Ellen Meiksins Wood: Against the Tide

Ellen Meiksins Wood died on January 14.

Ms. Wood was a prolific academic, writing many books and articles from a Marxist perspective. Among her peers, her work on the transition from feudalism to capitalism, the advocacy of so-called “political Marxism,” and her views on Ancient modes of production are remembered.

With a broader audience, she will be remembered for her staunch defense of classical Marxism at a time of full retreat.

After the fall of the Soviet Union, most of Western Marxism—both Party-based and otherwise—lost its way. Disillusionment and despair held sway. In academic circles, a period of “rethinking” Marxism grew like a virus. The fundamentals of classical Marxism were challenged by the supposed rigor of rational choice theory on one hand and the wildly wielded scalpel of post-modernism on the other.

Rational choice theory announced ominously that the Marxist foundation was not and could not be built on the basis of homo economicus, a result that was both obvious and welcome to any serious student of Marx. Nonetheless, so-called “Analytical Marxism” took a toll.

A wave of epistemological relativism penetrated Western political thought from its pretentious and esoteric perch in European-- especially French-- universities. The idea that we could not defend any foundation for our world views apart from our own subjective and uniquely shaped perspective took hold. The fact that thinkers formerly associated with Marxism promulgated these views carried considerable weight in the English-speaking world. The unity that Marxism had striven to achieve between workers and other oppressed groups was shattered into a multitude of self-reflecting identities by the post-modern turn. Students and budding intellectuals hurled the epithet of “reductionism” at every effort to reveal underlying structures or processes.

The expansion of world markets to previously market-adverse economies dramatically boosted trade and investment to new levels. Theorists dubbed this quantitative burst “globalization” and hastily heralded it as a new stage of capitalism. Some went further, counting it as a harbinger of a world with transnational corporations overruling the governance of historically constructed states.

Indeed, it was an ugly time. Nonsense abounded.

The intellectual climate fed a similar floundering of the activist left in the nineties. Socialism, as a societal vision, was diluted into a regimen of “social markets” or receded behind the allure of anarchism and spontaneity. The fuzzy, unfocussed anti-globalization movement replaced anti-imperialism as the organizing principle of the left. A nostalgic yearning for the supposed golden era of post-World War Two prosperity and a thread-bare safety net substituted for the quest for full social justice—“revolution” was retired.

It was in this context that Ellen Meiksins Wood declared war on the navel-gazers, the timid, and the opportunists abandoning Marxism. Even before the fall of the Soviet Union and the ensuing Western ideological Great Plague, she exposed the “new,” eviscerated Marxism in her Retreat from Class (1986). Reflecting upon it years later in a new introduction, she wrote:

People have, in their various ways, moved on, in ways that have very little to do with Marxism, or even socialism, except to repudiate it. It seems clear that Post-Marxism was just a short pit-stop on the way to anti-Marxism. The Retreat from Class (1998)

She carried out much of her struggle against traitors, slackers, and opportunists in the pages of Monthly Review while serving as co-editor with Paul Sweezy and Harry Magdoff from 1997 to 2000.

Her stinging attacks on the globalization thesis (‘Globalization’ or ‘globaloney’?), along with the equally biting polemics by Doug Henwood, were aimed at anyone who would dare to defend it: “…globalization…is the heaviest ideological albatross around the neck of the left today.” (MR, February 1997)

Wood saw the global dominance of markets not as a defeat, but as an opportunity for the left:

Now capitalism has no more escape routes, no more safety valves or corrective mechanisms outside its own internal logic… So maybe it’s time for the left to see the universalization of capitalism not just as a defeat for us but also as an opportunity—and that, of course above all means a new opportunity for that unfashionable thing called class struggle. (Back to Marx, MR, June, 1997)

The recurring theme in Ellen Meiksins Wood’s writings was the centrality of class struggle. Against the tide of New Leftism, neo-Marxism, post-Marxism, post-modernism, and other wooly, confused departures from Marxism, she saw the working class as the essential agent for change.

When Frances Fox Piven and Richard A. Cloward engaged her on the pages of Monthly Review (January, 1998), challenging her “nostalgia for the working-class formations of the industrial era” and asserting that “We are all social democrats now,” she responded sharply:

‘There are no social-democrats now.’ People are waking up to the fact that social democracy is not a viable option. For those who have tended to identify social democracy with socialism, there seems to be no other alternative to capitalism—in fact no alternative to the more inhumane, neoliberal forms of capitalism. So the loss of social democracy is for them indeed an awesome one. It is for them a more cataclysmic and perhaps even final loss than for those who, while certainly supporting the welfare state or any amelioration of capitalism’s destructive consequences, have always doubted the long term sustainability of capitalism “with a human face.” Those who used to place all their hopes in social democracy are inclined to explain their awesome loss not by conceding that a humane capitalism was never sustainable in the long term but by invoking some massive epochal shift which had destroyed what used to be, but no longer is, a real possibility.

In answer to the then fashionable skepticism toward the socialist project, Ms. Wood asserted that the naysayers could offer nothing beyond “a better and maybe more humane management of ‘flexible’ capitalism,” an insight that presages by nearly two decades the principled refusal of Greek Communists today to join SYRIZA in the management of capitalism.

