PERSPECTIVOS

The tree of liberty...dies with the Tea Party, and Obama. The increasing case for radical alternatives.

2010-07-23T19:22:00.002-04:00

The near total incompetence of the Obama administration reached its apex this week with the dismissal of Shirley Sherrod after a barrage from the right-wing smear machine, spearheaded by Fox News and propagandist Andrew Breitbart. As most people now know, a video was leaked of Mrs. Sherrod claiming that she did not want to give aid to a white farmer, especially considering the pain of black farmers who were being systemically ignored by the US government. As this trickled through the echo-chamber, everyone denounced her as a ‘reverse-racist’; so much so that even the NAACP wrote a communique denouncing her statements. Of course, this video was edited, and with even the White House jumping to conclusions, Mrs. Sherrod was fired. Why? One of the reasons, according to Mrs. Sherrod, was that Glenn Beck would ramp the story up. Thus, the POTUS was essentially bullied by Glenn Beck! She was told to pull over to the side of the road by the White House, and to resign right there.

Eventually, the whole video came out, and the moral of her story was the exact opposite of what the overreaction was premised on. Later on, she argued that she helped the white farmer, because this was not an issue of race, but one of inequality that transcends race, viz. class. Of course, this was de-emphasized even in the aftermath by all sides. Mrs. Sherrod was offered her job back by the spineless Obama administration, and was offered an apology for having her name dragged through the mud.

Now we know that the Obama administration does not look kindly on the left-wing of the Democratic Party, with Rahm Emanuel calling them and their policies ‘fucking retarded’; and he is right, the progressive wing of the party are ‘retarded’. Their continued adherence to an obvious corporatist shill, who cowers at the feet of Glenn Beck and Fox News is awe inspiring. The whole list of ersatz reform packages that he has championed, be it health-care, financial-reform, climate-change, etc., has amounted to a give away for corporate America in terms of subsidies, perpetual bail-outs, weak regulatory reform and the lack of any substantive ‘public options’ to create some sense of competition with monopoly capital. So why hasn’t the left been rising up against Obama en masse? N.B. this is not to say that some elements of the left aren't riled up against Obama, a cursory look at the blogs and MSNBC's head commentators suggest a contradictory relationship with Obama.

One reason, so I figure, is the post-modern, post-class, identity-politics fascination with a mixed president in the office, representing the realization of MLK’s dream; but the reality is that MLK’s dream is only half fulfilled by Obama. Obama is still very much within the ‘modernist’ mould of class politics, he still caters to the rich and their interests. In a sense, he has to, if he did not do so, Democrats and his re-election would face a barrage of corporate financed opposition. Again, we are witnessing the total failure of liberal-democracy, a hole that I fear it has no chance of resurrecting itself from.

Like Mrs.Sherrod, MLK’s dream is only half spoken about, the other half is obfuscated and ignored. Both argued that the country has to see a radical reduction in inequality, redistribution of wealth and income to make the principles of liberalism: equality, freedom, egalitarianism, and mobility, a reality. The right will not engage in such a programme, its reason d’etre is to solidify and expand hierarchal inequality, and to expand as much as possible the process of reification throughout society, subordinating everything to the logic of the impersonal market system. The left’s alternative has to be the expansion of the state in order to safeguard more and more into a democratic mechanism to distribute goods and services; but, this alternative has all but died among the contemporary left with Clinton’s abandonment of this project with ‘triangulation’, or the ‘Third Way’ in the UK. We are in a serious crisis and the left has to fearlessly signal an enemy to rile up populist forces in a positive manner, because if the masses are not articulated in a positive, progressive manner they will be, and are, being articulated in a reactionary mode.

The reality is that populist rage is growing in the United States, more and more demands are currently being unmet by the state or civil society--principal among them: employment. The Obama team has totally failed to transform these into a progressive base, like FDR did. Therefore, these normally ‘democratic demands’ are beginning to transform into ‘populist demands’ that can no longer easily be institutionally absorbed into the current hegemonic symbolic order. We see this manifested in the ‘Tea Party’ movement, and its increasing antagonistic view of its relation to the state.

A good example is Sharon Angle’s so-called ‘Second Amendment remedies’, or Sarah Palin’s references to ‘pro and anti America’--it is interesting to note that the post-modern fascination with ‘identity’ goes both ways, since the superstars of the right are now women. This is a purely populist operation, cf. Ernesto Laclau.

What may be occurring in the United States is that there is a serious bifurcation of what Althusser would call the ISA’s (Ideological State Apparatuses), with Fox News, and the blog-sphere spearheading a new set of ISA’s that is interpellating subjects in a way that is increasingly radically counter-hegemonic/populist. Indeed, the constant references to ‘real America’ suggests just that.

Of course, these people are being interpellated by dominant capital to fight for the deregulation of the markets, to cut taxes, and a whole slew of other policies that would make millions of lives, including their own, materially worse, deepen inequality, and strangle social mobility. Interestingly, the deeper the inequality grows, these individual’s will continue to blame the state as the portent of their discontent--a feedback loop--, instead of channeling their energies against capital and its total capture of the state ideologically and materially.

The left is so used to fight its political battles through the courts and other mechanisms, since the presumption is that the American public is inalterably conservative. This naturalization of American subjectivity is essentially a cop-out on the side of the left, a left that is unwilling to engage in a ‘war of position’ against the ‘nodal points’ that the right has successfully planted in the American body politic. It is a remnant of empiricism, by assuming what is seen today was and always will be. Therefore, anytime you hear a reference to God, human nature, or other forms of abstraction as a basis of argument for inaction/action, you should immediately remember Althusser’s words: “The function of the concept of origin, as in original sin, is to summarize in one word what has not to be thought in order to be able to think what one wants to think.” Hence, the left can change the political terrain in the United States to be more congenial to its interests, especially during a time of systemic crisis; however, one of the problem the left faces is its inability, or unwillingness, to signify a clear enemy who stands against the unity of ‘the people’, and thus help change the ‘frames’ that people interpret the world with.

So what does the left, whatever is left of it, to do? It has to begin to agitate for a new left party--my preferred option--, or a strong coup within the Democratic party to use the party as a means to change the political landscape, if that all fails, more drastic action may have to be taken. This battle is one that the left could very well lose, but it is not a time to be timid. As Gramsci notes, one of the most important ‘organic intellectuals’ are party members, and the institution of the party is the best way to get the message across. Do not forget, about 50-40 percent of the American population does not vote, therefore, the left has to bring these people into politics. However, this will necessitate populism, and antagonism, things that the left has foolishly forsaken. Indeed, so debased has the notion of revolution become that now Glenn Beck describes himself as one!

"Baby, it was raining outside." The G20 and you...

2010-06-27T13:17:00.010-04:00

    The fetishism of the violence at the G20 summit has done its job, it has totally hidden the progressive agenda of the protesters from sight. The actions of hooligans, anarchists and probably agent provocateurs--police agitators--, coupled with sensationalist media coverage--with menacing music and replaying the same window being broken again and again--have done its job. I personally went to protest against the exploitation of human labour, and the Earth that is inherent within the current system, and the displacement of its debts on us from corporate bailouts--a cost in the United States that might top $24 trillion, or $80,000 per citizen--, the increasingly precarious effects of global warming, and the associated costs by the accumulation of massive sovereign debt. These debts will be paid by high regressive sales taxes, HST anyone? Spending cuts, and thus a reduction of access to social services like healthcare, education, etc., and making our labour more ‘flexible’, viz. a reduction in labour rights. All of this, plus the reduction of corporate tax rates, is being done in a vain attempt to attract capital investment, based on a failed supply-side, neoliberal model.

