What It Takes to Make It Better

On July 2, as people in the US began their Independence Day festivities, Associated Press writer, Paul Wiseman, offered a remarkable article for our fellow citizens to ponder. In The Economic Recovery Turns 2: Feel Better Yet?, Wiseman gives a summary of the meaning of “recovery” for ordinary folks.

Wiseman observes: “[ In this recovery], …ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven’t kept up with prices at the grocery store and gas station. The economy’s meager gains are going mostly to the wealthiest.”

True enough.

But Wiseman goes on to demonstrate his claim in a way never seen in the mainstream media. He points out that workers’ wages (with skyrocketing executive pay included!) account now for 57.5% of GDP, down from 64% before the first throes of the crisis. Moreover, profits are up by nearly 50% since the “recovery” began in June of 2009. Much of this, I might add, “achieved” during the tenure of a laughably pro-worker government led by the Democrats.

Wiseman notes that “Unemployment has never been so high – 9.1 percent [now 9.2%!] – this long after any recession since World War II… Average worker’s hourly wages, after accounting for inflation, were 1.6 percent lower in May than a year earlier…[And] Higher paying jobs in the private sector, the one’s that pay roughly $19 to $31 an hour, made up 40 percent of the jobs lost from January 2008 to February 2010, but only 27% of the jobs created since then.”

Wiseman’s bleak picture of US workers’ plight dispels any notion, constantly floated by politicos and their lap dog media, of shared sacrifice. Instead, the “recovery” has been decidedly one-sided: the wealthy and the corporations have enjoyed substantial gains, while working people have sunk further economically.

On the heels of the long July 4 weekend, pundits and forecasters sought to conjure better news by projecting a drop in the unemployment rate. Euphoria set in when the ADP data suggested strong job growth, sending the stock market soaring.

But as is often the case, the ADP report proved to be fool’s gold and the forecasts baseless, with the June unemployment rate notching up to 9.2%. A mere 18,000 jobs were added in June, the fewest since September of 2010. And May’s meager numbers were also revised dramatically downward. It has been over a year since fewer private sector jobs were added to the workforce. Temporary jobs – the new “growth” area – were down by 12,000.

In addition, wages were lower in June and workers worked fewer hours. If Wiseman had waited a week, he could have painted an even bleaker picture.

Amazingly, news of this import – news that directly and severely affects the lives of hundreds of thousands of people and indirectly millions more – gets little more than a shrug from a media obsessed with bizarre crimes and celebrity missteps.

At the same time, the politicians who owe their offices to these millions sidestep the question by expressing canned condolences prepared for random acts of nature, or – worst of all – linking the solution to unemployment to the need to rein in the debt, a cynical insult to the unemployed. The Commander-in-Chief offered an empty platitude – “The American people need us to do everything we can to strengthen the economy and make sure that we are producing more jobs.” – while working hand-in-glove with Republicans to cut government spending and guarantee the loss of more jobs.

This is surely a shameful performance all around.

To be sure, the continuing crisis of capitalism demonstrates the bankruptcy of the ideologies that supposedly triumphed over Marxism, over Communism. With those ideologies enjoying well over thirty years of ascendancy and domination over policy, the net result is an economic collapse of catastrophic proportions. If this putrid mix of corrupted bourgeois politics and economic alchemy were held to honest account, millions of our fellow citizens would be rushing to embrace an alternative, including socialism.

But those who rule and hoard the wealth have many mechanisms to restrain any such movement: fear, war-mongering, xenophobia, racism, anti-Communism, consumerism, and a host of other tools designed to derail any movement away from accepting the despair brought forth by capitalism.

Fending off these ugly, divisive influences has never been easy; perhaps it is even harder today, but it is essential for uniting and unleashing the popular forces that could challenge a world view that has been tried, but failed.

Yet, fighting consumerism, racism, anti-Communism and the other sordid road blocks to unity is not enough. We cannot unify without something to unify around. We cannot take an exit from this road designated by misleaders and well-paid flacks by simply removing blinders. We must also offer a new route, based on careful analysis and historical experience, that promises an escape from the carnage of global economic crisis.

