Northites Inc.: Toeing the Bottom Line

Being Determines Consciousness

In the spring of 2007, the Socialist Equality Party/Inter-national Committee (SEP/IC) was rocked by a public scandal when Scott Solomon, an embittered former adherent, revealed that David North is not only the leading figure of the SEP and IC, but is also CEO of Grand River Printing & Imaging (GRPI), a multi-million dollar business in Michigan. The SEP leadership would apparently prefer to keep its successful commercial venture secret, but it cannot deny the facts.

The GRPI evolved from the in-house printshop that used to produce the Bulletin, the newspaper of the Workers League (WL—the SEP’s predecessor). When the WL/SEP suspended publication of the Bulletin in favor of producing an online daily on its World Socialist Web Site (WSWS), the party print shop was apparently quietly transformed into a full-blown business.

At about the same time, the SEP/IC leadership discarded the traditional Marxist view of trade unions as defensive organizations of the working class and declared that they had become simple agencies of the capitalists. North wrote a lengthy essay on this theme entitled “Globalization and the Unions,” in which he announced the “objective transformation of the AFL-CIO into an instrument of the corporations and the capitalist state.” We polemicized against this in 1917 No. 29 (see “SEP: Defeatist and Confusionist: The Class Nature of the Unions”).

The Northites recently seized upon the squalid deal signed by the United Auto Workers (UAW) in October 2007 with General Motors, which permits the company to offload responsibility for its retirees’ health-care coverage with a contribution of cash and a $4.4 billion convertible note (based on the value of GM common stock) to a Voluntary Employee Benefit Association (VEBA). The deal benefited the bosses by massively reducing their liabilities, while giving the UAW bureaucracy, which gets to manage the fund, a major new source of revenue and influence. The only ones to lose out will be retired autoworkers, whose benefits will be reduced when VEBA’s investment portfolio underperforms.

In a 12 October 2007 statement, the SEP wrote:

“The so-called ‘voluntary employees beneficiary association,’ or VEBA, will turn the union into a profit-making enterprise and make the union bureaucracy full-fledged shareholders in the exploitation of the workers. The UAW bureaucracy will get its hands on a massive cash hoard, including shares in GM, which will ensure its income even as it administers ever deeper cuts in the benefits of retired union members.”
—“The middle-class ‘left’ and the UAW-GM contract”

Seemingly oblivious to the parallel between the UAW bureaucracy’s relationship to VEBA and the SEP’s to the GRPI, the Northites declared: “The open transformation of the UAW into a business is not a sudden or unexpected development.” But the auto union has not been transformed into a capitalist enterprise; the UAW remains part of the workers’ movement, despite the grotesque, and growing, corruption of its leadership. Leon Trotsky described the tendency of the labor bureaucracy in the imperialist countries to be transformed from mere agents of the bourgeoisie into “stakeholders” in the ventures of the ruling class:

“The intensification of class contradictions within each country, the intensification of antagonisms between one country and another, produce a situation in which imperialist capitalism can tolerate (i.e., up to a certain time) a reformist bureaucracy only if the latter serves directly as a petty but active stockholder of its imperialist enterprises, of its plans and programs within the country as well as on the world arena.”
—“Trade Unions in the Epoch of Imperialist Decay,” 1940

Yet Trotsky concluded:

“in spite of the progressive degeneration of trade unions and their growing together with the imperialist state, the work within the trade unions not only does not lose any of its importance but remains as before and becomes in a certain sense even more important work than ever for every revolutionary party. The matter at issue is essentially the struggle for influence over the working class.”

When the IC first announced that it was writing off the unions, our German comrades projected that North & Co. might one day “find themselves in a political bloc with the capitalists in their attack on the institutions of the workers’ movement” (1917 No. 20). The SEP’s October 2007 statement does exactly that, declaring: “The Socialist Equality Party would advise workers, should the UAW come to their plant, to vote to keep it out.”

