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Monday, March 29, 2010

Marxist Fundamentalism

As much as things have changed since Karl Marx’s time, his fundamental insights about the nexus of labor, exploitation, and profit remain the best guide to understanding capitalism and capitalist crisis. Theorist have come and gone, spinning elaborate revisions or alternatives based upon concepts of under consumption, over production, imbalance, disequilibrium, etc. Many have found in changing features of capitalism - like monopolization, automation, vertical integration, de-centralization, chip and robot innovation, globalization, financialization, etc - the altering of the logic of capitalist production and its inclination to dysfunction. Still others have seen changes in ownership and management relations as changing the dynamics of capitalist accumulation. While all of these reflect truths and useful perspectives, they miss or obscure the engine that drives all capitalist processes: the pursuit of profits through the exploitation of labor by the capitalist enterprise.

For Marx, the expression of this engine and its propensity to misfire lies in the struggle to maintain profits against its intrinsic tendency to decline. Call me a fundamentalist, but I believe this was, and remains, the best, if not only, road to understanding capitalist crisis, including the current deep downturn.

Exploitation, Profits, and Wages

I have written often and emphatically of the rise in the US rate of exploitation in the aftermath of the severe economic decline. I have pointed to the explosion of labor productivity driven by mass unemployment, weak organized resistance, and government complicity. The official numbers are staggering and beyond any recent precedent (see Exploitation Soars, Unemployment Jumps! and The Class War: Where Things Stand). And the reports of this radical restructuring of the relations between labor and capital continue to mount, though of little notice in the labor and left press.

The Commerce Department reports that fourth quarter 2009 pretax corporate profits rose nearly 30% over the prior year and 8% over the prior quarter (the third quarter increase was 10.8% over the second quarter). The US economy has not seen such an annual increase in pretax corporate profits since 1984 during the Reagan administration. Clearly labor productivity and the rate of profit are moving in lockstep. This is further evidence that profits are growing from an intensification of the labor process – on the backs of workers.

Should further data be necessary, the Commerce Department also reports that personal income dropped in 42 of 50 states last year at a cumulative rate of 1.7%, unadjusted for inflation. It must be noted that this report lumps together wages, dividends, rent, retirement income, and government benefits, underestimating the impact upon the working class.

Of course not all profits were generated directly through exploitation at the point of production. Half of the explosion of profits was generated through the financial sector. With the financial sector, workers were, however, exploited indirectly through the massive bailout, the assumption of cancerous assets, and the extension of essentially risk and interest free loans. Some estimate this burden - to be collected on future taxes and the slashing of common, public assets and social programs – to total $14 trillion. Some estimate even more.

I would concede that US organized labor is showing some gumption in the electoral arena, prodding the Administration and Democrats to show a bit of backbone on behalf of programs benefiting working people. Nonetheless, the legacy of complicity in the destruction of class- struggle unionism in the early stages of the Cold War saddles current labor leaders with a timid, class collaborationist approach that fails to mount even a modest resistance to this brutal class offensive.

Growth, the Safety Net, and the Class Struggle

Thanks to stronger, more militant labor movements, oppositional formations, and genuine left political parties, there has been much resistance in the European Union to any US-style surrender to a solely capitalist recovery constructed on the backs and from the pockets of working people. In a rare departure from past practices of reserving ideological rants to the back pages, The Wall Street Journal offered a front-page lecture to the EU: “Europe’s Choice: Growth or Safety Net” (3-25-10). The WSJ writers take up the cause of high unemployment among young people in Europe, but oddly fail to see any connection with the failings of capitalism. Instead they fault pensions, benefits, job protection, and the other elements of Europe’s historic social democratic safety net. Odd, indeed. They note that “…many economists say: chip away at the cherished ‘social model.’ That means limiting pensions and benefits to those who really need them, ensuring the able-bodied are working rather than living off the state, and eliminating business and labor laws that deter entrepreneurship and job creation.” This prescription might have counted as an enticement for the US-model when the US economy was perking along, but it invites contempt in the face of massive US unemployment, under funded and non-existent pensions and benefits, criminally inadequate health care, home foreclosures, increased hunger, etc. It is no wonder that the writers comment “Even in the best of times, Europeans are loath to move toward a US-style model.” And well they should be.

The trenches of this battle for the future of the European working class are in the traditionally poorer countries – Greece, Portugal, Spain, and Ireland – that borrowed extensively to maintain an economic pace and standard of living on a par with their richer neighbors: keeping up with the Joneses on a national scale. Now the stronger EU members want to punish them for their debt – debt on a scale not far from that of the US or UK. The more powerful states are insisting on budget cuts that will drastically slash incomes, pensions, and benefits while also stifling any potential for growth. This is simply imposing the US model by fiat.

