Stern Advice to the Left from the House of Lords

A sense of humor is essential to balance the humbuggery of much of the political commentary that surfaces today. “Astonishment” is the best word for a recent “provocative discussion” (Say No to Protectionism) posted on the Political Affairs website and authored by Peter Mandelson--“Lord Mandelson” to his UK peers. In the past, Political Affairs was the source of timely, informative articles that expressed the views of advocates of the Marxist-Leninist perspective, authors like Jacques Duclos, Palmiro Togliatti, William Z. Foster, Henry Winston, Herbert Aptheker, Paul Robeson, and many other committed Communists.

But today Political Affairs embraces a far wider spectrum of opinion including now, for undoubtedly the first time, a “lord” from the prestigious UK House of Lords, Lord Peter Mandelson. Unlike Foster, Winston, and Robeson, Mandelson has established his credentials by championing the “third way”, a position to the right of traditional social democratic doctrine.

Mandelson, a pal of George Bush’s subservient buddy, Tony Blair, argued that the UK Labour Party should transform into a market-friendly, classless party located somewhere in the narrow political space occupied by the US two-party farce.

While advocating the vacuous, yet successful ideological fakery of Tony Blair,
he managed to cash in on the new opportunities afforded by the “third way”. Undeterred by the media scandals—the multiple resignations from government positions forced by shaky financial dealings—Mandelson persevered with his personal program. Like his US counterparts in governing, he managed to accumulate a fortune and achieve a tainted celebrity.

Mandelson’s subservience to capital has earned him—besides a “lordship”—a consultancy firm, an advisory position with the banking firm, Lazard Freres, and participation in the elite Bilderberg conference: all dubiously supportive of his leftist credentials.

Though Mandelson’s career has been tarnished by opportunistic changes of heart, charges of corruption, and political expediency, those facts do not necessarily diminish his argument. In other words, it doesn’t follow that Mandelson is wrong simply because he is a scoundrel.

So what does Mandelson have to say?

Put bluntly, Mandelson offers a simple, lordly scold to the Left: Say “no” to protectionism; say “yes” to globalization. In his words, “The most important focus for the left should be on equipping people to live in an uncertain economic world, not shutting that world out.”

But let us be clear: in the tortured language of modern day media punditry, Mandelson isn’t scolding the traditional Left of Marx, Lenin, or even the Left of Ralph Nader or Dennis Kucinich, as the editor of Political Affairs might want us believe. Instead, Mandelson means the tepid, slippery left of Barack Obama and Francois Hollande, the Left defined by its ever-so-slight distance from the Center and its merely rhetorical commitment to common folks. One might better call it the “corporate Left” for its refusal to decouple any popular reform from the promotion of corporate interests. That is, Obama and Hollande are really “third way” Left poseurs like Mandelson’s pal, Tony Blair. Hollande, the Presidential candidate of France’s misnamed Socialist Party, says as much in a recent interview in the UK Guardian (http://www.guardian.co.uk/world/2012/feb/17/francois-hollande-uk-city-london) where he heaps lavish praise upon Blair as well as associating himself with Obama’s policies.

While monopoly capital has little to fear from these third-wayers, Mandelson knows that in the heat of both Obama and Hollande’s electoral campaigns, they may well reach deep into their bags of campaign tricks and pull out a calculated populist promise to be tossed to the masses. His concern is that some may take them at their word and actually expect a mild rebuke to the corporate agenda.

For Mandelson, the great fear is that his ideological compatriots might back away from a fully enthusiastic commitment to “globalization”. Now “globalization” is one of those unfortunate and lazy terms that rise to the surface of popular discourse while masking more than it reveals. For decades, talk of free trade, the sins of protectionism, and the enhancement of international competitiveness have been a cover for the exploitation of labor markets. In the end, all the speeches, legislation, and agreements have been constructed to allow capital to flow freely and easily to centers of cheap labor—no more, no less.

It should be obvious that regions, countries, sections, and cities differ vastly in terms of resources, infrastructure, technologies, and capital. But the one element that they all share, the one element that can flexibly change to meet competition, is the cost of labor-power; workers can always be convinced or forced to work for less. A country or region cannot compete globally in the energy market if it has no energy resources, but any country can choose to compete by offering cheaper labor for production or services. Thus, behind all the promised benefits of globalization lies a profit-driven motive: cheap labor. Of course capitalists are not concerned that this process inevitably results in a wage-death spiral.

The big lie proffered by Mandelson and his ilk is that global, unfettered competition can produce a world of winners. Yes, even the most apathetic sports fan knows that competition is about winners and losers; someone loses when someone else wins. Perhaps when David Ricardo wrote nearly two centuries ago about countries enjoying relative advantages, the idea of winning some competitions and losing others made some sense. But in today’s world of huge trans-national monopoly enterprises rushing from one low wage area, then to another, the ancient argument dissolves. Only a fool does not see this. And Mandelson is no fool.

He writes that: “The banking crisis discredited certain kinds of financial capitalism and financial regulation and not capitalism in general…we still have to have faith in the basic model of an open and competitive economy.”

And faith is all that Mandelson offers. Only a “lord” in the church of market fundamentalism could disconnect the financially-triggered crisis from the trajectory of global capitalism. Vast wealth and income inequalities, spawned in large part by the “globalization” so dear to Mandelson’s heart, generated a vast ocean of capital seeking investment opportunities. Capitalists found a haven for this enormous glut of surplus value in the banks and other financial institutions, a haven promising strong returns through speculative ventures. Of course this was not a random series of events, but another logical step in the evolution of monopoly capitalism driven by the insatiable thirst for profit.

If over four years of global economic turmoil, four years of mass unemployment and declining living standards, does not “discredit… capitalism in general”, one wonders what would. With even conservative institutions like the IMF and the OECD projecting 5 to 10 more years of pain and suffering in Europe, one wonders what stands behind Mandelson’s vote of confidence.

Perhaps Lord Mandelson’s advice to the left will advance his career and earn him the prestigious knighthood. Certainly he has served the ruling class well.

Zoltan Zigedy
zoltanzigedy@gmail.com

Theater of the Absurd

Talented artists are gifted with the ability to take some commonplace belief or unquestioned assumption and reveal underlying nonsense. Still others craft inventive works that expose fatuity lurking behind pomposity and platitudes.

But consider some of the events transpiring over the last few weeks. Reality is indeed stranger than fiction. These events rival any work of literature in illustrating hypocrisy and proud ignorance. And the real-life actors in this public theater know no shame or regret.

The Republican primary medicine show is low entertainment. Its candidates and their stage hands have amused liberal, but spineless commentators and shocked international observers with the primary debate inanities.

Within the arena of right-wing ultimate fighting, Gingrich has assailed Romney’s money making career as “vulture capitalism.” Romney sups at the table of Bain Capital, a private equity fund that preys on vulnerable businesses weighed by debt and burdened by marginally criminal mismanagement. Bain buys these businesses at a heavily discounted price by leveraging their substantial assets and then guts the victims chiefly of their employees, imposing a new draconian labor discipline, and reselling the polished product at an enormous profit. Indeed, "vulture capitalism" is the appropriate term for this parasitic process widely practiced among ambitious capitalists in the US.

But wait! This exposé came from Newt Gingrich? Not from Paul Krugman? Joseph Stiglitz? Or any of the other economists or pundits arrayed around the liberal wing of the Democratic Party? None of the Party’s shrewd operatives rallied around President Obama? Or the President himself?

No, this exposé of vulture capitalism came from one of the icons of the ultra-right. Further, the ultra-right fed on the revelation that Romney only paid taxes at a rate of 15% or less compared to the much higher rates paid by most citizens.

