Wednesday, March 30, 2011

Gaddafi’s Pseudo-Socialism

On 1 September 1969 a group of Libyan army officers belonging to the Movement of Free Officers, Unionists, and Socialists led by Colonel Muammar Al-Gaddafi overthrew King Idris and proclaimed the Libyan Arab Republic (LAR). One of the main goals of the revolution was the building of a form of Islamic socialism to be achieved through "social justice, high levels of production, the elimination of all forms of exploitation and the equitable distribution of national wealth." In 1972 Gaddafi took the title of "Brotherly Leader and Guide of the First of September Great Revolution of the Socialist People's Libyan Arab Jamahiriya". At around that time the late Jozef Wilczynski, a prolific Polish specialist in comparative and socialist economics (then teaching at the Royal Military College, University of New South Wales, Canberra) invited me to join a research project lavishly funded by the Brotherly Leader for the development of the Libyan brand of socialism. I declined the invitation, thus missing my chance perhaps to influence the course of Libyan history but saving my soul – and I have never regretted it, least of all now.

In 1975-79 Gaddafi published in instalments his political-economic philosophy, The Green Book, a slim volume apparently styled after Mao’s Little Red Book and intended to be required reading for all Libyans. It was composed of three parts; Part One: The Solution of the Problem of Democracy - Power to the People; Part Two: The solution of the Economic Problem – Socialism; Part Three: The social Basis of the Third Universal Theory. This is also known as the Third International Theory, but should not be confused with the Third Socialist International or Comintern; it is a reference to a Third Way alternative to both capitalism and communism, aimed at solving the contradictions inherent in both, in order to promote a worldwide political, economic and social revolution, and liberate oppressed peoples everywhere.

There is however a connection with the Third Way of Tony Blair & Co. “Britain’s best known sociologist, Anthony Giddens, … [played] the part of intellectual emissary for the Third Way. Giddens is helping the Libyan dictator Gaddafi, whose son [Saif] studied at the LSE where Giddens is based, to be rehabilitated back into the orbit of Western acceptability”, see “Telling the Truth”, The 2006 Socialist Register Edited by Leo Panitch and Colin Leys. In 2006 Giddens went to Tripoli to interview Gaddafi for The New Statesman, where he wrote that Libya had been transformed: "Gaddafi's 'conversion' may have been driven partly by the wish to escape sanctions, but I get the strong sense it is authentic and there is a lot of motive power behind it. Saif Gaddafi is a driving force behind the rehabilitation and potential modernisation of Libya. Gaddafi Sr, however, is authorising these processes." Lord Giddens persisted in his visits in 2007. In 2003-2008 Saif al-Islam Gaddafi obtained from LSE an MSc and a PhD, supervised by Ed Miliband’s advisor and co-author Professor David Held and examined by Professor the Lord Meghnad Desai. The PhD dissertation is now alleged to be largely plagiarized (Lord Wolf is conducting an enquiry) and Meghnad Desai says no-one told him it had been copied so how was he to know? LSE’s Global Governance Unit founded in 1992 and formerly directed by Lord Desai, obtained from the Gaddafi International Charity and Development Foundation a £1.5 million grant, which forced an “embarrassed” LSE Director Sir Howard Davies to resign on 4 March 2011. The planned visit by Professor Mary Kaldor – Co-Director of the Centre – as a guest of the Gaddafi family this year may have had to be put off due to current events.

In the recent uprisings lots of copies of The Green Book have been burned by demonstrators, and monuments to it set in concrete have been pushed over and smashed to pieces by Libyans, often under our very eyes on TV screens. Andrew Roberts, in The Daily Beast of 2 March lists his best 10 quotes from the book, and claims that those demonstrators “are in fact not performing acts of vandalism so much as of perceptive literary criticism” – of a book that is “a mélange of banalities, non-sequiturs, nuttiness, Socialism, Islamicism and pseudo-intellectualism”. (Apart from the Islamicism much the same could be said of Giddens’ contributions to New Labour’s Third Way).

