False Choices: Globalism or Nationalism

In November of 2008, in the midst of the most severe global economic crisis since the Great Depression, I wrote that the era of global internationalism-- so-called “globalization”-- was coming to an end. “Centrifugal forces” of self-preservation were now operant, pulling apart existing alliances, blocs, joint institutions, and common solutions:

The economic crisis has reversed the post-Soviet process of international integration – so-called "globalization." As with the Great Depression, the economic crisis strikes different economies in different ways. Despite efforts to integrate the world economies, the international division of labor and the differing levels of development foreclose a unified solution to economic distress. The weak efforts at joint action, the conferences, the summits, etc. cannot succeed simply because every nation has different interests and problems, a condition that will only become more acute as the crisis mounts… It is highly unlikely that the [European] Union will come up with common solutions. Indeed, the unraveling of the EU is a possibility.

A decade later, it should be apparent that this projection anticipated the rise and growth of economic nationalism, a political trend that threatens to sweep away the institutions and policies of free market globalism. Just as the failure of the Keynesian consensus to address a new crisis in the 1970s brought the ascension of market fundamentalism (so-called “neo-liberalism”) and its later international consolidation as the “globalization” consensus, the shock of 2007-2008 brought the weaknesses, shortcomings, and failures of market fundamentalism to the fore. Consequently, the policy of open global markets is now engaged in a life-and-death struggle with economic nationalism. To a great extent, the larger capitalist states are retreating toward aggressive self-interest and intensifying global competition.

The most obvious expressions of these growing rivalries are sanctions, trade barriers, shifting alliances, military buildups, saber-rattling and, inevitably, wars.

That a global consensus has been disrupted is neither widely acknowledged nor accepted. But keen bourgeois observers are beginning to expose the fractures in global economic integration. Mohamed A. El-Erian, a prominent columnist for The Financial Times and Bloomberg News writes of the “cracks” in the “global policy coordination that can make the whole much larger than the sum of the parts…”. He laments how “...too many years of low and insufficiently inclusive growth… tears at the fabric of society, erodes trust in key institutions, and fuels the politics of anger.” “[S]omething deeper is going on here-- a common thread, if you like,” he opines. “And the ramifications will be accentuated by what are now widening inequalities brought about by differing growth rates and policies in advanced economies as the U.S. increasingly outpaces other economies.” (Bloomberg Businessweek, 6-11-18) The “common thread” is intensifying rivalries, a scramble to secure advantage in a global economy increasingly resembling a ‘state of nature.’

Despite the glowing US reports of booming employment, economic growth, rising wealth, and stock market euphoria, serious observers are noting the disparate economic news emanating from the reaches of the global economy. Recent Wall Street Journal headlines underline this reality: Global Growth Loses Steam, Emerging-Market Route Feeds Contagion Fear, U.S. Profit Boom Leaves Europe Behind, Growth In U.S. Leaves World Behind. With competition for fewer and fewer crumbs, the strongest, healthiest economy-- the US-- is snatching them up at the expense of its friends and allies alike. Ironically, the PRChina and Russia are the staunchest public defenders of the old order of global “cooperation,” while preparing to forge new partnerships and tactics to meet the disintegration of that order.

As Lenin wrote in Imperialism: The Highest Stage of Capitalism:

...in the realities of the capitalist system… alliances, no matter what form they may assume, whether of one imperialist coalition against another, or of a general alliance embracing all the imperialist powers, are inevitably nothing more than a ‘truce’ in periods between wars. Peaceful alliances prepare the ground for wars, and in their turn grow out of wars; the one is the condition for the other, giving rise to alternating forms of peaceful and non-peaceful struggle out of one and the same basis of imperialist connections and the relations between world economics and world politics.

Thus, we are seeing the passing from the global “alliance” moment towards intensifying competition now contained by a regimen of sanctions, tariffs, other “peaceful” forms, and “limited” wars, but with general war looming off-stage.

Getting It Wrong

It is a mistake or a witting mischaracterization to see the break-up of the global open market consensus as merely the result of crackpot policies of Trump and his ilk. It is a serious error to associate sanctions, tariffs, and sharpening rivalries simply with the tactics of the rightwing populist parties and their partisans.

In the first place, the nationalist, protectionist policies emerging today are not rooted in policy whims or ideological dispositions alone. Instead, they are urged on by a badly performing capitalism. While the prevailing paradigm-- the globalism consensus-- has served capitalism well, generating profits and growth, it is profoundly in need of repair or replacement. The ruling class recognizes this failing and is searching for a solution, a process expressed, in one way, through the political confrontation between traditional centrist parties and upstarts.

Secondly, the struggle is trivialized and obscured if it is posed as a struggle between reaction or fascism and the forces of enlightenment or progress. Economic nationalism has no necessary ideological link to either. In the Great Depression, autarky-- economic self-sufficiency, isolationism-- was as identified with Roosevelt as it was with Hitler. The fact that the creepy politics of Trump, Farage, Le Pen, and Salvini most vigorously embrace economic nationalism is historically contingent. While the US media have portrayed Trump’s tariff-mania as an affront to economic sanity, they fail to portray the other weapons of economic nationalism-- sanctions and wars-- similarly. While the Obama administration hewed to the orthodoxy of foregoing new tariffs, it briskly accelerated the use of sanctions and war.

Thus, the sanction/tariff initiative in the US is often not a matter of pro or con, but rather who is targeted. Senator Schumer, the leading Democratic Senator and harsh critic of Trump, is not against tariffs per se. Instead, he differs from Trump only on which countries should be attacked. He is sharply critical of tariffs against NATO allies or Japan, but enthusiastic for punitive tariffs (and other maneuvers) against Russia, the PRC, Venezuela, and other rivals or perceived delinquents.

The current ZTE controversy demonstrates how economic nationalism infects both US parties. ZTE, a leading Chinese multinational telecommunications corporation, is accused of defying US sanctions against the PDRKorea and Iran. Trump, the arch-America-First warrior negotiated a $1 billion penalty and an outrageous arrangement that would make ZTE pay for a team of on-site US inspectors! This insulting affront to Chinese dignity is opposed by leading Senators of both parties who hope to go further and put ZTE completely out of business by denying it access to essential US components.

While the US ruling class may be debating how to address disappointment with the reigning paradigm, it fully understands that the US is still the world’s leading economic and imperialist power. The clash between Trump and his European counterparts is over how best to engage and expand that power with or without concessions to international cooperation.

Entrapping the Left

In the 1970s, capitalism suffered a severe crisis of inflation, stagnation, and declining profit rates. The tools that had stabilized and steered capitalism from The Great Depression until the 1970s (popularly identified with JM Keynes) proved to be largely ineffective against the particular mix of problems then afflicting the global economy. In the US, a new paradigm (rather, the revival of an older paradigm) of unfettered, unregulated markets gained political traction as an answer to that failure, first in the second half of the Carter administration, and then more intensely in the Reagan administration. By the mid-90s, the new market-centered paradigm dominated both US political parties, attained broad ideological hegemony, and reached into every crack and crevice of life in the US, from public services to cultural production. With the disappearance of the Soviet Union and the European socialist countries, and the reorientation of the many socialist-oriented countries, market-obsession and deregulation spread worldwide like a virus.

With a market-based answer to every problem, ruling classes began to dismantle the protective and social-maintenance structures that had been hard won by generations of working people. Market fundamentalism clashed with the very notion of social guarantees or a welfare safety net.

