Sixto and the Queen of Versailles

Seventy-five years ago, Christopher Caudwell’s Studies in a Dying Culture was published posthumously. Caudwell, a brilliant young British Communist writer and poet volunteered to fight for the Spanish Republic and was killed in 1937. If Caudwell’s assessment of capitalist culture was appropriate to the mid-twentieth century, that culture has reached a terminal phase in the second decade of the twenty-first century.

The artistic and personal liberties unleashed by the escape from the repressive, conformist 1950s and the energy and optimism accompanying the civil rights and anti-war movements were methodically and overwhelmingly suffocated by corporate cooption. Any and every new spring of creative originality—whether it be a new popular musical form or an original film director—has been damned and channeled by the monopoly entertainment industry. As a result, cultural products with any claim to broad popularity are reduced to either formulaic, safe entertainments or vapid, lifeless expressions of “high” culture.

This is not to demean the tens of thousands of talented cultural workers who struggle at minimum wage jobs while studying and exercising their craft for the few willing to step away from the corporately constructed temples of culture. They labor even more heroically than their predecessors who were occasionally able to hew some measure of independence from the grasp of cultural moguls and business accountants. That is less possible today when only unrestrained vulgarity and violence or unchallenging distraction and fantasy offer the keys to entering the cultural big stage.

In an age where the promise of hip hop has been reduced to a grinding pulse of swagger, violence, and selfishness and the freedom of independent commercial film predictably delivers time-released, regular spasms of ultra-violence, nudity, and sex, relief from the tedium is especially delicious. More and more that relief is coming from documentary film.

I have in mind two documentaries that expose the worst and best of the US. 

The Queen of Versailles

The best documentaries often rise to great heights on sheer dumb luck; the Irish film makers who, by happenstance, captured close-up the coup against Hugo Chavez and its aftermath were extraordinary examples of the film gods in action (The Revolution Will Not Be Televised). Similarly, Lauren Greenfield's 2012 documentary, The Queen of Versailles draws its drama from the impact of the economic crisis upon one of the richest families in the US. What begins as the capture of the excesses and embarrassing vulgarity of the nouveau riche devolves to a tale of blame, self-pity, and neglect, thanks to the impact of the unforeseen crisis.

On the way up, a fortune built around the hustle and shrewd entrapment of the time-share industry allows an orgy of self-indulgence, senseless consumerism, and smugness. David Siegel, the ruler of the empire, brags about his clandestine role in getting Bush elected President; he creates a glitzy tower in Las Vegas to signal his success, and he aspires to build the largest private home in the US to flaunt that success. Siegel embodies Marx’s infamous iconic capitalist: “… The less you eat, drink, and buy books; the less you go to the theater, the dance hall, the public house; the less you think, love, theorize, sing, paint, fence, etc, the more you save—the greater becomes your treasure which neither moths nor dust will devour—your capital.” But as Marx acknowledges, your abstinence and single-minded greed is rewarded, for your accumulated wealth can “appropriate art, learning, the treasures of the past, political power…” And Siegel does all of this.

But the 2008 economic collapse brings the Siegel family to its knees. Dead, unattended pets; dog feces on carpets; fast food; cranky, spoiled children; and sullenness and self-pity replace the former swagger. “It’s the banks, the rotten, greedy banks,” the Siegels exclaim. They angrily protest that “ordinary” people like themselves are victimized by selfish bankers.

As the empire totters, the Siegels scramble to adjust. On a visit to her childhood friends, wife Jackie must subject her children to their first flight on a commercial airline. “Why are these other people on our plane?” they wonder. Jackie asks the rental car agent for the name of the driver; he responds with a puzzled look. The rich are not like the rest of us.

Through their “ordeal,” David Siegel sulks, whines, and wallows in self-pity. While Jackie’s untamed consumerism remains pathological, she shows more character and resilience, serving as both the family’s anchor and morale-booster. This snap shot of the very wealthy in full bloom and under duress shows the shallowness of that life choice and the ugliness of conspicuous self-aggrandizement. It is hard to feel sympathy for the Siegels.

Searching for Sugarman

If the Siegels conjure contempt, even disgust, Sixto Rodriguez—the focus of the documentary, Searching for Sugarman—counts as a glorious expression of the best of us. Rodriguez, a discarded cultural worker, exudes nobility, humility, warmth, and intelligence, whether working in small, marginal clubs, laboring on excavation or demolition sites, raising his children, or enjoying a belated celebrity.

Others have written of his strange, magical journey from a quickly emerging and falling talent forty years ago to the re-discovered celebrity of today. In between, Rodriguez worked and raised his children like millions of others, but with uncommon dignity and strength. The film, Sugarman, attests to the man’s resilience, but also celebrates his incredible impact upon others.

Unmistakably, Rodriguez, himself a former autoworker and the son of an immigrant Mexican autoworker, is a legacy of the US multi-national working class—a living example of the best of working class values. He, like his co-workers interviewed in the film, has an unassuming intellect and unqualified respect for others.

And he and his music are consummately “political.” Not in any clumsy or preachy sense, but in a way that speaks to and for the disadvantaged, that resonates with those who seek change. Early in his career he associated in Detroit with John Sinclair, the political commissar of the proto-proletarian-punk group, the MC5. Later, when his music arrived in Australia, he opened in live performances for Australia’s most widely known politically outspoken rock group, Midnight Oil.

But the greatest testament to his strong politics is the curious and bizarre impact on South African youth. After Angolan independence at the end of 1975, South Africa intensified its military interventions in that country and Namibia. Over the next decade, conscription of white South Africans into the military met further and further resistance. For reasons that remain obscure, the music of Rodriguez, commercially a flop in the US, found a following in South Africa. Rodriguez became the voice of resistance and change for many young, white South Africans. His music created the sound track for the anti-conscription movement. And by the mid-eighties he inspired other musical groups to propel the End Conscription Campaign. The Kalahari Surfers, Cherry Faced Lurchers, and other alternative musical groups gave expression to disenchanted white youth (see Forces Favourites, Rounder Records, 1986). The resounding defeat of the South African military by the Angolan military and its Cuban internationalist ally, the growing militancy of the African National Congress and the South African Communist Party, and the disenchantment of white South Africans brought apartheid to its knees and paved the way to South African liberation.

In a real way, this modest worker in Detroit helped rock the foundations of the racist, repressive apartheid system in South Africa-- quite an accomplishment for an artist without recognition in his homeland. Quite an achievement for a talent initially crushed by the gears of an industry driven by immediacy and profit.

