Another Retreat in the Class War

Monday brought fresh news from the Class War Front. The stock market leaped forward nearly 500 points on news of another advance by capital. The president of the Securities Industry and Financial Markets Association – a spokesperson for big capital speculators – hailed the news: “For the first time in seven months, I can say they’ve done it right.”

What provoked this euphoria from markets and market players?

The Obama administration’s economic czar, Treasury Secretary Timothy Geithner, betrayed the majority standing on one side of the class divide and surrendered the government and the people’s resources to the banking industry. Of course Geithner disguised the massive betrayal as a necessary rescue of the financial industry, posturing the self-induced collapse of fictitious financial capital as the stumbling block for full recovery of the world economy.

Following the Bush administration and former Treasury Secretary Paulson, Geithner and Obama’s economic team locate the economic problem in the disposal of what, for lack of a better expression, economists have come to call “toxic assets”. While an odd choice of words, “toxic assets” does suggest that those responsible for creating them should be held responsible for eliminating them. But that would be logical and fair to the vast majority of the US citizens who had little to do with the financial mess. Instead, Geithner, dutiful to his corporate cronies, and enabled by a President either oblivious to the consequences or fully compliant, chose to socialize an enormous pile of crap created and unwanted by the private sector. The Geithner proposal would pull the virtually worthless paper residing in dusty corners of big financial corporations– untenable mortgages, securities constructed from these mortgages, and bets made on them - and place them back in the market place. As irresponsible as this may sound, Geithner would offer the big financial players bags of public funds to purchase this junk with the prospect of selling it at a later date for a profit. To reduce the risk to these players to next to nothing, the government would guarantee the loans secured for the purchase of this toxicity. As a result, those who would participate in this obscene plan would engage virtually no risk for the remote possibility of making a profit. Commentators agree that, at best, a private financial corporation participating in this scam would risk $7.00 for every $93.00 of public money. It’s no wonder that Wall Street and the financial sector have started their victory celebration. Cowboy capitalism is alive and well.

For details of this obscenity, one has only to turn to the writings of liberal economists Paul Krugman and James Galbraith. Their well-reasoned exposure of the Geithner deal is notable for its passionate and uncommon outrage at the plan’s audacity. Galbraith contends that there can be no other explanation for following the Geithner option other than political opportunism. The campaign contributions from the financial sector are simply too important to resist. The same could be said for the Administration and Senate’s tamping down of the outrage over the AIG bonuses. The good Senators are slinking away from answering the public anger and they’re doing it with the encouragement of Barack Obama.

The larger question is: When will this now one-sided class struggle be joined by forces equal to this challenge from capital? There should be no doubt that the outcome of the class war being waged mercilessly by capital will have consequences for working people that approach or surpass the damage from aggressive wars. Clearly there is a need for a movement on the scope of past anti-war mobilizations. Yet the organized labor movement has been unable to separate its cause from the rescue of capitalism, showing undeserved deference to the Obama economic team. Likewise, liberals have failed to find the energy to combat this economic assault on our future with the same fervor that they find for many of their single issues. Thus, the popular anger goes largely unorganized.

While this covert war on future living standards is masked by policy double-talk and technical jargon, a clear response is urgent: Geithner and his team must go!

Zoltan Zigedy

Contracts and Class

Contracts are the sacred glue that binds virtually all capitalist social, political and economic relations. Indeed, the contractual model stands as the basic ideological building block in virtually the entire edifice of social thought in bourgeois ideology. From Hobbes to Rawls, contracts are viewed as the basis for moral and legal legitimacy. Modern constitutions are taken to be social contracts between citizens and with their leaders. No idea is more central to the very existence of a market-based economy and its superstructure.

Thanks to the decline of class struggle unionism and its replacement – business unionism – the contract assumes a similar sacrosanct role in the relation between labor and capital. Where unions still exist, labor and management agree to a contract binding both parties to obligations that govern compensation, benefits, work rules and all other matters deemed important.

But like so much of capitalist mythology, the force of contracts is always trumped by the interests of the privileged and wealthy while sternly enforced against the weak and vulnerable.

Take, for example, the unionized auto workers. Their mutually agreed contracts with automakers have been challenged, attacked, and renegotiated persistently and aggressively for years. Their benefit packages, compensation and work rules have been assaulted by lawmakers, media pundits, and management. The contractual obligations to retirees have been sliced and diced through an onerous VEBA agreement followed by another demand to convert the employers’ obligations to virtually worthless stock. Despite a firm, consensual agreement, the autoworkers were extorted under the threat of plant closings and bankruptcy – moves that would have simply obliterated a contract thought to be the bedrock of labor/management relations. Of course these actions would benefit only management and shareholders. The same tactics stripped earlier contracts in the airline and steel industry. The workers’ contracts were firm and unbreakable until capital decide they weren’t.