No doubt GRPI management would give similar advice to any employees thinking about unionizing. Socialists, by contrast, believe that workers should be organized. In a case of vice paying homage to virtue, the SEP’s 12 January 2006 statement for the U.S. mid-term elections advocated “a guaranteed right of workers to join a union and control the union democratically; the outlawing of union-busting tactics and wage-cutting.” This was coupled with a peculiar demand for “government support for small and medium-sized businesses.” Even the reformist left has not historically been in the habit of demanding public funding for private capitalists, but then few of them ever owned “medium-sized businesses.”

Sri Lankan Exceptionalism in the IC

The SEP/IC’s October 2007 statement on the UAW makes it very clear that its anti-union stance is not only applicable in North America:

“Two facts demonstrate that the transformation of the UAW is not simply the product of the subjective characteristics of corrupt leaders or misguided policies, but rather the expression of fundamental objective processes rooted in the nature of trade union organizations and the impact of major changes in the structure of world capitalism. The first is the protracted period, now extending over decades, in which the unions have worked openly to suppress the class struggle and impose cuts in workers’ wages and benefits, along with massive layoffs.”

“The second fact is the international scale of the degeneration and transformation of the unions. This is not an American, but rather a world phenomenon, embracing the unions in the advanced capitalist centers of North America, Europe and Asia, as well as those in so-called ‘less developed’ countries. From the American UAW and AFL-CIO, to the British Trades Union Congress, to the German Federation of Unions, to the Australian Council of Trade Unions, to the Congress of South African Trade Unions, the unions have adopted a corporatist policy of labor-management ‘partnership’ and worked to drive down labor costs at the expense of the jobs, wages and working conditions of their members.

“The driving force behind this universal process is the globalization of capitalist production, which has eclipsed the former primacy of national markets, including the labor market, and enabled transnational corporations to scour the earth for ever-cheaper sources of labor power. This has rendered the unions, wedded by dint of their historical origins and class-collaborationist tendencies to the national market and the national state, obsolete and impotent.”

It seems, however, that Sri Lanka is an exception to this “world phenomenon.” It is perhaps not a coincidence that this is the one country in which a leading member of an IC section is also a union president. Unlike North’s role as the boss of a capitalist enterprise, the IC seems proud of their Sri Lankan comrade’s activities. The WSWS report on a 13 November 2007 SEP public meeting in Colombo to denounce the ongoing war against Tamil separatists mentioned that one of the main speakers was “K.B. Mavikumbura, an SEP central committee member and president of the Central Bank Employees Union (CBEU).” The article extensively quoted Mavikumbura’s account of his recent union activities:

“We presented a resolution in the CBEU calling on workers to unite on socialist policies to end the war. We pointed out that the campaign for the withdrawal of the military from the north-east, which is under de facto military rule, is a necessary condition to unite workers….

“Recently I attended a trade union meeting to organise a picket in support of teachers. The government had said it could not increase the salaries of teachers as it had to pay for the war. It took out an order in the Supreme Court to intimidate teachers. I explained that workers should take up a political fight against the government. The central question is to oppose the war, but the trade unions leaders rejected that. Instead they said workers should form an alliance with the opposition United National Party (UNP), which is notorious for attacking workers’ rights. Workers need to build an independent political movement based on a socialist perspective.”
—“SEP holds public meeting in Colombo to oppose the war in Sri Lanka”

Anyone in the political orbit of the Northites might wonder how Mavikumbura’s activities can be squared with the view that unions are simply agencies of the bosses.

‘Transformation Into a Business’

Does the IC position on the unions simply reflect a loss of confidence in the capacity of the working class to oust the bureaucrats and gain control of its own mass organizations? Or is it a reflection of the social pressures of running a successful business? As Marx observed, being tends to determine consciousness, and for North & Co., the increasing revenues of the GRPI could certainly provide a material basis for the growth of personal/political corruption within the SEP/IC leadership.

Alex Steiner and Frank Brenner, former close associates of North who continue to identify politically with the SEP/IC, hint at this in the conclusion of a lengthy document dated 16 December 2007 which recalls how Gerry Healy (the former head of the IC) accepted large sums of money from various Middle Eastern regimes to act as their left publicist:

“This too was one of the key lessons of the WRP [Workers Revolutionary Party] split—that the ‘unanimity’ of Healy’s leadership group masked all kinds of opportunist relationships based on personal and financial arrangements. We have no doubt that the silence of the rest of the IC leadership is also based, at least in part, on opportunist considerations of a financial and personal nature.”
—“Marxism Without Its Head or Its Heart”

The IC’s revisionism did not commence with the transformation of the WL printing plant into a business, nor as Steiner and Brenner argue, when North et al abandoned the struggle against “pragmatism.” Gerry Healy’s political-bandit operation (including its American satellite run initially by Tim Wolhforth and later by North) was very distant programmatically from Trotskyism long before they began promoting Colonel Qaddaffi and other Middle Eastern despots.