Understandably, the left rallied to defend these gains against the full assault on living standards. To a great extent, the left initiative was an attempt to achieve a broad popular front to defend the twentieth century victories-- limited as they were-- of the broad masses.

The left failed. It failed at great cost.

By the end of the twentieth century, every center-left political party of consequence had fully embraced market fundamentalism and had become wholly untrustworthy allies in the defensive battle against deregulation, privatization, and the evisceration of the welfare state. This left the anti-capitalist and revolutionary left to fight alone for the historical center-left program. In the US, we like to joke that this was the era when Democrats became Republicans, and socialists, even Communists, became Democrats. Nonetheless, the Democratic Party programs-- the 1930s New Deal and the 1960s Great Society -- continue to erode.

Most of the anti-capitalist and revolutionary left placed the socialist program aside in the interest of an ephemeral unity with the center-left. The option of a serious replacement of capitalism was shelved to achieve a united defense of working-class gains, a common defense that never materialized. Consequently, a generation of rebellious youth-- scorched by poverty, unemployment, underemployment, and student debt-- are searching for a radical alternative, but finding anarchism, ersatz socialism, and other miraculous potions.

We’ll Not Do that Again!

Today’s fight between the market fundamentalists, the globalists and the economic nationalists is not our fight. It is a fight over how to maximize profits and sustain capitalism. The working class has no stake in its outcome. Unlike the dismantling of the welfare state, there is no defensive battle to be waged.

Market fundamentalism and globalism were disasters for the working class, allowing capitalism to drive down the price of labor power to its historically determined cost of production and reproduction-- wages in the US have been stagnant for nearly 50 years. Economic nationalism, on the other hand, offers workers nothing but ephemeral gains at the expense of brothers and sisters in other countries or the destruction of war.

When liberal pundits attack Trump’s tariff plans they are defending profit and growth, not the working class. When Krugman, Reich, or Stiglitz defend the sanctity of unfettered global markets, they are making “trickle down” promises, promises that have not been delivered in the many decades of expansive trade growth.

And when self-styled populists offer protectionism for jobs, they are protecting corporations and not jobs; they are selling snake oil to workers while seizing competitive advantage for corporations and their CEOs.

Nothing demonstrates the shell game of economic nationalism, of protectionism, better than the machinations of generations of class collaborationist trade union leaders who latched their careers to protectionism. Preaching the approach of “identity of interest,” they became cheerleaders for corporate success. When faced with rank-and-file stirrings, they join the chorus of “unfair competition.” Joined at the hip with corporate bosses, they discover foreign countries that don’t “play by the rules.” It should not go unnoticed that US union leaders typically point to “cheaters” in predominantly non-white countries-- Japan, the RoKorea, and now the PRChina.

Eventually, this no-struggle, blame-foreigners strategy as an explanation of stagnant wages and job loss backfires. For decades, the United Steelworkers Union has blamed the plight of steelworkers on foreign steel. So now, with President Trump promising a large tariff against the largest exporter of steel to the US, USW president, Leo Gerard, is in a quandary. His union represents the steelworkers in Canada, the largest exporter of steel to the US.

“‘The steelworkers believe in tariffs. We just believe they should be brought against countries that cheat,’ Mr. Gerard said, adding that is clearly not the case with Canada.” (Pittsburgh Post Gazette, 6-13-18). Of course it is hard to square this response with the fact that PRC only accounts for 2% of US steel imports. To this, Gerard uncovers a conspiracy: PRC surreptitiously ships its steel through third-party countries, thus, “masking the real country of origin.”

If true, how would tariffs targeted directly at the PRC change the flow of disguised “cheating” steel to the US? Wouldn’t the imports still sneak through?

Gerard followed up with a lengthy op-ed in the Pittsburgh Post Gazette (6-17-18) notable for its transparent appeal to crude patriotism and relentless China-bashing. As for the leading threat to the US steel and aluminum production industry, Gerard weakly reminds us that “American steel is used to make some cans in Canada that are then shipped to the United States where they are filled by American food companies.”

Hopefully, steelworkers are beginning to see this ruse designed to distract union members from the continuing rapacious exploitation of workers by the corporations.

For the left, there is, as there always has been, a third way: the fight for socialism. Those wedded to reforming capitalism and social democratic programs will, indeed must, choose between greasing the skids of global capitalism or closing the borders to foreign competition. Those are false choices for the working class. Those choices are dead ends for the left.

The struggle for socialism is neither a false choice nor a dead end.

Greg Godels

zzsblogml@gmail.com

Labor’s Betrayal

 THIS ARTICLE FIRST APPEARED IN MARXISM-LENINISM TODAY (6-3-18)

“Nor can I understand how men who aspire to the leadership of labor are able to sacrifice labor’s interests in favor of the Democratic Party. I cannot understand men to whom a visit to the White House is more important than getting the workers out of the dog house.” Wyndham Mortimer
 
At a time when ex-FBI chief James Comey’s self-serving, self-righteous book becomes a bestseller, in a season when ex-Secretary of State Madeleine Albright, the enthusiastic apologist for genocide against Iraqi children, joins Comey on the bestseller list with a preposterous lecture on fascism, it may well be time to retreat to the library.

I found some solace and much enlightenment from a dusty, cobweb infested paperback in a corner of a basement book self. I had read Organize! some years ago, maybe forty or more years ago. Published posthumously by the author’s daughter and a colleague, the book is a memoir of one of the US working class’s most valuable leaders-- Wyndham Mortimer-- at one of labor’s most important junctures.

The first time that I read Organize! In the 1970s, I thought it another chapter in the rich legacy of US labor militancy, one of many engaging stories of the militant roots of the then powerful institutional US labor movement.

Reading the book today, I am struck by the foretelling of the labor movement’s decline, the causes of the decline, and its source in misleadership. Light is shown on the devastating effects of anti-Communism and opportunism in the US labor movement. The sad, pathetic state of the labor movement today brings the accomplishments of Mortimer and his comrades into even sharper relief than it did forty years ago.

Who was Wyndham Mortimer?

Wyndham Mortimer was the son of an expatriate English/Welsh family that settled in Central Pennsylvania coal country. Like many coal-patch youth, Mortimer went to work in the mines at age twelve. He later worked in a steel mill, on the railroad, as a street car conductor, and finally at the White Motor Company in Cleveland. Throughout his working years, he had both a deep understanding of the exploitation of working people and a burning desire to remove that burden. His experience and study took him from the United Mine Workers, to the Socialist Party, to the Industrial Workers of the World, and finally to the Communist Party, a logical journey that equipped him to lead the fight to win the organization of industrial workers.

He learned from his railroad experience that not all forms of unionism were the same. The Brotherhood of Railway Trainmen (BRT), for example, preached the philosophy of “identity of interest” between workers and capital. He confronted the Grand President of the Brotherhood with the question: “You tell us the interests of the company and us workers are identical. What then is the reason for this union we call the BRT? Why don’t we join the same organization as the [railroad] carriers?”

The same question could be asked today of most AFL-CIO union presidents who advocate class collaboration or labor-management cooperation: Why do you need a union if the capitalists and the workers share common interests?

Mortimer garnered another valuable lesson from the encounter. Grand President Lee shouted back: “You are a socialist!”

“And I found out quite early that any time any organization or any individual spoke up in favor of the working people, they were immediately labeled [socialist or] Communist-- even though they might not have known the difference between Communism and rheumatism!”