Surely this is class warfare initiated from the right. And just as surely no prominent Democrat – representing the presumed Party of working people – joined the chorus. As David Bromwich noted, in The New York Review of Books (2-9-2012), “Gingrich… fleetingly placed himself to the left of President Obama, who has been careful to portray the financial collapse as a disaster without a villain.” Isn’t this an indictment of the hypocrisy and deception of the two-party circus?

Yes. Exposing a sector of capitalism as illegitimate is beyond the pale, beyond the two-party discourse, even though no one but Romney has rushed to defend it. Everyone knows that private equity firms – that have worked their black magic on over 3,200 firms – engage in wholesale destructive behavior (apologists call it “constructive destruction”) yet no one will say it – except Gingrich.

Similarly, Ron Paul, the only candidate in years with a set of internally consistent principles, has dared to challenge the two-party consensus on aggressive imperialism, arguing that the US should abandon its occupations and wars and let the rest of the world (including Iran) go its own way. Paul, the only Republican right-wing ideologue who believes what he says, stands for an anachronistic Republicanism favored by the Party before the New Deal. The target of liberal derision because of his appearance and mannerisms and discounted by conservatives because of his slender fund-raising, Paul continues to have his campaign energized by poll results and young volunteers impressed with his integrity. And he dares to speak heresy.

Of course those who respect the man’s integrity should consider the consequences of his free market and barely-breathing government principles before jumping on his bandwagon. Nineteenth-century nostrums are not the solution to twenty-first-century problems, regardless of Paul’s honesty.

It is incredible, however, that no one among the left of the Democratic Party’s luminaries has either defended Paul’s anti-imperialism or, at least, used it as a spring board for a tepid critique of US policies regarding Israel, Iran, or the rest of the Middle East. Again, writing in the New York Review of Books, David Bromwich ventures: “In addressing such issues, he has no rival among Republicans, and, after the death of Robert Byrd and the defeat of Russ Feingold, none among Democrats of national stature. On issues of national security and war, he is the American politician who speaks to Americans as if they were grownups interested in their own condition…”

But who speaks for “grownups” on the other urgent issues? Certainly not the Democrats. This is surely a measure of the untenable, unpopular and unsustainable US two-party system and its money-driven pre-election entertainment.

●●●

Hungary has its own Ron Paul in the body of conservative Prime Minister Viktor Orban. A political maverick born of the anti-Communist scramble for power after Hungary’s socialist government crumbled, Orban won election in 2010 representing the right-wing, nationalist Fidesz Party. Lacking Paul’s principles or any principles at all, Orban delights in playing to nationalist sentiments and defying the EU and the IMF. I wrote earlier of the outrage created by Orban when he dared to tax banks to reduce Hungary’s deficit. As I sarcastically noted, austerity programs to lower the deficit on the backs of working people are prescribed by these august bodies, but raising revenue by taxing banks is strictly forbidden, even though the deficit-lowering results would be the same! So much for the independence and objectivity of the EU and the IMF.

Orban struck again late last year securing a parliamentary law that slightly limits the powers of Hungary’s Central Bank. Like most Central Banks, Hungary’s enjoys a special status buffering it from any popular or governmental influence. In essence, capitalist Central banks are enormously powerful economic actors that are isolated from any kind of democratic control, pressure, or oversight. And the EU, the IMF, and capitalism, in general, want to keep it that way. It is capitalism’s ultimate economic tool immunized from the will of the people.

Orban’s parliament would place a government minister on the Bank’s monetary council, seemingly a small step towards democratizing the Bank, as well as requiring the Bank to share its meeting agenda with the parliament, another small step towards transparency. The move was met by righteous indignation from the European Commission (threatening to sue), the IMF (threatening to withhold funds) and the entire global financial hierarchy. They charged indignantly that the new law compromised the Central Bank’s “independence”.

Of course the question is independence from whom. Currently the Bank is independent from any sort of Hungarian popular governance, but it is hardly independent from outside influence, particularly the IMF, the EU, and financial markets. This is a strange sort of independence advocated and protected by foreign financial forces. To quote the famed philosopher, Humpty Dumpty: “When I use a word… it means just what I choose it to mean—neither more nor less.” Financial elites occupy the same fantasy world created by Lewis Carroll.

●●●

US workers can breathe easier. The wholesale destruction of their living standards, benefits, and wages, coupled with a dramatic increase in the rate of exploitation over the last decade is paying dividends. But not dividends for them.

Recently Caterpillar Inc locked out its Canadian workers in London, Ontario, contending that the workers need to cut their pay dramatically. They point to the fact that Caterpillar pays its workers 50% less in Lagrange, Illinois. Quoting The Wall Street Journal (US: A Cheaper Labor Pool 1-6-2012): “…[B]ut instead of pointing to the usual models of cheap and pliant labor, such as China and Mexico, it is using a more surprising example: the US.”

So the tables are turning and today we find that US workers are setting miserable standards of pay and benefits against their Canadian and European counterparts. They, in turn, could repeat the same sad misguided tactic popular in the US by blaming poorly paid “foreigners” – in this case US workers or their government’s policies -- for the pressure on their living standards. US hourly compensation costs in manufacturing rose only 39% over the last decade, while average comparable labor costs grew by 74% in OECD countries and 91% in Canada.

Put differently, labor costs per unit of output in the US are 13% less than they were in manufacturing a decade earlier. In Germany they rose 2.3%, the Republic of Korea 15%, and Canada 18%. These figures are most telling because they reflect—assuming roughly similar levels of productive force development – differences in the relative rates of exploitation. Clearly US workers have surrendered far more than their international brothers and sisters while being squeezed much harder in the work place.

Instead of the divisive and diversionary tactic of blaming foreign governments or foreign workers for job losses or pay cuts – typically China – it’s time to target the trans-national corporations that exploit labor cost differentials to increase profits. Like the machine-breakers of yore, workers and their trade union leaders must correctly identify the enemy and embrace class struggle unionism if they have any hope of stopping this destructive game of competition to see who can offer the best wage deal to rapacious corporations.

●●●

Speaking of China, the Western media reported on January 17 an ominous drop in fourth quarter GDP in the Peoples Republic of China; quoting Reuters: “Growth of 8.9% over a year earlier was slightly [my emphasis] stronger than the 8.7% forecast by economists in a Reuters poll, but the data on Tuesday raised concerns about the immediate outlook and how much support China can offer a struggling global economy… Growth for all of 2012 slipped to 9.2%, a pace last seen in 2009… from 10.4% in 2010."

While it is true that the PRC GDP growth dropped slightly (5%) from the 3rd to the 4th quarter, it meant that that the PRC GDP would double, at that rate, in a little over eight years rather than a bit more than seven and a half – not a bad performance either way for the world’s second largest economy. Put into perspective, the OECD estimates that from 2011 through 2013 the collective OECD states (including PRC) will only average less than 2% growth. At that rate, it would take the entire OECD over 37 years to double its economic output!

But the Reuters report, like so many other media accounts of PRC 4th quarter GDP performance, masks two implicit points:

1. The Chinese economy is vigorous even in the midst of world wide economic turmoil (2009, for example, and now).

2. Most importantly, economic wizards concede that the health of the global capitalist economy depends critically on the continued vigor of that economy.

So it’s not the future of the Chinese people that so worries the pundits, but the impact of the Chinese economic engine on capitalism’s future. At the same time, they continue to demonize the policies that fuel that powerful engine. Strange, indeed.

Zoltan Zigedy
zoltanzigedy@gmail.com

REVIEW: Post-Modern Imperialism—Geopolitics and the Great Games, by Eric Walberg

I confess that I cringe when I see the word “post-modern.” This word has obscured more discussions, confused more gullible readers, and conned more writers than any word since “existential” and its “-ism.” For the most part, it has served as a kind of fashionable linguistic operator that signals something radical and profound will follow. Almost always, what follows disappoints.