Lest anyone believe that Wood harbored any illusions about reformism apart from the goal of socialism, she offered the following thoughts to a 1999 forum in South Africa which included participants from the ANC, COSATU, and the South African Communist Party:

My main point is that there can be struggles and objectives short of a socialist transformation, but there can’t be such a thing as a Third Way. There really is no middle ground between capitalism and socialism.

That’s not a paradox. It simply means that all oppositional struggles… should be informed by one basic perception: the class struggle can’t, either by its presence or by its absence, eliminate the contradictions in the capitalist system, even though it can ultimately eliminate the system itself… without falling into the hopeless trap of believing that the left can do a better job of managing capitalism. Managing capitalism is not the job of socialists, but, more particularly, it’s not the job that can be done at all. (MR, September, 1999)

No doubt events have played the largest role in washing away much of the ideological fashions that enjoyed such popularity with the Western left in the 1990s. Endless wars, exploding inequality, and an epochal economic crisis make what appeared to be learned assessments and ominous projections appear little more than naïve.

We should not forget, however, how important it was to have a few courageous voices defend principle against the current, to stand firm while others were in full retreat.

Ellen Meiksins Wood was one.

Zoltan Zigedy

zoltanzigedy@gmail.com

A Moment Charged with Possibility

Writing in the Los Angeles Times (If Bernie Sanders loses, his backers may not be there for Hillary Clinton in November, February 5), Evan Halper and Michael A Memola report:

Gio Zanecchia is so enamored of Bernie Sanders that he made a five-hour drive with his wife and infant son from South Jersey on Saturday morning to catch a glimpse of the progressive firebrand.

But what if Sanders loses the Democratic nomination? Asked whether he will be there to vote for the Democrat in November should Sanders falter, the 34-year-old union mechanic reacts as if the question is insane. There is not a chance, he insists, that he would ever support Hillary Clinton.

“She’s establishment,” Zanecchia said. “Most of the guys I work with think she’s a criminal.”…

This is not a group that is particularly loyal to the Democratic Party. While liberal Democrats make up a big chunk of Sanders’ support, many other backers are independents. Some mistrust the party so much that Sanders supporters booed the party chair when she took the stage Friday night at a dinner at which the candidates spoke.

Zanecchia’s second choice for president is Donald Trump.

Attempting to interpret the electorate for the Wall Street Journal (The Life of the Party, January 30-31), John O’Sullivan, a prominent writer, highly regarded in conservative circles, agrees that Democratic Party loyalty plays a diminished role in this electoral cycle. He sees changes in the Democratic Party as creating a gulf: “These changes have orphaned a very large class of voters. Working-class Americans no longer feel well represented by the Democrats…”

But he sees a similar gulf lurking in a significant section of the Republican Party, producing: “ the people now saying that they will vote Trump for president. Early media analyses tended to assume that these voters were Tea Partiers under a new flag. But… Philip Bump… found that Trump supporters were younger, poorer, less educated, less conservative, more moderate, more likely to call themselves Republican, less likely to call themselves independent…, more likely to be white and less likely to be evangelical than were Tea Party supporters on all these points.”

Mr. O’Sullivan is troubled because these Republican-in-name voters are less willing to carry the water for the corporate Republicans. They eschew the anti-government dogma that welds corporate Republicanism together with the Tea-Party: “Tea Partiers stress constitutional limits on what government can and should do; Trump supporters are enthusiastic for getting things done and aren’t too particular about how that happens.”

The Trumpets and Trumpettes lack enthusiasm for free-market ideology: “[L]ibertarianism and its prophet, Sen. Rand Paul, have been pushed aside by the rush of popular support to Mr. Trump, who represents, if anything, a movement from libertarianism to activist government.”

And most alarming to Mr. O’Sullivan and the corporate Republicans, “…Mr. Trump has sweepingly promised to preserve entitlements against… reforms, discouraging other Republicans from making this tough case.”

Thus, the Trump segment of Republican voters departs sharply from the corporate Republican playbook and represents somewhat of a challenge to the core corporate ideology of Republican Party bosses.

Of course the Trump constituency openly embraces the anti-immigrant racism stirring in all the elements of the Republican base. O’Sullivan sees this more of a tactical issue than a principled difference.

Something is stirring in the US electorate

Dissatisfaction within the two parties is not new. The desire for a break from the past, for change, drove the Obama election. And the rise of the Tea Party signaled turmoil within the Republican Party. While Obama and the Tea Party were both responses to a continued deterioration of confidence in US institutions and politicians, the challenges never threatened the two parties’ pro-corporate programs-- the Obama phenomena never eroded the dominance of big business or the banks, nor did it pretend to do so; the Tea Party never distracted the Republican Party from its mission to promote capital, big and small. Both parties were confident that they could stage manage dissatisfaction and tame dissent in the final act.

The Sanders and Trump successes suggest that voters are not appeased by the thin gruel offered by the party elites this go-round. But something more profound is occurring—a refusal to settle for the usual charade. Moreover, party loyalty is unusually thin this time, challenging party leaders’ ability to count on a transfer from one candidate to another. What the pundits call “unpredictability” is actually the exercise of a new level of political maturity and independence.