And the old craft-union AFL was soon recognized to be no friend of the industrial worker, placing every obstacle in front of Mortimer’s organizing efforts in the auto industry. In the summer of 1932, Mortimer and his fellow workers approached the Cleveland Federation of Labor for help in organizing White Motors. CFL executive secretary, Harry McLaughlin dismissed the request: “Why, no one can organize that bunch of hunkies out there.” Unfortunately, this kind of craft-union insularity and elitism still infects too many of the trades.

At the famous 1935 AFL Convention, Mortimer stood by John L. Lewis when he raised the question of industrial-union organization. Apart from the celebrated punch-out of Carpenters’ union president, Bill Hutcheson, Lewis and his allies organized a challenge to the vice-presidency of the reactionary, vocal exponent of “identity of interest,” Matthew Wohl. Though they failed to defeat Wohl, they signaled that class-struggle unionism was on the industrial-union organizing agenda. The Committee of Industrial Organizations (CIO) was born from these encounters.

                             Organizing the Unorganized

It should be an embarrassment to present-day trade union functionaries, who have overseen the decline of trade union membership, when Mortimer becomes almost apologetic that workers of his era were so accepting of their fate: “To those who marvel at the docility of a working force that could accept this kind of insanity, let me explain the conditions existing at the time. Unemployment was widespread… Men were kept in a state of fear, workers were fired on the slightest pretext, or for no reason at all… In the absence of a union, some workers became sycophants and stool pigeons… So great was the fear of losing the precious job that men would even work through their lunch periods.” And yet skillful and dedicated leaders were able to overcome these obstacles to build the most powerful, militant movement in the history of US labor.

Today, labor “theorists” and their Democratic Party colleagues decry the backwardness of the workforce, blaming the sorry state of labor on the workers themselves. They fail to correct the growing sentiment that workers are “deplorables”-- uneducated, bigoted, and uncultured.

It takes Wyndham Mortimer to remind us that workers, like everyone else, are subjected to the worse prejudices, baseless rumors, and crackpot thinking that popular culture can conjure. Prior to the great organizational drive, “Fisher #1 [General Motors plant] employed about eight thousand workers in 1936. The Black Legion boasted a membership of three thousand in the plant at that time. Its membership was composed exclusively of white, protestant, gentile, native-born individuals. This fascist outfit was another powerful obstacle put in the path of the union… This group did not stop at murder if it served their ends. A number of union organizers had, in past years, been found shot. A bullet would be left on their chests and applications for membership in the union were found scattered about.”

Nevertheless, by the end of the year, the workers at Fisher #1 were at the center of what was one of the most militant labor actions in US history, an action that firmly planted the foundation of the United Automobile Workers Union (UAW) and gave impetus to the explosive growth of the CIO-- the General Motors sit-down strike.

And Wyndham Mortimer, along with Robert Travis, were the lead organizers of that action. In the words of Mortimer’s colleague, Leo Fenster, “Nothing that the UAW had done before, nothing that it has done since, had that kind of impact on events. The UAW has since, to a considerable extent, taken care of many of the problems of its members. But it has done so within the routine of the status quo… But this was the one occasion when the status quo was wrenched loose from those who would cling to it, when the establishment was yanked from its moorings, when the sacred, inviolable, indispensable open shop was turned into its opposite-- the union shop.”

A former UAW leader and Communist, Fenster did not live long enough to see the UAW’s full retreat from even the “routine of the status quo,” but he correctly understood the dramatic achievements of 1936-37.

For the first time, US workers en masse refused to accept the sanctity of property rights by refusing to leave the plants “owned” by US corporations.

US Workers overcame the differences of race and national origin to empower their class, a victory that led to the CIO becoming the most integrated institution in US society (second only to the Communist Party).

The notion that the boss could fire workers at will was defeated in the first CIO contracts, along with many of the other privileges claimed by management.

Mortimer and other Communists’ success and popularity in building the UAW did not go unnoticed by the more conservative elements of the leadership. The year after the settling of the Flint sit-down strike, the reactionary UAW president (Mortimer was first vice president) attempted to expel the most militant leaders of the union on the ludicrous charge of delivering the union to the Communists. Of course the attempt failed and was repudiated at the next UAW Convention.

Nonetheless, anti-Communism, careerist intrigue, false “leftism,” and Democratic Party influence combined to marginalize Mortimer’s influence and leadership. Like most CIO Communists, his continuing commitment to strengthening the hand of the workers and weakening the power of capital stood in the way of the center-right forces who sought to consolidate personal power and distance themselves from the rank-and-file. Despite his retirement in 1945, Mortimer continued to reflect and write on the labor movement.

                            Reflections on Labor’s Direction

● The modern-day wedding of the Democratic Party and the labor movement began with the Roosevelt administration and the New Deal. Despite the cult-like admiration of workers toward Roosevelt, especially encouraged by the more conservative elements of the labor leadership, Roosevelt’s efforts on behalf of labor were greatly exaggerated. Little was accomplished without a firm and insistent push (threat?) from the left. In Mortimer’s words: “I have dealt with President Roosevelt only because millions of American workers regard him as labor’s friend. Certainly destroying food and plowing little pigs underground was not the work of a friend when hunger was widespread in the land. We should understand that ‘friends’ of ours are not found among millionaires.” Were he alive today, Mortimer would thus find no “friends” of labor in Congress.

● “The time has come to convince the workers and common people of America that we must produce wealth to use and not to make people rich. I am well aware of the fact that we in America have been brainwashed and intimidated until such words as peace and socialism are never mentioned in polite society. But these two words must be heard loudly and constantly.”

● In January of 1950, Mortimer wrote an open letter to the CIO urging affirmative action to bring African American participation into the all-white leadership: “If the present leadership is sincere in its claims of opposition to Jim Crow, a most convincing way to demonstrate its conviction would be to do something about demolishing discrimination inside the unions. It is not an accident that the two largest unions in CIO, the UAW and USA [Steelworkers], with several hundred thousand Negro members in their ranks, do not have ONE Negro in any elective post. The Negro membership is not represented because, in my opinion, the present leadership does not want them represented.” The first Black elected to the UAW International Executive Board was Nelson Jack Edwards in 1964, a shameful delay abetted by the McCarthy-era purging of Communist and left-wing leaders from the CIO.

● Mortimer foresaw the abandonment of rank-and-file activism and its replacement with legal and financial maneuvers. He attacked the UAW’s $25 million strike fund when the union had a no-strike contract: “No ‘defense fund,’ however big, has ever won a battle between capital and labor, for the very good reason that the class struggle is not fought with money. If money were the deciding factor, then our fight would be hopeless… The UAW was built and won its right to live without any money. The great struggles of 1936, 1937, and 1938 were won because the American working class supported us, and any future struggles will be won in the same way… Trying to match monopoly capitalism’s bank balance is the greatest piece of hypocrisy, and the most dangerous delusion that any fast-talking phony labor statesman ever put over on the rank and file.” (1951)

● By 1950, Mortimer exposed the secretive, treacherous collaboration between US Cold Warriors and the leadership of the labor movement. He named the names of labor functionaries who enjoyed lucrative salaries to help undermine labor militancy in Europe and Asia. He traces this to the “...Foreign Service Act of 1946. This act provides, among other things, for two categories of ‘Labor Advisors’... The list of ‘Labor Advisors’ is too long for this letter, but they infest Europe and Asia like an army of locusts, spending their time and our money trying to weaken and destroy the organized labor movements…” This sordid activity morphed into the insidious AIFLD and exists with many bogus “solidarity” actions of the US labor movement today.