Eric Walberg’s book, Post-Modern Imperialism (Clarity Press, 2011), doesn’t change my general opinion of the word, though what follows the title certainly doesn’t disappoint.

Walberg has offered a welcome taxonomy of imperialism from its nineteenth century genesis until today; he has given a plausible explanation of imperialism’s contours since the exit of the Soviet Union and Eastern European socialism from the world stage; and he has convincingly described Israel’s unique role in the continuing reshaping of imperialism’s grasp for world domination.

One of the disappointments of recent Marxist thought is a neglect of the theory of imperialism. It is not that imperialism is questioned by Marxists; it would be hard to find an advocate who denied its existence or historical significance. Indeed, few Marxists dispute (since the Lenin-Kautsky debate) the fundamental elements of imperialism as outlined by Lenin and presaged by Hobson; but its historical trajectory -- deflected by wars (hot and cold), shifting balances of forces and alliances, and economic upheaval – has received only cursory attention. All acknowledge that the dominant imperial center of power has shifted from Britain before World War I to the USA after the Second World War. Outside of the bizarre pseudo-Marxism popularized in the post-Soviet period (Hardt and Negri’s Empire and theories of the decline of the nation-state and ascendancy of the trans-national corporation, for example), most left-of-center political thinkers would concede that imperialism – especially, as expressed by US imperialism -- is alive and well today. Yet, Marxist studies have yet to provide a full, overarching account of the material forces that have shaped imperialism’s evolution over the last century and a half. We see this failing in the world-wide confusion and tepid resistance to NATO’s Balkan aggressions, the various contrived color “revolutions,” and the wars and interventions in the Middle East and Central Asia.

It is to Walberg’s credit that he attempts to provide this account. While expressing respectful homage to the Leninist tradition, Walberg writes in an eclectic style that expropriates the terms of the agents of imperialism, both old and new. Following Lord Curzon in 1898 and Z. Brzezinski today, imperialism becomes the Great Game, an exercise in aggressive national self-interest that engages economic coercion, political manipulation, subversion, alliances, and, of course, war. And behind the curtain of “national self-interest” proclaimed by the ideologues of imperialism lies the real interests of monopoly and finance capital.

In Walberg’s account of the classic era of imperialism – dubbed Great Game I (GGI) – European powers and the US competed for the economic and political domination of the world, its resources, and its people. In this competition, the British Empire stood triumphant. This small island, thanks to its industrial might, its dominant navy, and its highly developed colonial apparatus, imposed its will globally. Other powers sought to undermine this dominance, resulting in the tensions and conflicts that climaxed in the Great War, World War I.

The Great War, in turn, spawned an anti-imperialist movement centered in revolutionary Russia, nascent Communist Parties, and nationalist movements aroused and supported by the liberated Euro-Asian power, the USSR. For Walberg, this event – the Bolshevik revolution—became the central event determining the course of imperialism. The crisis of imperialism identified with the unprecedented slaughter of 1914-1918 unleashed a new era of counter-revolution – or counter-anti-imperialism – with the locus of anti-imperialism to be found in the USSR.

Walberg calls this new era “GGII: Empire Against Communism”.

It is this assessment, this correct analysis, which separates him from the conventional view popularized on the left, center and right. Walberg is emphatically correct on two crucial counts.

First, he identifies the imperialist project as targeting the role of the Soviet Union in inspiring, supporting and sustaining the anti-imperialist movement after World War I. Those honest enough to recognize the decline of the anti-imperialist movement since the demise of the Soviet Union surely must recognize this point. From China’s liberation to the independence of the former African Portuguese colonies, from Egypt’s national movement to the Vietnamese victory over US aggression, from Cuba’s revolution to the destruction of apartheid in South Africa, the Soviet Union had devoted generous material and moral support to anti-imperialism. Because of this support, anti-Communism became the ideological, political and military pillar of imperialism.

Second, he discounts the view advanced by imperialists and the ultra-left that the Soviet Union was itself an imperialist power. While he voices criticisms of the USSR, he stops far short of characterizing its policies as imperialistic, a conclusion that he argues persuasively.

Between the two World Wars, the imperialist countries were saddled with a profound economic crisis that challenged the very viability of capitalism and strengthened the anti-capitalist and anti-imperialist movements. In many countries, this challenge generated a ferocious and violent movement, fascism, expressing a new, more virulent, and aggressive strain of anti-Communism. Both in Europe and Asia, the primary goal of these movements, when securing power, was to remove the obstacle of Communism and anti-imperial nationalism in furthering their imperialist goals. In all cases, the Communists and anti-imperial nationalists were the backbone of domestic resistance to these aggressions.

After the Second World War and the defeat of fascism, the US engaged its economic and military might to lead the imperialist powers. At the same time, it organized and launched a new, more sophisticated attack on the strengthened, world-wide Communist and anti-imperialist movement. The lengthy Cold War, while proclaimed as a struggle between democracy and tyranny, was simply a continuance of imperialism in a new context. At stake was the economic exploitation of the resources and people of the world outside of the imperial club.

Walberg does a thorough job of demonstrating the role of the US dollar nexus in cementing the anti-Communist alliance, as well as describing the international institutions enabling and enforcing this dollar domination of world economic activity. He equally exposes the political and military institutions and alliances, such as NATO, created to both maintain US imperial goals and confront Communism and anti-imperialism.

Walberg’s narrative masterfully exposes the imaginative, but unscrupulous tactics devised to further the imperial goals. From engineered coups to CIA-backed intellectuals, from surrogate insurgents to phony human rights campaigns, Walberg dissects the tactics and reveals the hypocrisy behind imperialist intrigues. Most impressively, Walberg knits together the long standing, but seldom acknowledged, imperialist tactic of exploiting purist Islamic movements -- with its latent hostility to secular leftism and nationalism -- to oppose, divert, and even exterminate socialist and anti-imperialist movements in the Middle East and Asia. Of course this is not a new tactic; imperialism similarly used Christianity, especially Catholicism, to disable trade union movements and left parties in Europe and the US. But, Walberg brings much detail and historical continuity to the story of religious manipulation in the Islamic world. And he reveals Israel as a key player in this maneuver.

With the departure of the Soviet Union, a new phase of imperialism emerged, dubbed “Great Game III” by Walberg. The consequent triumphalism of the US and other imperialist powers was disguised as the promise of a global paradise based on economic fundamentalism, free trade, “democratic” governance and human rights. But in truth, this disguise masked a commitment to economic aggression, imperial intervention, and unfettered domination. A massive array of new or transformed institutions – the UN, NAFTA, countless NGOs, etc—eagerly aided the imperial program. And after September 11, 2001, imperialism found its alien scapegoat in Islam, the excuse to vigorously and openly mount military adventures, especially in Asia, the Middle East and Northern Africa.

To Walberg’s praise, his deep understanding of the shifting currents of imperial aggression along with its historical continuities allows him to identify the anti-imperialist actors in each phase of imperialism’s development. He clearly understands that resistance to imperialism, regardless of its religious, ideological or political underpinnings, is objectively anti-imperialist. This is in sharp contrast to many on the left in Europe and the US who sided with imperialism or demonized the Islamic fighters who met the US on the battlefield. Blinded by their cultural distaste for what they saw as obscurantism, social backwardness, and intolerance, they betray anti-imperialist unity and objectively take the side of imperialism. Like previous supporters, seduced by Britain’s “civilizing mission,” they accede to apologists who portray the resistance as “Islamo-fascists.” This shallow understanding of imperialism accounts for the failure of many to recognize and reject the recent Libyan regime change and the current foreign interventions in Syria and Iran as imperialist actions. Leftist “purists” prefer standing on the sidelines to siding with the “tainted” Islamists who now militantly oppose imperial power.