    To put it in terms that many erstwhile citizens, now consumers, would better understand: this means less Starbucks fraps, LCD TV’s, and Puma shoes for you--unless you are wiling to pay for it in perpetuity with usurious interest rates, and secret fees; being only able to pay the minimum payment on your credit card, as per the intention of the credit card companies--, but more hours at work, stagnant real wages, and credit card debt just to get by with the benefit of that exploitation going to the very top. Do not let the veneer of name brand clothing that people wear obfuscate, as it’s supposed to do, their actual socio-economic position. Just because you own an expensive (insert inane product here) doesn’t mean you are rich, or even middle class. Chances are very likely that the person with the newest Michael Koors bag is living at home with their parents, because their jobs and wages cannot actually allow them actually live independently, and they probably bought the bag on credit and cannot afford to pay for it for months, years, if ever.

    The reason why poverty is so obvious in third world countries and not here, to a large degree, is our access to credit that allows us to hide our true poverty. If you don’t believe me that our entire economy is increasingly premised on credit, read this from The Economist:

Like alcohol, a debt boom tends to induce euphoria. Traders and investors saw the asset-price rises it brought with it as proof of their brilliance; central banks and governments thought that rising markets and higher tax revenues attested to the soundness of their policies. The answer to all problems seemed to be more debt. Depressed? Use your credit card for a shopping spree “because you’re worth it”. Want to get rich quick? Work for a private-equity or hedge-fund firm, using borrowed money to enhance returns. Looking for faster growth for your company? Borrow money and make an acquisition

Sadly, this debt, in the long-run, makes us worse off. The effective poverty rate is higher than reported, because we do not take away from people’s income their credit payments, which reduces their effective, net income; consider the interest you pay as another, privatized tax. Thus, that expensive bag you bought will cost you a lot more than you’d ever imagine down the line--opportunity cost--, and that bag would, generally, not garner ANY return on investment!

    In addition, inequality is still increasing, which supposedly is a good thing because it creates ‘incentives’ for people to work harder and rewards those who ‘deserve’ what they earn. But, as Nobel Prize winning economist, Joseph Stiglitz argues,

Neoclassical economic theory, which has dominated in the West for a century, holds that each individual’s compensation reflects his marginal social contribution...But Borlaug [inventor of the Green Revolution] and our bankers refute that theory. If neoclassical theory were correct, Borlaug would have been among the wealthiest men in the world, while our bankers would have been lining up at soup kitchens

Indeed, if the neoclassical mode was right, crisis would not exist because resources would go, efficiently, to where it should go. Instead, we are now living in a world that has the highest level of inequality in history, and the economic system collapsed. Why? As inequality increases, aggregate demand decreases, which increases savings by capitalists, due to an associated lack of profitable investment opportunities--overaccumulation--that leads to higher unemployment that leads to lower real wages and a weakening of the labour movement with the creation of a “reserve army” of the unemployed. Sound too abstract? I will quote Nobel Prize winning economist, Paul Krugman:

Every year that goes by with extremely high unemployment increases the chance that many of the long-term unemployed will never come back to the work force, and become a permanent underclass. Every year that there are five times as many people seeking work as there are job openings means that hundreds of thousands of Americans graduating from school are denied the chance to get started on their working lives. And with each passing month we drift closer to a Japanese-style deflationary trap.

I know, “well that’s not me” syndrome is hitting, but you must realize you are replaceable, don’t you?

    Therefore, congealed into a whole, this creates a feedback loop creating the same demand destruction that created the crisis in the first place. Thus, the ‘free market’ is a pro-cyclical institution, meaning that “rational” economic decisions, taken by individuals, may make sense to them (micro-level), but on a social level (macro-level) it is contradictory. The only way to effectively stop the cycle is for the state to come in and stop it, as it did in the Great Depression. How did we do it in the 1930s? Social movements, unions, and the spectre of a different world.

    So, all of this directly affects you, this is not some abstract thing I am talking about, you are living through this and you know as well as I do that this is a shitty system. But you must retain hope that if you do follow the rules and work hard you can get ahead. However, to hold this belief you have to willfully ignore structures that prevent that from happening, en masse. Let me put it like this, the United States claims to adhere to the notion of the ‘American Dream’, which means that your children will be better off than you, they can move up the social latter if they just work hard enough.

Unfortunately, the reality is that Americans are among the most industrious people on Earth, but they face a cycle of poverty and debt, due to low wages that forces them to work more; massive inequality, due to the inability of their incomes to pay for their schooling, latent racism, and the accumulation of debt--credit, student, housing--that forces individuals to work at any job to avoid bankruptcy. Thus, the US is actually the country with the lowest level of social mobility among the OECD nations, viz. the ‘rich’ world. Which countries have the highest, well of course, the socialistic Nordic states.

    These are only some of the reasons, and the most selfish of them at that, that you should have been protesting with us on Saturday. I saw elderly women on canes struggling to make it all the way back to Queen’s Park, I saw families, I saw recent immigrants, professors, professionals, hipsters, etc., all standing up for their rights as democratic citizens. So, what excuse did you have for not defending YOUR OWN RIGHTS? Slavoj Zizek seems to be right:

if as a consequence of our cynical pragmatism, we have lost the capacity to recognise the promise of emancipation, we in the West will have entered a post-democratic era, ready for our own Ahmadinejads. Italians already know his name: Berlusconi

FIGHT FOR YOUR RIGHTS!

First as a tragedy, then Obama...

2010-06-08T20:32:00.002-04:00

    The recent debacle of the Gulf spill, coupled with the impotent response to the financial crisis and the underwhelming healthcare and financial reform bills that President Obama signed into law seems to prove Marx’s claim that pivotal historical characters repeat and that they come “the first time as a tragedy, the second as a farce.” Why is this so? The objective conditions were all there for Obama to become the second-FDR: the speed that the stock market declined, the furious pace at which unemployment rose, the precipitous decline in industrial production and the truly scary decline in international trade were as bad, or worse, than they were in the beginning phases of the depression (http://www.voxeu.org/index.php?q=node/3421). With much of the traditional forces of ‘laissez-faire’ capital being in state hands, or bailed out by the state, Obama had greater leverage than FDR ever did to structurally change the makeup of American capitalism. Thus, not unreasonably, many people had hopes that Obama would become the second FDR, in that he would challenge not only the ideological, but the material base of dominant capital’s stranglehold over the economy and the state.

    Like FDR, Obama won a land-slide election on a wave of proto-populist resentment and ‘hope’--it helped that the opponent, McCain, like Hoover, was seen as incompotent--; however, that wave, although intense, lacked a true leader and quickly fizzled out. Obama certainly inspired a nation, if not a planet, that not only could a African-American of mixed lineage could make it to the presidency--fulfilling part of MLK’s American dream--, but it was seen as a time for America’s renewal from the dark recesses of the Bush administration that had put the United States on a veritable ‘Road to Serfdom’ in an Orwellian journey proclaiming that ‘slavery is freedom’.

    Obama, however, as I stated earlier, is not a ‘true leader’, in a populist sense. The mass movement that Obama nurtured throughout his campaign seemed to have disappeared, being replaced by the ‘Tea Party’--astroturf-- movement. Obama certainly played lip-service to the hopes of the American people. For instance, in his inauguration speech, for example, Obama reiterated one of the key tenants of American progressivism,

    Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth     and expand freedom is unmatched. But this crisis has reminded us that     without a watchful eye, the market     can spin out of control. The nation cannot prosper long when it favors only the prosperous.