Where The Queen of Versailles drains the spirit with its celebration of accumulation and ostentation, Searching for Sugarman brings joy and inspiration. Both are revealing. Watch them both, one after the other. Hang your head in embarrassment with the decadence that the unbridled capitalist system has wrought. Raise your head with hope for the nobility that people like Rodriguez bring to us.

Zoltan Zigedy

zoltanzigedy@gmail.com      

Notes from the Brink: March 2013

More Workers’ Woes

If it seems like I’m picking on the United Auto Workers union, it’s only because its descent from its once lofty, exemplary stature as one of the most democratic and militant CIO unions has been the steepest. Last month, I wrote of the leadership’s complicity in the gutting of union wage and benefit standards, a gutting that has left starting wages often lower than for their non-union counterparts. I reported that UAW contracts were pressuring management at non-union Toyota to buy out older workers in order to establish a new, lower starting wage to compete with their unionized competitors. UAW union contracts are now the corporate tool for slashing labor costs!

But it’s even worse than I thought. A retired autoworker pointed out that my claim of two-tier employment at UAW shops was incomplete. At Ford, the UAW has acceded to a three-tier system! Below the “entry” level tier, Ford, with UAW agreement, has established a classification of “long term supplemental” that offers the $14-16 entry-level starting wage, but with no job security or benefits! In some suburban, high- income areas, fast food restaurants offer better wages and benefits than this!

Labor Notes Ken Paff reports on a shameful act of treachery against workers employed at a car-hauling company under a Teamster contract. As revealed by a National Labor Relations Board decision, Ford colluded with a UAW local to underbid the Teamster contract and award the work to a lower-paying competitor. The NLRB administrative law judge ordered the voiding of the UAW contract and the re-employment of the laid-off workers with full back pay. According to the decision, Ford arranged the sub-standard contract with the UAW beforehand to secure a lower bid. As a result, the Teamster members who had made about $20 an hour were replaced with workers employed under a UAW contract at $11-14 per hour. According to a leaked document, the collusion would save Ford $9.8 million a year. This sorry deal was known to the top union leadership.

Treachery of this dimension transcends class collaboration and business unionism and sinks to the level of scabbing. Those who gave their lives to organize the UAW must be turning in their graves. Their legacy deserves much better than this insult to labor solidarity.

Currency War

Why is the escalation of the global currency war by the Abe government in Japan significant?

Until now, the leaders of all of the leading capitalist countries have proclaimed open and unrestrained trade—free markets—as a mark of a new level of international cooperation. They have advertised the dramatic growth of international trade as establishing bonds of mutual dependence that strengthen relations and lessen tensions.
But these “interdependencies” were tenuous at best. They temporarily concealed the ever compelled, inevitable drive for competitive advantage, to win at the expense of competitors. Cooperation is alien to a system—capitalism—based upon ever greater accumulation. A deepening crisis quickly surfaced these tendencies.

It was not the Abe government that opened the currency wars, but the US. The doses of “quantitative easing” adopted by the US Federal Reserve cheapened the dollar, making US exports more attractive and foreign imports less so. As a result, there was a marked revival of US manufacturing. In short, US policy makers broke with international cooperation and set out on the road to securing national advantage.

The first to feel the bite from this unilateral policy were many economies in Latin America. Despite the justifiable complaint of their leaders, US investment money flooded these markets, disrupting capital markets, and attacking their exports. Two years ago, Brazil lodged loud complaints against US quantitative easing and its negative impact on Brazilian exports.

Other countries, like the Republic of Korea, Switzerland, and Israel, have acted to protect their currencies, while Australian manufacturing has been seriously slowed because it has refrained from reacting.

The already seriously wounded EU economy has been further disrupted by the currency wars, with the European Central Bank reluctant to retaliate. Germany, with its manufacturing largely immune to price competition, has successfully blocked any strong reaction. The rest of the EU has consequently felt the loss of competitiveness.
It was the Abe government in Japan that brought this escalating contest into the open. Their explicit determination to weaken the yen served as the basis for Abe’s election campaign.

Despite a frantic attempt to get some agreement among the G7 powers, the battle only promises to become more aggressive and destructive. The Brazilian Finance Minister was recently quoted in The Wall Street Journal: “The currency war has become more explicit now because trade conflicts have become sharper. Countries are trying to devalue their currencies because of falling global trade. So many of them are in a difficult situation.”

The tensions emerging in the currency war are leading to sharp military confrontations and threats, especially among Asian Pacific countries. The capitalist sharks are turning on each other.

Here We Go Again!

Signs are eerily pointing toward developments reminiscent of the 2008 crash. Once again an enormous pool of capital is accumulating and overflowing into riskier and riskier areas to find a return. As reported in the WSJ, $149 billion has channeled into money market funds since November of 2012. The Journal notes that these funds are increasingly accepting risk (for example, French bank debt) to secure better returns.

Cash is also flooding equity markets. In only four weeks in the New Year, $38.1 billion was invested in stock mutual funds, more than the previous record in February, 2000 (remember that moment?).

A recent bank of charts published in the WSJ tellingly demonstrates the many signs of an overheated, dangerously speculative economy:

● Issuance of high-yield corporate bonds below investment grade is nearly double what it was in 2007.

● Business loans not required to meet traditional standards have risen sharply (though still well below

2007).

● Total assets in US high-yield, junk bond funds and exchange traded funds are more than double what

they were in 2007.

● Iowa farmland prices are more than double what they were in 2007.

As if there were not enough danger signs in the global economy, another over-accumulation event approaches. Hold on to your hats!

Zoltan Zigedy

zoltanzigedy@gmail.com

The ABC of Bourgeois Politics

From the Russian Revolution until the demise of Soviet and Eastern European socialism, one dominant, uncompromising and persistent theme has obsessed ruling elites in the capitalist world and their allies: Anything but Communism (ABC). The ABC doctrine has led to the seemingly contradictory consequence of “champions” of democracy and human rights embracing anti-Communist despots and torturers. It has led the same celebrated values to be compromised in capitalist countries by the violent repression of Communists, leftists, and workers. The doctrine has placed arbitrary limits on the rights of self-determination for any emerging nation daring to flirt with a non-capitalist path. And when Communism threatens to breach the barriers constructed by the capitalist class, that class resorts to the most extreme form of Anything but Communism: fascism. 