Walberg places much emphasis on Israel’s role in the imperial project. His position as a Middle East-based writer for Cairo’s Al Ahram newspaper, coupled with his obvious prodigious research, gives him a privileged vantage point for commenting on this area. Readers will be impressed with his account of the history and ideology of Zionism. He brings great detail to the overt and covert activities of Israel both on behalf of US interests (as a policemen in the region) and in its own behalf (as a neo-colonial aggressor). His exposure of the role of US Zionists and their political partners in shaping US policies towards Israel (and the Middle East) is boldly and starkly presented, with little of the usual forbearance or timidity.

On the other hand, I believe his privileged position also brings a measure of myopia to his analysis. Throughout the book, he asserts a persistent importance of the Middle East and Central Asia that might unwittingly minimize the importance of other regions in imperialism’s grand designs. Certainly his demonstrated sensitivity to the shifting forces, policies and foci of imperialism would suggest that there is not one materially critical area of imperialist design. For example, through the first thirty years of the postwar period, imperialism was mostly directed to the Far East, with massive, brutal wars launched in Korea and Vietnam. And today, the staunch anti-imperialist advances in Central and South America cause deep concern and intense activity in the imperialist centers, especially the US. This area gets little coverage in Walberg’s fine book. Imperialism is indeed a scheme for complete global domination, wherever there are resources and people to exploit.

Also, I think that Walberg overstates the role of Israel in the imperialist order. Despite his excellent exposition of the “tail wagging the dog” behavior of Israel, it remains a junior partner in the imperialist picture. Israel still needs and expects the US to pull its chestnuts out of the fire.

In the same vein, it is an exaggeration to portray Islam (or any other religion) as inherently anti-imperialist: in his words, “The unyielding anti-imperialist nature of Islam, its rejection of the fundamental principles of capitalism concerning money, its refusal to be sidelined from economic and hence political life…” Surely, Walberg’s own account challenges this claim; Islamic movements in the Middle East have and continue to shift sides frequently in both the struggles between imperial powers, in support of imperialist powers, and its current leading role in resisting imperialism in the Middle East. I would suggest, rather, that religion adjusts (as with Catholic Liberation Theology) to the material, historical plight of its believers. In the case of the Middle East, half a century of Palestinian oppression is the wellspring of contemporary Islamic anti-imperialism.

“GGIII: Many Players, Many Games”—Walberg’s final chapter – is an immensely useful overview of how things stand at the moment in the Middle East-Central Asia “Great Game.” One will not find a better concise account of the forces, alliances and institutions at play in this contest, a contest best understood as between imperialism and its foes.

One final quibble: throughout Post-Modern Imperialism, Walberg insists on the division between pre-modern, modern, and post-modern states (hence, the title), a distinction he adopts from the influential work of Robert Cooper. Distinctions are neither true nor false; rather they are helpful, misleading or irrelevant. Despite its currency, Cooper’s distinction blurs instead of clarifying Walberg’s excellent account of imperialism.

That said, I can enthusiastically recommend Post-Modern Imperialism – the book is a serious contribution to our critical understanding of imperialism, its history, and, particularly, its expression in our era. By reading this study, both Marxist and non-Marxist activists will be better armed to confront the beast.

Zoltan Zigedy
zoltanzigedy@gmail.com

2011-2012: Summing Up/Taking Stock

People across the political spectrum share one thing: they sense that we are living at a critical moment in the history of capitalism. Where the last decade of the twentieth century brought a near-universal and smug celebration of capitalism’s success, the second decade of the twenty-first century and beyond finds uncertainty, doubts, and fears in every conversation about global capitalism.

As recently as 1999, capitalism’s managers – look-alike, sound-alike politicians, media puppets, and swaggering corporate managers – enjoyed the confidence of all but obstinate skeptics and those many living on the margins.

True, the so-called “anti-globalization movement” gained traction at the end of the twentieth century, but as a scattered, unfocussed movement against capital’s excesses and not its mechanism.

Today, everything has changed. Confidence in capitalism and its institutions is at a low never seen in most our lifetimes. While I plead guilty as much as any Marxist in finding a “crisis” at every juncture, one can construct a plausible argument for locating profound contradictions in every bourgeois institution – the economy, the political system, ideology, and culture.

Few would argue that the global capitalist economy is healthy. Instead, leaders and thinkers of every stripe are occupied with offering road maps for delivery from the four years of intractable chaos. Little progress has been made.

The four years of economic turmoil has taken its toll on political legitimacy. The US political system and its two-party manifestation have likely never known such deep and popular disapproval. Alternative movements of left and right have boiled over to express this frustration.

The Obama administration, after three years, appears stuck in a historic rut slightly more activist than the Hoover administration in 1932, but far from the audacity and experimentation of the Roosevelt administration of 1933.

Looking back, it is easy to see the political revival of the right in 2010 as the obstacle and subsequent log jam to progress, but that abuses history. Armed with a Congressional majority, the Democrats could have moved decisively in 2008, but not with the cabal of neo-liberal advisors chosen by Obama to craft policy. One can better see the rise of the right as a measure of the disappointment with the Administration’s inadequate management of the economy.

In Europe, elected governments have ceded authority to technocrats approved by international financial interests. Frustration with social democratic impotence has lead to a series of “protest” victories by conservatives.

In the near future, there is a real chance that Germany will achieve, by peaceful means, the dominance of Europe that it sought in World War II.

Ideologically, most of the world’s leaders remain caught in the web of neo-liberalism – the worship of markets, balanced budgets, government restraint, and the sanctity of capital. Despite much sensationalist commentary early in the economic crisis about the death of neo-liberalism or the passing of the Thatcher-Reagan moment, political leaders, most economists, and too many labor leaders have failed to escape neo-liberal thinking.

Fundamentalist market dogma, enforced by an extortionate financial complex, breeds the crisis-deepening austerity favored by leaders in the US and Europe. And there is no escape in sight.

Culture, dominated by monopoly capital entertainment behemoths, has sunk to new levels of vulgarity and triviality. At the same time, it counts as the distraction that holds together the fragile politico-economic system. The coarseness of “reality” television, the violence and moral depravity of cinema, banal, soulless corporate-crafted music, and the faux-loyalties of spectator team sports pass as entertainment. Equally distracting is the ubiquitous cult of the celebrity.

The once-promising diversity of the internet is, thanks to commercial penetration, transforming into a medium of personal, individualistic self-indulgence.

The same monopolies that own the entertainment industry own the news media and employ the mass opinion makers. The result is timid, conformist coverage, slanted to respect officialdom and the corporate paymasters. Likewise, what passes for analysis is a useless brew of shallowness and deference to the rich and powerful.

Entering the New Year, dangers abound. Italy alone must refinance nearly a third of its national debt in 2012-2013—591.9 billion euros. Spain must refinance nearly half and Greece nearly two-thirds. None can sustain refinancing at current yields asked by financial markets without harsh, dramatic counter-cuts in spending. And these cuts necessarily will shrink economic growth, resulting in even greater debt as a percentage of GDP. Growth rates are already shrinking in the European Union: On December 16, Ireland announced a 1.9% drop in GDP for the 3rd quarter, well below expectations. Overall EU growth has slipped to .8% in the 3rd quarter from 3.1% in the 1st quarter. The politics of austerity will only exacerbate this trend in 2012.

In the US, the Federal Reserve reports that households’ net worth fell by $2.4 trillion from the second to third quarter of 2011. For the year, growth in personal disposable income has been flat or trending downward, while the personal savings rate has dropped dramatically and consumer credit debt is again on the upswing— mimicking the pre-crisis trend. Debt-driven consumer spending fuels what little economic growth is shown by the anemic US economy. These same consumers must contend with escalating food prices: year-over-year increases in food costs hit 4.6% in November.

September and October factory orders dropped and the index of service sector activity declined in November.