In a technocratic, de-politicized way, this makes sense; but it fundamentally lacks the necessary component of a clear antagonist, viz. an agent who stands in the way of the total ‘suturation’ of the ‘people’ from the calamity of crisis that undermined the entire symbolic and economic order, which the antagonist caused. Obama’s use of the term ‘prosperous’ is an ambiguous one; certainly considering that a) ‘prosperous’ has a positive connotation, suggesting some chance of future reconciliation and, b) Obama was lauding the ability of American’s to become ‘prosperous’, via the ‘American Dream’, that it effectively means nothing. Obama ceded the ground to the banks and other corporations by not calling them out, by name, for their wrong-doings.

    The same could not be said of FDR during his inauguration speech in 1933:

    Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils     of the old order; there must be a strict supervision of all banking and credits and investments; there must be     an end to speculation with other people’s money, and there must be provision for an adequate but sound     currency.

Here FDR clearly states two things, first, the taint in the body politic is not external, but internal: American finance capital. Second, FDR makes it clear that there are exploiters and ‘underdogs’ in a structurally unfair system, or as he calls it, in the heart of the “evils of the old order.” Therefore, FDR, unlike Obama, was then able to articulate a clear demarcation between good/evil, between the people and the tyrants and by doing so, FDR was able to radically re-found American society by creating a genuine popular movement.

    And this leads us to the abject failure of ‘consensus’ politics in the post-Cold War era, where antagonism and ideology has supposedly died and the search for ‘technocratic’ solutions dominate. This hegemonic form of politics, otherwise known as ‘triangulation’, has undermined the ability of citizens to change their society through politics proper and has accepted the logic and arguments of capital; indeed, if technocratic, ‘pragmatic’ solutions are sought, the answer, by definition, resides with existing powers and their ideological biases. FDR realized that politics is not meant to be pragmatic, but transformative and interventionist; Obama clearly has not, and does not intend to.

    The limits of Obama’s progressivism is that of a corporate progressivist, which is to say that Obama funnels public money, via ersatz Keynesianism, into the hands of corporations in an attempt to ‘stimulate’ the macro-economy, without fundamentally changing the structure of power relations in the economy that created the mess in the first place. Thus, in order to bring about growth, Obama cannot ‘rock the boat’ too much, because ultimately he is at the mercy of capital’s volunteerism in terms of investment--a strategy that, so far, is not working very well. FDR did not wait for capital to invest, but rather, went ahead and directly hired millions of Americans in the WPA and sought to, through the NRA, to stimulate industrial production through direct state intervention in the price and labour markets. Thus, Obama has accumulated a huge deficit, growing debt and unemployment is still lingering at 10%, that is excluding the millions of long-run unemployed and discouraged workers that could push the real unemployment rate upwards of 18%. Therefore, has neoliberalism really died? No, Obama still depends on the market to do all the work, he just engages in some ‘lemon socialism’ bailing out the rich in hopes they will invest and bring growth; isn’t that what trickle-down economics is all about?

    Thus, in my opinion, the greatest damage Obama has done is two-fold, first, he has used a genuine populist movement and its tactics to do exactly what they did not want, i.e., support for corporations via bailouts, off-shore drilling concessions, supporting ‘clean coal’, allowing insurance and big pharma to help write the healthcare reform bill and taking off the table, from the very beginning, the ‘public option’. And secondly, he used the passions of the people to effectively strengthen the hold of corporations over the economy and the state, and now supported by explicit and implicit government largesse--bailouts, subsidies, etc.--to secure their profits at the cost of future public investments in 'use value', i.e. education, healthcare, etc. To sum up, quoting Robert Reich:

    The interesting question is why the president, who says he wants to get “tough” on banks, has also turned     his back on changing the structure of American banks — opting for a regulatory approach instead...It’s     almost exactly like health care reform. Ideas for changing the structure of the health-care industry — a     single payer, Medicare for all, even a so-called “public option” — were all jettisoned by the White House     in favor of a complex set of regulations that left the old system of private for-profit health insurers in place.     The final    health care act doesn’t even remove the exemption of private insurers from the nation’s antitrust     laws...Regulations don’t work if the underlying structure of an industry — be it banking or health care —     got us into trouble in the first place. Wall Street’s big banks are just too big, and their ability to draw on     commercial deposits for investment banking activities, including derivatives, will make them even bigger.     It will also subject the economy to greater and greater risks in the future. No amount of regulation can cure     that...A regulatory rather than structural approach to deep-seated problems in complex industries like     banking and health care is also vulnerable to the inevitable erosion that occurs when industry lobbyists     insert themselves into the regulatory process. Tiny loopholes get larger. Delays get longer. Legislative     words are warped and distorted to mean what industry wants them to mean.

(http://robertreich.org/post/628324698/obamas-regulatory-brain)

Let the farce continue...

The Democratic Revolution and Neoliberalism

2010-04-22T16:13:00.003-04:00

    Again, I am trying to finish Hayek’s, The Road to Serfdom, (R2S) in order to better understand the political logic of the political right. Certainly, this work is a seminal tome in the history of the liberal-right and offers the most provocative defense of the existing system; it is not unlike the Communist Manifesto of Karl Marx, in that it stakes the claim most important to the intellectuals and practitioners of this ideology. Though having read both, albeit R2S is still a work in progress, one can sense that there is a serious ontological disconnect between the two authors, which makes a debate between them difficult.

    Reading Hayek’s work, it becomes obvious that Hayek associates ‘liberty’ with consumerism, not citizenship. What is citizenship? Citizenship is the ability of every individual, who is formally equal in their possession of political power, to dictate the terms of society’s political and ideological teleology. Citizenship purposefully negates the differences of wealth and income between individuals in order to better get the ‘general will’ of the people. This equalization in the political sphere, or the so-called ‘public sphere’, has a knock-on effects in that it forces the question of equalization in other parts of society--’the private sphere’; this ideological effect is known as the ‘democratic revolution’. It is no coincidence that with the extension of the franchise, the inequality in society decreased dramatically, and public services increased significantly, in tandem. And it is not a coincidence that in the early-1970s, when the ‘democratic revolution’ reached its apogee, coup d’etat’s against democratically elected regimes became the norm and reactionary organizations like the Trilateral Commission commissioned the anti-democratic diatribe, ‘Too Much Democracy’.

    What is the neoliberal alternative? The consumer, as Wendy Brown argues:

with the hollowing out of a democratic political culture and the production of the undemocratic citizen. This is the citizen who loves and wants neither freedom nor equality, even of a liberal sort; the citizen who expects neither truth nor accountability in governance and state actions; the citizen who is not distressed by exorbitant concentrations of political and economic power, routine abrogations of the rule of law, or distinctly undemocratic formulations of national purpose at home and abroad.

The neoliberal citizen is merely interested in its ability to consume, which is actually their condition of freedom. The point is to take substantive questions of power relations, democracy, justice, etc., off the table and to subsume everyone to the same commodity fetishism, which creates a false allure of equality. The ideological belief is, as E.K. Hunt notes, “all human actions and interactions are reduced to a simple, rational, utility-maximizing exchanges. The world is, by the definitions and assumptions of their [neoliberals] theory, always in a state of Pareto optimum bliss. Everything is always rational and efficient”, of course, until the government and mal-informed people interfere. There must be a hedge against this interference of the misinformed masses, and there is, the elite.