A vague commitment to anti-capitalism is not enough, either. While it makes a nice slogan, a nice balm for the soul, it offers no solution, no road forward.
The road forward begins with a vision of a society shorn of all-powerful corporations, corrupted politicians, the pillaging of nature, exploitative social relations, and self-centeredness. For sure, it’s not a new idea. Elements of that society are found in all religions; they emerge more fully in utopians like Thomas More, Fourier, Saint-Simon and Robert Owen who painted a social landscape of fraternity and cooperation.

Industrial society coalesced this thinking into the idea of socialism and the recognition that the market economy and private ownership of productive assets stood in the way of the new vision. The clearest and most reasoned, though certainly not the final, expression of this vision was conveyed in the works of Karl Marx and Frederick Engels.

Since their time, no other alternative to capitalism, no rival vision, has emerged to effectively challenge capitalism, except socialism. No alternative has captured the allegiance of working people world-wide, across borders, in factories and villages, like socialism.

With the Bolshevik revolution in Czarist Russia, the vision became a reality. Like all visions that come to life, the Russian experience inspired and warranted study. And the touchstone of that inspiration and study was the work and thought of the Bolshevik leader, V. I. Lenin. Throughout the twentieth century, millions drew upon that experience to spark and shape their struggle for a better life. As Bertolt Brecht wrote:

Comrade Lenin has been honored
often and plentifully. There are busts and statues.
Cities and children have been named after him.
Speeches have been given in many languages,
meetings held, and demonstrations
from Shanghai to Chicago in honor of Lenin.

Again, Lenin was not the last word, but his program and its successes marked a step further from vision to reality. It was no accident that Leninism, as an anti-capitalist program inspired by Marxism, marked a point of departure for anyone serious about moving beyond the grip of capitalism. And to date, no alternative to Leninism has succeeded in fully breaking the shackles of exploitation and the dictatorship of profit.

Assuredly, political movements of a different cloth and their leaders have successfully championed anti-imperialism and national independence. Some have even raised the banner of “socialism” over profound changes in the balance of forces between the owners of capital and working people. They have even privileged working people, to some extent, over the bosses, using electoral leverage to achieve great gains. But they have yet to eliminate exploitation or erase private profit as the economic engine. Nor do they have a coherent idea of how to do it. I am thinking today, of course, of the revolutionary movements that inspire us in Latin America. While they inspire us, they inspire us as visionaries, remaining caught in the web of utopianism, as were Robert Owen and Pierre-Joseph Proudhon before them.

Of course much has changed since the time of Lenin. Still, Leninism remains the touchstone for crafting a revolutionary strategy. Advocating anti-capitalism, while dismissing Leninism, failing to heed its lessons, is like starting a journey without knowing where you are and where you are going. Marxism-Leninism boldly offers a full account of both where we are and where we should be going.

The failure to seriously engage Marxism-Leninism is a transparent failing of the left, especially in the US, but also in many other parts of the world. It is not a theological failure, a failure to memorize the classic texts or mechanically apply them, but a failure to grasp the powerful tools resting in the Marxist-Leninist tool chest – the analytical devices of class, profit and exploitation and the strategic notions of vanguard party and dictatorship of the proletariat. That is not to say that these tools must be accepted as they are or applied in the old ways, but they remain available, particularly at a time when so few viable alternatives to capitalism have emerged.

One sees the absence of class analysis and revolutionary tactics in the popular movements in the US, much of Europe, and the upheaval in many Arab countries. While the sentiment is there – anger, frustration, and despair – it fails to channel toward a program of fundamental change. While we must admire the determination and dedication of active masses, that action is too often dissipated or redirected by self-styled leaders or “democratic” illusions. Rather than shaking the foundations of capitalism, these movements demonstrate against the personalities and character of those in power. But these rulers are disposable, to be easily and quickly replaced by others of their ilk. A deeper understanding of the structures and institutions that reproduce the model bourgeois politician and minister is lacking. Marxism-Leninism offers that understanding.

The capitalist media showers us with pictures of thousands of “indignants” determined to give voice and physical commitment to their anger. Missing from these pictures are the slogans or banners that reflect an alternative program either challenging capitalism or wresting power from the capitalist rulers and their parliamentary lackeys. In short, they constitute no “specter” haunting those in power.

For Marxist-Leninists, spontaneity is seldom a reliable road to change.

In the US, the political arena is further complicated by leftist ideologues who have no mass base and mass leaders who have no ideology.