● While many leftists, even Communists, were seduced by the social democratic “road” to socialism in the 1950s, Mortimer stands out as a clear-headed, unmoved advocate of revolutionary socialism. In a 1949 response to an article lauding British “socialism,” Mortimer responded sharply:

You say, “British socialism is not abhorrent to UAW members.” Again, you say, “Most UAW members believe in a future non-Marxist world that includes privately owned corporations, paced by cooperatively owned activities and government-owned authorities-- the so-called mixed economy, like Sweden, like Britain, but with the UAW and Roosevelt and Senator Norris [a New Deal icon] added.

Now isn’t that a precious piece of nonsense?

I would remind you that surplus value would be perfectly safe with either Roosevelt or Norris. Their crime, in the eyes of monopoly, was that they saved capitalism from itself....

The British coal baron who formerly held a million pounds in coal securities [before nationalization], is now the holder of a million pounds in government bonds upon which he is guaranteed six per cent. Is this what you call a “middle” economy?

For my part, I am waiting to see what the [UK] social democratic government will do in the present economic crisis. Will it drop its policy of gradualism, and tackle the emergency on socialist lines? Or will it drop all thought of socialism in order to reassure Wall Street, thereby getting another billion dollars and a breathing spell? My guess is that it will forget the working class. It will seek to transmute the gold of working class militancy into the lead of passivity and subservience [Labour began a retreat and was pushed out of power in 1951].

Social democrats in general show a touching faith in the infallibility of capitalism-- a faith not shared by the more shrewd and clear-sighted capitalists themselves.

● Today’s trade union movement bears the deep scars of the purges of hundreds, of thousands of Communists like Wyndham Mortimer, Communist-sympathizers, and militants from the labor movement. By driving the most visionary, most uncompromising, and most dedicated fighters from the organizations that they were essential in building, the labor movement was destined for a decline that is today on the verge of restoring the open shop (80 years after labor’s victory over the open shop). With a Supreme Court decision looming, a decision that will likely make the open shop the fate of public workers in every state (It is already legislatively established for public workers in 28 states), how does the labor movement meet this attack?

With dollars spent on lawyers and lobbyists. And today, at the last minute, with text messages, phone calls, and letters begging members to commit to future dues payment!

On May 30, my local paper carried an advertisement sponsored by the AFL-CIO, between ads for a mattress sale and weight loss solutions, appealing for workers to visit the Internet and join a union. An impressive response to a life-or-death challenge!

Mortimer saw it coming in the midst of the 1950s purges. Writing in 1951:

[The treacherous, anti-Communist union leadership] plan to make the American labor movement the staunch ally of monopoly capitalism in its war against the exploited and poverty stricken peoples of the world. And here at home, their witchhunting, disrupting, and raiding of other unions, is treason to the working class…

They eagerly enlisted in monopoly’s army set out to cripple the unity and solidarity of the world’s working people… and their job is to disrupt, confuse, and, if possible, destroy the labor unions of those countries.

They have scuttled the once powerful CIO. They have assassinated the greatest hope American labor ever had, and have dealt the working men and women of America a cowardly blow from which they will not recover for many a long day.

A blow from which they have yet to recover.

Greg Godels

zzsblogml@gmail.com

Many thanks to Roger Keeran who encouraged me to write about Wyndham Mortimer. His book The Communist Party and the Auto Workers’ Unions  is a classic on the subject.

Is There a Future for Social Democracy?

Karl Marx was right! That was the valuable lesson that Thomas Piketty unwittingly delivered with his celebrated book, Capital in the Twenty-first Century.¹ While Piketty should be credited with bringing inequality back into the popular spotlight, his most significant contribution was the powerful empirical proof that the historic trajectory of capitalism was, in the final analysis, to reward the owners of capital and beggar those who produce it.

For the post-World War II generations, a different “truth” was fostered. The period of relative prosperity (roughly defined as the growth of broad-based living standards in close step with robust productivity growth) that endured into the early 1970s was believed to be a new, permanent feature of capitalism. Attached to this belief was a confidence that the policy tools afforded by the economic doctrines of John Maynard Keynes would guarantee that this prosperity would continue.

But this “truth” was challenged by the explosion of inequality that began and persisted over the subsequent forty years and beyond.

Looked at from the perspective of Piketty’s data, centuries of growing global inequality is broken only by the Great Depression and the later post-war interlude, what the French call les trente glorieuses-- the 30 presumably happy years of economic levelling. In light of the historic arc, they are exceptions to the rule.

In the decade before World War II, there was a dramatic collapse of economic growth and a shifting of resources to the various governments’ temporary employment-maintenance programs. These two factors slowed the persistent concentration of wealth channeled toward the highest tiers. The 1930s were a time of desperate efforts to restore collapsing mass demand and to answer the utter despair of the unemployed through projects that were, in effect, modestly redistributive. Throughout the world, preparing for and conducting war soon replaced these projects, substituting military spending and the military absorption of the unemployed (and their subsequent slaughter) for the earlier welfare-centered economic stimulation.

But the post-war period was an entirely different matter. A proper explanation of the post-war anomaly remains contested.

It is only in recent years (and bolstered by the work of Piketty and his colleagues) that the notion of capitalism’s fundamental tendency toward inequality seeped back into the mainstream and commanded attention. The recent memory of post-war “prosperity” leads many to falsely view the most recent era of mounting inequality, tattering social safety nets, crumbling infrastructure, forced austerity, debt, and falling living standards as a mere “correction” of the profligacies and inefficiencies of the earlier period. To Piketty’s credit, his unequalled research into the historical long-term global tendencies of capitalist economies demonstrates the opposite. Twenty-first century capitalism and its massive inequalities constitutes the capitalist norm and not a correction.

Piketty and Social Democracy

If it is true that, except under temporary, extraordinary circumstances, capitalism uniformly produces and reproduces wealth and income inequality, then Piketty’s findings present the social democratic left with great, seemingly insurmountable challenges. Understanding social democracy, broadly speaking, as an ideology that accepts capitalism as either reformable or as a possible institutional platform for the gradual transformation of the social order into something different, the prospects for its success would seem dim at best². Capital’s overwhelming domination of today’s political institutions and the monopolization of the channels of mass influence would likely foreclose any new gains from collaborating with or conceding capitalism.

The last quarter of the twentieth century and our twenty-first century experience find social democracy declining nearly everywhere in both effectiveness and popular legitimacy. With its “golden era” coinciding with the post-war “golden era” of crisis-free economic growth, social democracy not only failed to advance a substantive agenda after the crisis-ridden decade of the 1970s, but actually surrendered the gains won in the past.

Toward the end of the last century, the traditional hosts of social democratic ideology-- the US Democrats, the UK Labour Party, the French, Italian Socialists (and Communists), and most similar parties-- cast the classic tenets of social democracy into history’s dustbin, embracing the dominance of markets, private-over-public initiatives, growth over redistribution (“a rising tide lifts all boats”), the inefficiency of the public sector, and homage to the market as a rational and moral calculator.

As the public soon found most social democratic thinking a cheap imitation of conservatism, the traditional social democratic parties sought a new “progressivism” based upon promoting civil inclusion over aggressively fighting for economic and political inclusion. Unlike economic inclusion, civil inclusion-- the embracing of individual diversity and civil tolerance-- does not address economic inequality; it requires no change in the balance of power between capital and labor; it makes no consequential demands or sacrifices on the rich and powerful; and it requires no redistribution of material assets.