A recent Pew Research Center poll (December 8-13, 2015) bears out the mood of voter alienation: 62% of all respondents maintain that “the federal government does not do enough for middle-class people.” Thus, the notion that anti-government sentiment runs deep in the populace is a media-inspired illusion. Instead, people want better government.

Furthermore, the respondents harbor no illusions about the political parties. Sixty-two percent (62%) believe that the Republican Party favors the rich. And only 32% of the public believe that the Democratic Party favors the “middle class.”

One should not be fooled by the dodgy term “middle class,” so popular with class-conflict deniers. Respondents understand the term as roughly synonymous with “working class”: “When it comes to what it takes to be middle class, there is near unanimity in the public that a secure job and the ability to save money are essential for middle-class status.” (Pew)

Thus dissatisfaction is understandable when “middle class” is coupled with the finding that “Majorities of self-identified middle-class (58%) and lower-class adults (73%) say that good jobs are difficult to find.”

An even more recent Pew poll (released 2-10-16) shows a remarkably strong unhappiness with the US economic system (presumably capitalism!): “A substantial majority of Americans – 65% – say the economic system in this country ‘unfairly favors powerful interests.’” Fewer than half as many (31%) say the system “is generally fair to most Americans.”

While rejection of “the establishment” and “business-as-usual” marks a new level of political maturity, it is not accompanied by a comparable ideological clarity; the public shares only a murky vision of alternatives. The expression of dissent through such diverse electoral vehicles as Sanders and Trump demonstrates this point.

Nonetheless, the successes of the Sanders campaign, despite many weaknesses, open up an opportunity for the left in the US. Sanders has successfully and unapologetically embraced words like “socialism” and “revolution” in his campaign narrative. Never mind that he may use the words in a modest, unthreatening way; they have been effectively banned from main stream US political discourse for most of our lives. To the shock of many, a Boston Globe survey of New Hampshire Democratic Party primary voters prior to the February 9 vote found that 31% described themselves as “socialist,” over half of those between the ages of 17 and 34 did so as well.

Certainly many only have a hazy idea of socialism, but any one afraid to discuss socialism with others in this climate should surrender her or his leftist badge.

The failure of intense red-baiting to gain traction at this moment is equally remarkable. Consequently, the occasion to interact with an angry electorate looking for fresh answers should not be lost to the socialist left.

While Democratic Party values have inexorably moved rightward over the last 25 years or more, its loyal followers have just as deliberately moved leftward. An NBC/Wall Street Journal poll shows that Democrats describing themselves as “Very Liberal” rose from a mere 9% in the Bill Clinton era (1992) to 22% in 2016. Whatever “Very Liberal” means, it should be fallow ground for those of us offering a fresh alternative. It is surely apparent that the barrier to moving politics leftward is the Democratic Party establishment and the two-party stranglehold on change.

Lest anyone harbor illusions, the insurgencies are very far from victory. The two party establishments are not going to surrender—they will fight ferociously to the end. After all, the two parties belong to the elites and their corporate partners.

On the Republican side, should a corporate Republican fail to rise to successfully challenge Trump, Michael Bloomberg stands in the wings with a threatened independent run. The party’s corporate masters would rather he scuttle the ship temporarily than see Trump set back Republican chances for the next decade, especially with the emerging minority majority.

Should Clinton falter on the Democratic side, Biden is waiting in the wings, ready to accept a hand off. Rigged primaries, media assaults, and other traps lie ahead for Sanders before a stacked convention. We must remember that the Democratic Party doesn’t belong to the people.

The left must offer ideas of substance and clarity, along with bold alternatives, to the young idealists supporting Sanders’ quixotic campaign or they may retreat to indifference and inaction. A lot is possible.

Zoltan Zigedy

zoltanzigedy@gmail.com

Journalists or Courtesans?

If there is an honest, unfettered, or unsullied investigative reporter or commentator working for the major—even minor—US commercial press, would he or she please stand up?

This past several weeks have demonstrated that the so-called “free press” may well be free of overt US government dictate, but it nevertheless hues faithfully to the US government line on foreign policy matters. The words that flow from the official US spokespersons are dutifully recorded and slavishly reported as news copy by every domestic reporter or pundit holding a press badge and assigned to cover a branch of government.

Consider the outrageous rebuff of Seymour Hersh who has won well over a dozen of the most prestigious US journalism awards, including the Pulitzer and five Polk prizes. Responsible for the My Lai and Abu Ghraib atrocity revelations, Hersh has been effectively blacklisted from publishing in the US since 2013. His accounts of the Syrian war and the US assassination of Osama bin Laden were published overseas in the London Review of Books, since his former primary publisher, The New Yorker, and other US outlets refused to accept them. Amazingly, no groups of journalists, journalist organizations, or “freedom of the press” advocates have risen in protest against this muzzling of one of their most esteemed colleagues. Collective letters protesting alleged media repression in socialist countries or countries critical of US policy appear regularly in the New York Review of Books and as paid ads in the New York Times; yet these same indignant journalists, pundits, and academics have remained overwhelmingly silent when it comes to Seymour Hersh.

Even more outrageous is the lack of any serious effort by the mainstream press to confirm or refute Hersh’s claims. His counter narrative to the Obama Administration’s well publicized and embarrassingly self-serving account of bin Laden’s death would be easily assessed by following the threads developed by Hersh. Instead, the press interviewed a handful of government officials and camp followers and left the official story intact.