With no mass base, the best known ideologues command an audience, but their words are shorn of tactical constraints or organizational commitment. As such, they speak “freely” and “independently,” but with little concern for the political impact or the context of their statements. Noam Chomsky’s recent sharp, public criticism of a single alleged policy of the popular, progressive Hugo Chavez government in Venezuela is a case in point. As perhaps the leading light of the broad left, Chomsky, with his interview in the UK Guardian, provided raw meat to a pack of media carnivores ready to pounce upon the Bolivarian Revolution. This attack came at a time of great vulnerability brought on by malicious speculation about Chavez’s health. No doubt Chomsky acted from sincere individual conscience, but dissociated from any organization and without any responsibility to a movement –and no internationalist obligation to the interests of the majority of the Venezuelan people. As a result, he evades responsibility for the consequences of his words.

And our mass leaders, especially most labor leaders, often rail against the inequities and injustices wrought by capitalism, but without any over-riding, systematic understanding of how it produces and reproduces these results. Mired in the immediacy of policies dictated by others – corporate bosses, two-party politicians, and other hostile social forces – they only react with indignation and without a strategic plan to shift to the offensive. Without an ideology, without a class-based stance, they fulminate without inspiring, posture without leading. All of the mass anger and fighting spirit is funneled into the electoral arena and barely qualified support for the Democratic Party.

The Wisconsin uprising demonstrates well the ideological vacuum and strategic chains limiting the labor movement. Acclaimed by all as a major escalation of working class militancy, the mass actions threatened to grow in scope and fervor, but were soon sapped by “leaders” promising to convert the struggle into a grueling legalistic campaign for electoral recall. Instead of mobilizing tens of thousands of workers nationwide who are equally threatened by draconian cuts in wages and benefits, instead of calling for strikes and other expressions of solidarity, US labor leaders opted to divert the struggle to a mere political contest between Republicans and Democrats. Their fear of mass initiative and their ideological immaturity smothered a rare opportunity for US workers to achieve a level of effectiveness on a par with many struggles in Europe and the Arab world, a chance to stand up to ruling class power.

These weaknesses point again to the need for a Marxist-Leninist political organization, an organization committed to bringing a vital, energizing ideology to working people. Whether that organization comes in the US from a change in direction of the now nearly empty shell of the Communist Party USA, or one of the few, small organizations that have emerged to fill the ideological void abandoned by the CPUSA, or from some new formation is yet to be settled. The process is a difficult one requiring a clearing of all of the ideological underbrush accumulated since the fall of the Soviet Union and the shedding of all of the disillusionment generated by that fall. That process will only develop from offering Communist leadership to mass action and diligent and aggressive action in the war of ideas.

Such an organization will not arrive spontaneously, but we should be confident it can be delivered.

Zoltan Zigedy
zoltanzigedy@gmail.com

Capitalism Mugs Greece. Who Is Next?

To understand the fate facing the people of Greece, you have to imagine an intruder coming to your home, putting a gun to your head and demanding that you turn over your earnings, surrender your savings, and sell off your car, your television, and your refrigerator t. Greek citizens neither benefited from the profit frenzy of international bankers nor encouraged their irresponsible behavior, yet they are being asked – no, forced – to pay the price for the damage incurred in the collapse of the world capitalist system.

Greece – a small corner of the European Union – and its people know little of the exotic instruments concocted in the world’s financial centers to overproduce massive amounts of phantom capital fueling the growth of this rapacious system. They are only indirectly acquainted with the arrogant, irresponsible actions of giant investment banks like Bear Stearns, Lehmann Brothers or Goldman Sachs. Very few Greeks see their future tied to the success of the predatory financial behemoths that roam the global economy. And yet they are being forced, at gun point, to pay for their losses.

When the media fog lifts, this is clearly the plight of Greece’s eleven million citizens.

If home invasion, armed robbery, and extortion are crimes, then surely Greece is a crime victim. And the European Union, the European Central Bank and the International Monetary Fund are the criminals. They are aided and abetted by the bond bandits who prey on debt, pouncing on a country struggling to revive its sinking economy. And their puppets – pathetically willing accessories to the crime – are the PASOK leaders and parliamentarians who attempt to legitimize the crime.