Leftist organizations that obtain substantial funding from sources outside their field of political activity will inevitably tend to become depoliticized and subject to alien class forces. Trotsky made this point in an 8 October 1923 letter addressing some of the early symptoms of the growing bureaucratization of the Soviet Communist Party:

“There is without question an inner connection between the separate and self-contained character of the secretarial organization—more and more independent of the party—and the tendency toward setting up a budget as independent as possible of the success or failure of the party’s collective work of construction.”
The Challenge of the Left Opposition (1923-25)

North et al said essentially the same thing in their major 1986 statement renouncing Healy:

“Moreover, elements among the journalists, actors and actresses who passed from Fleet Street and the West End into the Political Committee of the WRP, without any apprenticeship in the class struggle, provided a physical link to material resources such as the Party had never known. Apart from the day-to-day struggle of the Party membership inside the working class, huge amounts of money were raised. The central leadership thus acquired an independence from the rank and file that destroyed the foundations of democratic centralism.”

“Healy’s high-flying diplomacy and his sudden access to vast material resources, based largely on his opportunist utilization of Vanessa Redgrave as the WRP’s calling card in the Middle East, had a corrosive effect on the Party’s political line and its relation to the working class. Whatever its original intention, it became part of a process through which the WRP became the political captive of alien class force. At the very moment when it was most in need of a course correction, the ‘success’ of its work in the Middle East, which from the beginning lacked a basic proletarian reference point, made it less and less dependent upon the penetration of the working class in Britain and internationally.”
—“How the Revolutionary Workers Party Betrayed Trotskyism”

The commercial success of the GRPI today gives the SEP leadership far more independence from their ranks than is usually the case in bureaucratized leftist groups where disposable income tends to be closely tied to the size of the dues base. The SEP’s web-centered political activity requires a cadre of talented writers and editors, but the fact that the group conducts very little real public activity means that there are few opportunities for new recruits to develop outside of attending the occasional in-house event. Over time, we would expect the cash flow generated by the GRPI to have much the same effect on the SEP/IC’s upper strata as VEBA will on the occupants of Solidarity House.

The following commentary on the SEP/IC and GRPI originally appeared on the IBT website in May 2007.

In recent weeks reports have surfaced that David North, leader of the ostensibly Trotskyist Socialist Equality Party and its International Committee, also (as David Green) acts as CEO of Grand River Printing & Imaging (GRPI—, one of Michigan’s larger printing companies, which reported $25 million in business transactions last year. Like other readers of the SEP’s online daily, we have been waiting to see what the World Socialist Web Site has to say about the flap over the GRPI. It seems that, for the time being at least, North et al have decided that discretion is the better part of valor, and are maintaining radio silence.

Most of the comments printed below were written by our comrade Samuel T., who was recruited to the Workers League (predecessor of the SEP) during Fred Mazelis’ 1989 campaign for mayor of New York City. Sam left the WL in 1991 when it refused to call for the defeat of U.S. imperialism in the first Gulf War (see Trotskyist Bulletin No. 8).

On the weekend of 31 March/1 April [2007] Sam and a couple of other IBT supporters went to Ann Arbor, Michigan to attend an SEP anti-war conference that was advertised as open to “all WSWS readers.” When our comrades arrived, however, they found that supporters of organizations other than the SEP were not really welcome, and the SEP leadership seemed a bit put out by our criticisms of their claim that trade unions are no longer working-class organizations (see 1917 No. 29).

