profit by raising the rate of exploitation .
The Theory of Imperialism
Clawson’s analysis of the periodisation of the internationalisation of capital ultimately begs the crucial question. The internationalisation of money (finance) capital is clearly meant to be identified with Lenin’s theory of imperialism. The different historical internationalisation of different circuits of capital is thus presented as a theory of the development of imperialism. But serious questions are posed by such a theorisation, and Clawson does not broach them.
The first and most obvious problem has already been indicated. If ‘Egyptian capitalism developed largely due to foreign capital’ (P88), and if it has always needed foreign capital (‘The internationalisation of capital is not a policy option that a government can choose to accept or reject’, (P197), then why did the Egyptian bourgeoisie, with encouragment by the state in the post-1919 period, develop a nationalist ideology that opposed foreign capitalist domination? Clawson notes that ‘Bank Misr, which was founded out of the nationalist outpouring of the 1919 revolution, was initially opposed to any co-operation with foreign capital. [But it] was forced… to take foreign partners who threatened [competition] with Bank Misr firms’ (P90). But the question of why the Misr group opposed foreign capital, initially or otherwise,46
is left open.
Had Clawson tried to understand the significance of the bourgeois nation-state for capital accumulation, he could have gone some way towards seeing that capitalist development is not a unilateral internationalisation, but a contradictory, dialectical process in which classes are locked in conflict. The internationalisation of capital cannot transcend limitations imposed by nation-states, which are essential for the guarantee of the reproduction of capitalist social relations at the economic, political, and ideological levels.47
Other historical factors influence the formation of classes as well, of course. But Clawson appears not to see the problem.
The second problem is more complex, and relates to a broader theoretical question. The ‘radical’ theories of underdevelopment that Clawson rightly rejects provided fairly straightforward, albeit populist, political guidelines. Many of the recent, more vigorous Marxist attempts to explain relations between advanced and Third World countries are frustratingly apolitical. Where they have provided political direction is in breaking through the petty-bourgeois nationalism that has dominated working-class movements in the Third World. But the question of imperialism itself has in the process remained unexplored. If the effect of capitalist penetration is ‘underdevelopment’, it is obvious that socialists must oppose it. If, as Clawson argues, capitalist penetration does not underdevelop Third World countries, then the attitude socialists should take to it is less clear. Bill Warren, whose position is similar to Clawson’s although infinitely less sophisticated, has taken the view of imperialism as a good thing to the extent of actively supporting such ventures as the Lomé convention.48
Clawson clearly intends to point not in such a direction,49
but back to Lenin’s position. Yet the changing face of the post-colonial world perhaps renders many of Lenin’s central themes (national independence, etc.) irrelevant. At the most basic level, socialists obviously oppose capital, whatèver its national origin. But the issue of imperialism is separate”to some extent: there is, after all, a difference in power between US and Egyptian capital. A theory of crisis goes some of the way towards resolving this problem, since as we have seen, ‘infitah’ can be situated in the context of a world capitalist crisis, and imperialism’s efforts to resolve it. But the role of imperialism in Egypt is quite clearly related to its regional interests and cannot be reduced to the protection of capital investments. Camp David, the RDF, and so on are part of an imperialist political strategy arising from the global needs of imperialist capital, rather than simply the internationalisation of capital. The theory of the internationalisation of capital is intended as counterposition to the radical sociology of underdevelopment. In some respects, Clawson does not break completely with these radical conceptions, however. The use of expressions like ‘dependence on the advanced economies’ (p 104) is an example of an approach that remains to some extent fixated by inter-nation relations, with the difference that in Clawson’s framework ‘nations’ are rendered anomalous. What is more serious is the consequent focus on the development of local and international oppressor classes rather than on the oppressed. Political questions to do with strategy and ideology (for instance, an assessment of the potential of a nationalist movement) remain elusive in this perspective. Clawson’s most serious weakness in this respect is that he presents but the outline of a theory of imperialism that is never actually developed into such a theory; it never fulfils its promise. As a result, no clear conception of the underlying faults of the existing Marxist literature on Egypt emerges. The tendency to pose issues related to Egypt in nationalist terms – to see Egyptian history first and foremost as an unfolding national liberation struggle – and to judge the Nasserist state by nationalist criteria is not challenged. It is not enough to counterpose a different theory: for Marxism theory has a political purpose. Clawson’s framework leans toward an alternative ‘world systems’ theory, which is potentially dangerous. Thus: ‘This pattern is much the same as that to be seen in Latin America, Africa, or Asia. . . The wide applicability of this overall pattern lends strength to my basic thesis’ (p 109).
But is the pattern so uniform? Clawson’s argument that it is can rest only on a model of capitalist development that is monocausal and devoid of the notion of class struggle. The movement of capital is always historically specific, and it is doubtful that a theory of ‘the world’ is possible. The classical Marxist conception of imperialism, unlike its post-war imitators, conceived of relations between imperialist capital and the Third World as the result, not the definition, of imperialism; Clawson’s search for a world theory points back to the conflation of imperialism with the world economy, and this is a route we should not take.
It has not been my intention to suggest that Clawson’s analysis is hopelessly wrong, merely that it is somewhat two-dimensional, and needs further development.50
Nor have I tried to answer all the questions that have been raised.
My objective has been to show that since 1965 a crisis in theaccumulation of capital has developed in Egypt that can be resolved only by reducing the living standards of the Egyptian masses, in an effort to raise the rate of surplus-value. January 1977 showed that if it is to succeed in this, the Egyptian state will have to employ wholesale repression on a scale of which itis not presently capable. A crucial element in the strategy is to establish an alliance with US capital, which if achieved would help enormously in alleviating many of the problems of Egyptian capitalism. The continuing instability of the Egyptian state militates against fructification of this alliance. The crisis of capitalism is thus also a political crisis, and the question mark hanging over Egypt is whether the bourgeoisie can impose its solution, or whether the working class can smash the bourgeois state and reorganise production. If those of us outside Egypt can contribute something by way of analysis for and solidarity with the workers in Egypt, all the ink that has flowed will have been worthwhile.