For the left, ABC has often appeared to be an insurmountable hurdle to the goal of peoples’ power and socialism. Too often the task of overcoming ABC overwhelms the advocates of socialism, leading to compromise, concession and ideological dilution. Certainly, many of the formerly powerful Communist Parties of Western Europe succumbed to this lure. The self-described Euro-Communists, especially, hoped to convince their opponents that they were reliable and docile contestants unworthy of the class hatred embodied in ABC. They thought that by demonstrating their fealty to bourgeois standards of political conduct and by donning the trappings of civil parliamentarians, they would win the respect of their class foes. But the illusion of acceptance through “historical compromise” and electoral coalition proved to be just that—an illusion. Today, these parties have thoroughly demonstrated their “trustworthiness” by totally abandoning Communism for tepid class-neutral reformism.

ABC and Syriza

In the wake of the twenty-first-century crisis of capitalism, the need for a revolutionary movement of peoples’ power and socialism becomes both more apparent and more urgent with every passing day. The material conditions of most poor and working people have sunk to a level demanding far more radical solutions than those offered by the traditional bourgeois parties. Their failure to correct, or even address, the harsh deterioration of mass living standards over the last five years confirms their political irrelevance.

Nor are the romantic and spontaneous movements of the recent past of any use in the face of the ravages of a capitalist economic, social, and political crisis. Subcommandante Marcos or the leader-eschewing leaders of the Occupy movement are incapable of combating the ravages of a wounded capitalism despite the enthusiasm and encouragement of much of the US and European left.

Indeed, the objective conditions call for an organized movement determined to overthrow capitalism and replace it with peoples’ rule and the construction of socialism.

Yet the US left and much of the European left are still captured by the mentality of Anything but Communism. They subjectively hope to manage capitalism and yearn to return to the pre-crisis world of life-style advocacy, promotion of social harmony and tolerance, and incremental social welfare; they imagine class struggle without class conflict; and they share the make-believe hope of class justice without class domination.

This hope is found in the most recent celebrity of the Greek party, Syriza, and its attractive and agreeable leader, Alexis Tsipras. Syriza embodies the delusions of the US and European soft-left in the post-Soviet era: it advocates a noisy but vacuous anti-capitalist posture attached to a program of “enlightened” management of capitalism. Like its forebears in Social Democracy and Euro-Communism, it offers to appease the bourgeoisie while promising a distant goal with no more clarity than that of William Blake’s poetic Jerusalem.

Tsipras reveals the timidity and conservatism of the Syriza program in two recent documents: an interview with Bret Stephens of The Wall Street Journal published as a glowing opinion piece (The Conscience of a Radical) on January 28, 2013 and an article authored by Tsipras in Le Monde Diplomatique (The Greek Revival Plan, February 16, 2013).

The WSJ interview occurred when Tsipras visited New York to “meet with think-tank scholars, journalists and International Monetary Fund officials, and to be dined at the State Department,” to quote Stephens. It is hard to envision anyone frightening capitalism while maintaining this itinerary. As the friendly Stephens noted: “It definitely amused me to meet him in the breakfast room at his hotel, the Helmsley Park Lane on Central Park South. Not exactly the cafeteria of the proletariat.”  

The trusted spokesperson for monopoly capital, Stephens, found much to like in the spokesperson for Syriza. He concludes that: “If the radical in Syriza means a party capable of thinking for itself and posing the right questions, maybe the right answers won’t be far behind.”

Apart from this ringing endorsement, what answers does Tsipras offer to the growing devastation of Greece and the capitalist crisis?

Tsipras assures Stephens that he advocates neither a default on Greek debt nor an exit from the euro zone.

Instead, Syriza is committed to a “conference” with the European Union to discuss negotiating a restructuring of Greece’s debt (Tsipras writes of the “public debt” though he also calls for the recapitalization of Greek banks, presumably mainly private banks). The model for this maneuver is the 1953 conference called to renegotiate the debt of the Federal Republic of Germany (Tsipras fails to acknowledge that there were two Germanys in 1953!) where 21 countries agreed to reduce the FRG debt and invoke less onerous terms. Unsaid in his proposal is the Cold War context of the 1953 conference. Conferees remembered well the consequences for the world of the heavy reparations and debt imposed on Germany after World War I. They were equally anxious to draw the FRG into the Cold War (the FRG joined NATO IN 1955) and in need of the FRG’s growing industrial might. Nothing remotely like these considerations weighs on the other EU members in deciding Greece’s fate today.

But how would Syriza secure such a conference today? By moral suasion? By calling on historical parallels? Neither would move EU leaders or their Central Bankers to participate in a plan that they would perceive as disordering financial markets. To believe so is to vastly misunderstand the logic of contemporary capitalism. There is something remarkably naïve in believing that the Greek crisis can be solved by merely calling a conference of EU leaders.

Tsipras, in both his interview and article, blames Greece’s sorry state on corruption. He does not place the capitalist system, the capitalist crisis, inequality, or any other systemic element or process in Syriza’s sights; rather, he sees Greece declining because of corruption and cronyism. Surely the leader of a “radical left” party must recognize that capitalism breeds corruption just as surely as it generates crisis. Corruption is an inevitable byproduct of capitalism and will reappear and expand as long as capitalism exists. To attack it, one must attack capitalism.

But there is no attack on capitalism in Tsipras’ or Syriza’s plans. Instead, there is “…breaking with the past… working for social justice, equal rights, political and fiscal transparency—in other words, democracy.”

Fine. But these broad slogans are not socialist. They are not even anti-capitalist. In fact, they could be embraced easily by Social Democrats in Europe or even Democrats in the US.

For those who were quick to condemn the Greek Communists (KKE) for not joining with Syriza in an electoral coalition, Tsipras’ and Syriza’s program should cause pause to reconsider. Like previous appeasers of Anything but Communism, Syriza trades on its differences with Communists. It offers a pledge of fidelity to the bourgeois rules of the game. Like other appeasers, it sacrifices principled advocacy of socialism to political expediency, a sacrifice that gets us no closer to peoples’ power or to socialism. Once Syriza is compelled to come forth with a program, it is impossible to locate a common ground with revolutionary Communists.

Tackling global capitalism—essential to reversing the continuing devastation of this deep and profound crisis—requires more than a conference and a series of slogans. Real solutions are not to be found with those promising to guide capitalism out of an inhuman crisis of its own making.