Unemployment remains dangerously and intransigently high despite minor adjustments in the official rate that reflect, at best, deep structural changes in the employment and compensation options available to those without work or underemployed. Even the Wall Street gasbags who fill the airwaves with Pollyanna optimism know that US standards of living have taken a radical and gloomy turn for the worse.

The electoral landscape in the US shows little to celebrate. While many on the left are again raising fears of a Republican Party in ascendancy, the truth is that the Republicans are engaged in an intense, bitter, and bloody struggle between the corporate wing and the no-nothing fanatics who occupy the Party’s extreme right. With Obama-mania now reduced to a tepid enthusiasm for blocking the crazies, corporate Republicans sense a real opportunity to win executive power as many of their European counterparts have in recent months. At the same time, they recognize that voters overwhelmingly reject the ranting of the extreme right Neanderthals. So far, corporate Republicans have used their financial resources and media control to turn back the tea-party pretenders: Palin, Bachman, Cain, Perry, and now Gingrich. Clearly, they want Mitt Romney, a man who can talk the tea-party talk, but walk the pro-corporate walk.

And just as clearly, the Democratic Party has its counterpart to Romney. Obama can skillfully rouse the liberal base by scoring the rich, the powerful, and the privileged while delivering for the corporations. The words are there, but where is peace, health care, EFCA, strengthened Social Security and Medicare, enlightened foreign policy, tax fairness, a robust social safety net, Constitutional guarantees and other “liberal” goals promised four years ago?

Obama and Romney are the designated hitters for the ruling class. Where do working people find their political voice in this charade?

Once again, the New Year promises intense struggles against imperialism, against exploitation, and for social justice and sovereignty. But again, the focus of these struggles will likely remain on the periphery of the most advanced capitalist countries where workers and the poor are more organizationally and ideologically advanced and fervent in their commitment. Despite healthy developments like the Occupy movement and only-too-rare labor militancy, North America seems destined to confine the fight to the corrupted field of electoral politics, especially in the US, where the Presidential election will soon overshadow all other action and siphon off oppositional energies.

The uprisings in North Africa and the Middle East were unexpected and important developments in 2011. They brought masses into the streets and shook ruling elites throughout the region. Yet observers overestimated their political impact and potential and underestimated the ability of imperialism to exploit these events for its own interests. The billions committed at the G-20 summit, the rapid response of the “soft” imperialist Western NGO’s, and the violent intervention of NATO quickly re-directed or superseded many of these movements with regime changes beneficial to the NATO allies, an attempt to create a reprise of the infamous “color revolutions.”

Libya was the clearest example of this, with Syria now fixed in imperialism’s sights. Egypt, another target of imperialist intervention, continues to resist the “helpful” hand of the US State Department and many US-funded NGO’s that hope to shape the political landscape in a way friendly to US interests.

The same kind of struggle is emerging in Russia after the strong showing of Communists and their allies in the Parliamentary elections. Enjoying little popular support and with much encouragement and resources from the West, Russia’s liberals have sought to bring down the Medvedev/Putin government through mass protests against electoral irregularities. While electoral fraud is a fact and directed mainly at Russia’s Communists, while the Communists support the struggle for transparent elections, the liberals are seizing on the issue as their own best chance to better their marginal role in Russian politics.

At the same time, in the time-honored bourgeois tradition, Vladimir Putin --the ruling class candidate for Russian President in the forthcoming elections – has thrown up a Trojan horse candidate disguised as the opposition: an expatriate, playboy billionaire who owns a US NBA basketball team. The hope, of course, is that the billionaire’s resources will generate a hollow media campaign to confuse and split the opposition.

The deceptions and ruses of imperialism and its liberal chess pieces ultimately serve imperialism. The broad masses astutely see the call for “democracy” or “free elections” as useful only insofar as they actually lead to their empowerment and well-being. For working people, this is, and should be, the litmus test for their support.

In Russia, as in the Egyptian revolution of 2011, the masses will rally against bad leadership under the banner of “democracy,” but they want more than a hollow procedural victory; they want peace, a better life, a promising future. Twenty-first century liberals offer only the meager morsel of elections and not the nourishment of justice and prosperity. That is why Russian and Egyptian liberals fared so poorly in recent elections. That is why Russian Communists made big gains.

My hope for the New Year is that working-class-oriented, working-class-based movements, especially Communist and Workers Parties, will bring this nourishment to all the peoples of the world.

Zoltan Zigedy
zoltanzigedy@gmail.com

The Chinese Puzzle

Whither China? was the name of a widely circulated pamphlet authored by the respected Anglo-Indian Marxist author, R. Palme Dutt. Writing in 1966, with The People’s Republic of China (PRC) in the throes of the “Cultural Revolution”, the pamphlet sought to shed light on the PRC’s tortured road from liberation in 1949 to a vast upheaval disrupting all aspects of Chinese society as well as foreign relations. To most people – across the entire political spectrum—developments within this Asian giant were a challenge to understand. To be sure, there were zealots outside of the PRC who hung on every word uttered by The Great Helmsman, Chairman Mao, and stood by every release explaining Chinese events in the People’s Daily, Red Flag and Peking Review. A few Communist Parties and many middle-class intellectuals embraced the Cultural Revolution as a rite of purification. Yet for most, as with Palme Dutt, the paramount question remained: Where is the PRC going?

Today, forty-five years later, the question remains open.

The cultish followers of Mao have mostly gone on to their life’s work, though some still uncritically defend every aspect of Chinese Communist Party policies during Mao’s chairmanship.

But the PRC that we know today is a vastly different country from the country worrying R. Palme Dutt in 1966; yet it is one that is just as difficult to comprehend. In place of the economic stagnation of the Cultural Revolution period, the contemporary Chinese economy enjoys one of the highest consistent growth rates in the world and counts as an industrial giant well on its way to challenging the USA in annual national product. The economic autarky of the Mao period has been replaced with a massive effort to trade globally. And state enterprises and common land ownership are now eroded by private investment and private ownership. The PRC today has an abundance of millionaires and not too few billionaires, a fact that would violently offend the militants of the Cultural Revolution.

At the same time, the ruling party in the PRC is the Communist Party. Its theorists and ideologues insist that they are proceeding down a distinctive, deliberate road to socialism. Ironically the PRC is now the darling of many in the right wing of the anti-capitalist movement, embraced by those who defend the market mechanism and a gradualist, evolutionary approach to socialism.

Among those advocating socialism, the PRC constitutes a kind of laboratory for socialist policy, much the way the Soviet Union was regarded after 1917. Partisans of socialism sift through the massive literature, reports, and commentaries on the PRC to find evidence to support ideological positions. For the most part, conclusions are, at best, tentative and speculative. Comprehensive conclusions remain illusive to even the most elevated intellectual egos.

Yet the PRC is entirely too formidable of a factor in global political and economic affairs to ignore. Therefore, I offer some modest observations.

“China-bashing”

Wherever the PRC road leads, it remains a lightening rod to bourgeois politicians and, unfortunately, most labor leaders. To hide their own failings, they easily and often point to some Chinese policy that stands in the way of satisfying the interests of working people. In its crudest form and in its essence, it is vulgar anti-Communism. Exploiting the deeply ingrained collective hysteria of the Cold-War, crass leaders and class-compromised union bureaucrats invoke the words “Chinese Communists” and mass distraction ensues. China-bashing has replaced Soviet-bashing (and the once popular Japan-bashing when Japanese corporate power was on the upswing) as an easy and frequent diversion from the rapacious behavior of multi-national corporations.

Rather than blame US multi-nationals for the destruction of decent paying jobs in the US, leaders scapegoat the PRC. From 1999 until 2009, US multinationals added 2.9 million workers abroad while cutting 864,400 in the US, according to the Commerce Department. In 2009, these monopoly capitalist enterprises employed 23.1 million workers in the US against 10.8 million in other countries. Most overseas employees are in Europe with the Chinese holding only 943,900 jobs from US multi-nationals. Canada, Mexico, and the UK, on the other hand, account for over 3 million of multinational overseas employment.