    Therefore, there is an appeal to the ruling classes--yes, they exist--to protect ‘civilization’ from the hordes of the uneducated who do not know what is 'right' in this world, but merely their animal desires and needs. This line of argumentation has been with us since the times of the Greeks, the inherent class-antagonism embedded in all propertied systems has meant that this robust notion of citizenship could lead to some form of socialism or totalitarianism, depending where you stand on the ideological fault-line. There have been two main lines of attack against the ‘democratic revolution’: the first, technocratic rule and the second, debasing citizenship and democracy as the ‘nodal point’--structuring principle--of society. Indeed, according to Hillary Wainwright that is the conscious effort of the neoliberals like Hayek to reverse the ‘democratic revolution’: “In historical terms, the intellectual project of Mises and Hayek was self-consciously to re-Iay, in the disarray of the twentieth century, the intellectual tracks that would guide society back to the civilized order which ignorant, primitive social forces had disturbed.”

    In ancient Athens, this threat was headed off, ideologically, with the belief in the superiority of the propertied and the inferiority of the working masses. As Geoffrey Ernest Maurice De Ste. Croix in his work, The class struggle in the ancient Greek world, notes:

The most common form of the type of propaganda [interpellation] we are considering is that which seeks to     persuade the poor that they are not really fitted to rule and this is much better left to their     ‘betters’ (‘the best     people’, hoi beltstoi, as Greek gentlemen liked to call themselves): those who have been trained for     the job and have the leisure to devote themselves thoroughly to it...In fact Plato would have     entrusted all political power to those men who were in his     opinion intellectually qualified for ruling     and had received a full philosophical education--and such men would     necessarily have to belong     to the propertied class. (411-412)

This argument serves as the first layer against socialism, it basically argues that only the already existing ruling classes are best able to govern the existing state of affairs, and, if defined in this sense, they are right. If one takes the idealist notion of Plato or of liberals--that there is a transcendent state of right and there is a true form--and the current state of affairs best approximates that--’civilization’--; then, as a consequence, the rich--who have benefitted within the existing order are the closest to the ideal--should govern and raise the bottom layers of society to their level of enlightenment, read J.S. Mill’s insistence on the poor getting a proper ‘education’ before being able to vote. This all assumes some level of ‘truth’, or in liberal speak, ‘universality’ and ‘inalienability’, which exists independent of social relations and is pre-political. Hayek has his own version, with a proto-Philosopher King methodology, as Wainwright notes:

According to Hayek's constitutional prescription there would be a higher body made up of male     citizens     of mature and expert judgement, preferably over 40 years of age, to guard the products of     social evolution.     They should be up for election every 15 years, so that they would not be     susceptible to the kind of     political pressures which might lead to tampering in the particular     interest of a vociferous group. A     military junta or well-protected Prime Ministerial government     have, it seems, been the nearest actual     equivalents to this ideal arrangement.

    However, if one takes the opposite tack, the anti-humanist/materialist route, then once can clearly see that this is hubris and the very height of the ideological by denying its own ideological character. For instance, J.S. Mill’s insistence of achieving some high level of education that would enable individuals to have the ‘proper’ requisite knowledge prior to being fully integrated into the political system is actually the most important ideological operation, what some may call ‘re-education camps’, of infusing the working class with what Gramsci calls ‘contradictory consciousness’. The implication here being that, once persons are educated in the virtue of the Enlightenment, rational, liberal, private property system they will not be so easily duped into the populist diatribes of atavistic or utopian socialists. Even in Rawls you have, in my opinion, the damning qualification of ‘general facts’ in his ‘original position’; ironically, he assumes the persons under the ‘veil of ignorance’ aren’t so ignorant: “It is taken for granted, however, that they know the general facts about human society. They understand political affairs and the principles of economic theory; they know the basis of social organization and the laws of human psychology” (137).

    However, these positions are only cogent if you assume that the education that individuals receive in schools, or the ‘general facts’ are not their own form of ideological indoctrination, but are the ‘truth. Indeed, neither Mill or Rawls question what is being taught in those schools, or what is assumed in the ‘original position’ is actually itself an ideological operation to eliminate the socialist alternative; which is the critique of Althusser in his work, Ideological State Apparatuses. The role of the ISAs--like schools, or the ‘general facts’--is to interpellate individuals subjectivity in such a way to fit the hegemonic order’s interest. Their operation of denying the stench of ideology and placing the onus on the ‘other’ as the ideological one, is the essence of a hegemonic operation. As Zizek argues:

...ideology is always, by definition, ‘ideology of ideology’. Suffice it to recall the disintegration of real     Socialism: Socialism was perceived as the rule of ‘ideological’ oppression and indoctrination, whereas the     passage into democracy--capitalism was experienced as deliverance from teh constraints of ideology--    however, was not this very experience of ‘deliverance’ in the course of which political parties and     teh market economy were perceived as ‘non-ideological’, as the ‘natural state of things’, ideological par     excellence? Our point is that this feature is universal: there is no ideology that does not assert itself by     means of delimiting itself from another ‘mere ideology’. An individual subjected to ideology can never say for     himself ‘I am in ideology’, he always requires another corpus of doxa in order to distinguish his own ‘true’     position form it.

    Therefore, the interest of liberals, analytical philosophers and other status quo types is the propagation of idealism and natural-ness, as the basis of society and the denial of contingency. Socialists reject this and insist on the structuring principles of historical materialism, which argues that the material basis--the economy--structures the horizon of the debate, which sets-up the basis for hegemonic operations between two antagonistic camps--with a Post-Marxist twist, this does not necessarily mean the bourgeoisie/proletarian dialectic--that determine the outcome of social conflict. As Alex Callinicos states,

Reduced to its rational kernel, historical materialism is a theory of possible production relations, an account     of what     can be placed on the historical agenda, in view of the level of development of productive forces...[It]       will     not by itself explain historical change; nor will it predict the outcomes of class struggles. But it does give     an account of the     conditions for the possibility of change and of the options available to classes in struggle.

    What is the consequence, well let us take Rawls’s Theory of Justice; if we accept the precepts of historical materialism, we can say that the outcome of the ‘original position’, with different ideological assumptions embedded in the ‘general facts’, could lead to very different conclusions, since reason is itself structured via the filter of ideology. Some may find the use of term ‘ideology’ as a negative, however, ideology is actually the positive condition of existence, it cannot be transcended, in Gramscian terms it serves as the ‘cementing’ subject positions of individuals in society into a coherent totality.

    The lesson here for the first, and most ancient, critique of democracy and citizenship is that there is nothing natural or ‘real’ about the existing state of affairs, rather the current state of affairs is very much a political/hegemonic operation to sustain the existing power relations. Thus, the denial of citizenship rights to the majority is an unjust denial of rights and artificially presupposes the ‘unnaturalness’ of their rule. It also questions the idea that those who are currently in charge are inherently better to rule; rather it contends that their position is due to contingent factors like property ownership, that do not bequeath upon them any special attributes, other than an interest in the propagation of the existing order, which they erroneously call ‘civilization’. Lastly, it rejects idealist notion that there exists a humanist/Enlightenment notion of a ‘rational’ reality that is immutable and structures human relations throughout all time and we just have to discover it, or implement it--technocracy.

Hayek: A Totalitarian in Sheep's Clothing.

