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Monday, December 17, 2018

Where to Begin

“...they take from Marxism all that is acceptable to the liberal bourgeoisie, ...cast aside only the living soul of Marxism, ‘only’ its revolutionary content.” VI Lenin The Collapse of the Second International

Standing with me on a cold corner with a sign urging bank disinvestment, a venerated comrade reminded me of the lasting value of Vladimir Lenin’s What Is To Be Done?. Food for thought: while we read this classic in our political youth, does it retain its relevance as we gain experience and mature?

What Is To Be Done? began as a promissory note to expand a polemical sketch written in May of 1901 entitled “Where to Begin.” The question lingered in Lenin’s mind for nearly a year before the lengthy pamphlet emerged.

What Is To Be Done? is not an easy read. It is filled with esoteric references to journals, personalities, and events specific to turn-of-the-last-century Russia, as well as unusually named political tendencies. It is easy to confuse the various “Rabochaya” or “Rabocheye” (workers’ newspapers) or forget the meaning of “Economism,” “Narodnism,” or “legal ‘Marxism’.”

But Lenin’s goals can be put rather simply:

● Identify the political trends or tendencies that are obstacles to advancing to socialism.

● Establish conditions necessary for the advancement to socialism.

“Every step of real movement is more important than a dozen programmes.” Martynov “The movement is everything, the final aim is nothing.” Bernstein

For Lenin, the epigrams pronounced by A.S. Martynov and Eduard Bernstein-- a German theoretician of socialist gradualism-- were symptomatic of an infection to the body of revolutionary socialism. For those “socialists,” socialism was simply the product of the struggle for reforms, an inevitable final step or stage in the evolution of the workers’ movement. Set in motion, political and economic struggle would-- on its own-- through “timid zigzags” (Lenin’s characterization) ultimately lead to socialism.

In Lenin’s words, they and their adherents imagine that movements “...pure and simple can elaborate, and will elaborate, an independent ideology for itself, if only the workers ‘wrest their fate from the hands of the leaders’.” They submit that it is bureaucratic and foot-dragging trade union and political leaders who retard the natural evolution of reformism toward discarding capitalism and constructing socialism.

Democracy+continual reforms=socialism, in the minds of Martynov, Bernstein, the French socialist Millerand, the German socialist Georg von Vollmar and their ilk.

Lenin regards these views as a sharp departure (revision) of the theory of revolutionary socialism, a departure based upon the unjustifiable faith in spontaneity. He views ‘spontaneity’ as a key concept in understanding both the potential of struggle and its limits. Using the industrial strikes of 1896 in Russia as an example, he shows that the working class movement and the people’s movement will always generate a fight back, a response to exploitation and oppression. But it will always be limited to immediate grievances and immediate remedies without the further introduction of a conscious element, a leap to attacking capitalism itself. The idea that spontaneous political motion will, by itself, find its way to socialism is a false and harmful illusion.

Defiance, resistance, sabotage, demonstrating, civil disobedience, etc. are largely spontaneous responses of individuals or groups; strikes, planned actions with demands, political initiatives, and other collective actions are often spontaneous, in Lenin’s sense, but “nothing more nor less than consciousness in an embryonic form.” Because they have elements of planning and goals, though limited and immediate, these struggles offer the potential for more radical, more profound change. They lack only ideology, organization, and a program of advancement, elements that must come from a united, disciplined, and committed group of socialist partisans. Those partisans must bring a vision beyond simple reformism to provide the tools for overthrowing the grip of capitalist social and economic relations.

[R.M. writing in Rabochaya Mysl says:] “That struggle is desirable which is possible, and the struggle which is possible is that which is going on at the given moment. This is precisely the trend of unbounded opportunism, which passively adopts itself to spontaneity.” (Lenin) [my emphasis]

The embrace of spontaneity as the wellspring of political and social change is identified by Lenin with withdrawal from the struggle for qualitative change, from meaningful engagement with the source of exploitation and oppression. This surrender to “realism,” pragmatism, the “possible” is opportunistic because it courts respectability or an easy legitimacy and compromises the fight for the liberation of working people from the chains of exploitation to garner the nearest goals of the closest moment.

“We have said that there could not have been Social-Democratic [socialist] consciousness among the workers. It would have to be brought to them from without. The history of all countries shows that the working class, exclusively by its own effort, is able to develop only trade-union consciousness, i.e., the conviction that it is necessary to combine in unions, fight the employers, and strive to compel the government to pass necessary labor legislation, etc. The theory of socialism… arose as a natural and inevitable outcome of the development of thought among the revolutionary socialist intelligentsia.” (Lenin)

Lenin’s distinction between trade-union consciousness and socialist consciousness holds true, over a hundred years later. No events since have shown Lenin’s assessment to be wrong. No working class or popular movement has taken up socialism without its introduction from outside the movement, typically through a socialist political organization. In a world dominated by the ideology of capitalism, in the course of “the drab ordinary struggle,” the idea of socialism is alien. It is the task of dedicated socialist revolutionaries-- armed with a program and of one mind-- to bring socialist consciousness to the popular movements.

Those like the Russian acolytes of Bernstein in Lenin’s time-- the Economists, the “legal” Marxists, the Socialist Revolutionaries-- “...kneel in prayer to spontaneity, gazing with awe (to take an expression from Plekhanov) upon the ‘posterior’ of the proletariat.”

The Communist movement coined the term “tailism” to more politely capture Plekhanov’s vivid description of political opportunism. Slavishly deferring to the “drab, everyday struggles” of the trade union movement or the spontaneous peoples’ movement will get us no closer to socialism.

Political forces will invariably arise that promise to spur spontaneous action by the popular masses through acts of terrorism; they intend to “excite” the working class, to give it “strong impetus” to press its supposedly latent radicalism. For Lenin, this is equally a departure from sound revolutionary strategy. Like reformism (Economism), the anarchism of the act (early Narodism and the Socialist Revolutionaries) fails to recognize a role for determined agitating and organizing the people for the overthrow of capitalism and the building of socialism.

Revolutionaries are not aloof from the fight for democratic reforms: “He is no Social-Democrat [revolutionary] who forgets in practice his obligation to be ahead of all in raising, accentuating, and solving every general democratic question.” [Lenin’s emphasis]. But Lenin also emphasizes that this practice must not “for a moment [conceal] our socialist conviction.”