With few exceptions, countries have been obliged to take on additional debt to stimulate economic growth in the face of a severe drop in global investment and broad demand. Capitalist economies have no option other than sinking further in decline. In earlier times, deficit, debt-producing spending produced improved growth and accompanying inflation. Growth and inflation, in turn, increased tax revenues and cheapened debt, allowing the public debt to shrink in proportion to the economic product. This has long been a feature of capitalist recoveries from mild to severe recessions. Conventional economists teach this as though it were a universal law.

But we live in exceptional times and conventional economists are seldom right about anything any more.

Today, two factors have changed this dynamic. First, the near-total domination of neo-liberal ideology has shaped opinion to fear public debt of any degree. What was once the dogma of the fringe right has, thanks to over forty years of focused, class-based intellectual encroachment, spawned a uniformity of thought among the media, politicians, and opinion makers bordering on faith and defying history and facts. What began as the so-called “Washington Consensus” in 1989 has become an international consensus, gaining near-theological obeisance. International capitalist institutions like the International Monetary Fund have eagerly embraced its tenets.

Debt hysteria, like patriotic fervor, induces baseless fears that perversely shape policy decisions. Like contrived patriotism, debt fright masks a hidden agenda – in this case, a hatred of all socially useful public spending.

Secondly, for decades, changes in the global economy ushered in a new dynamic that manipulates and exploits debt far beyond anything we have seen before. With many of the capital-rich countries surrendering their manufacturing to low-wage areas, financial activities – the management, manipulation and creative expansion of capital – took on a greater role in these economies. New techniques, instruments and institutions evolved to accumulate surplus value – profits – in the hands of the few engaged in the financial game.

As capital accumulated – US financial profits accounted for over two-fifths of all profits before the collapse – it became increasingly difficult to maintain the rate of return spurred by financial ascendancy. (In Marxist terms, the tendency for the rate of profit to decline reared its ugly head.) Riskier and riskier speculation sought to find a home for the overproduction of capital until the system collapsed, the scenario that we all know so well.

Fueled by an injection of public funds, the financial sector has returned to speculation with a vengeance. In addition, they are now finding new profits in attacking the debt of the most fiscally vulnerable countries and forcing the conversion of private debt into public debt. The financial sector was neither wounded nor chastened by its folly. Instead, it has roared back, attacking sovereign debt in vulnerable countries like Greece, Ireland, Portugal and Spain. Speculative capital has turned virulently predatory.

The combination of these two elements – one subjective, one objective – has placed Greece in a death spiral. With unemployment soaring over 16%, taxes on the poor enacted, homelessness on the rise, salaries and benefits sliced, and social services eviscerated, Greek workers face a future of decline.

II

If there is one insight central to the science of Marxism, it is that appearances seldom reveal the real social realities; indeed, they most often mask them. The interplay of personalities, the clash of proclaimed interests, or the statements of policy makers conveyed by the corporate media are seldom the actual forces at play in social developments. Instead, material forces evolving from the system’s dynamics are usually the decisive factors in driving change.

In the case of Greece and, soon, the other vulnerable European Union countries, finance capital -- particularly its most predatory elements (hedge funds and private equity firms) -- has exploited the crisis to generate profits by betting against Greece’s ability to manage its debt. These bets have predictably influenced the market, making it even more difficult for Greece to secure and pay off its debts. As selling and redeeming bonds became more costly, Greece lost the ability to generate a recovery from further deficit spending.

Without a boost from public sector spending to jump-start economic activity, tax revenues shrank further, crippling Greece’s ability to meet debt payments and again find favor with the bond profiteers. The painful, tortured route to economic destruction ensued.

The only sensible exit from the vise gripping Greece was to stand up to finance capital and extract a new deal or exercise its sovereignty by voiding its debt – defaulting. But Greece’s “socialist” party, PASOK, instead turned to the eager criminals of the IMF, the EU and the European Central Bank for “help”. Only the Greek Communist Party and the advanced sector of the working class, PAME, advocated swift exit from the financial vise.

III

Where the media presents Greece’s plight as simply one of irresponsible government bringing pain on itself and the attendant economic hardships as the market’s revenge, the truth is far different. The Greek crisis is what an unrestrained, dominant, and predatory financial sector produces. But we must also recognize that the financial monster devouring Greece is itself the product of a capitalist system dependent upon finance to sustain its continued accumulation of surplus value. Those who think that taming the financial behemoth will restore a kinder, gentler capitalism are ignorant of the system’s logic.