Daily, the mouthpieces of big capital – the media and politicians – call for workers to forego management contractual obligations, in the interest of the economy, the company, the nation and their fellow citizens. No sacrifice – by workers – is too great to demonstrate patriotism and selflessness, in short, a greater good. Yet every worker knows that the mortgage, the car note, the credit cards, the school tuition – the obligations owed to capital - are sacrosanct, sealed by the holy bond of a contract.

Given this demonstrated hypocrisy, it should surprise no one that the AIG cabal and their ever helpful pals on Obama’s economic team – Geithner, Summers, et al – posture the obscene bonuses paid to AIG’s cowboy speculators as contractual obligations. We were told that denying bonuses to those who brought AIG –and the economy – to its knees would be akin to cracking the foundations of Western civilization. In this case, a contract is holy writ, to be worshipped with solemn reverence. This claim became challenged in the court of public opinion when management drug out the tired, risible argument that AIG’s derivative team was so indispensable that the managers’ exit would halt efforts to unwind the complex instruments that they foolishly contrived. Analogies abound: It’s like paying the thief a handsome bonus to tell us where he hid the money that he stole.

With the tortured explanation that these were retention bonuses, the public outrage increased. And this pathetic excuse evaporated when it was disclosed that many of the bonus recipients had already left AIG. How did they earn a retention bonus if they left? So much for the integrity of these sacred contracts.

But AIG did honor their insurance contracts (credit default swaps) with numerous firms like Goldman Sachs. In the spirit of the inviolability of contractual obligations, they paid out collateral obligations in full, preserving their high reputation and integrity with public funds obligingly supplied by Treasury Secretary Geithner, a protégée of former Goldman Sachs exec Robert Rubin.

In the face of public outrage, the rascals who looked away, aided and abetted, or encouraged the AIG fiasco turned on each other. Senator Dodd, chairman of the Senate Finance Committee, came in for harsh attack because he modified his amendment to the stimulus bill, weakening the restraints upon executive pay and bonuses. In the face of criticism, Dodd - dodging any personal responsibility in the time honored tradition of his class, the Senate and his father – quickly pointed his finger at the Treasury Secretary who, he alleges, told him to remove any containment of corporate remuneration.

Both Dodd and Geithner, throughout their careers, have been joined at the hip with the financial sector which they are charged with overseeing. Dodd has raised over $1.5 million for his Senatorial campaign from the securities industry over the last six years in addition to the $2.7 million it gave for his Presidential run. He was also the recipient of two questionable, favorable mortgages arranged by the former CEO of Countrywide Bank.

The public outrage at the AIG bonuses exceeds even the massive anger over the original Paulson stealth plan to bailout the banking industry. While it is both welcome and promising, we must not lose sight of the political hypocrisy enabling AIG arrogance. The overriding idea of obscene amounts of public funds dedicated to a second chance for a thoroughly corrupted discredited, and irresponsible financial sector while the working class struggles under growing unemployment, debt, foreclosures, and insecurity borders on the criminal. The urgency of the bank bailouts contrasted with the snail-like progress on the people’s agenda underscores the class bias of our policy makers and the compliant media. Two demands are urgent: Nationalize the banks! Out with Geithner and crew!
Zoltan Zigedy

Response to Davidson and Dr. Scotch

I received the following responses to The Nation "Tackles" Socialism. My comments follow:

Carl Davidson said...

I assure you, Zoltan, that both Ehrenreich and Fletcher are socialists. Unless you just want to use the term to mean what you pick for it.

Ehrenreich is a traditional Social-Democrat, rooted in DSA, with all its upsides and downsides.

Fletcher is part of the ML movement, although not of your trend. His groups views are readily available.

If you want to do polemics with them over socialism these days, it's quite relevant to do so. But instead of flippant dismissals, it would be better to examine the actual view they hold, and their organizations represent.

Otherwise, we just get more of the curious sectarianism your trend is often noted for.



Anonymous Anonymous said...