Gerry Healy, the founder-leader of the British Workers Revolutionary Party (WRP) who headed the IC until the mid-1980s, had a well-deserved reputation as a cynical political thug with a penchant for pseudo-dialectical gibberish and crisis mongering. In the late 1960s, along with Ernest Mandel and the Pabloist “United Secretariat” (USec), the IC hailed various Middle East bonapartists as manifestations of a trans-class “Arab Revolution.” The IC also shared the Pabloists’ enthusiasm for Mao Zedong’s “Red Guard” faction during the massive intra-bureaucratic wrangle known as the “Great Proletarian Cultural Revolution.” Today, in a symmetrical deviation, North’s SEP denies that China was ever any sort of workers’ state.

By the 1980s, the political prostitutes of the IC were acting as paid publicists for Libya’s Muammar el Qaddafi and other Arab despots. The most despicable act of these political gangsters was providing intelligence to Saddam Hussein’s reactionary Baathist regime on émigré members of the Iraqi Communist Party. When the WRP/IC imploded in 1985-86, former members came forward and told of being sent to take photographs of leftist exiles at demonstrations, which the WRP leadership then passed on to the Iraqi embassy.

After Healy’s fall, the current IC leadership, headed by David North, sought to adjust the group’s image to something more closely approximating the “anti-Pabloite Trotskyist” tradition it falsely claims to represent. In their disingenuous account of their belated break with Healy, entitled “How the WRP Betrayed Trotskyism,” the WL leadership downplayed their record of years of slavish obedience to Healy’s every pronouncement. The insistence by North et al that they bear no political responsibility for the IC’s crimes, and that everything was Healy’s fault, recalls Nikita Khrushchev’s 1956 attempt to whitewash the crimes of the Soviet bureaucracy by blaming everything on Stalin. People who go back and examine issues of the Bulletin will see for themselves that the Workers League’s uncritical adulation of Qaddafi and the rest of the IC’s bonapartist bankrollers was every bit as enthusiastic as the WRP’s. They will also see that the SEP/IC, like the USec and almost every other pseudo-Trotskyist tendency, consistently supported counterrevolution in the former Soviet bloc, from Lech Walesa’s Polish Solidarnosc in 1981 to Boris Yeltsin’s pro-imperialist rabble in Moscow a decade later. With the passage of time, and an influx of politically raw new members, the SEP/IC leadership has tried to distance itself from its inglorious history. The tone of the WSWS today is far less hysterical than the Bulletin used to be, but the program it puts forward is no more revolutionary.

Some have suggested that the SEP leaders’ role in the GRPI may be connected to their repudiation of the Trotskyist analysis of the trade unions. We don’t claim to know for certain. But it was clear in Ann Arbor that there is a great deal of confusion in the ranks of the SEP on their position regarding the unions. Many newer members seem uneasy with the line, while the older cadres adamantly defend it, even if there is little consistency in the arguments they use, and none of them are able to explain how the AFL-CIO today is qualitatively different than it was in the 1960s and 70s. One senior SEP member ventured that perhaps the destruction of the USSR had somehow transformed U.S. unions into simple tools of the bourgeoisie, commenting: “Well, the collapse of the USSR has changed everything, so why wouldn’t it also change the unions?”

* * *

These comments are from internal discussion in the IBT.

Lenin drew a connection between the 4 August 1914 betrayal of the Social Democrats and the privileged social position of the labor aristocrats who constituted their social base. Trotsky made similar observations regarding the Stalinist bureaucracy, and also traced the Shachtmanites’ [a right-wing split from the then-Trotskyist Socialist Workers Party (SWP)] abandonment of defense of the USSR in 1940 to their petty-bourgeois social composition. In 1953, James P. Cannon argued that the Cochranites’ [a subsequent right-wing faction in the SWP] liquidationist politics reflected the conservatizing effects of relative economic stability on older workers. In 1983, we pointed out that the SL’s [Spartacist League] dive on saving the Marines in Lebanon, and its offer the next year to provide defense guards for the Democratic Party, were related to the desire of [SL leader James] Robertson to cultivate a “respectable” image with elements of the ruling class.

It can be a dangerous thing for a small group with Potemkin village inclinations, which the Northites have always had throughout their history, to accumulate assets out of proportion to their actual social weight. It would be surprising if running a major commercial enterprise did not affect the political consciousness of the SEP leadership—as Marx remarked, “being determines consciousness.”