By turning to the triumvirate (the EU, IMF and the ECB), the PASOK government surrendered the country’s sovereignty and its economy to three enemies of the Greek people, three enemies with often contradictory agendas.

The European Central Bank is the strong-arm enforcer for European banks. Its goal is simply to ensure that Euro-banks are not damaged by any Greek events, that the banks’ investments and loans are protected. It adamantly opposes any policy that will ask euro-banks to sacrifice. The ECB opposes default at all costs, threatening to not buy Greek bonds if Greece defaults. It supports EU bailouts because they transfer Greek debt from the private sector to the public sector. J.P. Morgan estimates that public sector sovereign debt liabilities against Greece will surpass their private sector counterparts in 2013 as outstanding bonds are paid off. This trend is expected to continue, going forward. The ECB welcomes this exit by private banking since it will leave the banks immune from any negative consequences. They have no interest in the fate of Greece’s working people.

The International Monetary Fund, on the other hand, serves as an active agent for international capital. Through extortionate loans, it imposes the conditions for capitalist exploitation upon countries desperately in need of financial help. Privatization, diminished social securities, and dis-empowered workers constitute its agenda. Clearing a path for US imperialism drives the policies of the IMF, with the interests of the other imperialist powers playing a secondary role.

The details of the austerity package for Greece – privatization, unemployment (to discipline workers), destruction of social services, etc. – are the work of the IMF. It was with glee that international capital welcomed the demand for a $71 billion privatization of Greek public assets, including Athens Airport and Greek railways. The Wall Street Journal cynically dubbed it a “National Tag Sale.” The IMF, too, has no interest in the fate of Greece’s working people.

The European Union, a political body, reflects the political will of the dominant governments of the EU: Germany and France. Both countries’ governments subscribe wholeheartedly to the neo-liberal dogmas, prescribing austerity for growing public debt. In this respect, they endorse and lead the EU to support the IMF regimen. But they have political reservations about the terms of the extortionate deals crafted to impose austerity. They resist committing their own public funds to buy the Greek government's collaboration in selling out the Greek people. So-called “bailouts” come at the expense of public funds provided by the EU constituent governments. They prefer to find another weapon to hold to the head of the Greek people. But the EU, as well, has no interest in the fate of Greece’s working people.

Like all criminal syndicates, the unity of the triumvirate is threatened by selfish interests. The German government recently proposed a restructuring of privately held Greek debt (largely euro-banks), but the ECB slammed the door on this since it would call on European banks to sacrifice. France is now proposing similar actions with the ECB similarly in opposition. Neither government wants to commit its own public funds to the sustenance of Greek government debt. While they agree on the crime, they cannot agree on the weapon.

IV

It would be a profound mistake to see the mugging of Greece as an isolated, inconsequential event. Rather, it is a template for the way ahead for international capital.

In the days before the betrayal of the Greek people by the 155 PASOK representatives, stock markets world-wide were falling, in fear that the massive strike and demonstrations of the Greek people might frighten these spineless politicians into rejecting the extortionate deal demanded by the IMF, the ECB and the EU. The mere possibility that resistance would derail the program shook the foundations of capital. In the days following, the markets leaped forward more than they had in months.

Greece is neither isolated nor inconsequential.

The pattern established in Greece is being repeated in other countries, like Portugal, Ireland and Spain. Italy and the UK are next in line, with others to follow. The game plan will undoubtedly be tailored to different circumstances and different balances of forces, but capital will relentlessly strive to squeeze profit from the living standards of working people and expropriate the public wealth held socially. The weapon in this assault is debt manipulation.

Some on the left sounded the death knell of neo-liberal capitalism in the depths of the crisis. Clearly, that was a profound mistake. Neo-liberalism, financial predation and global capital have mounted a vigorous counter-attack, leaving those illusions dashed.

We can, however, draw important lessons from the Greek struggle. While the Greek people, led in this conflict by Communists and class-conscious workers, failed to stop the mugging, they are not defeated. They will have much to say about the next chapter in this unfolding story.

For us in the US, the assault on the Greek people should remind us of what we face. While we should be inspired by the resistance in Wisconsin, Ohio and other states, we must recognize what a daunting, difficult struggle lays ahead. And we should not be seduced by phony political allies like the Democratic Party, the US counterpart to PASOK, in this fight.

With all respect to our many causes, this is the central battle of our times.

Zoltan Zigedy
zoltanzigedy@gmail.com