Although, for Hayek, the critique goes beyond this, he cleverly changes the very nature of the debate itself. Hayek focuses, not on the citizenship-centric notion of freedom, but the consumerist notion and creates an alternative to socialism and liberalism: catallaxy, or the rule of instrumental reason and market exchanges in all of our lives, secured by a strong constitutional order that is safe from the ‘irrationalities’ of the masses and their ‘atavistic’ notions of social justice so that the ‘invisible hand’ may distribute according to merit not need. For Hayek, it is the commodity form, money, and the free market, which gives us the ability to ‘choose’ within the economic sphere and this becomes the definition of liberty. As Hayek argues: “It would be much truer to say that money is one of the greatest instruments of freedom ever invented by man.” Deprived of this ‘economic freedom’, we are thus denied liberty itself and are lead on a R2S. Again, as Hayek states,

This is really the crux of the matter. Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower, in short, what men should believe and strive for. Central planning means that the economic problem is to be solved by the community instead of by the individual; but this involves that it must also be the community, or rather its representatives, who must decide the relative importance of the different needs...Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes we can turn to another. But if we face a monopolist we are at his mercy. And an authority directing the whole economic system would be the most powerful monopolist conceivable.

Here is the fundamental flaw of Hayek’s argument. His entire argument, or ‘the crux of the matter’, rests on the assumption of a classical liberal, neoclassical model of a ‘competitive market’ society, which means that no single firm has market power and the economy is at full employment. As Adam James Tebble notes,

    In the market decisions about what needs to be done are ‘taken’ by the price     mechanism     under a     regime where people enjoy freedom of contract but where,     due to what Hayek calls the     ‘impersonal compulsion’ of the market process, they     have an infinitesimally small degree of     control     over the economic context in which     they must act (1978, p. 189). By contrast, in the     case of the state     individuals are freed from the impositions of the price mechanism but at the cost of being directly told     what to do so that a socially just outcome may be achieved...For Hayek, of course, the choice is easy:     that being commanded what to do is indeed worse than having the economic nexus at large act as the     constraining context upon one’s opportunities and decisions.

The absurdity of that statement cannot be overemphasized in the context of monopoly capitalism.

    The capitalist system inherently tends towards concentration, even before the ‘government’ intervention of the corporation. How? If one firms gains enough of a differential advantage--be it through innovation, branding, etc.--it is in its interest to merge and acquire other firms or, drive other firms out of the market and take over more market-share, and thus, have pricing power. As capital aggregates, our scope of effective choice decreases and the ‘totalitarian’ concentration of power rests with corporations, not the state. The existence of monopolies/oligopolies creates a condition described by Nobel-Prize winning, neoclassical economist, Paul Samuelson: “In appraising oligopoly we must not that the desire of corporations to earn a fair return on their past investments can at times be at variance with the well being of the consumer”. One need only to look at the creation of monopolies during the mid-to-late 1800s in America, the era of the ‘Robber Barons’, to see that it is possible to have a stable monopoly without a massive, interventionist state propping up that monopoly. The response from the state to this was the creation of anti-trust legislation to break-up these monopolies, most famously applied to Standard Oil. Paul Samuelson sums up the rationale, “We cannot expect competition to become everywhere ‘perfectly perfect’...But we must strive for is what the late J.M. Clark years ago called ‘workable competition’...But laissez-faire cannot be counted on to do this. Public vigilance and support for antitrust will be required.” However, Hayek would not allow such a mechanism, why? Well, we have to refer to his notion of the Rule of Law (RofL)--no pun intended.

    In his chapter on the Rule of Law, he declares that a ‘free’ society can only exist where the laws are universal, generalizable, stable and, most importantly, devoid of democratic demagoguery. These laws find their basis in the Constitution, or equivalent documents, of the nation-state that effectively restrict the scope of political choice from the outset. Before I go on, this part is really an indication of the ‘real totalitarianism’ embedded in Hayek’s thought. He does not care, it seems, whether or not the Constitution is setup by a undemocratic dictator--like Pinochet, or the Honduran military junta--just that it was established and it respects the basic liberal principle of property rights. Hayek is delimiting the possibility of citizens to change the unfair imposition of the RofL on them by largely unelected, plutocratic elites, who are effectively living under a residual dictatorship of Constitutionalism. It is to the great credit of Chavez, Morales, and other neo-leftists that they are attempting to correct this historic injustice by creating popular constitutional assemblies to democratically and legitimately base the RofL on the will of the citizens.

Regardless, once these laws have been established it is imperative that “whatever form it [the Rule of Law] takes, any such recognised limitations of the powers of legislation imply the recognition of the inalienable right of the individual, inviolable rights of man.”--note, how Hayek is forced to use the idealist, liberal notion of this pre-political concept of “invioable rights” to defend this anti-democratic position. In order for the RofL to work, the individuals in the society must know what the laws are and that they are unchanging so that “the individual can foresee the action of the state and make use of this knowledge as a datum in forming his own plans”.

    The problem for Hayek emerges when he states,

The Rule of Law thus implies limits to the scope of legislation: it restricts it to the kind of general rules known as formal law, and excludes legislation either directly aimed at particular people, or at enabling anybody to use the coercive power of the state for the purpose of such discrimination. It means, not that everything is regulated by law, but, on the contrary, that the coercive power of the state can be used only in cases defined in advance by the law and in such a way that it can be foreseen how it will be used.

If this is the definition of the RofL, then there is no hedge against monopoly capital and thus, corporate totalitarianism. Hayek can maintain this position on the, disproven, belief that capital does not automatically aggregate and that ‘free market’ pressures are strong-enough to counteract that aggregation of capital. Antitrust legislation is directly “aimed at particular people” and the victims are chosen, arbitrarily out of the value-judgments of the state, to coercively break-up a firm. There is no way a firm could know it is going to be victim of antitrust, because there is no way to define ‘in advance’ the specific criteria for the enactment of antitrust. Ultimately, Hayek’s entire work rests on the kernel of anti-government, he ultimately does not care about totalitarianism, as long as its privatized.

Has Third Way Politics Failed?

2010-03-30T12:52:00.002-04:00

    The Economist is currently having a debate on whether or not 'New Labour', or Third-Way (3W) politics, has failed. Certainly, if you read my blog enough, you would know that I think 3W politics is doomed to failure, because it has accepted the ideological terrain of 'the enemy', by leaving capitalism outside of contention. The politics of the 3W basically articulated a discourse that sought to satisfy everyone and in the end satisfied no one. As one of the debaters argued:

    New Labour was a centrist project, once charged with trying to be all things to    all people. Ironically, 13 years on, it often lacks advocates, as it is challenged    from the right for increasing spending and tax and from the left for not doing     more on inequality.

    This is exactly what the left has been warning about, the 'consensus politics' of the 3W alienates everyone, because it ignores what politics is supposed to be about: change, conflict and values, viz. antagonism. There is no such thing as consensus, there is only conflict and when a 'hegemonic bloc' has gained the upper-hand it institutionalizes its values through ideological hegemony--ISA's--or when that fails, institutionalized force--RSA's. The 3W tried to avoid all three, it tried to have Thactherism, which Zizek correctly argues became hegemonic only when Blair appropriated and accepted her logics, with social progressivism. It sought to tame the wild excesses of finance capitalism in the interests of progressive distribution of income, through an increase in the availability of public services, but not changing a thing about the actual structure of the economy; therefore, in reality the basis of a stable economy was eroding as demand was being constantly crunched by the flows of capital to the top percentage of the population, which lead to the current crisis by undermining the basis of a debt-economy: sound fundamentals. Finally, the push forth the 'cultural' card to replace the emancipatory project with one centred on formal recognition of reified social categories, i.e. gay, black, etc. As Wendy Brown argues:

    The retreat from more substantive visions of justice heralded by the promulgation of     tolerance today is part of a more general depoliticization of citizenship and power and     retreat     from political life itself. The cultivation of tolerance as a political end implicitly     constitutes a     rejection of politics as a domain in which conflict can be productively     articulated and addressed, a     domain in which citizens can be transformed by their     participation, a domain in which differences     are understood as created and negotiated politically,     indeed a domain in which “difference” makes up     much of the subject matter. To the contrary,     as it casts the political and the social as places where     individuals with fixed     identities, interests, and ideas chafe and bargain, tolerance discourse attempts     to remove from the political table as much of our putatively “natural” enmity as it can.