The French Revolution wasn't so bad.
Dr. Scotch

Carl Davidson may well be correct that Barbara Ehrenreich and Bill Fletcher, Jr. are, in their hearts, socialists. All the more reason to be critical of their The Nation contributions. The same could be said for Tariq Ali. He has certainly written frequently and militantly about imperialism and the evils of capitalism. But maybe my point was not as clear as I would like. Surely the opportunity afforded by the largest circulation liberal/left publication in the US conjoined with an economic catastrophe the likes of which none of us have seen in our lifetimes provides a unique opportunity to put forward a vision of socialism - not necessarily mine or Carl's - but some vision that might actually provoke some reader to consider or even advocate socialism.

Carl, do you think that anyone - say a young activist - would actually seek out socialists or socialist organizations after reading these articles? Do you think the commentaries inspired anyone to go to the library or the internet to find out more about socialism?

For generations, the non-Communist left has constructed models of socialism based primarily upon what they viewed as flawed with the Soviet Union or the Communist Party. The Soviet Union is gone and the Communist Party USA is little more than a liberal think tank. Today, A Communist or Socialist must tell people what they believe in and, hopefully, do it with some conviction. You're welcome to show my where you find this in The Nation pieces.

What is relevant here is not whether we engage in polemics on our various takes on socialism, but that, when given an opportunity, we make some kind of impassioned advocacy for some kind of socialism. We don't have to agree with other visions of socialism, Carl, but at least put 'em on the table!

Carl, you refer to their "actual views". Why should I have to research them? Why weren't they in the article?

As for the Anonymous Dr Scotch: Yes, the French Revolution wasn't bad. In fact, it was great, except for one small omission: It left out the sans coulottes - the property-less and those without influence or power. They did the fighting and dying, but with little material change in their miserable lives. That's why they rose again in 1848 and 1871. They are still trying to find a little justice after two centuries.

Zoltan Zigedy

The Nation "Tackles" Socialism

And now for the sixty-four thousand dollar question: What historical figure has been identified with socialism for the last century and a half? Yes, that’s right. Karl Marx! Bonus question: What has been the ideology of the movement for socialism in nearly the entire period? Right, again. Marxism!

You would never know this from reading the contributions in the current issue of the most popular, most influential publication on the US left, The Nation. In an issue headlined Reinventing Capitalism/Reimagining Socialism, The Nation editors call on “self-identified socialists” to discuss the prospects of socialism in the wake of a sinking world capitalist economy. To hedge their bets, the editors include an article by Joseph Stiglitz posing a strategy for saving capitalism from itself. I suppose we should applaud the magazine for raising a prospect that has long been absent from the pages of this journal that goes back almost to the founding of the First Workers’ International. Certainly, The Nation devoted much more attention to socialism in its first hundred years than they have in the last fifteen years – the era of capitalist triumphalism.

In the five articles featured in the March 23, 2009 issue, there are only two mentions of Marxism, including this derisive comment: “And we all know the joke about the Marxist economist who successfully predicted eleven out of the last three recessions.” Yes, I know that economist, too. But his or her confidence that capitalism periodically stumbles from its own internal logic strikes me as far more insightful than the correspondents who were caught completely unawares by the dimensions of the economic upheaval. So they dust-off their old socialist credentials and proffer musings on the prospects of socialism sans Marx – they re-imagine socialism.

The lead article by Barbara Ehrenreich and Bill Fletcher Jr. (Rising to the Occasion) is meant to “kick off a spirited dialogue”. One can imagine the Parisian Communards, Lenin, Mao, Fidel, or Hugo sitting in the rubble, in exile, on the Long March, in the Sierra Maestra, or in jail shouting: “Hey comrades, let’s kick off a spirited dialogue on socialism!” But, then, they were not twenty-first century US liberals.

Make no mistake about it; Barbara Ehrenreich and Bill Fletcher Jr. are good folks. Their dedication and service to democratic reforms and defense of the rights of working people is unmatched among progressives. But they ain’t socialists. They see no revolutionary potential in the current moment: “There was supposed to be a revolution, remember?” They can find nothing worthy of revolutionary expropriation: “In recent years, capitalism has become increasingly and almost mystically abstract” (What could “mystically abstract” possibly mean?).

Their vision is darkly pessimistic: “Can we see our way out of this and into a just, democratic…future? Let’s just put it right out on the table: we don’t.” If this were my view, I’d ask for a re-deal.

Instead of a vision of workers power, social ownership of the key economic sectors and an end to exploitation, Fletcher and Ehrenreich opt for “participatory democracy” and “solidarity” – two ideas that would draw approval across the political spectrum from soft liberals to raging anarchists. It would seem that after over two hundred years of suffering the whip of capitalism, the best answers the left can supply were inherited from the French Revolution.