These same multinational corporations have reduced capital investment spending in the US at a decade long annual rate of .2% while boosting capital investment overseas by an annual average of 4%.

These job shifts are corporate decisions based upon profit expectations and, according to the Commerce Department, “primarily to sell to local customers… rather to sell in the US market.” Thus, politicians and union leaders are hiding behind simplistic and self-serving demagogy in blaming China for the demise of US jobs. And their aversion to class struggle against US corporate giants masks the role of those corporations in taking jobs to where they can recover profits most easily; bogus patriotism obscures corporate fealty to the bottom line.

When pressed to put some meat on the bare bones of China-bashing, bourgeois economists cite the currency policies of the PRC. They argue that the relationship between the yuan and other currencies is consciously maintained at a lower-than-market level to increase the competitiveness of the Chinese export industries. But that argument has evaporated over the last year. Third quarter reports of PRC current-account surplus – a widely acknowledged measure of trade imbalance – show a dramatic decline from a year earlier; against the third quarter of 2010, the PRC current-account balance fell by 43.5%. Through the first three quarters of this year, PRC current-accounts surplus as a percentage of GDP fell from 5.1% last year to 3% currently. Ironically, at the November, 2010 G20 meeting, the US pressed hard to establish 4% or less current-accounts surplus/GDP as the benchmark for determining whether currencies were reasonably valued. With the PRC easily passing this test, the US has no argument. Nonetheless, US policy makers and pundits, including liberals, like Roubini and Krugman, continue to pound away at PRC currency policies.

When these current-account numbers are coupled with the continued high growth of the PRC (9.1% in the third quarter), they suggest that the PRC has made a significant shift from export growth to investment and consumption growth.

For the US left, the myths supporting China-bashing should be emphatically rebuffed. While the PRC policies internationally are generally self-interested – the PRC has seldom demonstrated the kind of international solidarity associated with twentieth century socialism—they are nonetheless independent of US imperialism. That is, the PRC operates to promote its own security and economic health. Where it clashes with US imperialism, for example, in UN votes against NATO aggression, progressives should applaud its role. At the same time, it shares many features with imperialism in its competition for markets, resources, and economic advantage in the global economy. These features often place it on the wrong side in its relations with other countries.

White Cat, Black stripes; Black Cat, White Stripes?

Much heat has been generated over the question of whether the PRC is socialist or capitalist. But from a Marxist perspective – like that of Palme Dutt – the telling question is not where it is, but where it’s going: Is the PRC on a path towards socialism or capitalism? Where is the process leading?

No one can deny that for decades, the PRC has allowed -- indeed welcomed -- capitalism in the front door. Foreign direct investment, joint-stock and private-stock enterprises, privatization, securitization, and acceptance of the market mechanism have all transformed the PRC economy into a prominent player in the global economy. This change has brought forth stunning growth for the country and a general rise in the Chinese standard of living, certainly from the stagnation of the period of the Cultural Revolution. In only a few decades, the PRC leadership has mounted a veritable revolution as profound as the sharp turns organized in Mao’s era.

At the same time, capitalism has brought with it nearly all of its ills: inequalities that rival history’s worse, a shattered health care system, working conditions that too often approach that of Dickens’ England, corruption, cronyism, unemployment, and a broken sense of collective fate or communal solidarity.

The entry of capitalist features into the PRC economy has plagued it with the maladies that arise from the anarchy of markets: imbalances, speculative fervor and bubbles, inflation, labor unrest, grey and black markets, and labor market chaos. In the spring and summer of 2010, workers rose against low wages and working conditions in many areas. Again, this year, there were significant actions for better pay, working conditions and against layoffs. In the fall, the PRC’s sovereign wealth fund was forced to buy shares in major Chinese banks. Despite the fact that private investors own a quarter or less of the country’s biggest banks, a sell-off by foreign investors caused a near panic met by the sovereign wealth funds’ intervention. Today, inflation, a construction bubble, and over reliance on exports weigh on the economy.

Despite these ugly aspects of the PRC’s flirtation with capitalism, the PRC negotiated the most tempestuous waves of the global economic crisis without the catastrophic damage incurred by the other economic powerhouses. In addition, most honest analysts, including even The Wall Street Journal, credit the PRC with a large role in thwarting world economies from being swept over the brink in 2008-2009.

How was this done?

In my view, those structures intact from the PRC’s early commitment to socialist economics proved to be a bulwark against global economic turmoil, especially from the financial sector. Regardless of the future course of the Chinese economy, many elements of socialist economic structures remain and they and they alone, permitted the PRC to evade the harshest consequences of the 2008-2009 collapse and blunt the forces of the market.

1. Banks and finance: The PRC’s four largest banks dominate the financial system along with the Central Bank. Despite recent public offerings, the big four banks remain 75% or more under public ownership. The experiment in raising private funds through stock offerings has proven to be more damaging (a recent sell-off briefly rocked the stability of these public institutions) than advantageous, but, nevertheless, the banks remain steadfast under government management. And the Central Bank, unlike our corporate dominated Federal Reserve, functions as a publicly run and owned institution tuned in closely to government economic goals. The “shadow banking” that rocked Western private banks was virtually unknown in the PRC: no securitized US mortgages, no complex derivatives, opaque bank-to-bank deals, etc. The pillars of the financial system, because they were publicly owned and relatively transparent, stood solid against the crisis; they retained the central functions of a financial system without the corruption of private profiteering.

For sure, private banking in the PRC exists and jolts the smooth functioning and stability of the financial system, but to date the government has been able to adjust financial flows swiftly and efficiently.

2. Economic Policy: The PRC retains indicative planning, though flexible and partial. With the onset of the global crisis, the PRC embarked on a sharp turn towards domestic consumption and investment and away from a deteriorating international market. Quickly adopting a massive $622 billion stimulus program and loosening the valves on lending from the publicly owned banks, the PRC minimized the damage from a collapsing global capitalist economy. While the West, stumbled and delayed, politicizing and horse-trading intervention in the economy, the PRC acted promptly and decisively. As a result, the PRC maintained a growth rate well above Western norms through 2008-2009, while nearly all other countries endured negative growth.

Even with the corrosive and corruptive influences of capitalist social relations, the Communist Party of China remains a leading institution linked to advancing the general welfare of the people. That is, it continues to respect and seek the promotion of national interests. Compare its performance in the face of severe crisis to the appalling submission of bourgeois democratic institutions in the West to the welfare and interests of capitalist institutions; banks and corporations were rescued while living standards were decimated. In terms of serving the interests of the vast majority of the people, the PRC institutions proved far more democratic in content than the formal Western “democracies”.

3. Planned development: The PRC adopted the “National Medium- and
Long-Term Plan for the Development of Science and Technology” in 2006, a plan that proposed doubling the percentage of GDP devoted to research and development through 2020. At the end of this November, the PRC confirmed a plan to spend $1.7 trillion over the next 5 years on sectors including alternative energy, biotechnology, and advanced equipment manufacturing (Reuters, 11-21-11). Such national planning is virtually unheard of in the West since the massive investments in infrastructure, education, and research and development brought forth by the panic over the Soviet launch of Sputnik.

Chinese planning shows much more responsiveness and flexibility than policy initiatives in the West. With global demand shrinking from 2008 through 2009, the PRC shifted swiftly with internal investment and expanded consumption while Western powers debated and hesitated.