Zoltan Zigedy

zoltanzigedy@gmail.com 

Notes from the Brink: The Economy in the Winter of 2013

Workers’ Woes

Workers at a non-union Toyota plant in Kentucky have been offered incentives to retire early in order for management to replace them with new hires at a lower starting wage. The labor cost advantages formerly enjoyed by Toyota—the non-union premium—is no longer available to non-union plants in the auto industry. It seems the wages and benefits long ago won by a more aggressive UAW have retreated to the extent that non-union plants must now secure lower compensation in order to compete!

Since the UAW has conceded starting pay in the unionized industry down to about $14-16 per hour, Toyota seeks to replace older workers making around $26 per hour in their Kentucky plant with new hires at $16 per hour. Thus, the union shops are paradoxically pressuring downward the wages and benefits of non-union employees .

As reported in The Wall Street Journal, industry experts claim that the non-union manufacturers enjoyed a $29 an hour competitive advantage in wages and benefits as recently as 2008. By the end of 2011, they report that non-union labor costs were about equal with General Motors and actually higher than Chrysler!

It is hard to imagine a more demoralizing consequence for the union movement in the US: if only the market, and not a fighting union, is to competitively determine wages and benefits, how does one entice workers to join the union? For the bankrupt UAW leadership, union growth comes only from striking a deal with the employers-- a deal that would promise collaboration and stability at the expense of workers’ pay and benefits.

The decimation of the living standards of US unionized auto workers came with the bailout and subsequent temporary stewardship of the auto industry by a Democratic Party administration. That same administration demanded plant closings and layoffs as a condition of the bailout.

With friends like these, workers are sadly in dire straits.

Clearly, radical changes are in order, changes that cry out for class struggle unionism and independent political action. Without a new direction, US workers will continue the descent towards Depression-era living standards.

Currency Wars 

The 1917 text of Lenin’s Imperialism projected intense struggles between rival capitalist powers. Written during an unprecedented total war between the most economically advanced countries, a war that when settled cost the lives of millions of  people, Lenin’s tract explained the First World War as a contest between empires seeking global advantage for the spoils of capitalist exploitation.

Less than twenty years later, the same empire-building forces were again unleashed to carve the world in a desperate attempt to secure markets and sources of strategic resources. World War Two further confirmed Lenin’s thesis that competing capitalist powers were unable to collaborate and cooperate for some greater, universal good. Instead, competition always begets aggression, national chauvinism, and war.

Many were dismissive of Lenin’s prophecies when witnessing the Cold War expediencies of inter-imperial cooperation against the emerging post-war socialist community. With well over a third of the world’s population in the socialist camp, the imperial rivals found a temporary basis of unity around fears and resistance to the success of socialist revolution. The survival of capitalism tamed the inherent rivalries for that moment.

The demise of that threat with the collapse of Eastern European socialism and the accommodation with capitalism by Asian Communists has unleashed the beast of imperial competition. The global economic crisis only serves to fuel the tensions and expose the rivalries.

I wrote in November of 2008 of the “global crackup”, noting that the US was no longer in a position to impose its will on the rest of the world, unable to slough its problems easily upon others. I drew attention to the logic of capitalist competition that, in the long run, denies any hope of cooperation and common solutions.

Today, that tendency— aggressive imperialist rivalry—has found its expression in a new war, a war waged around the relative value of national currencies.

Rulers understand that in a climate of stagnant or declining world trade, nation-states will draw an advantage from devaluing national currencies; by cheapening money—the medium of exchange— domestic enterprises will be able to offer their products at a more favorable price in international markets.

The US tepid “recovery” from the depths of the crisis has largely been won by hyper-exploitation of a docile work force and the dramatic expansion of exports through the Federal Reserve’s massive devaluation of the dollar via the printing press. The Qualitative Easing programs aim to suppress interest rates and remove the corporate garbage generated by the financial promiscuity of the period before the collapse of 2008. But they also have the not-so-unintended consequence of bolstering the competitiveness of US export manufacturing.

At the same time, US policy makers pointed an accusatory finger at the Peoples’ Republic of China, charging its leaders with currency manipulation. While the charge got little traction from those who closely studied these relationships, it served as a useful diversion from US policies and bolstered rounds of anti-China bashing by do-nothing politicians and labor mis-leaders.

European Union leaders, occupied with the desperate effort to save the Euro, offered little resistance to US currency manipulation.

But with the election of Shinzo Abe in Japan, the currency war was joined. Abe, a right-wing nationalist, exploited the Japanese public’s frustration with years of ineffective governance and economic stagnation to scorn cooperation and offer an aggressive economic program geared towards restoring Japanese competitiveness. Assuming the office of Prime Minister, he launched an aggressive campaign to devalue the Yen. His pressure on the Bank of Japan has already (in less than two months!) produced a drop of 10% in the Yen’s value against the dollar and 15% against the Euro. This means that Japanese products are enjoying a growing competitive advantage in international markets.

International bankers see these moves clearly as the opening salvos in a major escalation of the currency/trade wars. Politicians in countries throughout the world have quietly made similar moves to spur competitiveness, but never with the open audacity shown by Abe.

Perhaps even more disturbing is the unabashed belligerence and arrogant nationalism accompanying these economic moves. The Japanese government has provoked disputes with nearly every Asian Pacific government over barren islands claimed as part of Greater Japan. Imperial aggression is as great a danger today as it was nearly a hundred years ago when Lenin established it as a structural feature of mature capitalism.

A Hushed Mea Culpa       

Capital’s policeman, the International Monetary Fund, has offered a quiet confession of an arcane theoretical mistake of enormous consequence. As the leading cheerleader for decades of the “fiscal responsibility” approach to public programs, the IMF can take dubious credit for the policy of austerity as a general panacea for economic duress. A cursory look at the IMF legacy shows a constant, unrelenting enforcement of balanced budgets and meager public spending. Developing countries seeking IMF loans have felt the lash of austerity as a condition of relief.

A cornerstone of IMF thinking was a little discussed macro-economic assumption of the compounding effects of debt reduction. Where “unschooled” common sense might suggest that removing a dollar of public spending from economic activity would remove at least a dollar from a nation’s gross domestic product, the IMF postulated that it would reduce economic activity by only half of a dollar. That is, the “multiplier” for a reduction of public spending was only .5. The assumption, of course, is the neo-liberal axiom that the dollar spent elsewhere in the private sector MUST always be far more productive, must always be greater than unity and, therefore, must always outweigh the loss of “inefficient” public sector spending.