But revolutionaries should not be confused into thinking that the fight for democratic reforms is more than it is: “Trade-unionist politics of the working class is precisely bourgeois politics of the working class.” [Lenin’s emphasis]

“Give us an organization of revolutionaries, and we will overturn Russia!”

Lenin’s famous proclamation is not an idle boast, but a concise statement of the necessity of an organization of committed, dedicated revolutionaries placing the struggle for socialism above all.

The task before the revolutionary movement is to develop and maintain working class leadership of the popular movements while shedding the patronizing attitude of delivering only that which is “accessible” to the masses. Recognizing the “excellently trained enemy,” Lenin insists that revolution must be a profession, combining the skills of propagandist, organizer, and agitator. The revolutionaries must develop tools: leaflets, pamphlets, books, etc., but most importantly a national organ (newspaper, website, etc.) that serves as a collective propagandist, agitator, and organizer, a tool for raising a definitive political line and rallying and making contact with followers.

Of course socialist revolutionaries must come together as an organization, as a party, as a vehicle for overthrowing capitalism. A loose-knit, independent scattering of even the most dedicated revolutionaries could hardly pose a threat to the forces and resources defending capitalism and its ruling class. That party must bring to the masses a program, a road map leading to socialism above all else.

Lenin stresses that a revolutionary organization cannot be seduced by the sirens of “primitive” or “toy” democracy, the false radicalism of direct representation so often advocated by young intellectuals and anarchists. Lenin cites the experiences of Sidney and Beatrice Webb (Fabian Society) and Karl Kautsky (German Social Democratic Party)-- two sources at odds with Leninism-- on their negative practical experiences with the folly of strict referenda democracy. Lenin recognized that direct democratic decision-making under the harsh, war-like conditions imposed by battling capitalism was sheerly utopian.

These are the answers that Lenin gave in his time to the question What Is To Be Done?

Twenty-first Century Relevance?

Does Lenin’s revolutionary theory hold relevance for the struggles of today?

Over generations, Lenin’s insights, admonitions, strategies, and tactics have been muted, diluted, or revised by many prominent left-wing thinkers in capitalist countries. The seduction of parliamentary politics, the burnished image of bourgeois democracy, doubts about the working class as a force for change, the rise of cultural and life-style radicalism combined with many other factors to distract the left from the revolutionary socialist program. The Cold War and the demonization of Communism further prodded the US and much of the academic and student Western European left to distance itself from Leninism. The ABC phenomenon-- Anything But Communism-- became deeply embedded in the “radicalism” of the late twentieth century. A “new” left-- purposefully new in order to dissociate from Leninism and Cold War ostracization-- sought new forms of radicalism, new approaches to struggle, new types of organizations.

Ironically, the New Left found answers that already failed in the past, in the kinds of politics toward which Lenin had earlier targeted his ideological weapons. And today’s US and European left reproduces many of the same tendencies.

It has been a common thread weaving through the US left that so-called participatory democracy is the foundation of radical politics and emancipatory or empowering for oppositional movements. From the New Left of the sixties to the Occupy and Indignados movements, this approach has been foundational. The fetish for procedure has not only overshadowed establishing a common program, but often blocked the achievement of one.

Organizationally, the insistence upon participatory democracy is stiflingly rigid. It fails to acknowledge the various types of democracy: direct, representational, ballot, referenda, etc.; it fails to recognize the appropriateness of the different types by time, place, and circumstance; and it fails to grasp the organizational fit of different democratic modes.

Accordingly, obsessive participatory, direct democracy becomes an obstacle to the establishment of an effective revolutionary organization charged with the tasks of building a movement for socialism to face the gale forces of the immensely powerful resources and the security apparatuses of a ruthless ruling class. Revolutionary movements must respect democratic norms, but not the cult of procedure that Lenin mocks as “toy” or “primitive” democracy.

Occupy and similar movements have floundered on the rocks of organizational chaos grounded in procedural sectarianism, a failure to establish efficient and effective leadership channels. Many once-promising movements fall as quickly as they rise without the appropriate, effective democratic standards.

It is a commonplace with today’s left to assume that removing the brakes that are thought to be restraining broad movements-- typically bureaucratic, entrenched leaders-- will in itself unleash worker or mass action. On this view, existing popular institutions-- trade unions, political parties, advocacy organizations, etc.-- only need fresh, democratically elected leaders to unleash the march toward a better world, towards socialism. Rather than tackling the difficult task of planting the germ of socialist thought into the movements, modern-day US leftists too often expect to see the idea of replacing capitalism-- the commitment to socialism-- flower spontaneously.

History knows of no serious challenge to capitalism emerging automatically, without the intervention of a revolutionary organization. Nonetheless, many in the US left deny the necessity or the desirability of a Leninist “organization of revolutionaries.” Instead, they count on the magical, spontaneous emergence of a socialist consciousness where none existed before. Swayed by Cold War dogma, they unthinkingly fear the ogre of “vanguardism.”

Despite many lifetimes of shredded hopes of taming capitalism by working for change within the Democratic Party, a new generation of idealistic youth are placing their hopes in the Democratic Party and a class collaborationist trade union movement. They follow modern day “legal” Marxists and other theorists of social democracy who ask them to “kneel in prayer to spontaneity,” expecting a radical vision to spring forth without the intercession of a revolutionary organization. Tailing bourgeois institutions and workers’ organizations umbilically linked to bourgeois institutions can only bring bourgeois politics, paraphrasing Lenin.

With dissatisfaction and anger growing, with confrontation intensifying, and with more and more institutions and authority discredited, the need for effective responses grows. Over a hundred years ago, Lenin’s famous pamphlet What Is To Be Done? cleared much of the ideological underbrush, discarded most of the false roads and missteps foiling a movement for socialism.

Today, these false roads, missteps, and ideological thickets again block the road to twenty-first-century socialism.

What Is To Be Done? demonstrates the need for a political organization of ardent, committed revolutionaries, united with a program to overthrow capitalism. Since the retreat of Communism, Leninism has unfortunately been discarded by many on the left. But the wisdom of Lenin’s pamphlet is needed now more than ever.