I was struck by the following passage from the SEP’s 2006 election program:

“To establish the economic foundation for the reorganization of economic life in the interests of the broad mass of the working people, we advocate the transformation of all privately owned industrial, manufacturing and information technology corporations valued at $10 billion or more—companies that, taken together, control the decisive share of the US economy—into publicly owned enterprises, with full compensation for small shareholders and the terms of compensation for large shareholders to be publicly negotiated.”

“Property rights must be subordinated to social rights. This does not mean the nationalization of everything, or the abolition of small or medium-sized businesses, which are themselves victimized by giant corporations and banks. Establishing a planned economy will give such businesses ready access to credit and more stable market conditions, so long as they provide decent wages and working conditions.”
—“For a socialist alternative in the 2006 U.S. elections,” 12 January 2006 (emphasis added)

How many printing companies in the U.S. are worth more than $10 billion? I notice that Rupert Murdoch is offering $5 billion for Dow Jones (which includes the Wall Street Journal). Would the SEP consider that a “medium-sized business”?

When I was a member, WLers were exhausted by mindless public activity (8-hour shopping mall sales, etc.). I think perhaps the turn away from mass agitation toward a more realistic propaganda perspective where members are not run into the ground accounts for why SEPers now project a more controlled, rational image in public (a high-pressure environment is not good for anyone’s sanity)….

In the old WL there was no escaping getting chewed out at an internal meeting (unless you were in the leadership) for not selling enough papers, doing enough work, contacting enough workers or giving the party enough money—there was no pledge schedule, rather comrades announced how much they were giving that month at a local meeting and then were pressured to give more.

The sense I got from what I was told when I was in, was that the org financed itself almost completely through contributions from members (who were bled dry and encouraged to collect money on the streets, go door to door, borrow from relatives, etc.). The other source was lit sales (which is one reason we’d get screamed at regularly for not selling enough).

I remember as a member asking about Cuba and its class character. When not attacked for raising the question to begin with (on the grounds that it reflected a potential desire to accommodate to Castroism), I was offered a wide range of explanations by different senior comrades. Some gave me a version of the ‘phantom capitalist’ theory (a Lambertiste position, that, as I found out later, was never adopted by the Healyites) [Pierre Lambert, leader of the French Organisation Communiste Internationaliste participated with Healy in the IC until they parted ways in 1971]. Other WLers told me that despite what I had read in books and newspapers, there was indeed significant private ownership in Cuba. They were all improvising, because the IC/WL/SEP to my knowledge always avoided any attempt to seriously explain their position in writing. Members who ask too many questions about touchy subjects like Cuba soon learn not to, as it is taken as displaying an appetite to abandon the working class. I suspect that a similar approach is being used today with those deemed too inquisitive about the GPRI.

On the myspace [website] discussion of the issue, one neophyte supporter of the SEP summed up the explanation he had been given as follows:

  1. the GRPI does not fund the SEP;
  2. the GRPI provides employment for a number of comrades;
  3. no one is getting rich through their involvement with the GRPI;
  4. the GRPI is a successful company and has won awards for being a quality employer.

If I were a member, I would be wondering what the purpose of the GRPI is, if it neither serves the needs of the SEP, nor makes anyone rich. I’d also be curious about which SEP comrades get jobs there and how they get selected. I suppose it’s nice to win awards, but most people would rather work in places where they have union protection instead of having to rely on management goodwill. (I think it is safe to assume that, since “unions have essentially completed their degeneration” they do not represent GRPI’s workforce.)

When the SEP liquidated its printed publications in favor of online publishing, they claimed that doing so was merely recognizing the reality that, in the new age of internet communication, printed matter was becoming obsolete as a way to reach people. It is clear that the SEP has continued to invest tremendous resources to produce its online daily. The WSWS, which is generally pretty well written and covers a wide range of topics from a leftist perspective, possibly has the largest readership of any English-language ostensibly Marxist publication. It gives the SEP a cyberspace presence that far exceeds its weight in the real world.