The economic crisis that began in 2007-2008 demonstrates emphatically the inadequacy of such a narrow approach. Millions of people were and are directly or indirectly wounded by the economic chaos generated by a global financial collapse and by its collateral damage. Social democracy had no answer and was justly rewarded for its policy bankruptcy. The traditional bearers of the banner were drastically diminished in popular support, in some cases, reduced to irrelevancy.

Understandably, an effort was made to invigorate social democracy by shoring up its economic program, adopting a critical stance toward markets-- especially financial markets, advocating regulation of capital, imposing progressive taxation, strengthening the social nets-- in short, returning to elements of the social democratic agenda of the post-war “golden era.”

In the face of the discrediting of the traditional parties, new parties, political alliances, or formations arose-- like SYRIZA, PODEMOS, and the Bernie Sanders movement.

But the twenty-first century was not the 1950s with its war reconstruction, the Marshall Plan, massive increases in military spending, Cold War compacts, its unleashed wave of consumerism, strong unions, and most importantly, a powerful revolutionary current to which social democracy could leverage its offer of moderation toward capital. There is no useful role for social democracy in the eyes of 21st century capitalists.

Twenty-first century capital-- absent a life-and-death struggle against socialism-- is merciless and ruthless, offering no compromise or social compact with social democracy. The youthful leaders of SYRIZA learned this lesson when they sought to reason with the custodians of European capital. They experienced the harsh aggression of financial predators, reducing SYRIZA militants to compliant middle-managers of Greek capitalism.

Sanders and his loyalists are being similarly schooled in the realities of the Democratic Party and US capitalism in the twenty-first century. The Democratic Party is owned by monopoly capital, and monopoly capital has no intention of surrendering its property rights to anyone else.

The Last Gasps of Social Democracy?

The hope for finding an effective strategy between resignation to capitalism and revolutionary socialism will always inspire utopian schemes. Social democracy will always survive for those frightened by the prospect of eliminating the scourge of capitalism, but appalled by its pillage of working people. Despite the failings of the latest incarnations, there are new theories waiting in the wings, new models of social democracy.

Beyond his celebrated book, Thomas Piketty has championed a social democratic agenda to address the persisting inequalities deeply embedded in capitalism. In a new book, Chronicles, he returns to these inequalities in the context of current events as addressed in a collection of columns he wrote for Libération and Le Monde. To his credit, he still adheres closely to his central thesis: “During the postwar decades, we mistakenly believed that we’d moved on to a new stage of capitalism, a sort of capitalism without capital. In reality, it was only a passing phase… In the long run, patrimonial capitalism is the only kind that can exist.”³

But if “patrimonial” capital (i.e., capital that persistently churns out inequality) is “the only kind that can exist,” how can there be enduring capitalism without obscene inequality? That-- put simply-- is the paradox of Piketty.

Indeed, that is the paradox of social democracy.

To anyone who has read Capital in the Twenty-first Century, Piketty’s answer to inequality is a colossal disappointment: We must have a global wealth tax. Magically, therefore, we could have both capitalism and less inequality. Of course Piketty does not tell us how we can overpower or coax “patrimonial” capitalism into accepting such a tax.

His answers in Chronicles, written specifically to address the crisis in the European Union, are more specific: The EU should be “federalized, tighter, centralized” so that the existing debt and tax structures could then also be federalized. To his way of thinking, a more tightly structured, integrated, and centrally ruled EU could overcome national disparities and-- not surprisingly-- institute a union-wide wealth tax!

But this answer is even more paradoxical. Would anyone believe that a union constructed to institutionalize, to protect and promote “patrimonial” capital would, by strengthening and centralizing that union, be more inclined to have its predatory character tamed? Would the EU, constructed upon the pillars of free markets, privatization, and the sanctity of profits, be more likely to surrender the fruits of free markets, privatization, and the sanctity of profits if given even greater power?

Clearly, there is more “wish list” in Chronicles than policy map. He joins the ranks of the neo-utopians⁴ who hope for a revival of social democracy through strategies that call for capital to concede its domination simply through moral suasion or dazzling intellect. Other neo-utopians like Yanis Varoufakis share Piketty’s commitment to globalism and supranational organizations, but with little acknowledgement that these policies and institutions are the product of powerful elites indisposed to heed the wise council of intellectuals. The EU, like the global market, is a construct born from the womb of Piketty’s “patrimonial” capitalism. The midwives will not surrender to clever ideas or an appeal for political “democratization.”

The State and Modern Monetary Theory

Others believe that they have found the social democratic holy grail in Modern Monetary Theory.⁵ William Mitchell and Thomas Fazi advocate this approach in their recent book, Reclaiming the State.⁶ Interestingly, they take the opposite tack to Piketty. Rather than calling for a strengthening of supranational institutions towards a global taxing body, they advocate a return to state projects free of supranational fetters. For Mitchell and Fazi, “reclaiming the state” is a necessary condition of reviving the social democratic project.

The title’s subscript gives away the game: “A Progressive Vision of Sovereignty for a Post-Neoliberal World.” It is not a vision for a post-capitalist world or a socialist world, but for a “post-neoliberal world,” a world like the world before the dominance of the unfettered, market-dominated, deregulated, private-ownership-worshiping capitalism that emerged in the 1970s. There is more than a hint of nostalgia for that earlier time, with the sincere hope that Modern Monetary Theory would open the door to radical reforms of capitalism-- capital controls, a new international framework, job guarantees, nationalization of “natural monopolies” and banks, the outlaw of non-productive financial transactions, and other measures.

In truth, the Mitchell and Fazi book is impressive. The first section, The Great Transformation Redux: From Keynesianism to Neoliberalism-- and Beyond, is a serious and well researched description of the course of capitalism from the end of World War II to the present. The authors fully recognize the important changes that events, parties, and persons made in that critical period. They also address some of the theories purporting to explain the changes without advocating strongly for one over another. For those reasons alone, the book is strongly recommended. No understanding of today’s capitalism is possible without a comprehensive understanding of the seventy-five years that preceded it.

But the history offered, though richly recounted, lacks a central motif, an underlying logic, linking and explaining developments. It is not enough to string together a list of factors that may, to a greater or lesser degree, shape the dramatic changes between the confident economic celebration of the fifties and sixties and the intractable problems of the 1970s. Despite a number of suggestive hints, the question “but why?” looms over the analysis. Without a deeper explanation, the account courts becoming a naked “just-so” story.

But more seriously, there is virtually no reference to the Soviet Union, the clash of post-war ideologies, the Cold War, or the threatening growth of the socialist world in size and influence (there is no citation for the Soviet Union in the index-- or to socialism for that matter). To discuss the post-war period without referencing the impact of Communism is like explaining the decline of the Roman Empire without reference to the rise of the Goths or of Christianity; it’s like explaining the US revolution without referencing the rivalries between Britain and France; or it’s like an explanation of the US Civil War without mention of slavery. It is at best incomplete; at worst, distorted.

US and European post-war social, political, and economic history arguably is the history of relations with Communism, domestically and internationally. Yet it is a commonplace for left and leftish academics to largely ignore the role of the Soviet Union, the Socialist world, and Communist Parties as though they were a mere sideshow.

The US and Western European left, especially in the universities, never accepted the reality that theory and practice were necessarily and inescapably located in political space by their proximity to twentieth-century Leninism. Consequently, the non-Leninist left failed to grasp the impact of state-sponsored anti-Communism in determining that space.