Another contributor, Immanuel Wallerstein, postures a similar negative view. In the short run, Wallerstein advocates pressure on Obama and similar centrist or reform-minded politicians – a sane position, but hardly a step towards socialism. In the longer run, Wallerstein opines that “[s]ince no one really knows, practically from day to day, where the [economic] indicators will shift, no one can sensibly plan anything.” Again, it would be hard to imagine these words coming from the mouths of Marx, Lenin, Mao, Fidel, or Hugo.

“What can we do?” Wallerstein asks. “[W]e must be clear what the battle is about. It is the battle between the spirit of Davos… and the spirit of Porto Alegre. No lesser evil here. It’s one or the other.”

In the end, the left is advised to promote “intellectual clarity”, “experiment with all kinds of new structures…” and “encourage sober optimism”. I suppose these less than ambitious goals flow from the spirituality of Porto Alegre.

Writing from the perspective of environmentalism and climate change, Bill McKibben confesses he’s “not much of a socialist.” And he’s right. His legitimate environmental concerns lead him to claim that the moment for socialism has past since socialism dealt with the problem of growth. “The fuel for free-market fundamentalism and Marxism was fossil fuel, and we’re not going to have it.”, he adds. While I credit his argument for its absolute simplicity, I don’t think Marx or any of his followers ever claimed that the road to socialism was paved with fossil fuels. Nor does changing the consuming habits of people or lowering their growth expectations preclude putting an end to labor exploitation.

McKibben’s contribution shows not even a hint of class awareness. The people of McKibben’s world all seem to be solidly middle-class albeit infected with “hyper-individualism” and a lack of respect for “common good”. There is no mention here of the role of trans-national corporations in corrupting the environment or accelerating climate change. Rather, he scolds us all for our intemperance. I guess if you can’t recognize capitalism, you will surely see no need for socialism.

For Rebecca Solnit, the revolution has already begun! But, unfortunately it has little or nothing to do with socialism. In place of public ownership, universal social securities, effort-determined compensation, and a democratic workplace, Solnit gives us “gardens”, “child-care-coops”, “bicycle lanes”, and “farmers’ markets”. How revolutionary! Like McKibben, she lives in a world without massive unemployment, debt, inadequate or no health insurance, poverty, or insecurity – the world of the self-satisfied burgher. One wonders if she has offered this revolutionary program to unemployed autoworkers or Bolivian peasants. Surely they need bicycle lanes, too.

Dismissively, she cites the Sandinista revolution as the “last of its kind”. Like so many romantic – decidedly middle class – leftists, she shows a smug affinity for the Zapatistas, who remain a toothless icon of media-friendly opposition. Apparently, she has yet to hear of the revolutionary changes in Venezuela, Bolivia, Ecuador, and Paraguay, all of which aim for a socialist future.

Tariq Ali has. His contribution shows much respect for the question posed by The Nation editors as well as a measured historical perspective on the neo-liberal triumph and its current collapse. For Ali, the model that fills the void may well be the “radical social democracy that seeks to combine state, socialized, cooperative, small-scale private and individual enterprises” which he finds in the South American countries cited above. While Ali’s admiration (and defense) of the South American model is commendable, he is dismissive of the labor movement’s role in securing change. Instead, he opts for the Hispanic community as the agent for change in the US. But here he shares the thread of utopian detachment that runs through all of the contributions. There is little more than shared ethnic heritage that links our-Spanish speaking brothers and sisters with the inspiring example of Venezuela, Bolivia, etc. They are yet to be organized for effective progressive action, not to mention Chavez-inspired “twenty-first century socialism.” Besides, these South American movements would have made little progress towards their goals without the support of working people, peasants and many of their organizations. In the world of Saint Thomas More, God, fortuity, and reason will bring Utopia, but in our world, we will only get Jerusalem by organizing the unemployed and the unorganized, while bringing a commitment to socialism to the previously organized labor movement.

I confess to both anger and disappointment with The Nation initiative. Since the dawn of capitalism in its industrial incarnation, it has left thousands, then millions living on the edge, marginalized by its profit-churning logic that enriches its agents with unimaginable wealth. This is not or should not be news to anyone on the left. The persistent crises of capitalism – some “moderate”, some deep and profound – have devastated communities and families. Sure, capitalism has changed dramatically and resiliently, but whether it is dark, satanic mills or work cubicles or fast food restaurants, employees suffer the indignities and exploitation of the capitalist work place as well as the injustices of capitalist practices. These truths remain constant.