Unfortunately, the axiom is wrong. IMF empirical studies show that, in fact, the multiplier of public spending reductions ranges between .9 and 1.7. In other words, the negative impact of public spending cuts was underestimated by two to three times! The IMF confessed as much in its October report. Unstated, however, is the negative impact of this “error” on hundreds of thousands, perhaps millions, of people who have lost public benefits to the discipline of IMF imposed “fiscal responsibility”. Even more have suffered from the constraint on economic growth produced by the regimen of austerity.

And yet debt reduction through choking government spending remains a priority of political parties from the far right to the social democratic left.

The Sky is Falling, but not on Everyone yet!  

You would never know it from the Wall Street pundits loudly proclaiming the best January stock market in two years, but the US GDP shrank in the final quarter of 2012 (as it did in the UK, the EU, and even the seemingly bullet-proof German economy).

Generally, negative GDP panics investors and disrupts markets, but we live in special times. To the extent that labor remains quiescent and social movements fail to translate into anti-capitalist uprisings, investors and the capitalist class have made their peace with historically unacceptable unemployment and stagnating, but stable economic growth. It’s the earnings that catch the eye of the investors and the wealthy. And they have been holding up rather well so far.

In fact, they are creating the conditions for another round of risk-taking. Money market funds are flush with cash and seeking greater returns, securitization of debt is on the rise again (securities built on auto loans are greater than at any time since 2005), and banks are again growing their real-estate loan portfolios. Capitalism and the lust for ever greater accumulation never sleep!

Of course it is the very mechanism of accumulation, the search for yield on swelling capital (and the accompanying pressures on profitability), that announces the next round in the crisis.

Zoltan Zigedy

zoltanzigedy@gmail.com

    

   

    

Chile, a Revolution Denied

This coming September 11 will mark the fortieth anniversary of the coup overthrowing the elected government of Chile, a country that, at the time, enjoyed the longest enduring tradition of electoral stability in South America. Despite the uninterrupted existence of a constitutional parliamentary system from 1932, the Chilean military—aided by US covert services—overthrew the President, Doctor Salvador Allende Gossens, and violently suppressed his supporters, installing a military junta that ruled for 26 years.

What prompted the US government and its traitorous allies in the Chilean military to destroy the fabric of Chilean civil society in 1973? What “sin” could possibly warrant the installation of a murderous, fascistic regime under the leadership of General Pinochet and his collaborators?

The answer is found in one word: socialism. Not the grafting of a tepid welfare safety net to the fringes of capitalism as promised by social democrats, not the “socialism” of workers’ token participation in management, not the bad faith of class collaboration or the regulation and management of a voracious and predatory profit system, but the real and robust pursuit of revolutionary and transformative change.

For Salvador Allende and Popular Unity-- the coalition of Communists, Socialists, and other worker and peasant organizations that backed his election in 1970, the vote was the opening steps on the unique “Chilean road to Socialism,” a road that would hopefully lead to working class political power and social ownership superseding the private ownership of the leading economic enterprises and giant agricultural estates.

The Allende government pressed forward with its agenda, nationalizing key industries and creating new and parallel organizations and institutions of local and workplace power. Of course this did not go well with the wealthy and powerful in Chile or unnoticed by their North American allies. Millions of our tax dollars were devoted to funding counter-revolutionary groups and actions in Chile. Provocative strikes were organized by middle-strata shop keepers, transportation owners, and managers to disrupt the economy. Demonstrations were instigated to bring sections of the middle strata—the “momios”—into the street in protest. Sabotage and vandalism were pressed. Even neo-Nazi terrorist groups were encouraged and funded by the CIA. And, of course, the US government did everything it could to isolate the Popular Unity government from international assistance, credits, and trade.

In the face of these provocations, Allende and his supporters urged workers and peasants to step forward in defense of the economy and the bourgeois democracy. And they did, in great numbers.

Thus, the expected rejection of Popular Unity in the elections of March, 1973 never materialized. Despite an unprecedented destabilization campaign, the Right was unable to muster enough votes to depose Allende. The only path left open to the enemies of popular power was the military coup. Six months later, Allende was dead and tens of thousands were about to be killed, jailed, tortured, disappeared or in hiding.

The Guzman Chronicles

It is rare to have a vivid and detailed account of such an important and tragic historical process. But thanks to the hours of video documentation secured by film maker Patricio Guzman, we can trace the powerful people’s movement that coalesced around Salvador Allende, the excitement and empowerment of the masses as they forged ahead, the hopes and disappointments of workers and the poor, and the betrayal and destruction of national aspirations. Guzman was a partisan of Popular Unity, yet open to recording the views and movements of the opposition. He captures the euphoria of workers and peasants finding their voices, the explosion of meetings and discussions of the formerly powerless, and the new-found confidence of the liberated.

His trilogy, The Battle of Chile (The Insurrection of the Bourgeoisie, The Coup d’Etat, and Popular Power) is available on DVD (Icarus Films) along with the 1996 film (Chile, Obstinate Memory) of his return to Chile to show his work in the post-Pinochet era.

Guzman’s prescient sense of the significance of Popular Unity seemingly put him on every corner, in every demonstration, in the mines and factories, and in the seats of governance. The visual imagery of workers, peasants, and ethnic minorities in the tens of thousands rallying to the cause of Popular Unity is unforgettable. Conversely, the faces of the “momios” and the military leaders reflect the ugliness of both their fear and their arrogance. Nor will one will ever forget the footage of a camera operator filming his own death at the hands of a soldier.

Far better than the many written accounts of the Chile tragedy, Guzman’s films expose the truths of class and ethnic divisions without adornment. In most cases, one can identify whether an interviewee on the streets of Santiago supports or opposes Popular Unity before he or she even speaks. Class identity is transparent.

Yes, it is class war, conscious class war. But class war that the long-ruling oligarchs, the industrialists, landlords and their minions could only win with the intervention of the military and their powerful friends to the north.  

While the popular forces lost the battle of Chile, the collective memory of the peoples’ rising had to be extinguished before Chile could be returned to anything close to a “normal” bourgeois republic. For some time after elections were restored, Chile still lay in the shadows of the Generals, fearful of their return.

When Guzman arrived to present The Battle of Chile for the first time in his native land, he recorded the responses of a group of youth, both before the showing and after. Before the viewing and with only modest exceptions, the students mouthed the views received from Pinochet-era textbooks and documentaries. They showed some sympathy for the conditions of the very poor that might move them to support Popular Unity, only to charge the partisans with impatience, irresponsibility, or poor judgment. The views expressed were remarkably similar to those one might encounter in an upper-middle class suburban school in the US.