The theory of Gaddafi’s economic-political system is reminiscent of Josip Broz Tito’s Yugoslavia: a one-party system (ACC the Arab Socialist Union being the sole legal political organization in the country), an “associationist” structure of various levels of self-management institutions, workers’ participation in enterprise management and results, “social” appropriation of reinvested surplus, market institutions in domestic and international economic relations. Yugoslav reality suffered from more central planning than was apparent, mostly via monetary policy and direct controls, and from the inefficiencies of an ambiguous property-rights regime in which – as stated in the 1975 Yugoslav Constitution –“nobody was the owner”. Gaddafi’s system parroted Yugoslavia but politically was a military dictatorship and economically an oil-driven system, exceptionally healthy though vulnerable, where oil represented 90% of exports, while economic control and surplus appropriation were firmly established in the Gaddafi family.

The IMF – which Libya joined in 1958 – happened to conclude its 2010 routine yearly “Art. IV Consultations” just before the recent uprisings, and reported on 15 February “a strong macroeconomic performance. In 2009 “solid growth” in non-hydrocarbon output at 9% had been matched by a decline of hydrocarbon output following OPEC policies and resulting in a GDP modest contraction of 1.6%. “Overall growth increased markedly by [they mean to, DMN] an estimated 10 percent in 2010 reflecting a sharp increase in oil production. Non-hydrocarbon growth also strengthened (to about 7 percent) as a result of large public expenditures. However, unemployment has remained high, particularly among the youth. Inflation is estimated to have picked up to about 4.5 percent in 2010 as higher oil revenue increased domestic liquidity and international commodity prices increased.” Per capita GDP peaked at 14.3 thousand US dollars, fell to 9.5 thousand in 2009 but recovered to 12.1 thousand in 2010. A budgetary surplus of “only” 7% in 2009 (due to the decline in oil revenue) rose again in 2010, when the external current account surplus also increased to an estimated 20% of GDP, from 16% in 2009. The exchange rate of the dinar, which is pegged to the Special Drawing Rights, remained stable and was judged to be “broadly aligned with fundamentals”. “Net foreign assets of the Central Bank of Libya (CBL) and the LIA [Libyan Investment Authority] are estimated to have reached $150 billion at end-2010 (the equivalent of almost 160 percent of GDP)”. And to counter the impact of higher global food prices, that unleashed the uprising in Egypt and Tunisia, the Libyan government abolished, on 16 January, taxes and custom duties on locally-produced and imported food products.

The Green Book, Part One rejects modern liberal democracy. “All political systems in the world today are a product of the struggle for power between alternative instruments of government. This struggle may be peaceful or armed, as is evidenced among classes, sects, tribes, parties or individuals. The outcome is always the victory of a particular governing structure - be it that of an individual, group, party or class - and the defeat of the people; the defeat of genuine democracy.” … “Parliaments are the backbone of that conventional democracy prevailing in the world today. … The mere existence of a parliament means the absence of the people. True democracy exists only through the direct participation of the people, and not through the activity of their representatives.” “The party is a contemporary form of dictatorship. It is the modern instrument of dictatorial government. The party is the rule of a part over the whole.” Plebiscites are “a fraud against democracy”. Democracy in Libya is based instead on direct democracy, in the form of various layers of popular conferences and people’s committees under which "management becomes popular, control becomes popular, and the old definition of democracy as 'control of people over the government' is replaced by its new definition as 'the people's control over itself'”.

The implementation of this project has been the object of a slow, gradual and troubled transition. In 2004 Gaddafi admitted that "popular participation in government was not complete". But reality is much worse: Gaddafi himself appoints a cabinet and departmental ministers, manipulates unelected revolutionary committees, draws an arbitrary line between state assets and his own (just like Saddam used to do) and runs a police state. Private ownership of the media is regarded as undemocratic, but in practice state ownership of all book publishers, newspapers, television and radio stations, silences any dissenting voice more effectively than a private near-monopoly like that of his ex-buddy Berlusconi. “Any ruling system must be made subservient to natural laws, not the reverse [i.e. to conventional laws]” – but Gaddafi’s will is law, period. This is candidly admitted at the very end of Book One: “Theoretically, this is genuine democracy but, realistically, the strong always rules, i.e., the stronger party in the society is the one that rules”, which is how Gaddafi and his ‘socialist’ élite of apparatchiks, spies and mercenaries ruled in GDR-style for the last 41 years over Libyan citizens, now criminally intimidated in Tripoli, and massacred in Misurata.