No doubt these truths strike different people, different strata, and different classes in different ways. A manual laborer in an Asian sweatshop, an autoworker in Detroit, and an academic or public intellectual may well feel the effects of capitalism in different ways, but all are capable of understanding the need for a system that provides decency, justice, and the absence of exploitation.

Since the dawn of industrial capitalism, the one solution that promises a complete and final break from capitalism is socialism. While there have been passionate debates over the contours of a socialist society, most advocates have offered homage to the pioneering work of Karl Marx, Frederick Engels and their adherents. Their legacy sustained and energized the movements for socialism, almost without exception. So why is it absent from The Nation’s discussion? With an economic crisis that offers opportunity unseen in most of our lifetimes, an opportunity to seize the initiative against a wounded capitalism, we deserve more than pessimism and bike lanes.
Zoltan Zigedy

Robert Brenner on the Crisis

Robert Brenner, a professor at UCLA, is most widely known for his re-sparking of an old, largely academic dispute about the transition from feudalism to capitalism. The Brenner debate brought much fury, though in a rather limited, confined community of Marxist scholars, to a question that took on far more self-conscious importance than the matter probably deserved. Much turned on how one understood feudalism and capitalism, yet the various disputants managed to pull in all the old controversies troubling the academic left for the last century.

This is not to belittle the question – actually a very interesting matter – but to remind how scholars, aloof from the urgency of party politics and robust class struggle, can drain a subject of the very life that might teach something useful to those thirsting for political understanding.

Apart from his position in this academic dustup, Brenner demonstrated a tenacious grasp of the Marxist method and an admirable ability to plow up tendencies and organize the historical data meaningfully.

Some years later, Brenner authored a lengthy paper, The Economics of Global Turbulence: A Special Report on the World Economy, 1950-1998, in May/June 1998 issue of New Left Review. In this book-length article, he sought to bring some deeper and more revealing understanding to the trajectory of post-war capitalism. Though ambitious, Brenner attacked this matter with a wealth of impressive economic and social data that challenged the then triumphant notion of capitalist stability and growth. As the Clinton golden era drew to a close, Brenner was one of the very few to see the precarious state of global capitalism. Certainly, he was among the even fewer embedding this projection in a Marxist framework.

Today, “Marxist” scholars are returning from the wilderness to offer alternatives to an anxious public thirsty for alternatives to the barren well of neo-liberal thinking. Those who did not flee the tradition in the face of the capitalist counter-revolution of the late twentieth century occupied themselves with fixing the “errant” ways of Marxist thought. Marxism was “rethought” and “reconstructed” in ways that accommodated the new perceived realities, the smug claim that There is No Alternative. For the most part, those returning from the wilderness are today offering an eviscerated, superficial caricature of Marxist thought: Marxism-lite. Of course they command the greater attention of the media.

Robert Brenner has not made these accommodations, nor has he been the darling of media attention. Nonetheless, he offered an interview on the current crisis to a Korean newspaper, Hankyoreh (http://www.hani.co.kr/arti/society/society_general/335869.html), in late December of last year. His careful thoughts are well worth reviewing. His comments are in italics.

1. What mainly accounts for [this crisis] is a deep, and lasting, decline of the rate of return on capital investment since the end of the 1960’s. The failure of the rate of profit to recover is all the more remarkable, in view of the huge drop-off in the growth of real wages over the period. Brenner correctly seeks and locates the source of crisis in a tendency for the rate of profit to decline. Profit – both absolutely and relatively – is the lifeblood of capitalism, determining its stability and growth. But it is not the militancy of labor that accounts for the pressures on profits since real wages have grown very little over this period.

2. I don’t think it’s helpful to counter-pose… the real and financial aspects of the crisis. As I emphasized, it is a Marxian crisis, in that it finds its roots in a long term fall and failure to recover of the rate of profit, which is the fundamental source of the extended slowdown of capital accumulation right into the present. Brenner locates the origins of the crisis in the economy and not, as is the fashion, just in the financial sector (specifically, degraded mortgages). They are only a manifestation of the far deeper illness plaguing capitalism since the long post-war expansion.