The left never appreciated that Western social democracy was not triumphant in the post-war decades, but permitted to taste political power by a capitalist ruling class in need of allies in the struggle against Communism.

To this day, non-Leninist theorists struggle with the contradiction that a social democratic program could be implemented in a state that is itself wholly captured by the capitalist class. A compromise with social democracy is made possible when the capitalist state is itself engaged in a life-or-death struggle with socialism. Accordingly, radical social democratic reforms that limit capital’s penetration, that retard or redress the march of inequality, or that shift the balance of power are only possible when the capitalist ruling class sees capitalism gravely under siege, a condition that social democracy, by its very definition, is unwilling to pursue to the demise of capitalism.

Mitchell and Fazi correctly identify supranational formations, institutions, and organs as obstacles to social change. Unlike Piketty and Varoufakis, they recognize that the EU, the IMF, the World Bank, the multilateral trade agreements, etc., are fundamentally created to strengthen the stranglehold of monopoly capital on the state. They are not impartial arbiters or equal-opportunity tools for shaping a progressive destiny.

They also grasp that a part of the globalization myth-- the claim that the state was in fatal decline-- is nonsense. Heavily promoted by academic leftists in the 1990s and into the twenty-first century, the rise of US exceptionalism, the US project of policing and dominating the world, and the 2007-2008 collapse, marked “paid” on the notion that the state was receding in power and significance. It’s noteworthy that as early as 1998, Linda Weiss demonstrably refuted this once fashionable position with her The Myth of the Powerless State.

Mitchell and Fazi fall on the right side of history with their defense of the resilience and centrality of the capitalist state.

But it is a capitalist state.

It is one thing to reclaim the state as the nucleus of capitalist social, political, and economic relations; it is quite another to reclaim the state from the tentacles of monopoly capitalism. Mitchell and Fazi succeed in achieving the former, but fail to open a path to the latter.

They are not alone in seeing Modern Monetary Theory (MMT) as a tonic for social democracy.⁷ They, like other liberals and social democrats, lament an opportunity lost when public policy is dictated by debt scolds. (“Debt scolds” are alarmist economists and policy makers who believe that debt is always dangerous, if not evil.)

Conservative Monetarists have fostered the notion that growing debt leads invariably to serious economic mayhem, a notion that constitutes a myth of tragic proportions in the eyes of Modern Monetary theorists. Put crudely, the Monetarist fear springs from a category mistake-- the conflation of contemporary state budgets (those not legitimized by precious metal reserves) and accrued debt with the budget and debts of an ordinary household. Unlike an individual household, a state’s central bank faces no natural or institutional limit on the issuance of credit and the incurrence of debt. The fears of the debt scolds are, therefore, unfounded.

And, they argue, embracing MMT can, as a result, break the stranglehold that debt-rating agencies, financial speculators, Monetarist pundits, and market-obsessed politicians have on government spending and social democratic programs.

But Mitchell and Fazi, like other MMT advocates, mistake the debt rating agencies, the financial speculators, the Monetarist pundits, and the market-obsessed politicians for honest intellectual brokers. They are not swayed by the avenues available to advance social democratic reforms. Their interest is in solely growing profits.

Clearly that point is driven home by the failure of prominent economists like Nobel laureate Paul Krugman who have loudly advocated against the austerity and fiscal abstinence of the Monetarist debt scolds for well over a decade. And to no avail. In the teeth of the gale winds unleashed by the 2007-2008 crash, capitalist policy makers steered the course of austerity, espousing a deep fear of debt-- every increase in government spending threatened catastrophe. Never mind that their fears were never realized.

The adherents of the continuing centrality of the state and MMT surely underestimate the death grip that the capitalist class has on all aspects of the state, especially over policy. Whether government spending may cross a dangerous threshold or not, whether MMT offers new life to the social democratic program, today’s capitalist rulers show no inclination to allow their hired politicians and servile journalists to engage or promulgate challenging ideas.

The growth of inequality (and the extreme concentration of wealth), the monopolization and subsequent conformity of the media, the continual erosion of the institutionally limited bourgeois democratic system, the deterioration of public education, and the other marks of the tightening grip of elites constitute a disappearing opportunity for social democracy.

It is not that social democracy will wane; it will always offer a promise to those too timid for revolutionary change. But it will offer, at best, a rear guard action to an increasingly powerful capitalist ruling class. It may retard the gains, slow the rot, but it will offer no reversal of capitalism’s course. That can only come from a revolutionary movement for socialism.

Taking issue with a venerated, sincere, but short-sighted advocate of the working class, Karl Marx mounted a measured defense of the value of trade union action to secure higher wages:

The general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labour more or less to its minimum limit. Such being the tendency of things in this system, is this to say that the working class should renounce their resistance against the encroachments of capital and abandon their attempt at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken down wretches past salvation…

...the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of these effects; that they are retarding the downward movement but not changing its direction; that they are applying palliatives, not curing the malady…

They ought to understand that, with all the miseries that it imposes on them, the present system simultaneously engenders the material conditions and the social forms necessary for an economic reconstruction of society. Instead of the conservative motto: “A fair day’s wages for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!” ⁸

Piketty and others have likewise shown that the “general tendency of capitalistic production is…” to increase inequality, paraphrasing Marx. Like trade union activism for higher wages alone, social democracy can only succeed in “...retarding the downward movement but not changing its direction; ...applying palliatives, not curing the malady…”

Instead of futilely seeking to turn the clock back to before “neo-liberalism,” our modern day warriors for social justice must embrace the revolutionary slogan: “Abolish capitalism!”

Greg Godels

zzsblogml@gmail.com

 
1 Capital in the Twenty-First Century, Thomas Piketty, translated by Arthur Goldhammer, 2014

2 Where social democracy doesn’t occur as a movement or party under its own name, it is represented from time to time or as the left wing of another movement or party (eg. UK Labour Party or US Democratic Party).

3 Chronicles On Our Troubled Times, 2017, p. 3-4.

4 In the Communist Manifesto, Marx and Engels describe utopian socialism as arising when the working class “...offers to them [the advocates of utopian socialism] the spectacle of a class without any historical initiative or any independent political movement.” For practitioners of utopian socialism, “[h]istorical action is to yield to their personal inventive action; historically created conditions of emancipation to fantastic ones; and the gradual, spontaneous class organization of the proletariat to an organization of society specially contrived by these inventors.”
Cooperatives, for example, are among the neo-utopian “fantastic conditions of emancipation” visited on today’s left. Academic leftists are leading neo-utopian spinners of “society specifically contrived by these inventors.”
5 For a clear and concise explanation of Modern Monetary Theory, see Modern Money, Robert Hockett, in Dollars and Sense, March/April, 2018, pp. 7-14. Hockett explains MMT in its social, legal, historical context.
6 Thanks to Tony Coughlan for recommending this important book.

7 Modern Monetary Theory springs from the notion that after the break with the Bretton Woods system tying currencies to gold and the shift to the dollar as a fiat currency in 1971, the issuance of currency becomes solely a matter of central bank decision making. MMT essentially uncouples money from any objective theory of value and makes its creation, its use, and its purpose a matter of convention or social choice.
The grizzled Howard in  the book/movie Treasure of the Sierra Madre as well as Karl Marx would be appalled by this view.
Its proponents overlook the danger of assets bubbles when any reasonable objective measure of value is lost. 