Greg Godels

Sunday, November 25, 2018

Blood and Oil

The Washington Post, the New York Times, and Reuters report that their sources have revealed the CIA is concluding (with its surely-by-now suspect “high confidence”) that the highest echelon of the Saudi Arabian government, including the Crown Prince Mohammed bin Salman, ordered the assassination of Jamal Khashoggi. Khashoggi’s murder at the Saudi embassy has occupied US headlines for the last six weeks. While it appears to be a particularly gruesome and brazen act, one cannot but recoil from the callous selectivity of the US media, a media that heretofore ignored or minimized the horrors inflicted upon tens of thousands of Yemeni people by the same Saudi government and its coalition allies.

As though choreographed for the moment, a study suddenly appeared last week proclaiming Saudi savagery (Aid Group Says 85,000 Children May Have Died of Hunger in Yemen) and capturing the attention of The New York Times, Washington Post,Time,The Independent, Voice of America, etc. Overnight, the US media discovered atrocities already well documented over the last three years by the UN and foreign and alternative media. Suspiciously, the aid group releasing the study was thrown out of Pakistan in 2015 charged with covering a bogus CIA vaccination program.
One might be led to believe that the violently imposed social, cultural, and political backwardness of the Saudi family regime and its bloody actions was unknown until the Khoshoggi affair. However, it is only politically expedient to recognize it now with a rift in the ruling class.

But what is one to make of this leak from anonymous CIA sources to the media?

Like so much of the unattributed information and misinformation driving the US entertainment-oriented media, the leaks stir the political pot without adding certainty or clarity.

Apart from information tantalizingly dangled by Turkish authorities, the CIA leakers additionally claim a phone intercept between the Crown Prince’s brother in Washington, DC and Khashoggi, assuring his safety for a visit to the Saudi consulate in Istanbul. The CIA sources assert that the call was made at the behest of the Crown Prince. Therefore, they conclude that bin Salman’s motive for the call was to set up the Khashoggi murder.

The corporate media have taken the matter as proven despite no official confirmation from top CIA officials or other government agencies. For the entertainment-industrial complex, the Khashoggi affair is just another opportunity to bait President Trump-- a firm supporter of the newly installed Crown Prince--  into another episode of prevarication, bluster, and outrageousness. And the simultaneous “discovery” of Saudi Arabia's bloody massacre of Yemen only adds to the case against Trump.

In the meantime, President Trump squirms before the broad national and international revulsion over the killing.

Is the revulsion over the Khashoggi killing sufficient for the US and the NATO allies to kick Saudi Arabia to the curb? Will they jettison their long reliable “policeman” over the Islamic world and their intermediary in imperial domination?

Soaked with self-righteousness, US and European leaders act as if they had forgotten the dirty work that the Arabian head choppers did for them, for example, in Afghanistan, in the former Yugoslavia, in supporting Israel, in Libya, and, of course, in Syria.

Like the US media, Erdogan’s Turkey stoked the assassination into a major crisis. They willingly exposed their illegal wiretap in order to discredit Saudi Arabia and drive a wedge between the Saudis and the US. They have also sided with Qatar in its defiance of the other Arabian monarchies.

Qatar, in turn, has conveniently befriended Iran with whom it shares an enormous natural gas field. Iran, like Turkey, has engaged in an off-again, on-again friendship with Russia. In the case of Turkey, Erdogan plays the US against Russia over arms sales. Round one went to Russia with its sale of its sophisticated ground-to-air defense system, annoying the US to no end. Though the US cancelled its offer of the defense industry’s crown jewel, the F-35, the Turkish leaders know that the US desperately needs to sell the fighter to rationalize the development costs. Erdogan would like to trade closer relations with the US (and not Russia), arms sales, and a muting of the Khashoggi affair to get their hands on Fethullah Gülen, the alleged coup plotter living in the US.

Alongside the gore of assassination and weapons sales haunting the Middle East, there is, as there always is, the specter of oil (energy). Saudi Arabia has sought to reset its role in the energy nexus. New leadership hopes to shed its image of unreconstructed tribalism, it attempts to diversify its vast wealth, and it looks to jump-start its capitalist normalization by making ARAMCO, the Saudi energy firm, a publicly traded corporation.

But the emergence of its long-time energy partner, the US, as an energy rival has deflected those goals. First, the Saudis tried to discipline the US energy industry by driving prices below cost of production, bullying the revived US fracking industry and taming its growth. With billions of investor funds propping up the US industry, the plan failed.

Saddled with enormous and growing expenses from the Yemeni war, the Saudis reverted to their traditional role as ‘CEO’ of OPEC, guiding the oil producers toward a stable mix of sustainable and profitable prices.

But their close friends in the Trump Administration overturned that effort. Taking the Trump sanctions against Iran at face value, the Saudis and the other oil producers ramped up production to fill the void. However, the Administration negotiated large exceptions to the sanctions, turning the increase into an overproduction glut and collapsing prices.

Sensing a betrayal of the alliance, the Saudis are embarking on an independent policy of drastically reducing production and urging others to do so as well. The oil wars are escalating.

With the Saudi-US alliance frayed, Putin has made nice to the Saudis in recent months.

If the Middle East seems a cauldron of chaos, drama, and frictions, it is only one of several centers of growing tension and conflict. Southeast Asia is becoming the scene of US-PRC rivalry, with different countries taking different sides, with influence peddling through loans and projects, and with threats and counter-threats.

Further, the European Union continues to barely hang together, wracked by ever more powerful centrifugal political forces. And South America continues to suffer sharp political and economic instability.

To those still viewing the world through the prism of the Cold War or the brief period of global US hegemony, today’s world appears as a great mystery-- a moment of intense drama and inexplicable chaos. The Cold War-- for all of its dangers-- operated under a fairly strict set of unspoken rules, even when reckless leaders like Ronald Reagan were in power. During the post-Soviet, short-lived US global regnum, all but a few countries accepted some US governance.

But today, states are in intense competition for economic advantage as Lenin's Imperialism foresaw. Capitalist countries are replaying the intense competition typical of human interactions under capitalism, but on the regional and international level. Alliances are formed and broken; contradictory new ones are formed in the blink of an eye. International rules and regulations are under siege as countries seek to gain an economic edge. Cooperation, always a tenuous global achievement, has dissolved to reveal a feral pursuit of national self-interest. A ruthless zero-sum logic replaces the heralded “win-win” attitude of global players during more stable economic times.  