3. The persistent weakness of aggregate demand has been the immediate source of the economy’s long term weakness…Since the start of the long downturn, state economic policies have tried to cope with the problem of insufficient demand by encouraging the increase of borrowing, both public and private… But because profitability had still not recovered… US authorities ended up adopting an approach [that]…[b]y keeping interest rates low… made it easy to borrow so as to encourage investment in financial assets. They were able to borrow on a titanic scale, vastly increase their investment and consumption, and in that way, drive the economy. So private deficits replaced public ones. What might be called “asset price Keynesianism” replaced traditional Keynesianism. With the ratcheting down of labor militancy and a long era of retreat and concessions by labor, the opportunity to grow profits became limited by diminished consumer resources. Investment opportunities were restricted – and consequent profitability – by stagnant incomes. I might add that public spending was restrained as well by a draconian neo-liberal ideological assault upon social welfare and public institutions. Debt – deferred payment - became the motor force for restoring profitability. Brenner is insightful in viewing this as a kind of perverted Keynesian stimulus.

4. Today, the recession is making the [financial] meltdown worse because it is exacerbating the housing crisis. The meltdown is intensifying the recession because it is making access to credit so difficult. It is the mutually reinforcing interaction between the crisis in the real economy and financial sector that has made the downward slide so intractable for policy makers and the potential for catastrophe is evident. This contradiction, stated so clearly by Brenner, captures the trap in to which policy makers have stumbled. Because the malady is rooted in a long term, chronic tendency of the capitalist system to strangle its own profit potential, policy makers are scrambling to restore profit while attempting to rescue a financial system dragging down that same potential. Where the massive debt was counted as an asset in the virtual expansion of the last two decades, it has now become of doubtful realization and, therefore, is counting as a dubious liability. Of course it’s not just the housing crisis that feeds the failure to meet debt payment, but also debt in commercial real estate, credit cards, student and auto loans, etc. that fall into default. While seldom noted, the “solution” – planned or unplanned – that capitalism offers to such a deep crisis is radical “restructuring”: the demise of smaller enterprises, the absorption of others, in short, the concentration and further monopolization of capital.

5. The idea of [“financialization”or]of a finance- led capitalization is a contradiction in terms, because, speaking generally…sustained financial profit making depends on sustained profit making in the real economy. To respond to the fall in the rate of profit in the real economy, some governments, led by the US encouraged a turn to finance by de-regulating the financial sector. But because the real economy continued to languish, the main result of de-regulation was to intensify competition in the financial sector, which made profit making more difficult and encouraged ever greater speculation and taking of risks. Brenner is correct to dismiss the fashionable “financialization” thesis which merely gives a pretentious name to a process requiring deeper analysis and understanding. Like the popularity of the shallow term “globalization”, nominalizing an observed phenomenon draws us no closer understanding its mechanism. However, Brenner does fail to note the division of labor in the global economy that stands behind the US economy’s dependence on the financial sector. It was not just de-regulation that pushed the financial sector forward, but the shifting of different capitalist functions to advantageous areas: manufacturing to low-wage areas, financial manipulation to wealthy, high consumption areas.

6. The triumph of Obama in the election is to be welcomed. A victory for McCain would have been a victory for the Republican Party and give an enormous boost to the most reactionary forces on the US political scene… That said, Obama is, like Roosevelt, a centrist Democrat, who cannot be expected, on his own, to do much to defend the vast majority of working people, who will be subjected to an accelerating assault from corporations trying to make up for their collapsing profits by reducing employment, compensation and so forth. Obama’s backed the titanic bailout of the financial sector, which represents perhaps the greatest robbery of the US taxpayer in American history… He also supported the bailout of the auto industry, even though it is conditional on massive cuts in the compensation of the auto workers. The bottom line is that, like Roosevelt, Obama can be expected to take decisive action in defense of working people only if he is pushed by way of organized direct action from below. The final point – the absolute necessity of pressure from working people to secure any gains for the masses – cannot be stressed enough.

7. I think that is probably the case [that only the crisis can resolve the crisis]. At first in the early 1930’s, the New Deal and Keynesianism were ineffective. In fact, through the length of the 1930’s, there was a failure to establish the conditions for a new boom, as was demonstrated when the economy fell back into the deep recession of 1937-1938. But, eventually, as a result of the long crisis in the thirties, you shook out the high cost, low profit means of production, creating the basic conditions for high rates of profit… all that was missing was a shock to demand. That demand was provided of course by the massive spending on armaments for World War II... [B]ut you needed a system-cleansing crisis first. Brenner’s understanding of Marxist crisis theory is buttressed well by his Great Depression example and equally apt for today: a “system-cleansing” is the order of the day, but not an answer to shrinking consumer demand brought on by declining incomes and employment and growing insecurities.