When the lights came on after the screening, the students were visibly moved—some were reduced to tears, others spoke openly for the first time of relatives who were repressed.  Despite the concerted effort to remove the memory of Popular Unity, The Battle of Chile shocked the young people into a sympathetic encounter with their own history. This moment is captured vividly in Guzman’s Chile, Obstinate Memory.

A Vital Source

But the events of these three years, as revealed by the film and other chronicles, constitutes more than the nostalgia of those of us who placed so much hope in Popular Unity. Rather, the Chilean experience was a case study of the struggle to throw off the yoke of imperialism and capitalism. This episode bore many features unique to the conditions existing at that time and the pathway chosen by the movement’s leaders. At the same time, the Chilean revolutionaries faced adversaries and obstacles that are universal in any profound social change. In short, we have much to learn from Chile’s tragedy.

Today’s militancy, emerging slowly, but inexorably from the crushing impoverishment and stark inequities spawned by the global crisis, constitutes a new and promising assault on wealth and power. However, a new generation of the angry and defiant risk failure and disillusionment unless it draws lessons from the successes and failures of the past. History is cruel to those who turn away from those lessons.

Only those who are terminally jaded can but admire the energy of the “Occupy” militants in the US and the “Indignados” in Europe. But any who view The Battle of Chile will quickly recognize that powerful ruling classes with far-reaching police, a sophisticated intelligence apparatus, and a modern military at their beck and call are not readily moved to surrender power and position to forces organized in open-air general assemblies or in urban street encampments. Nor will they accommodate demands issued with the nobility of moral authority. Chile’s legacy reminds us that transformational change is about overcoming the nexus of economic and state power.

Recognition of the fusion of economic and state power in our time—what Marxists call “state-monopoly capitalism”—is essential to any credible assault on the fortress of wealth and privilege. To reach for state power, the majority must begin to disable the economic might wielded by the few. But to accomplish this, the many must act to take the power of the state that preserves and protects the economic basis of the ruling elites. 

Solving these two challenges simultaneously is the task of revolutionaries. In Chile, Popular Unity hoped to meet the challenges by establishing loci of peoples’ organizations in neighborhoods and workplaces and nationalizing the heights of the economy. They understood that presidential power was only a fragile link to state power and far from sufficient to neutralize the economic might of the Chilean capitalists and their courtiers and attendants. Our modern day would-be revolutionaries are well-advised to grasp these realities.

The Battle for Chile is cold water in the face of so many erstwhile advocates of social justice who have turned to timid or utopian schemes to address a capitalist social system that has only become more aggressive and rapacious since the era of Chile’s interrupted revolution. While the loss of a counter-force to the US and its allies—the European socialist community—has vastly strengthened the hand of global capitalism, it neither excuses nor justifies a retreat from an anti-capitalist program. We see alternative schemes emerging from those disillusioned with the politics of reformism, but uneasy with revolutionary politics; they advocate motley theories of “radical democracy,” cooperatives, “The New Economy,” various strains of anarchism and kindred rejections of “hierarchies,” among others.

Marx and Engels anticipated these developments over a century and a half ago when they wrote in the Communist Manifesto:

Historical action is to yield to their personal inventive action; historically created conditions of emancipation to fantastic ones; and the gradual, spontaneous class organisation of the proletariat to an organisation of society especially contrived by these inventors. Future history resolves itself, in their eyes, into the propaganda and the practical carrying out of their social plans.

In the formation of their plans, they are conscious of caring chiefly for the interests of the working class, as being the most suffering class. Only from the point of view of being the most suffering class does the proletariat exist for them.

The undeveloped state of the class struggle, as well as their own surroundings, causes [activists] of this kind to consider themselves far superior to all class antagonisms. They want to improve the condition of every member of society, even that of the most favoured. Hence, they habitually appeal to society at large, without the distinction of class... For how can people, when once they understand their system, fail to see in it the best possible plan of the best possible state of society?

Hence, they reject all political, and especially all revolutionary action; they wish to attain their ends by peaceful means, necessarily doomed to failure, and by the force of example, to pave the way for the new social Gospel.

Such fantastic pictures of future society, painted at a time when the proletariat is still in a very undeveloped state and has but a fantastic conception of its own position, correspond with the first instinctive yearnings of that class for a general reconstruction of society…

They, therefore, endeavour, and that consistently, to deaden the class struggle and to reconcile the class antagonisms. They still dream of experimental realisation of their social Utopias, of founding isolated “phalansteres”, of establishing “Home Colonies”, or setting up a “Little Icaria” — duodecimo editions of the New Jerusalem — and to realise all these castles in the air, they are compelled to appeal to the feelings and purses of the bourgeois…

They, therefore, violently oppose all political action…; such action, according to them, can only result from blind unbelief in the new Gospel.

Revolutionaries must and will put these “castles in the air” behind them as the struggle for social justice sharpens.

And ahead are the many obstacles underscored by the Chilean events chronicled in Guzman’s film. Two critical problems of revolutionary theory that loom large in the battle for Chile are (1) the question of the military and other “security” organs and (2) the question of the “middle class.”

Clearly, Popular Unity failed to solve the problem of the military in 1973, though its leaders certainly recognized it. In our time, the near-coup in 2002 against President Hugo Chavez in Venezuela demonstrates the continuing dangers from those social elements holding a near monopoly on physical force: the military. Like the police and other organs of social control, the military invariably align with those opposing change. Without Chavez’s uniquely strong links to long-cultivated and sympathetic elements of the military, the coup would have undoubtedly led to a bloody and uncertain outcome. Any real quest for transformative change must wrestle with this question.

The question of the “middle classes” is really the problem posed by those who occupy the social space between the ownership class (the 1%) and those conscious of their diminished status resulting from employment by or servitude to the ownership class. While those who occupy this space are, in reality, also subservient to the rich and powerful, they see their status as above the poor and working class and identify their aspirations with the fate of those who rule. Labor leaders and other image shapers foster illusions about a broad and inclusive “middle class.” They offer the fantasy that auto workers and bus drivers have the same class interests as corporate lawyers and bond traders. In this imaginary world, their lives intersect at the shopping mall, the stadium, and the television set. Of course they really don’t. Even arch conservatives like Charles Murray have concluded that this view is nonsense, but the view persists widely in the mainstreams of both the US and Europe.

The dangers of these illusions are demonstrated well in The Battle of Chile. The “momios” who provided a mass base for the opposition to Popular Unity would, by and large, have eventually benefited from the Chilean road to socialism. But seduced by the lure of consumerism, vulgar culture, crass individualism and the delusional promise of joining the ranks of the privileged few, they proved to be an enormous obstacle to advancing the Popular Unity program.