The more powerful economies are attempting to construct hegemonic blocs to bring rivals to bay. Lesser powers are seeking regional hegemony or the most advantageous place in a larger constellation. The anarchy of unrestrained market competition has finally and decisively penetrated international relations. And there is no going back to a non-existent “golden era.”

But we have seen this before.

Today’s aggressive rivalries resemble only too well those smoldering before World War One. Like the pre-WWI period, big and small powers vie for economic advantage, taking every opportunity to expand the exploitative tentacles of their capitalist enterprises. As Lenin foresaw over a hundred years ago, the voracious hunger for new markets, for new sources of exploitation, and new resources inevitably leads to war.
That is where the toxic combination of economic decline and intensifying inter-state rivalries is taking us. As the danger of a spark igniting a disastrous regional or global war grows, too many good people are engaged in the machinations and maneuvers of bourgeois politics to now recognize the looming catastrophe.

Now, more than ever, we need a powerful movement for peace. Nothing could be more urgent.

Greg Godels

Thursday, November 8, 2018

Where is the Economy Headed?

Headlines such as “World Stocks Fall to Two-Year Low” that appears in today’s (October 30) Wall Street Journal have many wondering if the tepid recovery from the 2007-2008 crash is finished. Since mid-Summer, the Shenzhen Composite, FTSE 100, Stoxx Europe 600, and other benchmark exchanges have steadily declined, with the US Standard and Poor’s joining them over the last few weeks. As author Akane Otani notes: “After a punishing October, major indices in Europe, Japan, Shanghai, Hong Kong, Argentina, and Canada are languishing in correction territory-- a drop of at least 10% from a recent high. The US is teetering on the edge of joining its peers…”

The Stock Market Fetish

Like Gross Domestic Product (GDP) and the Unemployment rate, composite equity performance is a limited measuring stick of the economy’s health, though it is favored by popular mainstream pundits and celebrity economists. As such, all three become the grist for the bourgeois political mill. Invariably, they soon obscure more than they enlighten.

So what do the markets tell us?

In some parts of the world, they signal that stimulus programs have failed to revive stagnant economies (e.g. EU, Japan). Additionally, measures of manufacturing growth have declined for nearly every segment of the global market since the beginning of the year (emerging markets, EU, Japan, etc., excepting the US).

Last week’s EU quarterly GDP figures confirm the European Union’s persistent stagnation: the aggregate growth for the European Union’s 19 members was a mere 0.6%, the lowest in 5 years.

For the US stock market, on the other hand, highs and lows are more intertwined with policy decisions, financial manipulation, and speculation. Thus, the market euphoria of the last few years did not reflect real economic fundamentals, and the current volatility does not foretell an imminent collapse. Instead, US stock exchanges have thrived on nearly free money and a Federal Reserve that removed all of the “asset” flotsam and jetsam lingering in the wake of the 2007-2008 collapse. But the usual shakeout of less profitable, damaged firms was incomplete, thanks to the availability of money at interest rates suppressed by the central bank, the Federal Reserve. The low interest-rate environment was especially favorable to high-tech firms (slow to show sufficient revenue growth), emerging markets (hungry for low interest foreign loans), and small capitalization enterprises that should have sunk into oblivion because of investment unworthiness after the meltdown.

For the behemoths of monopoly capital, low interest rates in the wake of the crisis allowed for an orgy of mergers and acquisitions and stock buybacks that electrified equity markets without creating any socially useful results. In others words, the era of interest-free money buoyed up a leaking capitalist ship that predictably converted the gift into market “value” and profit.

Wiser heads in the Federal Reserve understood that if it continued to be a wet nurse for mature capitalist enterprises, asset inflation would continue unabated. Investors would wake up and see that there was no ‘there’ there and punch a hole in the market bubble.

Consequently, the Fed began a program of gradual interest-rate increases to slow the promiscuous borrowing that was fueling asset inflation. Industries like Technology, Finance, and Communication were particularly vulnerable to this program since their earnings growth stood well beyond their more modest growth of revenue.

Nothing shows the weakness of the overheated market more than the Initial Public Offerings (IPOs)-- the first stock offerings of newly public companies. So far in 2018, fully 83% of IPOs have been conducted for companies that have lost money in the last 12 months, a figure greater than that leading to the dot-com crisis year of 2000.

It is no wonder that the Federal Reserve, fearing an asset bubble, has put the brakes on. And it is no wonder that capitalists are caught between the responsibility of managing capitalism as a system and the ecstasy of operating with free money, the contradiction between systemic discipline and unrestrained accumulation.

Leading Indicators?

But if the stock market is a not-so-reliable guide to the health of the US economy, what are more reliable markers?

On the surface, the US economy is uniquely healthy in the midst of global stagnation or decline. The television hawkers of economic news herald the GDP growth rate in the second (4.2%) and third (3.5%) quarters of this year, numbers well above the post-crash averages. Similarly, the pundits are in awe of the officially reported low unemployment level. And they point to the less impressive, but welcome growth of wages in recent months as further evidence of a vibrant economy. They are less forthcoming-- embarrassed, perhaps-- about the explosion of already robust earnings (profits) in 2018.

Likely, this photo-shopped picture of the US economy will benefit Trump and his candidates in the elections. The warm and fuzzy picture is conveyed by the so-called leading indicators. But if we open the hood and look more closely at the capitalist economic engine, we get a somewhat different picture.

Behind the 2018 GDP growth are several contingent factors, including the Trump tax cut. But unacknowledged by many is the increase of government spending, largely military. Nearly half of the year-to-year growth-rate increase through April was accounted for by government spending alone, two-thirds of which was directly for the military. The bipartisan endorsement of an obscene military budget pumps up Trump-era growth as it has for many previous Presidents (remember Reagan?).

Fully 1.22 points were added to the 4.2% 2nd-quarter growth solely from global trade, the overseas purchase of US products like soybeans before the onset of the Chinese retaliatory tariffs.

And third-quarter GDP growth was equally a result of consumer spending (highest growth since 2014) and the aforementioned growth in government spending.

Despite the hollow celebration of rising wages, the aggregate numbers mask an important reality: Labor Department figures show that the greatest growth in weekly earnings accrue to the bottom 10% of earners (+5%) and the top 10% (+3+%), while 80% of US workers now see their incomes grow at a level only marginally above their cost of living.