    New Labour has certainly increased the standard of living for many Britons over the last 13 years, "Real incomes in Britain rose just under 2% per year from 1996/97 to 2007/08, with not dissimilar growth to that of the Thatcher and Major years. The difference was that Labour's choices saw the gains distributed much more evenly across society: the bottom half did proportionately best under Labour; the top third under the Conservatives ". So what? It doesn't make 3W politics any less alienating; rather it may make it more-so, consider if the lowest rungs of the income latter are getting progressively better, without actually changing their state of alienation or the politics of nihilism that the 3W represents, it doesn't mean much to these voters apart from greater pessimism that is manifested in new forms of politics that have no chance for hegemony and this impossibility manifests into frustration and violence--i.e., radical Islam, which is rampant in England.
    Politics is not merely about mere pecuniary conditions, it fundamentally means a desire to change the very relations of power/subordination in a society. The greatest err of The Economist's debaters and the debate itself is its 'vulgarity', focusing only on the effects not the causes of the failure, confusing the effects for the causes. The great myth of 3W politics is the end of alternatives, that power exists as it does today and should not change, because it is the best alternative out there; this hubris was best manifested by PM Gordon Brown's statement that 3W had create the conditions to end the era of "boom and bust"--the UK's economy last year shrank by, at least, 5%.
    The reality is that alternatives are emerging but in the guise of proto-fascist, racist movements like the BNP in England. As this short clip from Al Jazeera shows, the rise of the BNP is directly tied to the end of emancipatory politics of the left:

http://www.youtube.com/watch?v=iJGv2byX4qU

    The far-right critically misinterprets the problem away from capitalism proper towards the 'insider/outsider' distinction, best manifested with the nativist reaction against 'the other'. This is a result of the end of the Enlightenment project of internationalism, best exemplified by socialism, and the re-emphasis on the nation with 'tolerant multiculturalism' embedded in liberalism. This emphasis on 'culture' is the problem in many respects, because it leads to the kind of politics of the past that sought to obfuscate the tensions within capitalism to present them instead as tensions immanent in human civilization--the 'clash of civilizations'. Habermas describes this situation well:

    The neoconservative does not uncover the economic and social causes for the altered    attitudes towards work, consumption, achievement and leisure...The mood which feeds     neoconservativism today in no way originate from discontent     about the antinomian     consequences of a culture breaking from the museums into the     street of ordinary life. This     discontent has not been called into life by modernist     intellectuals. It is rooted in deep-seated     reactions against the process of societal     modernization. Under the pressures of the     dynamics of economic growth and the     organizational accomplishments of the state, the social     modernization penetrates     deeper and deeper into previous forms of human existence. I would     describe this     subordination of the life-worlds under the system's imperatives as a matter of     disturbing     the communicative infrastructure of everyday life. (Modernity--An Incomplete Project, p.     7-8)

Capitalism is a system characterized by deep and sharp social changes an inherent instability in symbolic representation and material security. When liberals, like the 3W and now even the Conservatives, trumpet the multicultural/progressive ethos of social liberalism they are only making this situation worse by not tying these evolution into an wider project--the Jewish Question redux. Without being tied to a greater project for full emancipation, even if that project is impossible, makes the rise of reactionary movements stronger and even more dangerous.
    The multiculturalist 3W politics has another dangerous aspect. The ossification of cultural difference as something that can never be superseded, but something that is to nurtured--another signal of abandonment of the Enlightenment project. This assumes that people cannot be changed by praxis of struggle, as Zizek notes:

        Perhaps, nothing expresses better the inconsistency of the post-political liberal project than its implicit paradoxical identification of culture and nature, the two traditional opposites: culture itself is naturalized, posited as something given...Actual universality is not the »deep« feeling that, above all differences, different civilizations share the same basic values, etc.; actual universality »appears« (actualizes itself) as the experience of negativity, of the inadequacy-to-itself, of a particular identity. The formula of revolutionary solidarity is not »let us tolerate our differences,« it is not a pact of civilizations, but a pact of struggles which cut across civilizations, a pact between what, in each civilization, undermines its identity from within, fights against its oppressive kernel. What unites us is the same struggle...In other words, in the emancipatory struggle, it is not the cultures in their identity which join hands, it is the repressed, the exploited and suffering, the 'parts of no-part' of every culture which come together in a shared struggle.

    The 3W's strength, and greatest threat, comes in by 'transforming' demands in a hyper-institutionalized way that makes existing inequalities in power, alienation, subordination and hopelessness even greater. As exploitation, unemployment, stagnating wages, massive inequalities in income grow, the population's demands are institutionally absorbed, denying them the possibility of creating 'equivalencies' with other demands that could turn into a veritable struggle for emancipation--Laclau's populism thesis. With the resistance against capitalism dead--indeed the very term capitalism has been replaced with 'the economy' making anti-capitalism seem anti-economy--the encroaching of capitalist subjectivity that Habermas and the entire socialist project warns about is reaching epic proportions. The unending commodification, bureaucratization, de-democraticization and depoliticalization of our lives is the true success of the 3W, by preventing people from coming together to see each other's individual struggles as a meta-struggle against a system that has no end to its exploitative effects.
    This is the lost message of the left, that it doesn't matter if the economy functions better, it doesn't matter if we have expansive social programs, because none of this is making people's lives any more tolerable it merely alienates them further. As this crisis shows, the means by which the economy grows and profits are accrued are at the direct cost of the average citizen through unemployment, increasing productivity without commensurate income growth, the increase in debt bondage all leading to the erosion or social mobility, the amplification of hopelessness, social marginalization...essentially proletarianism. The task of the modern left is to move beyond the growth fetishism, to fight for an end to growth--indeed, the earth cannot sustain more growth--and with the end of this fetishism, we should then fight for the democraticization of our lives.

Hayek would have supported Obamacare

2010-03-22T22:07:00.001-04:00

If you are angered by the recent passage of the US health-care bill as an undue expansion of the government into the market system, turning American into a socialist state then you must not know what socialism is, what liberalism is, or what capitalism is. Indeed, it was F.A. Hayek, the arch-defender of the free market that actually supported the logic of the bill fifty years before its passage:

"Furthermore, Hayek (1960, p. 287) is careful to distinguish between ‘compulsory insurance’ and ‘compulsory membership in a unitary organization controlled by the state’, and at least one of the drawbacks of such an organization, he contends, would be that it would thwart the process by which ever more effective insurance regimes could be devised. ‘If we commit ourselves to a single comprehensive organization because its immediate coverage is greater’, Hayek writes, ‘we may well prevent the evolution of other organizations whose eventual contribution to welfare might have been greater’ (1960, pp. 288, 291–292). Indeed, in The constitution of liberty (1960, chapter 19, pp. 287–305) he is at pains to reject a direct role for the state in provision of welfare services in general. Rather, and in order to secure the epistemological benefits of the market mechanism, he defends a system ‘under which individuals pay for benefits offered by competing institutions’ (Hayek, 1960, p. 304, emphasis added) with the role of the state being merely to temporarily expend public monies to stimulate the growth of a market for this kind of insurance (1960, p. 287). " (Tebble, 597)

First thing is first, the last sentence of the aforementioned quote is basically the US health-care in a nutshell.