8 Value, Price and Profit, addressed to Workingmen, Karl Marx, 1935, p. 61.

Distractions

For many in the US and Europe, a cynical call for violence posturing as the wrath of the righteous will readily produce a distraction from the urgent issues of our time. Judging by the initial protests of last Friday’s Trump/May/Macron aggression against Syria, far too many have fallen for this hypocritical, dishonest maneuver.

For Theresa May, Conservative UK prime minister, an attack on Syria promises to add to her effort to claw back from the disastrous Brexit vote that wounded her party. Anti-Russia hysteria, unprincipled charges of anti-Semitism lodged against Labour opponent Jeremy Corbyn, and now a missile-administered scolding of Syria’s president, Assad, help her in the polls or, at least, that’s her calculation.

Early in March, Emmanuel Macron’s poll numbers sank to the lowest level since his election. His ongoing attack on French workers and his enthusiasm for bombing Syria are meant to bolster his “tough guy” image. Like May, Macron has little else but austerity to offer workers; hence, manufacturing threats promises to distract.

Trump’s approval rate has taken a nose dive in recent weeks as well. Battered from all sides, Trump needed some love from the war hawks populating both parties. A muscular move against Assad would also signal Trump’s defiance of Putin, the alleged “devil’s handmaiden.”

Of course that didn’t win over the MSNBC/NPR/CNN crowd, the Democrats’ über alles. Schumer and Pelosi saw the trap: the choice between praising Trump for his attack on Syria or rejecting aggression. They, along with most other elected Democrats, performed an exercise of Clintonian triangulation: ‘we want to hit Assad more than anyone, but Trump should have allowed us to call for military action.’

For MSNBC’s Trump-reviling star, Rachel Maddow, Trump bombed Syria for the wrong reasons-- a case of “wagging the dog”-- hoping to distract critics from his domestic problems. She badgers her war-hawk guests to agree that Trump’s war on Assad was not authentic. Implicit is the notion that Trump could have established more credibility by raining greater death and destruction and further baiting the Russian bear.

Easy distraction has led apparently sober, morally-grounded people to overlook the telling coincidence of an alleged outrageous gas attack with the imminent defeat of the so-called rebels in Douma. They see no suspicious connection between Trump’s surprising announcement of US troop withdrawals and a provocation to revoke that decision. And they see no distraction from the contemporaneous cross-border slaughter of unarmed Palestinians by the Israeli military.

They see no calculation in scheduling the bombardment of Syria on Friday, the day before the arrival of the investigators from the Organization for the Prohibition of Chemical Weapons (OPCW) who might bring some light to the charges of chemical weapons’ use. And they are too distracted to be puzzled by the US military plan to destroy the facilities alleged to contain deadly gases and consequently risk harming innocent Syrian civilians.

Never mind that the US and its allies could rely upon no more than cell phone pictures and telephone interviews (so called “public source” information) to evidence the claims of a gas attack. It’s an astonishing fact that even though the “rebels” are supposedly democratically-minded allies who welcome CIA aid, no Western news service dares to actively cover their side by employing reporters on the ground. This has been the case with the US’s Islamic fundamentalist allies since CBS’s Dan Rather faked a visit to Afghanistan decades ago. The commitment of “freedom fighters” to “freedom of the press” seems to be wanting.

Oddly enough, the “authoritarian” Assad government welcomes Western journalists, though they-- excepting a CBS news reporter-- prefer the friendly confines of hotels in Beirut, Ankara, and Amman where they have easy access to press releases from the US embassy.

An affinity for distraction leads very many major media corporations to place complete, unthinking trust in UK-based reportage from the Syrian Observatory for Human Rights. It goes unnoted that the Observatory is a one-man show performed by an Assad-hating shopkeeper in Coventry who refuses to share his methodology, but admits to relying on his friends and acquaintances in Syria. Amnesty International, with its usual smug casuistry, judges the Observatory to be reliable, though it bases its evaluation on the same indirect, patchy evidence.

Anywhere but in Syria, these claims, based on second- and third-hand reports, anecdotes, and social media, would fail any and all journalistic smell tests. Imagine NBC News basing coverage of violence in Chicago on the network of contacts of an amateur sleuth in San Francisco.

Film critic Louis Proyect interjects, in an oddly timed article on Counterpunch, that a website dubbed Bellingcat “is perhaps the only place where you can find fact-based reporting on chemical attacks in Syria.” A quick look at the website will reveal some more UK-based amateur sleuths assembling second- and third-hand accounts and social media reports.

True to his film critic credentials, he likens the Syrian “rebels” to “the Arab version of John Steinbeck’s Joad family,” a bizarre innocuousness for the Douma-based, brutal Jaysh al-Islam that former Secretary of State John Kerry once characterized as a sub-group of ISIL. Promptly, the Obama administration was forced to “correct” Kerry, who was ignorant of the head-choppers’ rehabilitation.

Proyect chose the exact moment-- when the honest left was scrambling to mount some public opposition to war on Syria-- to attack the left for its skepticism of the official account, an historically justifiable skepticism given such devastatingly consequential deceptions as the Tonkin Gulf resolution and the 2003 weapons-of-mass-destruction fiasco. The military and the security services lie. Skepticism is the only antidote to gullibility.

The one NGO that actually claims direct reportage in Syria, the opposition-based Violations Documentation Center in Syria (VDC) has had its Douma office attacked numerous times by Jaysh al-Islam, forcing its active reporters out of the area.

Unmentioned by the tunnel-vision media, strong circumstantial evidence, Red Crescent confirmation, Kurdish accusations, and a near self-confession has pointed to Jaysh al-Islam employing chlorine gas in April of 2016.

In our era of Entertainment-Tonight-style distractions, of Trump’s sex life, of twitter-duels, of anonymous sources and calculated leaks, a principled, wise statement is a rare and welcome event. Tulsi Gabbard, the Representative from Hawaii addressed Trump with the following:

The people of Syria want peace more than anything else in the world. Attacking Syria will not bring their war-torn country any closer to peace. U.S. military action against Syria will simply escalate and prolong the war, resulting in more senseless death, destruction, and suffering...

If you are truly concerned about the suffering of the Syrian people, then you must do all you can to bring about peace. A US military attack against Syria will expand and escalate this war, increasing their suffering and causing more death, more refugees, and fewer resources to invest in rebuilding our own communities right here at home…

I call upon you to resist the loud calls of war and instead wield the power of the Presidency to help bring peace to the people of Syria, their devastated country, and the region.

Gabbard’s appeal is a stroke of sanity and maturity in a frightening rush to war lubricated by an unprecedented campaign of mass distraction, by the marketing of a Marvel-comic foreign policy.

Greg Godels 
zzsblogml@gmail.com

Stirring the Energy Pot

Since February of 2017, I have written frequently about changes in the global political economy of energy and the effects of those changes on imperialist rivalries and accompanying political trends: New Developments in Political Economy: The Politics of Oil (2-6-17), US Imperialism: Changing Direction (6-25-17), More on Energy Imperialism (7-26-17), Economic Nationalism: What It Means (12-28-17).

The broad gist of these articles was that (1) the era of global economic integration was severely challenged by the 2007-2008 shock; (2) a technological revolution in energy extraction moved the US-- the leading imperialist power-- towards energy independence; (3) the failure of OPEC and others to rein in US energy production and the continuing sluggishness of growth and trade prodded the US towards a further goal of energy dominance through competition in energy markets; (4) without the burden of dependence on stable, secure international energy sources, US imperialism stepped back from its role as the primary promoter and guarantor of global integration and stability; (5) intensifying competition in the context of stagnant growth fostered the politics of economic nationalism and the promotion of national self-interest in contrast to the politics of globalism.

