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Tuesday, November 22, 2011

Is There a Future for the European Union?

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

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

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

“Centrifugal Forces”

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

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

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

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

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

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

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

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

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

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

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

From this perspective, I wrote in November of 2008:
As with the Great Depression, the economic crisis strikes different economies in different ways. Despite efforts to integrate the world economies, the international division of labor and the differing levels of development foreclose a unified solution to economic distress. The weak efforts at joint action, the conferences, the summits, etc. cannot succeed simply because every nation has different interests and problems, a condition that will become more acute as the crisis mounts… It is highly unlikely that the [European] Union will come up with common solutions. Indeed, the unraveling of the EU is a possibility.

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

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

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

Zoltan Zigedy

Thursday, November 3, 2011

Where Does “Occupy Wall Street” Go From Here?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Zoltan Zigedy