While growth in income for the bottom 10% is welcome, it results only from the tight labor market in low-paying jobs, the largest source of job growth since the crash. The pressure on that segment underscores the hollowness of the employment recovery.

The US capitalist “recovery” has relied on the availability of low-wage labor. The collapse of 2007-8 generated a veritable ‘reserve army of unemployed’ willing to accept low-paying jobs, absent union militancy. Consequently, the capitalists have felt no need to invest in productivity-enhancing equipment-- it is cheaper to hire minimum-wage workers than invest in new machinery. Therefore, the last decade has experienced tepid growth in labor productivity demonstrated by 32 straight quarters (8 years!) of sub-2% productivity growth, but strong profitability, unprecedented in the post-World War II era.

Most of the growth in consumer spending is fueled, not by workers’ pay, but by additional borrowing and more people working more hours. US household debt hit a new high in the 2nd quarter; debt continues to rise faster than income for the average US citizen.


Contrary to the promises of the Trump Administration, the deep cut in corporate taxes along with the 21% increase in profits in the 3rd quarter have produced little increase in business investment. Growth in business investment was a mere .1% in both August and September.

A key measure of core industrial production—durable-goods orders excluding military orders-- declined 0.6% in September.

Retail spending-- a core element of consumer spending-- rose by only 0.1% in both August and September.

Two other critical components of consumer spending-- auto sales and home sales-- are flashing danger. Auto sales declined steeply by 6% in September, after a mostly sluggish year.

And home sales, a huge element in the US economy has tanked. New-home sales declined in September by 5.5%, the slowest rate in 2 years, and the latest month of a four-month slide.

Existing-home sales, a far bigger part of the housing market, declined by 3.4% in September, the latest month of a seven-month slide!

What to Expect

While it is true that Trump has been somewhat corralled into being a conventional right-wing Republican, but with his own uniquely vulgar and infantile stamp on the Presidency, he retains unconventional elements of populist nationalism-- the tacit confession that the empire is in trouble and the need to “Make America Great Again.” Both stances play into Trump’s economic policy in unusual and contradictory ways.

Like archetypical right-wing President Reagan, tax-cutting and deregulation drives a Corporation Über Alles approach. 

Like Reagan, the current Administration uses defense spending as the central stimulus for the economy. Since such a policy needs powerful enemies, the two parties have collaborated to concoct Russia and China as the countries to play the role of bitter enemies. The threat of war against China and/or Russia justifies far more spending and weapons sales than a war against Islamists in sandals or weak countries with ancient Soviet equipment.

Trump’s nationalism rejects alliances, pacts, and submission to international constraints, regulation, or authority. Instead, it embraces the economics of sanctions and tariffs; it substitutes the blatant behavior of a bully for the formerly fostered notion of global cooperation. If other countries deny US hegemony, the US will demonstrate it forcefully.

To the chagrin of the Democrats, the popular perception of the booming US economy has calmed corporate fears of Trump’s recklessness and emboldened Trump’s advisors and supporters.

But behind the appearance of economic exuberance is an economic engine running out of gas: key fundamental markers for consumption and investment are slackening, profits are threatened, and major political stumbling blocks lie ahead.

Despite record-breaking profits, compensation costs for capitalist enterprises are eating into those profits. The low unemployment rate has spurred an intense competition for workers. With fewer unemployed available, firms are offering higher wages, salaries, and benefits to wrest employees from other firms.

Further, the rising interest-rate environment is tacking on additional borrowing costs to overall costs, cutting into corporate margins.

And the relatively slow corporate-revenue growth, especially in Technology and Communication, is squeezing profits as well.

The explosive growth of Federal debt further challenges the Trump economy, though only for those wedded to conventional economic dogma. Because of the tax cuts, the deficit expanded by 17% in the fiscal year ending in September to the highest level in 6 years. With rising interest rates, deficit growth will only accelerate. The debt scolds in both parties will be screaming in chorus for budget cuts and spending limits (as they did so often during the Obama Administration). Of course they will argue for the cuts to come from programs and institutions that serve the people. The scourge of austerity will descend again over the economy, producing the readily predictable result of dampened growth.

The Trump Administration is battling the Federal Reserve over the issue of interest rates. The Fed is attempting to raise interest rates to take the oxygen out of the economy and evade speculative bubbles. Trump, on the other hand, wants low rates to pump oxygen into the economy to secure the continued growth that he has promised. Neither approach will save the economy from the turmoil ahead.

Next year will bring stagnation, if not economic decline, for the global as well as the US economy. Inevitably, capitalism will attempt to place the burden of the system’s failure onto the backs of working people. It will sell austerity as the palliative for that failure, another sign of the bankruptcy of the system.

Some will fight to fix the capitalist system, to reform it. Others will struggle to replace it. The goals should not be confused. They are different projects. Only one can promise a humane, peaceful, and sustainable world.

Greg Godels

Friday, October 19, 2018

The Lemming Effect and the Left

 With two weeks before the mid-Presidential-term US elections, the number of Democratic Party political solicitations in my e-mail inbox now approaches fifty a day. The curious-- “cynical” might be a better word-- thing is that none mention a genuine issue, none suggest an argument for a cause. All come with a folksy tone, an easy familiarity (from Bob, Chuck, Nancy, or Michelle) and all presume that I’m on their “team’  with cash at hand. The cheap emotional card is pulled frequently-- “Do you want to wish President Obama/Michelle Obama/Nancy Pelosi a happy birthday?” or “You didn’t respond to our request, do you HATE Bob Mueller?” Some are scolding: “TRAGIC ENDING. I [Nancy Pelosi] e-mailed yesterday. Barbra Streisand e-mailed. Harry Reid e-mailed. Now I’m e-mailing again…” And some are foreboding: “This is bad news…” One of the hilarious best: “Hi Friend, I just got off the phone with Senator Menendez, and he asked about you specifically.” Sure, he did...

But not a serious issue, an urgent cause, or a principled stand revealed.

Despite the lack of issues, not to mention a program, the Democrats fundraising tactics are working: ActBlue reports that Democrats raised $385 million in the third quarter alone, more than they raised in the entire 2014 midterm effort. Clearly, Trump-hating, even in its most visceral form, pays off.

However, the fund-raising orgy comes with a cost to democracy. Over 60 contested house seats sought by Democrats drew over a million dollars in campaign-fund donations in the third quarter alone compared to only 3 in the same quarter of 2014. The price of running a competitive campaign has risen dramatically (Source: WSJ, 10-16-2018).