In Greece, in particular, the working classes are vigorously and determinedly resisting these draconian changes, led by a fighting labor movement and the Greek Communists. They deserve our solidarity and serve as an example to our own labor movement.

Debt and the Class Struggle

Debt is a two-headed monster. At the depth of the crisis, the debt-burden incurred by irresponsible financial institutions was readily and undemocratically shifted from the private to the public sector through massive bailouts. Their debt problem is now our problem. Zhu Min, deputy governor of the People’s Bank of China put it well: “The governments tried to put every burden from the financial sector unto their own children.” But now with those burdens on the shoulders of working people, these same governments alarmingly call for debt reduction. Not surprisingly, they closely follow the EU strategy by demanding reductions in social programs. In the case of the US, the debt diet prescribes trimming the “waste” from social programs like Medicaid, Medicare, and Social Security. Of course there is no talk of reducing the immensely costly military budget or raising taxes on corporations and the wealthy. The debt issue is calculated to be another weapon in the assault on the living standards of working people.

Lessons must be drawn from this intense offensive against workers. In the US, the Democratic Administration and its Congressional troops have done little or nothing to side with working people in the class struggle. Rather, they have urged measures that have intensified exploitation, heaped debt on the working class, and threatened its safety net. The leaders of the labor movement have achieved little by lobbying, cajoling, and coddling; they have failed to take the struggle to the workplace and the streets.

The capitalist crisis is far from over. The financial monstrosities that sparked the crisis are once again fat, unregulated, and in hot pursuit of new risky ventures that will accelerate their rate of profit. There is every reason to believe that they will run aground again. We had an opportunity to stop this mad cycle with nationalization, but our economic leaders chose to reward the banks and encourage them to press on with their madness. Non-financial firms are swelling with profit from intensified exploitation, but lacking markets or consumption growth that would justify investment, expansion, or further employment, a situation that promises further pressure on their rate of profit. Of course they can further put the screws to workers, but hopefully we will take a lesson from our Greek comrades and join them in the streets.

Zoltan Zigedy

Sunday, March 14, 2010

A Political Conundrum

Sixteen months ago, political commentators and analysts felt they had a handle on the mood of US citizens. All saw the election of Obama and the sweep of Congress as a powerful rejection of the politics of the Bush era, including a repudiation of the extreme-right agenda associated with it. Roughly 20-25% of the electorate still tenaciously embraced the bizarre brew of religious zeal, rabid nationalism, racism, and social retardation, but polls – like the detailed, twenty year survey of “Trends in Political Values and Core Attitudes” conducted by The Pew Research Center – showed a decided tilt towards more socially progressive, government-directed policies on the part of the US population. Some pundits even spoke of a sea-change in US politics: the emergence of a new democratic and progressive era as potent as the so-called “Reagan Revolution”.

That moment has passed. Today, the political stage is not dominated by progressives or even tepid liberals, but by a motley, but dynamic group dubbed the “Tea-Party Movement”. While still a minority movement, its intense activism is amplified by the media, both the partisan right of Fox and talk radio as well as the “mainstream”. Today’s Father Coughlin’s – Rush Limbaugh and Glen Beck – nursed the stirrings against Obama’s health care plan into a national campaign knitted together around hatred for Obama and anti-government grievances. It is worth noting that no similar media courtesy has been extended to any left or liberal formations by the more moderate media. Indeed, the “mainstream” has shown a curious fascination - a sensational fixation – that has helped to propel the Tea-Party movement forward.

Of course this movement did not spring from nothing. The elements have been there for years, if not decades. Arguably, this political formation was even larger and more influential during the years of extreme anti-Communism, the era associated with the antics of Senator Joe McCarthy. Again, rightwing extremism forced itself center stage behind the candidacy of Barry Goldwater in the sixties. And, of course, it returned with a vengeance with the election of Ronald Reagan.

In most cases it attached to the Republican Party for its political expression. In most cases, it found a happy home with Republican leaders who were able to marshal the movement’s energy and press some of its demands without surrendering any of the Party’s commitment to a corporate-coddling agenda.