Secondly, the health-care bill does not nationalize any private insurance company--lemon socialism--, and it does not subordinate the profit-motive to humanitarian motives--socialism. Rather the health-care bill is subordinate to the profit-motive by shaping the contours of the bill in such a way that would guarantee super-profits for the health-care companies, mostly by adding 35 million young and healthy customers, often supported by government subsidizes--which, in my opinion is another government bail-out to corporate America. So the first hurdle has been passed according Hayek, the private market remains.

Thirdly, Hayek supports the notion of 'compulsory insurance', he certainly does not see this as an infringement on an individual's freedom, but as a condition of it. To Hayek, the infringement would be if the consumer did not have a choice buy to use a government insurance plan--the horror! Indeed, the current health-care bill includes a mandate in order to allow all Americans to be covered since, if you expand the base of clients to include the young and healthy, individual costs go down--or the rate of inflation decreases--and profits can be retained as those with illnesses can still be covered. There is no compulsion, since one can still choose where to buy insurance.

Fourthly, this jives with the 'American as apple pie' notion that competition works. The bill does not rid the system of private insurance, and implicitly assumes some form of competition; indeed, the logic of the bill is that competition would increase from these regulations in terms of better terms of insurance contracts or cost reductions for individuals. Thus, private insurance in health-care is better than state owned insurance, because "competition" leads to better results, as Hayek argues. In order to believe this you have to ignore the tendency of capital to aggregate, thereby rendering the free market inherently unable to remain a "free market" system and thus destroying its own through its own "rationality"--that is to say, as one firm gains differential advantage over others, it uses its leverage in the credit markets to gain the capital necessary to merge and acquire other firms increasing its market power and undermining the whole framework. Secondly, you have to ignore that branding, advertising, goodwill create mini-monopolies--Sraffa, Nitzan, etc.--that undermine the whole notion of easy substitution, the inability of firms to determine prices--they clearly do and can--, and thus, equilibrium.

But all in all, Hayek supports Obama...

Debunking Inequality as a Social Good

2010-03-13T23:11:00.001-05:00

This post is a continuation of the 'war of position' against the neoclassical/neoliberal ideology that still retains a lot, but certainly declining, sway among the general public. One of the most important arguments they have to retain capitalist power relations is through the defense of the indefensible: very high inequality is a sure means to boost economic growth and therefore is a ethical thing to do. They argue that having egalitarian distributions of income inevitability leads to lower growth since economic agents would not be sufficiently rewarded for the efforts they put in and lower economic growth leads to lower standards of living for everyone. While, in countries that have higher levels of inequality, rewards more "productive" people and therefore have more innovation and are more dynamic. Therefore, via the notion that a 'rising tide lifts all boats', they are normatively unconcerned with inequality, because as long as there is a pareto optimal outcome, things are just--something to be criticized later.

However, as per usual, the facts aren't in favour of this 'idealist absurdity'. As usual, Sweden disproves the entire neoclassical paradigm; if any country on earth would be on the "Road to Serfdom", it would be Sweden. Throughout the Cold War and beyond, Sweden had the world's most egalitarian distribution of income; so egalitarian that Sweden was more egalitarian than the USSR:

Thus, does Sweden have an utterly uncompetitive economy with a fascist/socialist--since they are the same thing in a Hayekian framework--dictatorship? No, Sweden is internationally recognized as not only one of the most open liberal democracies in the world, but it is also a country where the population leads amongst the best lives in the world, measured by the HDI. Thirdly, Sweden has a per capita income of $52,180 ($37,333 PPP), while Britain, which engaged in radical neoliberal reform has a per capita income of $43,733 ($36,357 PPP) in 2008. Finally, its exports as a percentage of GDP is also higher, suggesting a much more competitive economy. Importantly, it also has a more innovative economy than those with higher rates of inequality, according to The Spirit Level:

Rather than stimulating innovation and progress, great inequality wastes the talents of a large proportion of the population. The evidence shows that it reduces children’s educational performance as well as reducing social mobility. Economic studies of the relationship between the extent of inequality and economic growth rates have mixed results: most suggest that greater equality is beneficial to growth but a few suggest the opposite...There is a weak but statistically significant tendency for more equal societies to gain more patents per head than less equal ones. (http://www.equalitytrust.org.uk/why/ evidence/frequently-asked-questions#innovation)

I realize that the economy does not determine all, something that eludes the neoliberals. Reasons why country a does not grow, or descends into a dictatorship is due a overdetermination of causes that cannot be easily reduced to the economic problematic. As Althusser states:

If, as in this situation, a vast accumulation of ‘contradictions’ come into play in the same court, some of which are radically heterogeneous—of different origins, different sense, different levels and points of application—but which nevertheless ‘group themselves’ into a ruptural unity, we can no longer talk of the sole, unique power of the general ‘contradiction’ [the economy]

Hayek's rather simplistic and wrong thesis needs to expunged from the social body in order to bring a more just society (http://perspectivos.blogspot.com/2009/12/on-hayek-part-i.html). On Pareto optimality, because it deals only with absolute measures it is certainly a normatively inappropriate means to determine what is ethically and even economically sensible. As Tony Smith states:

Critics of neoliberalism also note that the very notion of Pareto optimality is deeply flawed from a normative standpoint with respect to distributional issues. A society in which a small handful of individuals appropriates almost all the income and wealth of a society, leaving the vast majority in hopeless poverty, can count as ‘optimal’ according to this notion.

Idealist Absurdities, the Paradox of Victory

2010-03-05T22:26:00.001-05:00

Is capitalism going to collapse via a proletarian revolution? Unlikely, it isn’t impossible, but in the past two hundred years we have not had a truly proletarian revolution anywhere in the world. The major revolutions that occurred all occurred in countries with large peasant populations, with encroaching industrialization and increasing commodification of the average person’s life, the reaction was strong—as it was in Europe during the 19^th century, i.e., Chartism, 1848, etc. In addition, many of the revolutions were ersatz in the sense they played a double role; certainly, they all played lip service to socialist internationalism, but the Thing they were really striving for was the anti-imperialist/nationalist bias of revolutionary movements.

In all the countries where revolution occurred, capitalism clearly was incomplete and the state was unable to adequately address new demands that were emerging from the new social relations that capitalism brought with it. In these countries, all lacking liberal-democratic forms of governance, the state could be defeated rather easily in what Gramsci called a ‘war of maneuver’, because the ‘state’—as conceived by Gramsci—was clearly not hegemonic, but rather depended on repression and pre-modern notions of statecraft—as Foucault notes, pre-modern states were primarily concerned with ‘sovereignty’ of the rulers leaving the unknown notion of the ‘population’ largely to its own devices, leaving them unarticulated by the state; the modern state was concerned with ‘governmentality’, or the organization of society to make it more productive with the wellbeing of the newly conceived notion of the ‘population’ as the new loci of state-craft, creating institutions to articulate and to discipline individuals.