4. Public ownership: With state banks opening the floodgates, and a
Communist Party leadership quickly implementing a stimulus program, publicly-owned enterprises reacted immediately and decisively to the call to expand economic activity. While the public sector was curtailed in the early years of the shift to market relations, it remains dramatically larger than in Western countries or most Asian neighbors. In a generally hostile article in The Wall Street Journal (China’s ‘State Capitalism’ Sparks a Global Backlash, 11-16-10), the authors make the point vividly: In 2008, the assets of the PRC’s publicly owned firms totaled 133% of economic output; in the same year, France’s state-owned firms’ assets amounted to only 28% of economic product. While much speculation revolves around the role of the public sector in the PRC, these numbers give a perspective on how important publicly-owned enterprises are in the PRC. Thus, when essential stimulus programs or planning initiatives are undertaken, they translate into rapid, measurable results, unlike in the US where policies are pushed through the sieve of private contractors with the consequent siphoning off of overhead and profits, few jobs created, and long delays.

While many in the West are skeptical of the PRC’s ability to move away from export-driven manufacturing to domestic consumption, the following figures are revealing: Exports as a percentage of GDP have fallen from 35% in 2007 to 27% in 2010; third quarter 2011 import growth exceeded export growth; and retail sales grew by 17% in August and 17.7% in September of this year against the prior year.

Of course the PRC’s success in weathering the economic crisis is no guarantee that it will do so going forward. Certainly the PRC leadership is aware of difficulties ahead. The PRC Vice Premier, Wang Qishan, was recently quoted by the Xinhua news agency: “The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic.”

The country’s participation in global markets could present problems that even its remaining socialist tools cannot overcome. Moreover, it is not clear if the PRC will strengthen these safeguards or jettison them, as its leading Communist Party shapes this awkward mix of socialism and capitalism.

Thus, forty-five years after Dutt’s pamphlet, we are still left with the burning question: Whither China?

Zoltan Zigedy
zoltanzigedy@gmail.com

Is There a Future for the European Union?

When the so-called “dismal science” – economics -- resorts to hollow metaphors like “contagion,” “belt-tightening,” “toxic,” or “tsunami” to describe economic facts and events, one might reasonably wonder if it represents dismay more than science. For sure, practitioners in this field eschew metaphors for technical jargon in their narrow academic studies that have earned many prizes and peer acclaim. But these studies have proven singularly unhelpful in explaining or resolving the four years of chaos that has befallen the global economy.

Thus, it comes as a surprise that those who are paid handsomely to think for us are hailing the appointment of two professional economists to run Greece and Italy. Reflecting these changes, stock markets and other market indicators also reacted happily. Aside from the fact that -- over the course of a weekend -- the democratic content of two bourgeois democracies were exposed as shams, aside from the fact that the appointments were largely dictated by forces outside of the two countries, it is incomprehensible that two economists—one a former vice-president of the European Central Bank and the other a former European Union Commissioner – will do anything other than continue subservience to the neo-liberal agenda. In effect, Greece and Italy have been put into receivership by the European Union.

That receivership promises no new approach, no retreat from austerity for the masses, no lessening of the slavish commitment to capital, and no defiance of financial markets.

“Centrifugal Forces”

There are properties of economic actors that exert pressure, propelling them away from each other, confounding collaboration and sowing antagonism. Marx identified these properties as intrinsic to capitalism. The properties of individual self-interest, competition and exploitation are inseparable from the social relations that define capitalism in all of its forms. From the small business owner to the CEO of a mega-corporation, from the Chamber of Commerce to the union of nation-states, the opportunity for gaining an advantage always stands in the way of any real, lasting unity between agents big and small. Within the confines of the capitalist mode of production, pressures are always latent to fracture or dissolve combinations or collectives.

Yet economic actors are wise enough to recognize the advantages that may arise from combination and cooperation; a larger capitalist enterprise enjoys an advantage over a smaller one: a big fish eats the little one. On the level of nation-states, a larger nation, or a federation of states, better competes against its rivals. Thus, they strive to advance their interests by striking some measure of unity with some against still other competitors.

Frederick Engels, in the seminal work of Marxist political economy, explained this dialectic well:

Each smaller group of competitors cannot but desire the monopoly for itself against all others. Competition is based on self-interest, and self-interest in turn breeds monopoly. In short, competition passes over into monopoly. On the other hand, monopoly cannot stem the tide of competition—indeed, it itself breeds competition… F. Engels, A Critique of Political Economy

It is this dialectical dance between immediate individual self-interest and self-interest promoted through opportune unity that explains the unstable existence of the European Union. Established as a bloc to compete more favorably against the economic might of the US and Japan, a senior partner in the Cold War rather than a compliant underling, the European community was a last-ditch effort to restore prestige and power to the old, formerly dominating European empires. Devastated by war and in the shadow of the new, post-war great powers, Euro-leaders hoped to forge a unity that would create a formidable entity capable of holding its own, or even overwhelm in the competition between imperialist blocs. Later, the bloc was the European answer to the post-Soviet international landscape that saw other economic powers like Brazil, Russia, India and China join the global competition for markets, resources, and ultimately profits.

In the better part of the twentieth century, imperialist competition led invariably to war; new economic, geographic and political arrangements were settled militarily. By contrast, the European Union was perhaps the most ambitious attempt at a voluntary and peaceful unification of capitalist states to secure economic advantage in global markets. But because each of its constituent states was in widely different circumstances and at uneven levels of development when accepting membership, they had widely divergent goals. The more economically successful states saw preferred markets for their products and downward pressure on their labor force from low-wage members. The poorer countries foresaw better financial terms, investments, and consumer spending from the newly adopted, successful Euro-siblings. In short, all the members – rich and poor – acquiesced to the Union for their own self-interest.

Today, these divergent interests are in immediate danger of destroying the EU. The only solution possible is outside of the logic of self-interest and individual advantage, that is, outside of the logic of capitalism. As Ian Bremmer and Nouriel Roubini put it, in an otherwise confused, cynical op-ed piece in The Wall Street Journal (Whose Economy Has It Worst? 11-12/13-11), “[the solution] implies a gradual transfer of wealth from the core economies to the periphery, a ‘transfer union’ from rich to poorer states.” Put plainly, the future of the EU rests on a program of affirmative action that will equalize the disparity in wealth and economic development between the European haves and the have-nots.

Instead, policy makers have resolved to punish the poorer states for being poor. The devastating austerity programs imposed by the EU, The European Central Bank and the IMF drive Greece, Ireland, Portugal, Spain, and soon Italy, into even greater depths of poverty. The inequalities in the EU generated greater inequalities and now the richer states propose to solve the financial crisis of the Union by proposing even greater inequalities. There is no affirmative action in this scheme.

Contrast this with the other twentieth-century experiments in unification: the union of republics constituting the USSR and the post-war CMEA project uniting Eastern European countries (and later, Cuba). For most of the twentieth century the USSR followed a Leninist policy of affirmative action regarding the poorer constituent republics of the USSR and likewise for post-war reconstruction of Eastern Europe (excepting the GDR which paid a heavy price in war reparations). Growth rates in the poorer republics and Eastern Europe’s former backwaters usually exceeded the rates of the Russian Republic. Most of these countries achieved levels of development on a par with or exceeding that of top European powers, measured by telling socioeconomic indicators: education, life expectancy, access to health care, culture, social securities, leisure, etc. And these achievements arrived in a short time.

Tellingly, the breakdown of Leninist policies during the Gorbachev era, the move to basing trade and aid policies on international market forces led to disintegration and the dissolving of this hard-won unity, another example of the centrifugal forces spawned by markets and the emergence of unequal, individualistic policies. Few will recall the disastrous effects of this policy shift, especially upon Cuba, and well before the demise of the Soviet Union. Indeed, these changes contributed powerfully to that demise.

With justification, one might conclude that unification – mutually beneficial combinations of national entities—is extremely unlikely to be successful with capitalist social and economic relations intact. Conversely, socialist social and economic relations, linked with an internationalist perspective hold the only real, lasting opportunity for unity among diverse states.