That is not to say there were not times when the extreme-right could not be contained within the bounds of the two-party system. The Wallace-LeMay campaign of 1968 drew nearly 10 million votes (13.5% of voters) to a virulently racist, belligerently war-mongering program outside of both major parties. But generally, the extreme right sees the Republican Party as a natural haven. Likewise, Republican leaders find extreme-right ideology as a handy weapon or ready diversion against liberal-left ideas that might slow or stop the rapacity of capital. They have succeeded in wedding “free enterprise”, anti-regulation, anti-tax principles to the racist and nationalist intolerance and conservative values of the historical extreme-right. Throughout most of the twentieth century, the bond cementing this wedding was anti-Communism.

Doug Henwood of Left Business Observer (LBO #125) takes a stab at describing the social composition of the Tea-baggers, the current crop of extreme-right foot soldiers: “Though no one has done the rigorous sociological work, they look to be a movement of middle managers, professionals, and retirees – the petite-bourgeoisie, to use the old language.” I think Henwood is substantially correct, though “petite-bourgeoisie” is both a broader and more precise category than he suggests while still eminently useful despite its age. Those who answer polls by identifying with the wealthy few because they mistakenly believe they are the rich or soon will be instantiate this class or, at least, this mentality. Further, I think this class has historically always provided the fertile ground for extreme-right views. The shrillness and threatened violence of the extreme-right’s actions are clearly rooted in fear and the threat to petit-bourgois illusions from the economic crisis.

Tea-baggers and Fascism

It is a facile and immediate response to label all extreme-right movements as “fascist”. The term has been wrenched from its precise meaning in a particular historic period applying to particular historic developments and particular social movements as to lose all meaningfulness. Its common use today is more as an expletive rather than a helpful explanatory term. Nonetheless, it is useful to locate extreme-right movements in relation to historical antecedents. Thus, we understand the Tea-Party movement better by uncovering its common features and differences with the fascist social movements of the 1930’s and 1940’s.

As Henwood points out, the Tea-Party movement is predominantly petit-bourgeois in social composition. It shares this feature with the earlier fascist movements which drew heavily from the upper-middle and middle strata. These strata – in pre-war Germany, but also Italy – feared the loss of a comfortable and formerly stable way of life. Then and now, that life-style was seriously threatened by an economic crisis. Assumptions about values and world-views were and are challenged by the crises.

For the most part, fascist movements were responsive to a left and working class movement growing in power and influence. While that is not true today, the Tea-baggers have constructed an imaginary left by drawing on Cold-War imagery and crudely pasting that imagery on a President perceived by them as alien. If indeed history repeats itself first as tragedy, then as farce, the Tea-bagger fears of the left are surely farcical – labeling policies aiding corporations and the wealthy as “socialist”.

Like their fascist predecessors, the Tea-Party groups operate somewhat independently of the established political parties. Previously, the extreme-right found a comfortable home inside the Republican Party. And to a great extent, the cynical, corrupted leaders of the Republican Party exercised a control, even manipulation, of the fundamentalist zealots, racists, libertarians, etc. that nested in that party. But the new movement challenges those reins on many counts, generating some consternation among Republican big-wigs.

Recently, Dorothy Rabinowitz, a trusted member of The Wall Street Journal editorial board, chastised Sarah Palin in an op-ed piece (2-18-10) for Palin’s recent endorsement of Rand Paul – libertarian Ron Paul’s son. Paul, the younger, “holds views on national security and defense that have much in common with those of the far left.” She notes that Paul, the elder, has “said repeatedly that the United States had given Osama bin Laden good cause to attack us…” In addition, Rand Paul “stands opposed to the Patriot Act and he wants to cut defense spending.” Rabinowitz is warning Palin, the Paul’s, and others in the Tea-Party movement that any deviation from the Republican pro-corporate, pro-imperialist agenda will not be tolerated. The defense procurement and supporting industries are among the most generous and loyal components of the Republican fund raising apparatus. Moreover, imperialist aggression is the policy that drives the growth of these industries.

Twelve days later, Gerald F. Seib, The Wall Street Journal’s influential Capital Journal columnist emphasized the dangers of a renegade Tea-Party movement with an article “Tea Party Holds Risks for GOP” (3-2-10). “In particular,” he writes, “Republicans’ courtship of the Tea Party movement threatens to pull the party away from its moorings on two crucial and emotional issues: the war on terror and immigration.” One can translate this to mean that Republicans are fearful that this movement will alienate its corporate sponsors in the defense industry and challenge Republican efforts to recruit voters from the ranks of Hispanics. Seib cites many examples of Tea-Party leaders opting for a libertarian slant on civil liberties over the repressive, police state Patriot Act – further signs of a distance from a corporate agenda. His closing comments reveal the danger perceived by the two-party system insiders: “The problem with those independent movements is that they are exactly that – independent.”