Even more egregious, some independent investigations of Hersh’s Sarin-gas claims have surfaced that suggest strongly that he might be right in laying the gassing of civilians at the doorstep of US allies in the anti-Assad crusade. Both a UN agency and a Turkish legislative body have challenged the sensational claims of alleged Syrian government barbarity that prop the US argument for regime change. However, no major US media outlet has actively acknowledged this challenge—a shameful affront to journalistic integrity.

The Blair/Ghadaffi Phone Transcripts

A few weeks ago, Tony Blair, former UK Prime Minister, released transcripts of two phone conversations that he had with Muammar Ghadaffi on February 25, 2011. Despite their significant bearing on the early moments of the Libyan rising that led to Ghadaffi’s assassination and overthrow, US media barons and their sycophant employees chose to trivialize the importance of the calls.

Ten days after the date that the West marks as the major start of the Libyan uprising, Tony Blair placed an anxious call to the Libyan leader, self-admittedly at the behest of the Obama administration and the NATO allies. It is just as clear, with hostilities at an early stage, that Blair is threatening Ghadaffi on behalf of his sponsors. He begins innocuously enough, decrying violence and calling for a peaceful outcome. He then adds that Ghadaffi must “engage with the international community, including American and European…” Why that engagement is essential is not clear. But it soon becomes so…

Five hours later, Blair is back on the phone with a message from his masters: “…if you have a safe place to go you should go there because this will not end peacefully and there has to be a process of change, that process of change can be managed and we have to find a way of managing it.” He goes on: “the violence needs to stop and a new constitution needs to take shape… I repeat the statement people have said to me, if there is a way that he can leave he should do so now. I think this can happen peacefully but he has to act now and signal that he wants this to happen.” [my italics]

Blair could not be clearer. He is demanding that the leader of a sovereign country step aside and allow the US and European powers unilaterally and without the consent of the people of Libya to determine the future of Libya. Moreover, Blair clearly backs the demand with the threat of violence—“…this will not end peacefully.” Sane people would count this as tantamount to a coup.

For his part, Ghadaffi asks Blair to come and see the situation himself. He denies that the situation is either dire or unstable. But he does affirm strongly that his opposition is Al Qaeda—that is, extreme fundamentalists. He asks Blair if he supports them: “…are you supporting terrorism?” Exasperated with the threat, Ghaddafi concludes: “…we have no problem, just leave us alone. If you are really serious and you are looking for the truth, get on a plane and come see us.”

Of course Blair and those pulling his strings were not “looking for the truth’ anymore than the Western media are seriously looking for the truth.

Less than three weeks later, the UN declared the infamous “no fly zone” that allowed NATO forces to launch an air war against Ghadaffi’s forces. US and NATO planes, along with covert fighters from the Gulf States, crippled loyalist forces and violently turned the war against Ghadaffi just as Blair said they would.

And today, Libya is a broken, ungovernable state, a haven for jihadists, just as Ghadaffi said would happen.

A pity the courtesans of the US media show no interest in “looking for the truth.”

Adrift in the Persian Gulf

Two shallow draft riverine craft operated by the US military were boarded and held by Iranian security forces near Farsi Island the day of President Obama’s state of the union address and days before a radical shift in US-Iranian relations.

Any reasonably alert reader of US news accounts of this encounter would be curious about nearly every detail and subsequent explanation offered. The fact that two specialized military craft favored by US special operations and used extensively for command, control and reconnaissance, were boarded in Iranian territorial waters near Iran’s largest naval base might cause some wonder.

The fact that the riverine craft are designed to operate in shallow river or coastal waters, but found their way over two hundred miles from the Saudi shore and in the middle of the Persian Gulf surely warrants some further wonder.

The military’s first explanations of these bizarre circumstances blamed engine failure and drift for the embarrassing presence of two boats and ten US personnel in unauthorized waters.

Of course, it’s hard to imagine that both boats suffered engine failure at the same moment and no relief was mobilized to render assistance. Before anyone asked embarrassing questions (not that the lapdog press would), Defense Secretary Ash Carter offered another tale: navigational failure caused the boats to go off course (way off course!).

But should anyone press this explanation (no one did), they might notice that the boats are equipped with sophisticated navigation, radar, and communication systems; and the likelihood that both of the boats would make the same error, go undetected, and proceed radically off course is about the same as a commercial air craft leaving New York’s LaGuardia airport and heading east rather than west.

So the military (CENTCOM) returned to a version of the first account, stating emphatically that mechanical failure of one boat’s diesel engine caused the two to stop for repairs while travelling from Kuwait to Bahrain. Of course that leaves the question of why the shallow draft boats needed to be hundreds of miles from the Saudi coast in the middle of the Persian Gulf, far away from the most direct and appropriate route to their destination.

But the bumbling explanations caused no consternation among the willfully gullible capitalist press. Instead, they reported earnestly the xenophobic ranting of election-season politicians about imaginary offense to US virtue.

Apart from Glenn Greenwald at The Intercept, no significant media figure cast a doubt on the Pentagon’s ever changing fairy tale, another demonstration of the utter spinelessness of the US media.