The Green Book, Part Two, outlines the desired economic system. Wage labour is abolished and forbidden; all employees must be "partners not wage-workers", and have a right to the products which they manufacture. “Wage-earners, however improved their wages may be, are a type of slave. They are temporary slaves, and their slavery lasts as long as they work for wages from employers, be they individuals or the state.”… “ The ultimate solution lies in abolishing the wage-system, emancipating people from its bondage and reverting to the natural laws which defined relationships before the emergence of classes, forms of governments and man-made laws. These natural rules are the only measures that ought to govern human relations.”

“These natural rules have produced natural socialism based on equality among the components of economic production…“. “The exploitation of man by man and the possession by some individuals of more of the general wealth than their needs required is a manifest departure from the natural rule and the beginning of distortion and corruption in the life of the human community. It heralds the start of the exploitative society.” In March 1977 the "Declaration of Sabha" transformed Libya into a Jamahiriya (a neo-logism meaning “the state of the masses”), more precisely the Socialist People's Libyan Arab Jamahiriya. Foreign capital had been taken over soon after the 1969 coup and still has a limited presence; large and medium industrial enterprises are owned by the state. “Exploitative” forms of private ownership were abolished, whereas private family businesses in the service sector were preserved.

However, the IMF report of last February indicates and endorses trends in the opposite direction to the implementation of the Green Book: “An ambitious program to privatize banks and develop the nascent financial sector is underway. Banks have been partially privatized, interest rates decontrolled, and competition encouraged. Ongoing efforts to restructure and modernize the CBL are underway with assistance from the Fund. Capital and financial markets, however, are still underdeveloped with a very limited role in the economy. There are no markets for government or private debt and the foreign exchange market is small.”

“Structural reforms in other areas have progressed. The passing in early 2010 of a number of far- reaching laws bodes well for fostering private sector development and attracting foreign direct investment. The success of the new laws, however, hinges on promoting inter-agency coordination and open consultation with the legal and business communities, and establishing permanent bodies to monitor, assess, and oversee implementation. A comprehensive civil service reform is needed to facilitate more effective wage and employment policies that would address the needs of a young and growing labor force.” [so wage employment is still there after all?].

According to the Green Book, Part Two, “Housing is an essential need for both the individual and the family and should not be owned by others. Living in another's house, whether paying rent or not, compromises freedom.” This principle was made law in 1978. Last January the government announced the creation of a large multi-billion dollar investment fund that will focus on providing housing for the growing population.

“Transportation is also a necessity both to the individual and to the family. It should not be owned by others. In a socialist society, no person or authority has the right to own a means of transportation for the purpose of renting it, for this also means controlling the needs of others.”

“Land is the private property of no-one. Rather, everyone has the right to beneficially utilize it by working, farming or pasturing as long as he and his heirs live on it - to satisfy their needs, but without employing others with or without a wage.”

“If economic activity is allowed to extend beyond the satisfaction of needs, some will acquire more than required for their needs while others will be deprived. The savings which are in excess of one's needs are another person's share of the wealth of society. Allowing private economic activity to amass wealth beyond the satisfaction of one's needs and employing others to satisfy one's needs or beyond, or to secure savings, is the very essence of exploitation.”

“Disparity in the wealth of individuals in the new socialist society is not tolerated, save for those rendering certain services to the society for which they are accorded an amount congruent with their services. Individual shares only differ relative to the amount of production or public service rendered in excess“. In other words, some people are more equal than others.

“The antagonistic force of the trade unions in the capitalist world is capable of replacing capitalistic wage societies by a society of partnerships. The possibility of a socialist revolution starts by producers taking over their share of the production. Consequently, the aims of the producers' strikes will change from demanding increases in wages to controlling their share in production.”

“The Green Book thus defines the path of liberation to masses of wage-earners and domestic servants in order that human beings may achieve freedom”.