These same centrifugal forces gnaw at the twenty-first century effort to achieve economic integration among several progressive, anti-imperialist countries in Latin America. Clearly the European Union model cannot guide this effort. Its success can only come with a concerted effort to overcome the stubborn stance of self-interest and exploitative competitiveness of capitalist social relations.

From this perspective, I wrote in November of 2008:

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 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.

Five months later, and well before Greece became the focus of EU crisis, I wrote:

The EU old guard, led by France and Germany, has adamantly refused to expand financial support for the Eastern European members. The limited aid to the newer members has been mainly exhausted by assistance to Latvia and Hungary. Germany, along with France, the dominant members of the EU, oppose additional EU-wide stimulus. It's not only Eastern Europe, newly capitalist states that thrived on international loans, but many of the original EU states that are left to their own devices. Spain suffers from the implosion of the construction industry, with delinquent loans and unemployment provoking a banking crisis. A 19% unemployment rate is projected for next year, the highest in the EU. Italy suffers continued stagnation, huge debt, and a broken, corrupted political system – a system that seems incapable of even generating a modest response to the crisis,

Germany has been only too anxious to accept the role as the "big dog" in the EU, dictating most of the terms of Union-wide economic policy. Much as the US assumes that role in the global economy, Germany uses its economic might and relative health to impose its will upon the EU.

Three years later, these assessments and projections have been borne out.

Zoltan Zigedy
zoltanzigedy@gmail.com

Where Does “Occupy Wall Street” Go From Here?

One of the most striking aspects of the Occupy Wall Street phenomenon is its failure to get any traction among the elite political strata, especially among elected officials with an eye on the upcoming elections. Sure, there have been numerous Democrats and even some Republicans who have, with an earnest, but patronizing tone, suggested that OWS is an understandable response to the pain inflicted by a sinking economy. But there has been no real attempt to harness the visible anger and outrage to the forthcoming political campaigns of 2012.

This is especially noteworthy in light of the Republican stance regarding the so-called Tea Party movement. They, unlike the Democrats and the OWS movement, early and often endorsed, embraced, and amplified the views of the nascent Tea Party formation. They funded it and encouraged the already friendly media to exaggerate its size and importance. They rode the movement’s anger into the 2010 elections and welcomed its “heroes” into the Republican fold. No such embrace of OWS seems imminent on the part of the Democratic Party.

Recent poll results add to this observation: an AP/GfK poll conducted between October 13 and 17 shows that 37% of the public supports the OWS protests.

Compare this to the overblown Tea Partiers. At its peak at the time of the 2010 interim elections, the Tea Party drew 31% of the public’s support, according to a CBS/New York Times poll. That same polling source places Tea Party support at only 18% in August of this year. As I have argued and continue to argue, the Tea Party movement represents nothing more than the same 15-25% of the population that have always plagued US politics: the “Know Nothings,” the Klan, the Liberty Leaguers, the Black Legions, the Coughlinites, the Segregationists, the McCarthyites, the Goldwaterites, and now the Tea Partiers. They crawl out from under the rocks in times of crisis and, thanks to powerful funding and media hype, they enjoy undue prominence.

So with substantial and hopefully growing public support, why hasn’t the Democratic Party hitched its wagon to this popular movement? With the President’s popularity sinking, would not this be an unexpected boost to Democratic Party fortunes?

It’s not happening and it won’t happen because the Democratic Party is a corrupted and bankrupt organization owned by the very targets of the OWS movement. Of course I don’t discount the Democrats' enormous resources that are at play to co-opt, distort, and re-shape this movement; they have a sterling record of doing so with past potentially radical movements.

But the current message of OWS is substantially at odds with the values and material interests of all but a few fringe Democratic Party elected officials. The slogan touted by OWS supporters that “We are the 99 percenters” conveys a sense of class division and emerging class unity that sends shivers down the spines of the operatives from both political parties. Nothing violates the quaint rules of political engagement in our two-party contests like the recognition that the US is a class-divided society.

Similarly, the movement has focused on banks, investment houses, and Wall Street as symbols of the inequities and injustices of US society. Given the enormous material support for the Democratic Party proffered by these OWS targets, Democratic officials are more than a little uncomfortable acquiring a taint from this movement.

They don’t want it, and OWS shouldn’t want them.

While commentators ranging from old lefties to media nabobs have scored OWS for having neither a single issue nor a common program, the truth is that their central and primary slogans do capture the mood and anger of many if not most US citizens. In fact, given the shallow ideological depth of the US public conversation, stunted by swift suppression of diverse ideas, and a media that crowds out all but the most superficial thinking, the slogans, placards, and banners are well suited to the moment. With the left demoralized and ineffectual from the long bout with Obama flu and splintered by multiple, parochial issues, the OWS movement has marshaled a timely focus on economic issues to afford the left yet another opportunity to grow and participate in a real oppositional formation. The fact that a substantial body of the labor movement has spoken and acted in support of OWS shows the potential of this movement.

It goes without saying that OWS is as yet only a spontaneous and loosely organized beginning. Where it goes from here is decisive. Already the security services have begun harassment and repressive actions in Chicago, Oakland, and many other cities. Mindful of how the arrests and violent actions on the part of the police helped to energize the OWS in New York City, they have yet to bring the full weight of the state security forces into play. They are, however, challenging the depth of public support for the OWS movement by testing the public’s tolerance of police intervention. Consequently, public demonstrations of solidarity are essential at this time.

Today, OWS is largely only an emotional reaction to social inequality and the rapidly deteriorating standards of living in the US. Emotional responses, through acts of civil disobedience, acts of “witnessing,” and other attention-getting activities, may well be necessary for building effective movements for change, but hardly sufficient. Needed are organizational forms that can sustain and grow the movement. These forms can formulate and correct tactical and strategic action and organically develop goals and demands. These demands can be further pressed into advanced forms of struggle, achievable as reforms in the electoral arena or through revolutionary direct action. Each step is a challenge requiring organizing skills, a deepening understanding and the deft touch of capable leadership. In any case, spontaneity must evolve into concerted, focused collective action.

While many are hailing the “spontaneity” of this movement, they confuse a spark with a bonfire. Bonfires are carefully prepared, fed, and maintained. They require attention and effort or they will die or burn, to no good purpose.

The flip side of the spontaneity coin is the OWS obsession with “horizontal” structure and allergy to any kind of hierarchical organization. To many of us, this is strongly reminiscent of the 1960’s new left’s fixation on “participatory democracy.” Coming after the Cold War demonizing and destruction of labor militancy and Communist influence, many young leftists in the US saw the failure of radical ideas as a failure to incorporate democratic values. The then ubiquitous and popular anti-Communist and anti-labor stereotypes of Communist “dupes,” labor bureaucrats, and robotic thugs reinforced this view. Moreover, the fetish of bourgeois democracy, the notion that process trumps all other values, that how things are decided is more important than what is decided, has profoundly deep roots in US history. Coupled with the cult of the individual associated with US social development, this tendency fosters contempt for organization and structure. It also accounts for the popularity of anarchism on the left and libertarianism on the right: two radical expressions of a near-paranoid distrust of organized and structured collective action.

The pressing question for OWS is not simply a matter of a platform or set of demands – as many critics put it – but of a commitment to develop the struggle to reach broad masses and deepen popular understanding.

We do not know where this will go. It is too early to either dismiss the movement or herald it as the beginning of something that will leave a lasting imprint on our politics. US history is filled with movements which
started by capturing broad support but collapsed when faced with the resources, organization, and subversion of our ruling class. The few, but significant, victories were won by developing solid, unshakable leadership with organizational skills and with a clear, firm vision of a better way.

We can all play a role in propelling this movement forward by engaging those activists militantly confronting the heart of the beast: capitalism. And it wouldn’t hurt to bring along a copy of V. I. Lenin’s What is to be Done.

Zoltan Zigedy
zoltanzigedy@gmail.com