The existence of the GRPI, and the time and energy that North et al obviously pour into it, makes me wonder if the real motivation for curtailing the production of printed propaganda was to permit the company to reach its full potential. When I was a member we had to buy large numbers of the weekly Bulletin on consignment—each member probably sold around 100 papers a week. The group also printed a monthly Young Socialist, a monthly Spanish publication for immigrants, a monthly or bi-monthly French-language publication sold in Quebec and to Haitian immigrants in New York (amongst whom we had a significant readership), a monthly Canadian newspaper, tons of leaflets, a quarterly theoretical journal, and, most months, a pamphlet or a book. The discovery that paper printing was obsolete (although not for commercial purposes apparently) might also have been a result of a decision that meeting sales quotas by going door-to-door, hanging out at supermarkets, strike chasing and all the other things we used to do, was not an efficient use of members’ political time. It is notable that the change to online from paper publishing, and the transformation of the old party printing plant into a full-blown business enterprise seems to roughly coincide with the change of position on the unions. This may well be a classic case of “program generating theory.”

Marxists have generally seen revisionism as an expression of alien class pressures within the workers’ movement. Small propaganda organizations, with little organic connection to the labor movement, experience that pressure in more indirect ways than mass workers’ parties. In a small leftist group the personal qualities and political appetites of leading members are at least as important in determining the line and the character of its internal regime as the blind social forces that shape mass consciousness.

Marx and Engels wrote a fair number of polemics against the development of personality cults within small socialist organizations, whereas Lenin, Trotsky and Luxemburg, who operated in an atmosphere where socialist ideas were part of the mainstream of the labor movement, tended to dismiss the significance of such behavior.

Ignoring historical context and employing a caricature of the Leninist/Trotskyist analysis of trade-union, social-democratic and Stalinist bureaucracies, the IC has long denounced all other left groups as “petty bourgeois” (while their own social composition is no different) and simultaneously demanded that critics of their highly bureaucratic organization demonstrate upon what materially privileged stratum the IC leadership is based. The recent publicity surrounding the GRPI may lead the IC leadership to be a bit more careful about baiting other groups as “petty bourgeois” for a while.

A small and rigidly hierarchical ostensibly socialist organization, without significant connections to the labor movement or any other mass social movement, that has a largely literary political existence, with little public activity beyond occasionally running candidates in bourgeois elections, is likely to develop some peculiar political deviations. If the leaders of such an organization are also subjected to the social pressures of running a multi-million dollar business, it is hardly surprising that they may come to exhibit indifference to the actual struggles and needs of the working class, or at least find it difficult to connect the limited immediate struggles of the class to the necessity for socialist revolution (i.e., to find the sort of “bridge” that Trotsky outlined in the Transitional Program).

Trotsky saw it as essential for revolutionaries to struggle for the Marxist program within the existing mass organizations of the proletariat, i.e., the unions. The SEP leadership, by contrast, tends to advance a sort of abstract “Sunday Socialism” in which the key operational proposal is often the call to “build the SEP.”

For decades the IC has tended to cater to the backward consciousness of the more privileged sections of the working class and to show little interest in questions of special oppression. Those who insist on the importance of Marxists addressing such questions are attacked for “hating the working class” or being motivated by black-nationalist, bourgeois-feminist or other alien class ideologies. Tim Wohlforth, while still leader of the Workers League, spelled this out with his infamous comment that “The working class hates hippies, faggots and women’s libbers, and so do we!” While far less crude today, the WSWS coverage of the destruction of New Orleans by Hurricane Katrina, for example, was profoundly flawed by the tendency to ignore the blatant racism that characterized capitalist officialdom’s response to the crisis.

The cadres who produce the WSWS can certainly not be faulted for their work ethic—it is an impressive achievement for such a small group to have sustained such a venture for so long. But the value of such a project, from a revolutionary point of view, depends on the political program it advances. The profound revisionism of the SEP on the social revolutions that produced the Cuban and Chinese deformed workers’ states, its support to capitalist restorationists in the Soviet bloc, its defeatist and reactionary position on the trade unions, its historic tendency toward indifference to issues of special oppression and its abandonment of the Bolshevik position of “revolutionary defeatism” in imperialist wars, negates any value the WSWS might have as an instrument for socialist propaganda.

Published: 1917 No.30 (April 2008)