Since the British navy and other navies converted from coal to oil-burning vessels in the early 1900s and with the burgeoning dependence of modern militaries on oil, securing energy sources has been a strategic centerpiece of imperialist strategy.

It is not too great of an exaggeration to see German expansion in World War II as accelerated by a thirst for reliable energy supplies (Romania, Soviet Union). And the denial of energy resources to the Japanese militarists similarly prodded aggression in Southeast Asia.

For the US, declining domestic production and increasing reliance on foreign oil, particularly from the Middle East, led to greater attention to security and stability in the Middle East. The US established a powerful gendarmerie to police the region: the Shah’s Iran, Israel, and the Arabian petrostates. Billions of dollars of military hardware bolstered these watchdogs at various times in an effort to guarantee stable supplies of oil. US security services worked overtime to install stable regimes in all of the petrostates and their neighbors. US dominance was sealed with the establishment of the dollar as the petroleum-trading currency. The dominance was so complete that the US was able to use low petroleum prices as a weapon against the Soviets during the Cold War.

But matters have changed radically with the technology-enabled explosion of oil and natural gas production in the US.

The New

Writing in The Washington Post (The US is about to be the world’s top crude oil producer. Guess who didn’t see it coming, 3-7-18), Charles Lane reminds us of how matters were before: “During his 2006 ‘addicted to oil’ State of the Union address, President George W. Bush bemoaned imports from unstable parts of the world and called for replacing 75% of Middle East oil imports by 2025.” Bush, like his father, spent great efforts-- lives and wealth-- policing and bullying those “unstable” oil producers.  

Energy writer James Blas explains in Bloomberg Businessweek (The New World Order of Energy Will Be American, 1-29-18) how matters are now, how the US no longer has to “tiptoe around oil supplying nations” whether they are “friends” (Saudi Arabia) or “adversaries” (Venezuela). Instead, “energy dominance” is on the agenda.

Blas notes that the US won the battle for dominance started by Saudi Arabia in 2014 when the Saudis drove the price of West Texas crude oil down to as low as $26 a barrel through massive overproduction, expecting to cripple US shale production. Thanks to huge investments, the shale oil companies survived the attack, cut costs, and roared back. Today growth is faster than pre-2014 when prices for oil were actually much higher. And imports are now below 2.5 million barrels a day, the lowest level since record-keeping began in 1973 (imports were 12 million barrels per day in 2008).

Thanks to geo-political “flare-ups” (generally US-instigated instability), US exports at one point in 2017 hit 2 million barrels a day, mainly to Canada and the People's Republic of China (PRC). Exports are fully expected to grow even more in the future.

Venezuela is Illustrative of the US’s growing interest in disrupting oil markets to its advantage. Through disinvestment and sanctions, Venezuelan oil production dropped nearly 30% last year. Similarly, the US-NATO destruction of Libya has succeeded in disabling its oil industry. The wreckage of the Libyan energy industry means that oil prices would have to reach $78.10 per barrel for the industry to break even. With prices trending well below that number, there clearly is little chance for the Libyan industry to recover, invest, or add to the country’s sovereign wealth.

With massive corruption and an expensive war to finance, Saudi Arabia now needs $70 a barrel to merely break even. Hoping to escape from dependency on an oil regimen, the Saudis had planned a public offering (a sell-off to private interests) of its national oil company, ARAMCO. In the current unfavorable competitive environment, that move has been postponed time and time again.

Formerly a price dove-- the world’s advocate for low oil prices-- the Saudis are now desperate to achieve higher prices. Their escape plan from their losing hand in oil competition-- Vision 2030-- is endangered by modest prices. To reduce supply and increase both demand and prices, the Saudis are a strong advocate for sanctions against Iran, as are powerful energy interests within the US ruling class.

The new, competitive environment has brought forth new, unexpected alliances. Russia-- a frequent foe of Saudi foreign policy-- has recently signed a comprehensive energy agreement with Saudi Arabia. For its part, Russia is offering to take a substantial position in any future IPO of ARAMCO, boosting its prospects (along with a similar offer from the PRC). Saudi Arabia, in return has agreed to invest in Russian LNG projects and Eurasian drilling. It appears that Russia and the PRC are looking to guarantee security, stability, and cooperation among the energy-producing states, a role that the US has now abandoned with its pursuit of energy dominance and a role that is a necessary condition for peace in the region.

Because emerging US oil dominance (and sanctions: war by other means) threatens to disrupt the reliability and stability of existing petro-suppliers, the PRC has begun to negotiate crude-oil futures contracts in renminbis rather than petro-dollars.

Natural Gas

Much of the growing US animosity that is so apparent in US-Russia-PRC relations revolves around competition in the natural gas market. Through political fantasies, sanctions, threats, saber-rattling, and contrived affronts, the US has made every effort to wean Europe away from Russian natural gas, especially the expansion of pipelines to Europe promising consistent supply and favorable prices.

Some Eastern European countries, mired in historic anti-Russia enmity, have welcomed US liquefied natural gas (LNG) shipments, constructing new receiving facilities. They accept inconvenience, inefficiency, and higher prices as the cost of the politically motivated anti-Russia campaign. The US is trying to browbeat the rest of Europe into giving preference to US LNG.

But the big prize is the PRC, the fastest growing natural gas market in the world. Both Russia and the US are fighting to supply natural gas: Russia has a pipeline project (GAZPROM) sales agreement to supply 1.3 trillion cubic feet a year, while the US (Cheniere Energy) has contracts to supply 1.2 million tons of LNG per year.

The recently announced selective, very selective US tariffs-- apparently really only against PRC-- likely have a covert motive. US Secretary of Commerce Wilbur Ross suggested that increased Chinese purchases of LNG might have a happy consequence for tariffs by reducing the US-PRC trade deficit-- another shot fired in the energy wars.

Trade Tariffs

The sharpest edge of US economic nationalism is the emerging establishment and threats of trade tariffs. Short of embargo or out-and-out war, establishing disruptive trade barriers is the most hostile posture towards other nations. In the case of a powerful country like the US, tariffs constitute unabashed arrogance. As perceptive left commentators have noted, the US has always pressed its problems unto its weaker “friends,” but not with this hubris.

Lest anyone think this is a ‘Trump’ problem and not shared by fellow Republicans and Democrats, attention should be paid to what others are saying. When Trump announced the first round of tariffs directed at the PRC, Democratic Senate leader Chuck Schumer was quoted in The Wall Street Journal: “I don’t agree with President Trump on a whole lot, but today I want to give him a big pat on the back.”

And Reuters reported on April 1 that Democratic Senator Elizabeth Warren, speaking in Beijing:

The Massachusetts Democrat and Trump foe, who has been touted as a potential 2020 presidential candidate despite rejecting such speculation, has said U.S. trade policy needs a rethink and that she is not afraid of tariffs.

After years of mistakenly assuming economic engagement would lead to a more open China, the U.S. government was waking up to Chinese demands for U.S. companies to give up their know-how in exchange for access to its market, Warren said.

“The whole policy was misdirected. We told ourselves a happy-face story that never fit with the facts,” Warren told reporters on Saturday, during a three-day visit to China that began on Friday.

Clearly, broad sections of the US ruling class have joined the trend towards economic nationalism.

The implications for peace or war are stark.

Greg Godels

zzsblogml@gmail.com