8. I think the Chinese crisis is going to be a lot worse than people expected, and this is for two main reasons. The first is that the American crisis, and the global crisis more generally, is much more serious than people expected, and in the last analysis, the fate of the Chinese economy is inextricably dependent upon the fate of the US economy, the global economy. While Brenner’s point is sound, he may underestimate two factors: the Chinese have a huge potential and largely untapped domestic market with huge reserves potentially available for its development. And, secondly, the Chinese financial sector was, for the most part, not infected with corrupted US “assets”.

9. None of the world’s elites are trying to exploit the crisis, and the US’s enormous economic problem’s, to challenge US hegemony. Perhaps they are not setting out to challenge US hegemony, but there are underlying economic forces unleashing a current of economic nationalism. How this emerging nationalism plays out may yet, in fact, establish a new economic order. Here, I think, Brenner overlooks deeper economic factors and the logic of capitalism, while elevating political postures - a mistake he seldom makes.

10. …Now the crisis has revealed the total bankruptcy of the neo-liberal mode of economic organization… It has been very powerfully manifested in the opposition by American working people to the bailouts for the banks and financial sector. What they are saying today is “We are told that saving the financial institutions, the financial markets, is the key to restoring the economy, prosperity. But we don’t believe it. We don’t want any more of our money going to these people who are just robbing us”. So there is a big vacuum ideologically. Thus there is a big opening for left ideas. The problem is that there is very little organization of working people, let alone, any political expression. So one can say that there is this very big opportunity created by the change in the political environment, or the ideological climate, but that by itself is not going to provide a progressive outcome. So, again, the top priority for progressives – for any left activists – where they should be active, is in trying to revive the organizations of working people. Without the re-creation of working class power, little progressive will be possible, and the only way to recreate that power is by way of mobilization for direct action. Only through working people taking action, collectively and en masse, will they be able to create the organization and amass the power necessary to provide the social basis, so to speak, for a transformation of their own consciousness, for political radicalization. As a careful, open-minded historian, Brenner has drawn the right conclusions from his economic analysis and study of past working class struggles. Indeed, there is a vacuum - a vacuum unprecedented in our lifetime – begging to be filled with a radical vision. He is correct to note that our charge is to embed that vision in the working class movement, the most essential agent for change. I would add that this charge requires both a vital vanguard organization as well as a class-conscious labor movement to succeed and begin the trek towards working class power. Phony patriotism aside, this is the road-map to addressing the real “terrorism” against working people presented by the catastrophic crisis.

There is much to learn from Robert Brenner’s analysis and I would urge readers to read him carefully. I would only fault him for failing to fully appreciate the impact of the counter-revolution in the European socialist countries, an event that left a profound impact upon the direction of the world economy in the closing decade of the twentieth century.

Zoltan Zigedy

A Valentine's Day Reflection on Love

Christopher Caudwell was a young Communist poet and scholar whose commitment to humanity and liberty drew him to Spain and the struggle against fascism and for Spanish freedom. He joined the International Brigades and was killed fighting on February 12, 1937 at the age of thirty.

He wrote about "Love" in his posthumously published Studies in a Dying Culture:

Christopher Caudwell

To-day love could prepare an appalling indictment of the wrongs and privations that bourgeois social relations have inflicted upon it. The misery of world is economic, but that does not mean that it is cash. That is a bourgeois error. Just because they are economic, they involve the tenderest and most valued feelings of social man. For the satisfaction of all rich emotional capabilities and social tenderness which bourgeois relations have deprived him, he turns vainly to religion, hate, patriotism, fascism, the sentimentality of films and novels, which paint in imagination loves he cannot experience in life. Because of this he is neurotic, unhappy, sick, liable to the mass-hatreds of war and anti-semitism, to absurd and yet pathetic Royal Jubilee or Funeral enthusiasms to mad impossible loyalties to Hitlers and to mad Aryan grandmothers. Because of this life seems to him empty, stale, and unprofitable. Man delights him not, nor woman neither.

Bourgeois social relations, by transforming in this way all tender relations between men to relations to commodities, prepare their own doom. The threads that bind feudal lord to liege, chief to tribe, patriarch to household slave, father to son, because they are tender are strong. But those that bind shareholder to wage-employee, civil servant to taxpayer, and all men to the impersonal market, because they are merely cash and devoid of tender relations, cannot hold. The chief’s laws are understandable. The fiat of a man god is still a personal and affectionate command. But the laws of supply and demand (their substitute in bourgeois culture) are without any power save blind compulsion. To-day it is as if love and economic relations have gathered at two opposite poles. All the unused tenderness of man’s instincts gather at one pole and at the other are economic relations, reduced to bare coercive rights to commodities. This polar segregation is the source of a terrific tension, and will give rise to a vast transformation of bourgeois society. They must, in a revolutionary destruction and construction, return in on each other and fuse in a new synthesis. This is communism.