Some on the left confuse this independence with a spark of progressivism, taking attacks by Tea-baggers on the current health care reform initiative, the bailouts, and the stimulus package to be anti-corporate populism. In fact, they are rabidly and solely anti-government. The fact that there is virtually no popular understanding of the fusion of government and monopoly corporations in contemporary capitalism– state-monopoly capitalism – feeds this confusion. This same confusion creates a false and diversionary political divide between those who are pro- and anti-government. The truth is that government and big business are joined at the hip and any serious, progressive movement for change must tackle both.

A Conundrum

For those who cry wolf at the activities of every right wing movement on the political stage – easily recalling the rise of European fascism in the twentieth century – something resembling the real deal may now escape them. For generations, the extreme right has been nourished and groomed by the leaders of the Republican Party. Our current incarnation was courted by Ronald Reagan and his successors to serve as electoral troops for the Republican Party. In return, Republican leaders gave gestures and symbols to hold their attention while relentlessly pressing a corporate, wealth-coddling course. Nothing, absolutely nothing, was sacrificed from that course to hold the extreme-right in place. The raw meat of prayer, flag waving, charter schools, government funding for religious charitable work, anti-abortion posturing, gun rights, etc. cost the corporate world nothing, while cheaply satisfying right-wing zealotry.

Yet in the last few years –especially with the exposure of the callowness, cynicism, and corruption of the Bush administration – the movement has taken on a new life, fueled by Fox News, talk radio, unabashed racism, and economic uncertainty to make demands upon the Republican Party often out of step with the larger goals of the Party leaders, corporate board rooms, and our ruling class. The tail is beginning to wag the dog.

I believe this evolution of the organized extreme-right towards independent action accounts for the near unanimous Republican opposition to the TARP bailout – an event that found candidate Obama offering unconditional support for this blatant gift to the financial sector. Likewise, the Republicans fought hard against a stimulus package that Herbert Hoover could have endorsed in 1932. Republican intransigence towards the final Congressional health care proposal – a plan that had substantially won the support of the health care and pharmaceutical industry – counts as another example of the political weight of the extreme-right’s new found independence. In my view, it is this departure from the capitalist program that has Republican leaders – and mouthpieces like Rabinowitz and Seib – so frenzied over the Tea-bag movement. They – like their bourgeois antecedents in the nineteen thirties and forties – are trying to tame a tiger that has its own appetites.

Missing from this discussion are liberals, the left, and the Democratic Party. And therein lays the problem: they are missing. I begin with an account of the promise – both emotionally and objectively – of the election of 2008. If no other lesson can be drawn from the Tea-Party phenomenon, it is that an independent political movement, even a minority one, exercises inordinate influence upon the direction of US politics. As Seib points out so well in the above quote, independent movements pose serious problems to the corporate dominated two-party system, problems that bend the parties away from the trajectory preferred by the US ruling class. This is an old lesson – one that many of us drew from the mass upsurges of the thirties that shaped the programs of a cautious, relatively conservative President into the show pieces of the New Deal. The independent militancy of labor and the left prodded Roosevelt into becoming the icon of liberalism that he is today.

Many are wringing their hands and crying “betrayal”, blaming Obama for the failure to bring any significant change to the political landscape. This is silly. Anyone paying attention would recognize Obama as a mainstream corporate Democrat sensitive to the moment, but - left to his own devices - inclined to support the call of monopoly capital. I have written often of his career and the parallels with other Democrats who have been publicly ordained with messianic qualities. I have pointed to the strong corporate sponsorship – especially from finance capital – of his candidacy and warned of any easy dismissal of what that might mean. Those who fostered such illusions have only themselves to blame for the disappointment of the last fourteen months.

Facing an interim election in eight months, it is likely that little will be accomplished legislatively after the spring. Few politicians will want to take any risks and campaigning will begin in earnest. Still it will be a great opportunity to press an independent progressive agenda on vote-hungry, promise-happy politicos seeking support in November. It will be a chance to build a counter-force preparing for the legislative battles to come after the elections. Support for independent candidates – many Green Party candidates are projecting effective campaigns – will scare the pants off of complacent Democrats, much as the Tea-Party advocates frighten Republican leaders. There is much to do to put some spine into labor leadership and rekindle the anti-war movement. All of these steps will move us closer to creating a left-oriented third-party that can consistently influence our political course. Its time to lose the defensive posture of the last period and mount an offensive against those offering two flavors of the same poison. And we won’t have to explain the puzzling fact that the people are hungry for progressive change while the political winds are blowing rightward.

Zoltan Zigedy