Texas Senate Democratic hopeful Beto O’Rourke, a frequent solicitor appearing in my inbox, raised $38 million in the third quarter.

To date, Democratic House candidates have scheduled $122 million in TV commercials (Republicans $67 million) (WSJ, 10-16-18). It should be obvious that such fund raising is beyond the reach of truly independent candidates. The financial bar is set far too high to forego support from corporations, other well-heeled organizations, or wealthy contributors and expect to wrest power from Democratic or Republican incumbents. Accordingly, democracy is further stifled.

The notion of an authentic grass-roots campaign has nearly disappeared from the arsenal of the two major parties.

While posturing as a “people’s party,” the Democrats have largely substituted emotion for issues. Hatred of Trump and fear of Russia have served as the catalyst for the 2018 campaign. The Democrats have crudely sought to fold the two emotions into a brew disconnected from the sinking living standards, growing insecurity, and uncertain future of working people. A truly meaningful assault on Trumpism would necessarily target Trump’s pro-capitalist measures, cast light on betrayals by the Democratic Party, and underscore the failings of the two-party system, consequences that Democratic Party leaders dread.

It is no wonder that some commentators are describing political behavior today as “tribal.” In place of principled differences, the two parties have urged an amalgam of brand loyalty and blind faith. Stoked by a corporate media with its own interest in masking class-based issues and promoting imagery of class harmony, personal invective, anonymous charges, rumors, and internet gossip constitute the substance of political debate today. We have a reality TV-star President for reality-TV political theater.

After many decades of rightward drift by the two-party monolith, it is exceedingly difficult to find even a glimmer of hope that either party can be wrested from its corporate mooring. Yet hope does spring again and again with large sections of the US Left which attempt to pry open a door and commandeer the “people’s party,” a task now embraced by the youthful veterans of the Bernie Sanders campaign.

Our Left

With the last Presidential election, growing dissatisfaction with centrism found a home with Trumpism, a process that previously fueled the Tea Party movement for the Right. The Left experienced a similar distaste for centrism, a counterpart process that fueled the Bernie Sanders campaign-- a candidacy quickly subverted by the Democratic Party leadership.  

After the election, disenchanted young Democrats found expression in the nominal political residence of their pied piper: Democratic Socialists of America (DSA). DSA provided an organization; its burgeoning numbers provided energy and impact; but it left the youthful activists in ideological limbo, torn between a slapdash socialism and a decadent Democratic Party.

Like endless numbers of their predecessors, the youthful idealists are preparing to exhaust their principles and vision on the bastion of hypocrisy, the Democratic Party. Inexperience may excuse this illusion, but older veterans of the Left know no similar excuse. They have witnessed the subversion of George McGovern’s Presidential campaign, rallied around an exciting 1976 Democratic national platform, only to see the sanctimonious Jimmy Carter quickly run away from it. They have observed the Democratic Party leadership wilt in the face of right-wing reaction, abandoning the New Deal gains piece by piece. They have supported “insurgents” like Jesse Jackson or Howard Dean, only to see the dissidents pacified and escorted back into the fold.

It is a long and tortured history of failure, Don Quixote-like journeys to wrest the Democratic Party from the grip of its corporate owners. Sadly, many who embarked on these journeys were lost by the Left; disappointment bred inaction and cynicism.

Beyond the socialists (DSA), the US left is a small, largely electorally irrelevant motley mix, stretching ideologically from center-left liberals disenchanted with the Democrats to committed Marxist-Leninists.

Despite the fact that their endorsements or support will have virtually no effect on the outcome of the interim elections, the predictable stampede to support the Democrats has begun. Grandiose exhortations to stop Trump will serve as coded messages to support Democrats in the interim election. The ideological bankruptcy that fails to put promoting third parties, independent candidacies, anti-monopoly coalitions or advocating for socialism ahead of unconditional support for Democrats guarantees that the rightward two-party drift will continue, Trump or no Trump.

Unconditional support for Democrats reinforces the two-party stranglehold in two ways:

  1. It acquiesces to the already prevalent view that there is no other route to progressive change.
  2. It thwarts the development of third parties or actions that will disrupt the grip that Democrats have upon the Left.

That grip is continually strengthened by the insidious material influence (money!) spread by foundations, nonprofits, think tanks, right-wing labor organizations, etc. that enables the Democrats to capture the Left. And of course many reluctantly support the Democrats because they fear the ire of their allies in the broader mass and labor movements.

For decades, Leftists have explained their support for Democrats through a clumsy, misappropriation of Marxist-Leninist theory. Many have advocated a “United Front” tactic in the face of what they perceive as the threat of fascism. Specifically, Republican Presidential candidates-- Nixon, Reagan, Bush II, and now Trump-- are seen as harbingers, if not bearers of fascism. It is a bitter irony that much of the 1968 Nixon-era Republican platform would appear largely acceptable to today’s Democratic Party leadership.

But the fascism of the first half of the twentieth century does not figure in the crises facing the US today. Fascism was a ruling-class response to a dire challenge to its rule spawned by disillusionment from a bloody, but meaningless World War, crushing economic crises, and, especially, the political challenge from a powerful revolutionary Left.

Those conditions simply do not coalesce in the US at this time.

Instead, the ruling class in the US (and many other countries) faces a crisis of the legitimacy of the centrist parties that have ruled throughout the Cold War until today. Opinion polls in the US (and many other countries) show nearly non-existent confidence in the long-standing ruling parties. The Trump phenomenon and the Sanders experience demonstrate that dissatisfaction, no matter how imperfectly. The electoral successes of non-traditional parties in many other countries equally demonstrate a popular desire for a new course, a new direction.

One can bury one’s head in the sand and refuse to recognize the mass shift in political allegiance; one can continue to slavishly tail the Democratic Party or the now-discredited, corrupt parties of social democracy; one can choose to embrace the myth of containing the barbarian hordes; but this moment is different, demanding different strategies.

The Left must discard the unproductive, out-of-touch approach of defending the left flank of capitalism and begin an earnest search for a new, independent politics. The growing mass rejection of the old politics demands it.

The Left cannot grow in size and influence if it continues to attach itself to a rotting Democratic Party.