Zoltan Zigedy

zoltanzigedy@gmail.com

Tottering on Another Brink

In June of 2015, I wrote:

Broadly speaking, the three key factors of fixed business investment, productivity and, corporate profits have been trending downward for three to four years. First-quarter 2015 fixed investments fell 3.4%, not surprisingly, output per hour (productivity) fell by 3.1%, and earnings were expected to barely move. These three interdependent and fundamental indicators underscore the critical weaknesses in the US economy. Capitalism has wrung as much sweat as it can from workers, managers are reluctant to invest in new or advanced means of production, and US corporations are experiencing a decline in the rate of profit.

Since then, the “three key factors” gauging the health of the US economy have only worsened: Capital expenditure in the third quarter fell by 3.8%, productivity on an annualized basis was only up .4% for the third quarter, and profits suffered the largest (annualized through the third quarter) decline since the 2008 downturn.

In addition, the US manufacturing activity index (Institute for Supply Management) has fallen to its lowest level since June of 2009 and industrial production has declined for the third straight month through November (the just released December data from ISM affirm the first consecutive monthly contraction of the index of manufacturing activity since 2009).

Capacity utilization has dropped to 77%, the lowest in two years. Before 2007 and the onset of the economic crisis, it stood at 80%.

I wrote in June of the stock market inflation generated by mergers and acquisitions, stock buy-backs, and the obscenely low cost of borrowing. The wealth effect of that inflation—its psychological effect on spending—has receded. Market losses account for most of the $1.2 trillion in erased wealth in the third quarter, as reported by the Federal Reserve.

The rout of junk bonds (high-risk, high-yield bonds) in 2015 only adds to insecurity. While junk bonds only totaled $709 billion at the onset of crisis in 2008, they totalled $1.3 trillion when investors began to abandon them. Consequently the ratio of high-yield debt to corporate earnings is close to a new high. A faltering equity market is dampening investor euphoria.

I warned in June:

Today, there are 65 venture capital investments of over $1 billion each (CB Insights says there are 107), drawing funds from yield-hungry retirement funds, mutual funds, and hedge funds. Whatever the number, all agree that the total capitalization of these investments in firms that are little more than start-ups approaches or exceeds the capitalization of the similar “dot com” firms that blew up in 2000.

But new start-ups hit powerful head winds in 2015, especially in the tech/internet sector. As The Wall Street Journal reports: “Technology and Internet companies that went public in the US raised $9.5 billion in 2015, down from $40.8 billion in 2014… the number of IPOs in the sector dropped by more than half, to 29 from 62.”

Clearly, “yield-hungry” investors have miscalculated, as reflected by the current sharp fall of the NASDAQ equity market.

Of course, the US economy is also decidedly rocked by global developments: the PRC economy is shaky at best, the EU is stagnant, Canada is slowing, and the Russian and Brazilian economies are in sharp decline.

While consumer spending has buoyed the US economy, lifting GDP into positive territory, the well-spring of capitalism—profitability—continues to pose the critical problem. The third quarter of 2015 suffered the largest annualized decline in profits since the 2008 downturn. Third quarter profits were down 1.1% from the second quarter and 4.7% from the same quarter in 2014, demonstrating a persistent downward trend.

Interviewed in Barron’s (December 21, 2015), David Levy of the Jerome Levy Forecasting Center perceptively opined: “…But the one thing that has actually caused the economy to weaken a little is sagging profits. We’ve heard people use the expression ‘profit recession’, but there is no profits recession without a real recession. I see signs of things slowing as a result of that profits decline…”

It confounds me that progressive economists, many Marxists, and even Communist Parties continue to locate the source of the ongoing, and now deepening, capitalist crisis in “overproduction” or declining consumption or demand. These notions are remnants of an earlier pre-monopoly era or the influence of Keynesian thinking on Marxism and the broader Left. The “overproduction” that is relevant to capitalist crisis is the overproduction of capital which cannot find a profitable home without gumming up the accumulation process.

The demand-based theories serve as the centerpiece of social democratic crisis theory. Yes, corporate revenue and consumer spending are now stagnant or declining—not as leading indicators, but as consequences of a general economic slowdown brought on by the prospect of fewer profit opportunities. But it is a fall in the growth of profits or a decline in the rate of profit that causes capitalists to apply the brakes. If markets demonstrate greater profitability (by awarding capitalists a greater share, for example), capitalists will continue to invest, fuel the economic engine, even in the face of the stagnant or declining revenues of the moment. Of course falling revenues will eventually further retard the rate of profit. But it is profit that propels capitalism or sinks it in its absence.

For Marxists, it is not simply the numbers that explain the future, but the trends or patterns. Clearly the trends are negative. With central bank tools largely exhausted, it is difficult to imagine an easy escape from deepening crisis; it is difficult to see the coming year as bringing anything other than economic hardship.

Given the rise of the extreme right and the absence of a militant left in most countries, the economic crisis threatens to pose formidable political obstacles. And given the ubiquitous deadly conflicts and increasing inter-imperialist hostilities, the new year demands a heightened commitment to peace and social justice. That commitment must go beyond the tinctures and band aids served up currently by liberals and social democrats.

Zoltan Zigedy

zoltanzigedy@gmail.com

After State Monopoly Capitalism?