The Green Book, Part Three, is supposed to lay the foundations of the Libyan Third Way but is a collection of trite, often meaningless slogans, that do not deserve attention more than the samples given here for illustration: “The social factor, the national factor, is the dynamic force of human history. The social bond, which binds together human communities from the family through the tribe to the nation, is the basis for the movement of history.” “The national factor, the social bond, works automatically to impel a nation towards survival, in the same way that the gravity of an object works to keep it as one mass surrounding its centre.” “A tribe is a family which has grown as a result of procreation. It follows that a tribe is an enlarged family. Similarly, a nation is a tribe which has grown through procreation. The nation, then, is an enlarged tribe. The world is a nation which has been diversified into various nations. The world, then, is an enlarged nation. The relationship which binds the family also binds the tribe, the nation, and the world. … Since the tribe is a large family, it provides its members with much the same material benefits and social advantages that the family provides for its members, for the tribe is a secondary family… The tribe is a natural social "umbrella" for social security.” "The world will be ruled by the black people."

There is, however, a worthwhile, even an enlightening quote from the Green Book, Part One: “Society is composed of many individuals and entities. Therefore, if an individual is insane, that does not mean that the rest of society are mad, too.” And if the insane individual actually rules the country, in that case society would be mad not to throw him out at any cost.


Branko said...

I thought that Mario’s post was really excellent. The vacuity of Gaddafi’s “socialism” is complete: it represents a odd assemblage of ideas that he picked up along the way, kept them in their most banal form, and decided to string them together. But I would like to comment on one aspect in particular which also struck me some time ago when the crisis started and I read some pieces that explained Gaddafi’s “third way” and listened to an old interview of his on YouTube. It is unmistakable influence of Yugoslav integral self-management as defined and practiced since the mid-1970s, the time when Gaddafi was a frequent visitor to Yugoslavia and an ardent admirer of Marshal Tito. Two aspects of “integral (i.e. political and economic) self-management” are important.

Political representation is achieved by people selecting delegations and delegates which not merely represent people’s views but have a compulsory mandate to vote in accordance with the opinions expressed by the constituents. That was the basis of the claim that politically self-management got rid of representative democracy and went straight for direct democracy. Of course, the reality was exactly the opposite: the constituents (the “basis”) never voted on anything, nor were asked to vote on anything, no-one knew who his/her delegates were, and the delegates themselves were elected by the top. So rather than having the “basis” controlling the top, the outcome was the top selecting who the lower layers should be. This is exactly the same as what Mario explains happened with Gaddafi’s “people’s committees” of whom the “Jamahiriya” was supposed to be composed, and to be ruled.

The economic emancipation was to be achieved by getting rid of wage labor by eliminating private and state ownership of capital, and allowing employees to make all management and business decisions. That was less of a chimera because workers’ assemblies and workers’ councils in Yugoslavia did have some real role, limited, it is true, when it came to the appointment of top management in big enterprises, but pretty substantial elsewhere. It was certainly a much more participatory system than anything that existed in the West. In Gaddafi’s approach, wage-labor was akin to slave-labor and hence everybody had to become a “partner”: no more bosses and workers. (I really do not know what it means to be a “labor partner” without any capital in a privately owned enterprise but probably Gaddafi does not know either. ) To some extent, I think, this was also an extension to the sphere of labor of the relations that, in Islam, are supposed to exist between owners of capital and entrepreneurs. Because guaranteed return on capital (interest) is prohibited, debt cannot exist, and financial resources may be invested only in the form of joint partnership (which I think is called “commandite partnership”).

But while the Yugoslav system had some serious antecedents in Marx’s conception of “associated labor”, and even in some anarchistic traditions (like Rousseau's), as well as in the practices of the Paris Commune or early Soviets, Gaddafi’s was clearly put together by himself. He added into the mix, quite incongruously, Islam and produced an overall melange which is both banal and vacuous, and whose real objective was to ensure him absolute power.

Carlo said...

Sono d'accordo con quello che scrivi. Ma cosa dire se dopo la sceneggiata di Lampedusa i consensi del nostro premier aumentano?

Allora il pazzo guida il paese con l'appoggio e il consenso di una maggioranza di increduli fantocci? Peggio per gli altri.

D. Mario Nuti said...

Thanks Branko for expanding the Yugoslav perspective. Of course - as you remind us - traditional Islamic economics already has a difficulty with allowing the concept of interest except as a risk-sharing partnership income. To extend this approach to labour wages seems excessive, for it adds income risk to (un)-employment risk.