Paradoxically, continuing to support the discredited Democratic Party and failing to offer a credible alternative will only encourage more people to look rightward for inspiration and answers.

Greg Godels

Monday, October 8, 2018

Anti-Racism: Back to Affirmative Action

The situation of blacks in the workplace without AA [Affirmative Action] is not difficult to imagine. The racist impact of irrelevant job requirements will continue, perpetrating the victimizing effects of inferior ghetto education and the racial bias that has denied blacks training and work experience. Unless AA measures reduce the racist impact of seniority-based layoff, blacks will, as always, move down during recessions into unemployment. Should blacks wait until recessions are eliminated (until capitalism is fundamentally restructured) to achieve job security? Without AA, desirable jobs will be distributed through a white pipeline, as an ingrained practice in America’s two segregated societies.

...The aim of AA is to break that racist barrier. Without that pressure, even in an expanding economy, occupational segregation will continue. Blacks will remain second-class citizens. Gertrude Ezorsky, Racism and Justice: The Case for Affirmative Action, 1996.

The question of racial oppression in the US against peoples of African origin remains unsettled well over two hundred years after the country’s foundation.

Some would like to believe that the question was substantially solved after the Civil War with the liberation of African slaves from their bondage.

Still others would like to believe that the question was largely solved with the Civil Rights “revolution” of the 1960s when legal segregation was overturned and historical racially-based legal obstacles to voting were abolished.

And still others would like to believe that the final racial barrier was shattered when Barack Obama was elected, breaking the ultimate glass ceiling.

For many well-meaning liberals, only a mopping-up of the vestiges of racism remains: the abusive impact of language, attitudes, individual relations, micro-aggressions, etc. remain problematic. And, of course, these attitudes can fester into collective violence organized by the police or the so-called “alt-right.” From this perspective, the race question can neatly be absorbed into a vast rainbow of worthy causes, an intersection of dozens, if not hundreds, of group grievances for which liberal academics have concocted an umbrella word: “intersectionality.”

The wholly unique history of depredation and alienation experienced by a people forcibly “exported” to foreign lands for slave labor and subsequently scorned because of skin color is cast into a cauldron of -ism’s that range from the most benign to the most harsh, systemic, and unimaginably violent, elevating the slight and trivializing the brutal.

It is the relativizing of oppression that allows vast numbers of otherwise disinterested citizens to remonstrate against second-hand smoke while ignoring the slaughter of hundreds of thousands at the hands of the US military in its imperial campaigns throughout the world.

African Americans today fall behind their white counterparts in every objective, material standard of well-being, from life expectancy to accumulated wealth. Despite the relative successes of an upper stratum (petty bourgeoisie) of US Blacks who have parlayed education, social or political contacts, professional prowess, ethnocentric entrepreneurship, or fealty to power to its advantage, most African Americans occupy the lowest, most precarious rungs of the US working class.

Black citizens often live in bantustan-like neighborhoods, isolated from better housing, better schools, and better human services. Where Northern, urban African Americans have historically been confined to city ghettos, they are now being ethnically cleansed from inner cities by a process of gentrification motivated by young, white professionals enamored with the amenities of urban living. Today, Blacks are herded into declining suburban ghettos where they were formerly denied residence.

It is no exaggeration to say that the segregation of Blacks and whites is as great or even greater than ever, with a consequent disparity of advantage.

The Liberal Moment

The high point of progress against racism and its effects occurred in the 1960s coincident with the growth in breadth, militancy, and unity of many decades of anti-racist activism. New Deal liberals, prodded by a largely Communist left and CIO working-class radicalism laid the foundation for the direct action and broad-based movements of the 1950s and 1960s.

The Democratic Party, long an unholy alliance of Northern liberals and Southern racists, acutely felt the pressure from this movement. A unique conjuncture of sympathy for an assassinated President’s initiative, the rare audacity of a succeeding President, Lyndon Johnson, obsessed with leaving an historic legacy and repairing the international image of the US, widespread outrage over officially sanctioned violence in the South, and, most importantly, a disruptive mass movement for racial justice culminated in unparalleled legislation expanding civil, political, and human rights for US Blacks. The Civil Rights Act of 1964 and the Voting Rights Act of 1965 marked the high-water point in the struggle against racism. The history since that juncture has been one of defending, enforcing or, most tragically, witnessing the erosion of those gains.

To a great extent, the gains of the 1960s reached the limits of bourgeois democratic, rights-based reform. Unlike a revolutionary change brought on by the US Civil War, a war that overturned an entire politico-socio-economic system (while leaving the deplorable material conditions of Blacks largely intact), liberal reformism promises opportunity but does not promise the delivery of outcomes. In other words, liberal reformism may open closed doors without providing the means to pass through those doors.

The legislation of the mid-1960s opened many doors for African Americans, but failed to offer most of them the material essentials-- the education, the jobs, the living conditions, etc.-- to successfully pass through those doors toward real equality.

Just as the promise of 40 acres and a mule never materialized to liberate former slaves, liberal reformism fails to offer Blacks the socio-economic foundation that would liberate the African American working class in the twentieth and twenty-first centuries. To grant that foundation would challenge the most sacred values of capitalism and open further doors to the emancipation of the entire working class.

The aftermath of the Civil Rights era brought two promising developments: a movement to desegregate public schools in both the South and the North and an emerging commitment to affirmative action.

Beyond the Limits of Reformism?
School Desegregation

Of all of the potential reforms targeting racism, desegregating public schools and forcing children to bear the burden of social change was the least likely to come at a cost to capitalism or disrupt existing power relations. Nonetheless, there was great promise in dramatically improving the education available to Black youth by putting them in the same classroom with white youth, where the quality of teaching, resources, facilities, and options are consistently higher.

While minimalist in economic sacrifice, public school integration met intense opposition from highly organized racists who rallied many under the bogus banners of “forced busing,” “school choice,” and “neighborhood schools.” It made no difference that elites had embraced publicly subsidized busing and travel out of neighborhoods for their children’s attendance at private and parochial schools. The hypocrisy was only underscored by the use of busing and the abandonment of neighborhoods to avoid attendance at integrated schools.

Nonetheless integration of city schools persisted. Of course the problem of better education for Blacks remained unsolved because of the even greater class disparity between urban and suburban schools. To achieve some parity for Blacks would necessarily involve consolidating school districts across this class line at some additional material cost and with social and political cost to the existing racial barriers.