Few review articles are as satisfying as the recent Paul Krugman examination of Robert Reich’s new book, Saving Capitalism: For the Many, Not the Few, in the New York Review of Books (December 17, 2015). To begin with, it was gratifying to find the stark candor behind the title of Reich’s book. “Saving capitalism” assuredly implies that capitalism is on the ropes—in danger of expiring—an implication that I both believe and welcome.

Robert Reich, Paul Krugman, and another colleague, Joseph Stiglitz share lofty accomplishments in academic economics and constitute the intellectual triumvirate informing the non-Marxist left in the US. Although they do not agree on everything, they share a core set of beliefs in the viability of capitalism and its need to reform. It is unusual to see Krugman and Reich suggesting such blatant urgency.

The felt urgency turns on the dramatic increase of economic inequality in major capitalist countries, particularly the US. Krugman stresses that inequality was an issue that Reich and he “were already taking seriously” twenty-five years ago. That may be, but I think it’s fair to say that neither was taking the growth of inequality seriously as a structural feature of capitalism until the important work of Thomas Piketty two years ago.

Krugman takes us on an intellectual journey, outlining in clear, non-technical terms how he, Reich, and other non-Marxist economists modified their understanding of the causes of inequality growth (not simply inequality, but its growth) over the last several decades. Where Krugman arrives is nothing short of amazing: he, no doubt unwittingly, describes an evolved capitalism resembling the capitalism that Marxists described well over half of a century ago.

Decades ago, liberal, mainstream economists believed that rising inequality in the US sprang from a poor match between technological requirements and workers’ skill sets—what Krugman calls “skill-based technological change” (SBTC). Education was seen as the great leveler, restoring wealth and income to those falling behind. But with the correlation between levels of education and compensation broken today, all reject SBTC as an adequate explanation and the key to arresting the growth of inequality. The growth of debt-laden college graduates working in call centers surely shatters that illusion. Or as Krugman smartly puts it: “…hedge fund managers and high school teachers have similar levels of formal training.”

But economists fell back on another technological example: robots and other productivity-enhancing devices replacing workers. But Krugman makes short shrift of this explanation:

…if we were experiencing a robot-driven technological revolution, why did productivity growth seem to be slowing, not accelerating?

…if it were getting easier to replace workers with machines, we should have seen a rise in business investment as corporations raced to take advantage of the new opportunities; we didn’t and in fact corporations have increasingly been parking their profits in banks or using them to buy back stocks.

Krugman thus dismisses a technological explanation for the growth of inequality.

Instead he urges that we consider the centerpiece of Reich’s study: monopoly power.

It is the concentration of economic power in the hands of fewer corporate players that accounts for growing economic inequality, according to Krugman and Reich: “…it’s obvious to the naked eye that our economy consists much more of monopolies and oligopolists than it does of the atomistic, price-taking competitors economists often envision.”

So why did it take Reich and Krugman so long to arrive at this juncture, a place that Lenin visited over a hundred years ago? Marxist writers like Paul Baran and Paul Sweezy devoted an entire influential book to monopoly capitalism nearly fifty years ago.

Krugman apologetically-- “an intellectual and a policy error”--attributes the mainstream economic neglect of monopoly to an influential paper written by Milton Friedman in 1953 that emphatically dismissed the effects of monopoly power on significant economic behavior.

Thus, non-Marxist economists and their political allies have scorned the concept of monopoly power until recently, a concept that Marxists have made a centerpiece of their analyses for most of the twentieth century. What is “obvious to the naked eye…” now informs the theories embraced by our left-leaning reformers.

But Krugman and Reich reveal another crucial linkage—that between economic power (monopoly power) and political power (“And this ties the issue of market power to political power”). They see monopoly power as sustained, protected, and expanded by political actors. At the same time, they see political actors as selected, nourished, and guided by monopoly power. This creates a troubling conundrum for those seeking to reform capitalism. Reich’s conclusion, in Krugman’s words:

Rising wealth at the top buys growing political influence via campaign contributions, lobbying, and the rewards of the revolving door. Political influence in turn is used to rewrite the rules of the game—antitrust laws, deregulation, changes in contract law, union-busting—in a way that reinforces income concentration. The result is a sort of spiral, a vicious circle of oligarchy.

Putting aside the clashing metaphors of circles and spirals, this statement reasonably captures the mechanism behind the socio-economic formation Marxists call State Monopoly Capitalism.  For Marxists, concentration necessarily begets monopoly capitalism, which subsequently completely fuses with the state, creating a mutually reinforcing synthesis. The state rules in the interest of monopoly capitalism while policing the economic terrain to maximize the viability and success of monopoly capital. Monopoly capital legitimizes the state and selects and imposes its overseers. Nothing demonstrates the intimacy more than the crisis bailouts of mega-corporations (“too big to fail”) and the increasing establishment of international governing bodies and trade agreements. Nothing demonstrates monopoly capital’s political dominance more than the decisive role of mega-corporate money in the two-party political process.

With the recognition of the vital link of monopoly capital and the state, Krugman and Reich reach an understanding on a parallel with those Marxist theorists who characterized the post-World War II era as one of state monopoly capitalism. While some features of that characterization were and are sometimes disputed (see, for example, Politico-Economic Problems of Capitalism, Y. Varga, 1968), most Marxists would enthusiastically welcome the two economists to their camp on this important issue.