In the more prosperous capitalist countries, the problem of the middle strata is even more acute today. While Marx’s judgment that the “…individual members of this class… are being constantly hurled down into the proletariat…” may be somewhat affirmed by the global economic crisis, the fact remains that the middle-class world view is resilient and will persist for some time. Belief in personal exceptionalism, like belief in spirits, is a difficult deception to shed.

“To be young and a revolutionary is a biological imperative” was a piece of graffiti scrawled on a wall in Santiago and translated for me by my friend Kay when we visited Santiago in the fall of 1990. After Pinochet, this was a welcome inspiration for those of us who placed hope in the Chilean revolutionary process. But biology will only take revolutionaries so far without a study of history. In fact, without heeding the lessons of history—in this case the Allende government and its violent suppression—the imperatives and energy of youth will dissipate and give way to cynicism and disappointment. The Battle of Chile offers these hard lessons, but also profound inspiration.

Zoltan Zigedy

zoltanzigedy@gmail.com

UNDERSTANDING THE CRISIS

For a student of Marxist political economy, one of the last year’s highlights was the seven-part discussion of the global economic crisis, its causes, and consequences which was featured in Socialist Voice, the excellent monthly publication of the Communist Party of Ireland. Beginning in January with the review of a book on the crisis, two interlocutors—identified as NC and NL-- surveyed the landscape of radical and Marxist explanations of economic crises and their meaning for the working class movement.

Several features of the discussion were remarkable.

First, the discussion was conducted in a comradely and respectful manner. Much of the academic “Marxist” dialogue is about scoring points and splitting hairs. The SV exchange, on the other hand, sought to construct and unify.

Second, the articles were free of jargon and pretension. Too often self-styled Marxist economists feel compelled to package their views in fashionable or “sophisticated” language to create an aura of profundity.

Third, the dialogue owes little to bourgeois economics. Outside of a few distinguished Marxists like Maurice Dobb, Ronald Meek, and Victor Perlo, in the English-speaking world, training in mainstream bourgeois economics has been more of a hindrance than a help in grasping and advancing Marxism. Likewise, formalism—the fetish of mathematical and logical constructs-- has elevated issues like the so-called transformation problem or the “Okishio Theorem” to center stage at the expense of pursuing and elaborating the insights of Marx, Engels, and their successors. In most cases, the formalists and academicians would be well advised to return to a study of the opening chapters of Capital, an exercise that would render much of their exercises pettifoggery.

The Socialist Voice contributions cover briefly, but clearly and seriously, the theories of crisis ranging from the tendency-of-the-falling-rate-of-profit through underconsumptionism, stagnation, long cycles, and the general crisis of capitalism. They draw on a diverse group of theorists from Andrew Kliman and the Monthly Review adherents through Nikolai Kondratiev and Hans Heinz Holz.

The articles are to be found in the January, April, May, June, October, November, and December issues of Socialist Voice or online at:     http://www.communistpartyofireland.ie/sv/index.html.

I urge everyone interested in Marxist political economy to read them. Hopefully, this discussion will generate further research and debate over the many issues addressed. Developing a clear and full Marxist account of the current crisis is a work in progress. My own thoughts, offered in the same comradely spirit, are below:

SYSTEMIC CRISIS

1. Capitalist economic crises are of two types: cyclical and systemic. In the course of capitalist economic activity, imbalances occur between various departments of production, between suppliers and producers, between production and consumption, etc. These imbalances result in slumps or slowdowns in productive activity. Bourgeois economists refer to these as “business cycle” events, meaning that they are cyclical or self-correcting; recovery is on the horizon, perhaps the distant horizon, but on the horizon. Generally, bourgeois politicians apply conventional nostrums—interest rate adjustments, state spending, incentives or inducements—to adjust these cycles to their political ends. Even though these are episodic events, the ensuing damage generally falls on the backs of working people.

2. Systemic crises, on the other hand, are reflective of deep contradictions inherent in the capitalist system. As such, they are not subject to either patience or the usual menu of remedies. Capitalism, like a perpetual motion machine, violates the laws of nature. A system cannot continue forever that depends upon increasing complex social interactions while awarding the riches produced by those interactions to a few who are dissociated from the same social processes. In the long run, the accumulation of private, concentrated wealth tends to choke off the further accumulation of that wealth.

3. Systemic crises do not pass, but are temporarily suppressed or resolved through transformative change. That is, policy makers may blunt or postpone the harshest consequences of systemic crises, but eventually systemic changes are necessitated to exit the crisis. For example, despite New Deal boasts about resolving the Great Depression in the US, the Depression’s demise only came with the vast systemic changes that accompanied a world war— socialist-like economic planning, organization, investment, and production in war supplies and the massive destruction of material assets. In our time, the full impact of the 2001 technology crisis was suppressed only to exacerbate the 2008 crisis. The underlying dynamics of capitalist crisis remained, and still remain. 

4. Systemic crises are, in the final analysis, crises of accumulation. What cripples the mechanism of capitalism most decisively is the inability to generate sufficient profit. Conversely, those factors which restrain the growth of accumulation-- retard the rate of profit-- largely account for systemic crises. Thus, broadly speaking, crises are caused by a tendency within the system for the rate of profit to fall.

5. Basing systemic crisis on failing accumulation and not imbalances or unrealized consumption has the following political consequence: it cannot be overcome with liberal or social democratic panaceas. Wealth redistribution, public sector jobs programs, social insurance etc. will not directly restore profitability unless these programs are actually subterfuges for surplus transfer. Only the restoration of profit growth will stabilize the economy. We saw this in the US after mid-2009 when profits rebounded sharply (generated by intensified exploitation!). But even then earnings began to recede again by mid-2012. Thus, for the working class, the choice is really only between helping the capitalists restore profit or working to eliminate the capitalist system!

6. Paradoxically, the crisis exists because the accumulation process is overwhelmed by the huge pool of surplus in the hands of the few, the owners of the means of production, distribution, service, and finance. Just as before the Great Depression, investment opportunities in productive activities are outstripped by the sheer weight of accumulated surplus. The rate, as well as the expected rate, of profit sinks against the aggregate capital held by corporations, banks, and the rich.  They turn to speculation in scarce resources, property and financial schemes, the ever-active “hunt for yield.” And they take on debt which amplifies the folly of this ceaseless search for a return on available capital.