Walter said...

What an indictment - not only of Gaddafi but also of his "progressive" cronies. Thanks.

"apparatchiks and spies": you forgot to list mercenaries.

D. Mario Nuti said...

A bitter comment, Carlo, but very pertinent. Except that it is all the worse not for "them" but for the rest of us.

By the way, the Italian edition of The Green Book has suddenly appeared in Italian newsagents.

Mercenaries, Walter? Quite right, a "lapsus calami" omission, which I have now rectified in the post.

D. Mario Nuti said...

Two links to the LSE-Gaddafi connection:

D. Mario Nuti said...

And more in today's Observer:

Jacob Richter said...

It's not so much a poor version of Mao's Little Red Book but rather a poor version of Lenin's State and Revolution, itself a poor man's incomplete rehash of a more complete Marxist take on the nature of the state written by Kautsky in the 1900s: Republik und Sozialdemokratie in Frankreich.

Strictly at face value, Gaddafi repeats the valid criticisms of "Liberal Democracy" in various academic circles discussing Democratic Theory.

Harvey Shore said...

May I please ask if you can provide me with any information or links to the later career of Professor J Wilczynski. He was my economics teacher at RMC Duntroon in 1965-68, and always seemed intensely interested in socialist economics. But I lost contact with him after I graduated in 1968. I was surprised by your comment that in 1972 he inhvited you "... to join a research project lavishly funded by the Brotherly Leader for the development of the Libyan brand of socialism." Can you tell me why he got involved in Lybian socialism and what happened to him from this point onward? I'd appreciate any comments, as my RMC Class of '68 is having a reunion this coming weekend and they'f all like to know what happened to him. Thank you. Harvey Shore.

D. Mario Nuti said...

A former student of Professor Jozef Wilczynski has written to me asking me to provide details about the project to which I refer at the beginning of my post, surprised to learn that his teacher might have joined "the Dark Side".

I met Professor Wilcynski at a couple of conferences in England in the late sixties but I did not know him at all well, we knew each other's work and there was reciprical respect.

I am sorry if I gave the wrong impression, for I do not know the extent of Professor Wilczynski's involvement - if any = in Lybian affairs. But he did telephone me at King's College Cambridge and proposed my participation in a big conference in Tripoli, for which I would have had to write a paper on the economics of self-management for a good fee. I seem to remember that he had written a letter to me beforehand about this, but I cannot recall the details, let alone retrieve correspondence after all this time. I declined.

For all I know he might have simply passed on to me a request that he also had declined, thinking that - as at the time I was more sympathetic to the socialist idea than he was - I might have been more inclined to accept, which I was not. I continued to note his prolific publications but never met him again since then, and I did not have the opportunity to ask him for more details about the project, until I learned of his death.

Professor Wilczynski's student should not think that he might have joined "the Dark Side", indeed for the little I knew him I would be very surprised if he had.

D. Mario Nuti said...

My comment above is a reply to an e-mail from Mr Shore, written before I saw his comment on the Blog. I hope this is satisfactory.

Anonymous said...

Yes, yes ... it's perfectly satisfactory. Thank you for promptly and generously taking the time to write it.

Please be assured that I did not think you had maligned the professor in any way. I was just surprised to see him mentioned in connection with 'Mad Muammar' Gaddafi's regime, given what I knew of him.

By the way, here is his obituary, from a Polish organisation in Canberra, Australia:

Professor Joseph (sic) Wilczynski (b. 1922) was born in Augustow, Poland. He served in the Polish Underground Army and in the Polish Army under British Command during World War II. He arrived in Australia in 1951.
He completed his Ph.D in London (1967-68) and a D.Sc. (1975) in Sydney. His formal qualifications were in Economics, Education and Science. He had a working knowledge of at least four languages as well as being conversant in Polish and English.
From 1962 until 1969 he was a lecturer in Economics at the Duntroon Military College and from 1970 as Associate Professor of Economics. He died in 1984.
He established a fund, ca. 1985, whose purpose was to support the Polish cause and Polish culture in Australia. This is managed by the Council of Polish Organisations in the ACT Inc. which nominates a specific purpose. Currently this is to publish the Polish language journal Kronika Polonii which is issued quarterly to the Polish community.