But unlike Marxists, who see the overthrow of capitalism as the final answer to the wedding of monopoly power to political power, Krugman, Reich and their liberal and social democratic colleagues are left with the conundrum that follows inescapably from their conclusions about the source of inequality. The economic reforms that they envision to retard the growth of inequality are altogether blocked by the massive political power stacked against them. And that political power is stacked against reform because political power is the purchase of monopoly power. In other words, their findings confirm that monopoly has the political process locked up and that lock will ensure that monopoly will continue to grow along with inequality.

Krugman clearly recognizes this conundrum and casts serious doubts over Reich’s wistful glance back at the past and faith that a New Deal-like solution will magically emerge from the amorphous “populism” of candidates from both parties (he mentions Ted Cruz!).

Of course Krugman is right in dismissing Reich's nostalgic answer, but he can offer no alternative.

We conclude that the growth of inequality will only be stopped when the program of saving capitalism is put aside for a program that vigorously challenges the capitalist system. We hope that Krugman and Reich will draw the same conclusion in the future.

Zoltan Zigedy

zoltanzigedy@gmail.com

Where Did You Get the Money, Anne?

Without a Truth and Reconciliation Commission, we may never know to what extent cultural and intellectual life in the US was shaped by schemes and resources associated with powerful US Cold War elites. Thanks to scholars like Francis Stonor Saunders (The Cultural Cold War: The CIA and the World of Arts and Letters), Hugh Wilford (The Mighty Wurlitzer: How the CIA Played America), and a handful of resourceful academics, we can piece together a shameful story of knowing and unwitting collaboration with Cold War goals across and deep within the elite academic community; we know of the widespread compromise of key, influential figures in the media to the wishes of the Cold Warriors; and we better understand why some cultural and intellectual trends seemed to flourish while others were left to wither.

At the same time, we have learned more of the repression of dissent from the Cold War consensus. Facts have been uncovered that show that “McCarthyism” was more than a momentary lapse in democratic values. The post-war repression left scars that persist, thought patterns that remain frozen, intellectual and cultural roads that continue to be blocked.

For those who study this history, twentieth century intellectual pillars like Robert Conquest, George Orwell, and Isaiah Berlin are now diminished in stature. Their witting engagement with and sponsorship by secret services and the covert promotion of their ideas shatter any claim to the intellectual integrity of their widely influential work. While this tarnishing of Cold War icons is accepted by most academic specialists, the kept mainstream media continues to herald the “truths” disseminated by similarly kept Cold War intellectuals.

With the Cold War long over, the enduring chant of anti-Soviet demonology continues, but with a new generation of intellectual charlatans conjuring the demons.

The current flock of professional anti-Communists is equally adept at turning from its defamation of the Soviet Union to defaming capitalist Russia. It really comes down to serving up whatever its masters demand.

Timothy Snyder (Bloodlands) and Anne Applebaum (Gulag: A History, Iron Curtain: The Crushing of Eastern Europe, 1944–1956) are two of the new breed of intellectuals who espouse views that uncannily coincide with the ideological needs of our ruling elites. As I wrote in March of last year, the two brought their arsenal of invective to smear the deposed Ukraine president Yanukovych, hail the violent, extreme-right opposition, and plant the evil Russians in their apologies for the Ukrainian coup.

While Snyder’s academic credentials convey “expert” standing on his pronouncements, Anne Applebaum has parlayed a master’s degree in international relations and a career in journalism to a widely celebrated place as the leading “scholar” of Soviet-era repression. It’s fair to see her as heir apparent to Robert Conquest, owning the privilege of making ex cathedra judgments of everything Eastern European.

August publications like The New York Review of Books welcome her every thought on Soviet history or modern Eastern Europe, as does nearly every other Western medium. Curiously, none pauses to weigh-- not to mention, to acknowledge—Ms. Applebaum’s marital tie to one of Poland’s more prominent anti-Russian, right-wing, and controversial politicians, Radoslaw Sikorski. Sikorski’s racist outbursts, his extravagant life style, and his virulent anti-Russian screeds cast no shadow over his spouse’s exalted status in the West.

Sikorski’s recent scandals involving corruption and financial mismanagement are widely reported in Poland, but unaddressed in the West. In the US, the Polish power couple (Applebaum has taken Polish citizenship) is viewed as a paragon of liberalism and integrity.

But thanks to the tenacious research of an expatriate US citizen named John Helmer, evidence has emerged that suggests that Applebaum, like her intellectual forbearers, has tasted of the forbidden fruit. Polish law requires that officials and spouses report incomes, reports that are publicly accessible. According to Sikorski’s 2014 report, Ms. Applebaum earned around $800,000 from non-Polish sources in 2013. Generously allowing for income from book royalties, her WaPo and Newsweek columns, and a salary from the Legatum Foundation in London, that leaves several hundred thousand dollars unaccounted for (Helmer estimates $565,000).

It doesn’t take much imagination to see the workings of a hidden hand, a hand grateful for Applebaum’s slavish support and promulgation of US and NATO foreign policy objectives in Ukraine and other Eastern European countries.

Wikileaks noted this interesting bump in income (Sikorski reported his wife’s earnings as $20,000 the prior year). Applebaum responded to Wikileaks with out-of-character discomfit and the intensification of her anti-Russia hysterics. She tweeted: “Wow! Assange now using fake/libellous slander from John Helmer, who fled US after being recruited by the KGB in 80s.”