This dramatic step for parity education for African Americans was quashed with the Burger Supreme Court decision of 1974, Milliken v. Bradley.

The Burger majority effectively removed any legal obligation of suburban school districts to participate in school desegregation unless they could be shown to be intentionally racist, placing an untenable onus upon reformers. The urban Detroit school district was 75% Black when it originally appealed for judicial relief. With the Supreme Court denying relief, it was 90% Black by 1987.

Dissenting Justice Douglas caustically noted: “...the task of equity is to provide a unitary system for the affected area where, as here, the State washes its hands of its own creations.” One should clarify: the capitalist state washes its hands of its own creation.

With a substantial legal obstacle placed before it, the reformist desegregation movement collapsed well before it achieved any real educational parity for African Americans. Liberal reformist leaders surrendered without a further fight. Since Milliken v Bradley, it has been a persistent battle to protect the limited gains made from opportunist politicians.

Beyond the Limits of Reformism?
Affirmative Action

The other promising reform stoked by the Civil Rights movement-- and potentially the most significant-- was the policy of affirmative action, a policy designed to move beyond allowing participation in the US economy to actually leveling the employment playing field for US Blacks. Marxist political economist, Victor Perlo, calls affirmative action “...the principal mechanism designed to reduce discrimination against African Americans.”

Among the most thoughtful, passionate advocates for affirmative action is the liberal philosopher Gertrude Ezorsky. Her brief, concise book, Racism and Justice: The Case for Affirmative Action, is the classic on the policy. From first reading her book many years ago, I remember well her central datum that jobs are acquired overwhelming through contacts or personal networks. It caused me to reflect on my own work history from digging a basement for a neighbor when I was thirteen through the rest of my employments. Without exception, every job was gotten through family, friend, or other acquaintance. Every thoughtful person, except for the mythical “self-made man/woman,” will concede this datum.

Of course this means that those limited to the worst jobs through racism will only produce and reproduce, through their limited networks, still others locked into bad jobs.

It is this cycle that affirmative action promises to break by guaranteeing Black representation in workplaces proportional to African American representation in the population.

While ‘60s liberals acknowledged both the necessity and promise of affirmative action (Title 7, Civil Rights Act 1964), they were slow to devise plans or seek implementation of the policy. Ezorsky notes that, ironically, two of the more effective plans were enacted during the Nixon Administration. The 1969 Labor Department Philadelphia Plan saw the representation of Blacks in the construction trades go from 1% to 12% in Philadelphia. And Nixon’s 1971 Executive order 11246 required “that dated numerical targets for hiring, training, and promoting minorities be set by firms that hold government contracts but have underutilized minorities…” (Ezorsky, p.37)

Affirmative action got as much attention in the 1976 Democratic Party platform as did fisheries. When mentioned, it was conflated with the Black unemployment rate. Even less attention was given by the Carter Administration, in practice.

Ezorsky concedes that “[t]he affirmative action programs begun in the 1960s have been diminished in the 1980s in response to a different political climate.”

The Democratic National Committee’s 1986 83-page statement of principles, New Choices in a Changing America, written and endorsed by the Party’s luminaries, contains not one endorsement (or mention) of affirmative action. In its place were vague policies directed at unemployment and job training.

Affirmative action was dead.

Racial Justice

Because Ezorsky grasps the historical specificity of US racial oppression, she recognizes a strong need for restorative justice, a justice that must go beyond merely establishing opportunity. The liberal conception of justice as fairness-- everyone playing by the same rules-- professes a distance, a willful blindness to outcomes. But blindness to outcomes fails to acknowledge that inequality of means determines outcomes even when equality of opportunity is assured.

Thus, an equal opportunity to apply for acceptance from Harvard means little to the gifted African American student saddled with a third-rate education; an “equal opportunity” job-training program in the suburbs means nothing to a motivated potential employee lacking the financial resources to travel to the suburbs; and the right to stay at the Greenbrier resort counts for little to the vacationer who would have to devote an entire paycheck for a visit.

Of course it is the class dimension that arises with these examples, an “intersection” with racism that academics and “middle class” liberals seldom recognize.

Consequently, restorative justice-- like affirmative action, but unlike merely establishing civil rights-- depends on a redistribution of society’s resources. For Blacks to finally enjoy justice, they must acquire a material foundation beyond newly minted rights in order to participate productively in society and enjoy its benefits.

Obviously capitalism opposes any redistribution of assets or any reordering of power relations, unless it comes at the expense of the working class. And that opposition explains the stillbirth of affirmative action. It has disappeared almost entirely from the mainstream conversation.

Could affirmative action succeed in bringing racial justice to African Americans under capitalism?

Probably not, but the struggle for affirmative action would bring Blacks closer, and would attack racism at its core.

Anti-racism for the Twenty-first Century

The shallow and patronizing anti-racism that occupies much of the left-- the language-scolding, the tokenism, the guilt-driven deference-- leaves the structure of racial oppression untouched.

Nor does the idea of “reparations” attack that structure. Reparations draw upon hollow legalisms: the notion that a retributive settlement can be negotiated with a guilty party and magically restore justice to a people kept back for centuries. It fundamentally looks to the past, promising to repair damages incurred, but with no promise of delivering future justice. Further, reparations fail to explain how any settlement would be distributed in a way that benefits those most aggrieved. Like other liberal answers to racism, it fails to recognize the fact of class.

Any attack on the structure of US racism must recognize that eliminating the racial ghettos of poverty, inferior education, poor housing, mass incarceration, poor health care etc. must attack the economic ghetto of centuries of super exploitation, unemployment, underemployment, and inadequate jobs.

In his classic reprise on the subject, Economics of Racism II, Victor Perlo writes:

A program to achieve economic equality [for Blacks] has two main requirements:

  1. Affirmative action; that is, specific measures to improve the economic conditions of African Americans, Hispanics, Native Americans, and sections of the Asian population;
  2. Measures to advance the conditions of the entire working class. (Perlo, p. 281)

Any anti-racist reforms must, therefore, revisit affirmative action. An authentic People's anti-racist strategy must place restorative measures at the center of our efforts-- measures that afford African Americans the minimal means to march through the doors of opportunity won in the great Civil Rights struggles of the 1960s.

Greg Godels