7. The systemic crisis should not be understood as foretelling an ultimate breakdown of the system. Henryk Grossmann’s pioneering work on Marx’s tendency of the falling rate of profit—because of its strict logical exposition—mistakenly led some to believe that capitalism would implode by its own logic. Similarly, academic Marxists divorced from the working class movement lean heavily on projected stagnation to force the departure of capitalism from the world stage. But capitalism always has extreme measures to fall back on for its self-preservation: a re-shuffling of the cards through war, forced-march capitalism through fascism, and many forms of direct and indirect enslavement. The only escape from capitalism is through the efforts of the most advanced, organized elements of the working class armed with an understanding of capitalism. 

MONOPOLY AND STATE-MONOPOLY-CAPITALISM

1. The theorists at Monthly Review are correct to persistently point to the never-ending concentration of capital into fewer and fewer hands as evidence for the rise of monopoly capital. Mergers and acquisitions, bankruptcies, and integration ensure that leading corporations grow stronger and fewer. At the same time, they understate the resiliency of capitalism to create and re-create new arenas of competition. Frederick Engels stated it well in the very first Marxist tract on political economy (Outlines of a Critique of Political Economy): “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…” It is this seemingly small point that eludes the “Monopoly Capital” (MC) school associated with Monthly Review.

2. Even in a hugely capital-intensive industry and a paragon of monopoly like automobile production, competition persists with new producers entering the industry through new technologies (e.g., electric cars) or national initiatives (Japan, Korea, and today China and India). While price competition persists (contrary to the MC school), competition is also expressed through technological features, fuel consumption, performance, warranty protection, and a host of other differences. Moreover, these differences are based in the techniques of production and costs of production and not merely sloughed away as “the sales effort” as Sweezy and Baran do in Monopoly Capital. They equally sidestep the competition between old and new, mainstream and alternate industries.

3. Despite the persistent concentration of capital, competition among capitalists and the thirst for a return on capital stocks will always steer the system towards systemic crisis.

4. Of greater use to the working class movement is the theory of state-monopoly-capitalism. While monopolization may bend, but not break the logic of capitalism, enormous monopoly corporations have succeeded in merging their interests with the functions of the state. The enormous power and reach of monopoly enterprises have commandeered all organs of the state and harnessed the state’s actions to the promoting of capital accumulation. While the theory of state-monopoly-capitalism has been dismissed in left circles since the demise of European socialism, the priority by the state given to the US/European bank bailouts surely underscores its validity and makes the critics pause to reconsider. The theory is an essential tool for understanding the behavior of EU and US policy-makers through the course of the crisis.

“FINANCIALIZATION” AND DEBT

1. “Financialization” is an unfortunate term—fashionable, but adding little light to our understanding. The growing role of finance has been noted since before the time of Lenin. The process culminated in finance accounting for over 40% of corporate profits in the US by the early twenty-first century—in part by its increasing absorption of stampeding surplus and in part by the decline and departure of manufacturing that formerly accounted for a far greater share of US profits.

2. Unquestionably finance took on a leading role in the US, the UK, and a few other advanced capitalist countries with the creation of a vast new pool of low-wage workers available to manufacturing after the destruction of Eastern European socialism, its socialist-oriented allies and the PRC’s opening to global markets. This reflected the new national division of labor in the global economy— manufacturing and export in the East and South and finance, management, and services in the West and North.

3. As the leading financial center, the US became the Mecca for those with pockets overflowing with cash and fewer investment opportunities in an era of low interest rates and cheap money.

4. Unlike in the world of commodity production where value is produced in real time, finance offers opportunities to appropriate future value through contractual instruments like mortgages, bonds, futures, and, in our era, even more exotic creations. These instruments trade in future value, hence challenging capitalism to find even more marginal investment opportunities to absorb surplus and potential surplus.

5. Debt—the offspring of easy credit and low interest rates—serves as an amplifier of financial investment, the critical bridge to ever-more reckless speculation. Thus, finance served up its many “innovations” designed to absorb the ocean of surplus accumulated over decades and in search of another round of accumulation in an environment of diminishing returns. In this manner, the tendency for accumulation to retard its own re-production found its expression in the financial crisis that broke out in the US in 2007-2008.      

OTHER CRISIS THEORIES

1. Wave theory-- the notion that economic activity exhibits a wave-like trajectory from boom to bust and back to boom again—enjoys an almost mystical, spiritual attraction for many. Associated with the views of Nikolai Kondratiev in Marxist circles, the theory of a regular, periodic wave—long or short—is flawed for two distinct, but fatal reasons.

2. From an empirical perspective, it is impossible to settle on those features of economic history that are decisive in expressing the upturns and downturns of regular cycles. That is to say, the dependent variables are illusive and hazy. Moreover, when they are clearly stipulated—GDP, labor productivity, profits, etc—no incontrovertible pattern is revealed. Instead, only intuitive patterns are seen by those already disposed to see them.

3. From a theoretical point of view, there is no candidate for an independent variable that demonstrates a consistent and regular wave-like behavior throughout economic history (or the history of capitalism). Neither technological innovation, cultural or demographic change, nor any other candidate for the cause of cycles exhibits the kind of wave-like nature that would account for regular, periodic waves in the historic record. And where we find wave-like motion in nature (eg. Lunar cycles), there is no obvious causal connection with economic life.

4. In short, long cycles are impossible to discern without appealing to Rorschach-like impressionism and impossible to explain without assuming what it sets out to illustrate. When you want to see a face on the moon, you’ll see one.

5. We owe a great debt to Hans Heinz Holz, the late German Marxist philosopher, who brought new life to the long-standing Communist concept of the General Crisis of Capitalism (GCC). As Holz points out, Soviet social science mechanically and empirically attached the GCC to the historical stages ushered in by the Bolshevik revolution and the Second World War. This was a misleading interpretation dissolved by the setbacks to socialism.

6. Holz is correct in rehabilitating the GCC as a truly general crisis generated by capitalism’s internal mechanisms independently of important, but external events. He is correct to conceive of the GCC as a total crisis, not limited to the economic sphere but including social life, culture, ideology, and all other human relations.

7. Thus the GCC is not a theory of economic crisis. Instead, the systemic crisis of capitalism is one element—one causal element-- in the General Crisis of Capitalism.

8. Much more work needs to be done in developing a full theory of the GCC with its consequences in every aspect of everyday life.

Zoltan Zigedy

zoltanzigedy@gmail.com