There is nothing like a dose of red-baiting to deflect the question.

Whether Applebaum can explain this sudden bounty is uncertain. But one thing is certain: the Western media will never allow it to derail the war-mongering propaganda blitz targeting Russia.

Zoltan Zigedy

zoltanzigedy@gmail.com

The Pathologies of Capitalism

Capitalism owes its resilience to its ability to devise novel tactics to deflect, distort, and deflate mass resistance. Even with the casualties of global capitalism mounting, capitalism’s fixers have channeled public dissatisfaction and disappointment into private diminished self-worth and self-destructiveness.

London Review of Books reviewer, Katrina Forrester, aptly captures this insidious ploy: when faced with oppression and exploitation “Don’t join a union, pop a pill.” In her perceptive review of William Davies’ The Happiness Industry: How the Government and Big Business Sold Us Wellbeing (22 October 2015) she exposes the wide spread practice of defining rebellious behavior or negative attitudes as psychological disorders. “...if you’re not happy, wish things were different, or find it hard to adapt to the conditions of modern life, you may be diagnosed as suffering from a mental illness.”

More and more often, academics and therapists have accepted the notion that depression or dysfunctional behavior is a mark of mental problems regardless of the causes of the behavior or attitude. They “…think of unhappiness as a pathology, a psychological or mental state amenable to behavioral and medical intervention. This is the logic that underpins the growth of the ‘happiness industry.’” Thus, for example, when an Iraqi mother loses two sons fighting a foreign occupier, when her personal security is constantly threatened, and living conditions continue to deteriorate, her unhappiness is pathological. It is not the horrid conditions of her life (conditions which could have been avoided or can be altered), but her “negative” feelings that must be changed.

As Forrester points out, “Many people are unhappy for good reasons, which the new therapeutic practices of the happiness industry largely ignore.”

She goes on:

Where once the solution to unhappiness at work was social reform and collective action, now it’s individual uplift and “resilience”; when we want to resist, we don’t join a union but call in sick. If you lose your job and feel demoralized at the prospect of looking for a new one, that too might be a diagnosable condition.

Forrester reports that in the UK some have taken to rebranding unemployment as a psychological disorder with claimants’ “attitude to work” used as a determinant of benefit worthiness.

While appreciative of the book under review, Forrester faults the author for his weak answer to the happiness industry. Rather than recognizing that happiness-obsession serves capitalism by trivializing capital’s destructive nature, William Davies sees it as somehow a threat to democracy. By touting “democratizing” the work place, Davies joins all social democrats in assiduously avoiding placing capitalism’s pathologies at capitalism’s doorsteps. And Forrester sees this flaw clearly: “Happiness and depression are tied up with capital in ways far more concrete than Davies allows.”

Pathological Blowback

It is no secret that whites have often been the most socially compliant demographic group. Middle-aged white people are today inclined to cling to the dominant ideological narrative, to support the ruling class “verities.” But they are paying a heavy price for the trust that they have placed in wealth and power.

A recent study, Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century, shows that whites, especially less educated whites, between the ages of 45 to 54 have suffered a dramatic increase in mortality since 1999. The authors, Professors Case and Deaton, argue that much of this increase is caused by an over four-fold increase of drug and alcohol overdoses, an over 50% increase in suicides, and an over 25% increase of chronic liver disease. Further, they have related this abuse to mental-health problems and problems in handling personal difficulties, especially economic stresses.

Case and Deaton speculate that increased mortality may have caused 488,500 deaths that could have been avoided between 1999 and 2013—what the anti-Soviet Kremlinologists of the Cold War era would label “unnecessary deaths.”

While there is much alarm in the mainstream academic and social work community, there are few theories about how such mass “unhappiness” could occur and about how to arrest it.

But is it really that difficult to discern the causes of this mental health epidemic?

Should it be a surprise that white people who came of age during and after the Reagan era of fanatical US boosterism, who experienced the period where all social questions were settled with the mantra “Are YOU better off now?”, and who endured a time when personal “success” trumped social relations and social responsibilities, would now find disappointment, even despair in the unrelenting crises of the twenty-first century?

Capitalism fostered an ever-present trend of alienation, isolation, and subjectivism that accelerated dramatically over the last forty years. Extreme competitiveness for jobs, status, and power nurtured the virus of selfishness and insensitivity. In the Hobbesian State of Nature that ensued, many were consumed by ruthless competition—the struggle for success. Those who were “losers”—and there must be losers, if there are winners—were stripped of their self-worth.  

With the promise of boundless prosperity and the ideology of self-advancement rocked by two devastating economic crises in the first decade of the twenty-first century, those most committed to this faith were devastated. Harsh realities caught up with the fairy tales spun by capitalism’s apologists. For those seeing no options, alcohol, drugs, and suicide became an answer.  

But causes of this epidemic are not found in the soul or mind, but in capitalism. And solutions are not found on the therapist’s couch, in self-help sessions, the drug store or the bottle, but in creating a world where everyone has a welcoming, useful, and satisfying place. That place will never be found where capitalism reigns.

Zoltan Zigedy

zoltanzigedy@gmail.com