Caudwell's ideas on bourgeois love were shared by film maker Joseph Losey in several of his early films made in England after his exile from the anti-Communist blacklist.
While they were commercially boycotted in the US, they are available in DVD format.

Zoltan Zigedy

Another Look at the French Experience

In November 2008, I wrote:

The economic crisis has reversed the post-Soviet process of international integration – so-called "globalization." 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 only become more acute as the crisis mounts… We see great stress on the European Union. Germany's export driven economy is collapsing. France, on the other hand, has yet to feel the full force of the crisis… Indeed, the unraveling of the EU is a possibility. (The Deepening Crisis and the Socialist Option, MLToday 11-28-09)

At the time, the media were hailing the efforts on the part of the major capitalist governments and international organizations to forge a common solution to the economic crisis. Confidence was high that some kind of cooperative solution could be won. In the ensuing three months that confidence has been shattered. As I forecast, economic nationalism has emerged with a vengeance. "Buy American" has returned to spice the speeches and writings of many labor leaders. Limiting bailout funds and stimulus programs to US companies has swept through congressional debates. The same nationalist sentiment has caught fire throughout the world, including the headline-grabbing strike in the UK.

There is no point in lamenting this development since it is a logical feature of capitalism. It is impossible to secure joint action among nations that tolerate collective action only out of self-interest or economic coercion. Roosevelt understood this by stepping away from seeking international solutions and focusing upon domestic policies to attack The Great Depression.

There is however a point in critically analyzing the form that this nationalism takes. Some forms are more defensible than others.

In the US, we see a vulgar, unproductive nationalism that identifies the interests of the nation with the interests of corporations led by CEO's with English surnames or US residence. Never mind that US companies do not exist; they are virtually all multi-nationals. Never mind that these companies have long evacuated factories and jobs to low-wage countries. Never mind that these corporations reward product loyalty with further layoffs and intense exploitation through "restructuring".

Contrast this with the French nationalism expressed by the policy of linking bailout money for corporations to work place retention and job protection discussed in yesterday's ZZ post. Thanks to French labor militancy, Sarkozy - "le Petit Bush" – was forced to impose guarantees upon French auto makers that they would not lay off workers. In return, they are to get $8.4 billion in low interest loans. Today, we learn that the French government will insist that corporations close foreign plants before downsizing domestic enterprises.

It is not the return to nationalism that I admire, but the French labor movement's insistence that corporations cannot benefit from public funds while at the same time bringing desperation to French workers. This is far and away superior to a vacuous, impossible "Buy American" campaign that would not, and could not benefit US workers.

The more advanced level of class struggle in France underlines the bankruptcy of the policy of class collaboration deeply entrenched in the US labor movement. For years, French labor militancy was the butt of jokes by visitors and commentators who mocked the frequent public demonstrations that influence public policy and the comprehensive social safety net won by these actions. I remember well discussing the French 35 hour work week with friends in a Parisian restaurant only to be interrupted by tourists from the US who proceeded to lecture us on France's decline and failure to follow in the footsteps of the US.

Despite the efforts of many of the French to force emulation of the US version of capitalism, France has preserved much of its social democratic legacy, including the world's best health care system according to the UN. The Wall Street Journal concedes today (Feb. 12, 2009) that "France has long resisted textbook free market economics – and it could weather the downturn slightly better than its neighbors as a result." They report that France is the only European country that avoided recession in 2008.

The Wall Street Journal, in part, attributes France's relative immunity from the crisis to its large public sector spending: the French spend 52.7% of GDP, Germany 44.4%, and the US only 37.4% (2007) in the public sector. As the Journal explains, "Because most governments seldom shed workers quickly – particularly during a downturn – a bigger public sector means that a country's overall wages – and thus, consumption – tend to hold up."

Thus, the French do better because they keep workers employed, but we encourage companies to "restructure" by disposing of workers.

Those who study the New Deal should take note. Roosevelt engaged direct government employment by absorbing the unemployed into Federal works projects, conservation, and services without the intermediary of private companies as envisioned by the US government's current stimulus package. The French experience confirms the wisdom of this approach.

Zoltan Zigedy