Thus, in order to challenge liberal-democratic regimes, Gramsci noted that the proletariat and its allies must engage in a ‘war of position’ to ideologically disaggregate and replace the ‘nodal points’ that keep capitalist hegemony intact. Thus, according to Gramsci, the counter-hegemonic force, prior to taking power, must first achieve hegemony. Thus, the Marxist notion that the proletariat, being the universal class, would—inevitably—overthrow capitalism, due to the contradictions embedded in capitalism has been, hitherto, been proven false. The way to revolution, or radical change, is partly through political/ideological intermediation and then, in the last instance, material force; however, these two things are not mutually exclusive. As Marx states, “The weapon of criticism obviously cannot replace the criticism of weapons. Material force must be overthrown by material force. But theory also becomes a material force once it has gripped the masses”.

However, capitalism has shown its adaptability, because it has been able to grow enough to satisfy demands through institutions and has been able, via liberal democratic mechanisms, been able to give the concessions necessary to retain its hegemony. This ‘condition of impossibility’ is what makes capitalism possible, according to Zizek:

...what Marx overlooked is that, to put it in standard Derridean terms, this inherent obstacle/antagonism as the "condition of impossibility" of the full deployment of the productive forces is simultaneously its "condition of possibility": if we abolish the obstacle, the inherent contradiction of capitalism, we do not get the fully unleashed drive finally freed from its shackles, but rather we lose precisely this very productivity that seemed to be simultaneously generated and stifled by capitalism, for it simply dissipates . . . And it is as if this logic of the "obstacle as a positive condition" which underlay the failure of socialist attempts to overcome capitalism, is now returning with a vengeance in capitalism itself: capitalism can fully thrive not in the unencumbered reign of the market, but only when an obstacle (from minimal welfare-state intervention, up to and including the direct political rule of the Communist Party, as in the case of China) constrains its unimpeded rampage (190). 

However, the ‘common sense’ economics that sprouts from neoliberal economists suggests the opposite is true. The market, if encumbered by the government’s intervention, distorts the market by creating disincentives for worker to work; it artificially raises prices and lowers quality of services that could be better rendered by the for profit private sector; counter-cyclical economic policies do not help, but make matters worse by not allowing the market to correct, automatically, the causes of the crisis. Basically, the ethos is, the market does everything better, democracy is a false god and leads eventually to totalitarianism—Hayek’s thesis in The Road to Serfdom. Therefore, citizens should no longer conceive themselves as citizens in the sense they can use that power to change things politically, but rather they should be market agents who’s only aim is the maximization of their utility, with a given distribution of income, and the outcomes are inherently just because the responsibility for success or failure rests squarely on your shoulders.

However, as Jean Baudrillard notes, as interpreted by Sylvere Lotringer:

This is what Baudrillard meant by a total revolution: a strategy geared to escalate the system and push it to its breaking point. Then, giving up on every pretence of rationality, it would start revolving and achieve in the process a circularity of its own: "We know the potential of tautology when it reinforces the system's claim to perfect sphericity (Ubu Roi's belly)" (SE, p. 4)... After all, wasn't capitalism itself a pataphysical proposition? It was endlessly cutting the branch on which it sits, devastating the planet and endangering the human species while claiming to improve its lot. Capital didn't care a fig for the fate of humanity. The real wasn't its business. It had cancelled the principle of reality and substituted a codification of a higher order, a hyper-reality that made the real obsolete. Its dirge-like flows were self-referential, leaving everything else in a state of self-induced simulation. The flows of capital were posthumous, post-human. In their nihilistic energy, they carried the seeds of their own destruction.

Thus, is the lesson for the left still Lenin’s quip that ‘worse is better’? Leaving the market to its own devices will create the conditions for a revolution? As Baudrillard states:

"Every system that approaches perfect operativity simultaneously approaches its downfall. . . it approaches absolute power and total absurdity; that is, immediate and probable subversion. A gentle push in the right place is enough to bring it crashing down" (5E, p. 4).

Leaving the market to operate as close to the ideal as possible would, fundamentally undermine the operation of the market itself. Total capitalist victory, the neoliberal world-order would, in essence take away the “condition of impossibility" that simultaneously creates the “condition of possibility”. Arguably, the most successful capitalist states are those where a balance between the market and the social has been created where capital has little option but to invest in investments that increase the well-being of the population, examples can go from Sweden to China; whilst, countries that have gone to the opposite extremes are facing severe crisis, e,g., Argentina in 2001, the United States, the United Kingdom, etc.

Therefore, neoliberalism has created the seeds of its own downfall for engaging in what Baidou calls ‘idealist absurdies’ that abstract away the social and pretend that the models in neoclassical economics can actually exist, which presupposes that ‘there is no society, just individual men and women’ engaged in a marketplace. It has also created the conditions of unending hubris, leading to a form of intellectual laziness, or worse, ideological blindness that lead to the current crisis. Therefore, the rush towards the triumph of capitalism has lead to its greatest crisis. Thus, as Baudrillard argues, maybe we should be triumphing the capitalist market economy; maybe the ultimate agent of capitalism’s demise is capital itself.

The Resiude of Shock

2010-02-12T12:59:00.000-05:00

The common refrain from the left in the post-9/11 era has been to link the emergence of radical Islam, terrorism, etc., as a result of the end of the emancipatory, universal project of socialism. The popular interpretation from liberals is to point to the “irrationality”, the “particularity”, “immoral” and even “evil” nature of their “ideological” convictions, which run counter to the universal agent, embodied in the Universal Declaration of Human Rights and the logic of the ‘end of history’. However, contrary to the ‘popular religion’ in the West, communism was not destroyed via the mechanism of ideas; the defeat of the left in many parts of the world was a result of a coordinated effort by the United States and its allies to suppress communist movements throughout the world and install highly repressive, authoritarian regimes to create the conditions for capitalist accumulation and to undermine the ‘organic’ basis of anti-capitalist struggle—peasantry, unionization, intellectuals, etc. This repression, this destruction of emancipatory alternatives, has led to frustration and nihilism—a nihilism that can either be expressed with resignation; ‘fetishist disavowal’, like the belief that Sarah Palin is capable of enacting change, whilst knowing she can’t and won’t; or, in the case of many ‘terrorists’, suicide. This is has given rise to proto-fascistic forces of cynical, racist, disparate, intellectually inconsistent—if not blatantly and proudly dishonest—, right wing, reactionary populism and outrage worldwide. It suggests that Walter Benjamin’s famous argument that “Every fascism is an index of a failed revolution”, couldn’t be starker.

Famous examples of this suppression include: the Red Scare, 1919; McCarthyism, 1950’s; Iran, 1953; Guatemala, 1954; Cuba, 1961; Brazil, 1964; Indonesia, 1965; Vietnam 1945-1975; Chile, 1973; Operation Condor, post-1976; the Contras, 1980s; Grenada, 1983; etc. If aggregated, the anti-communist struggle in the Cold War had victims, easily, in excess of 4 million. Throughout the world, the material and thus, intellectual basis for anti-capitalist struggle was undermined. For example, in Latin America, many of the states that had enacted ISI forms of industrialization, under the subsequent dictatorships, undermined industrial development, via liberalization, to undermine the organizational power of unions and the labour-force. Also, the countryside saw increasing forms of dispossession for peasants, who were among the most dangerous anti-capitalist forces, forcing them into the slums surrounding decaying cities. For many in Latin America, this experience of torture, death, totalitarianism and primitive accumulation ‘shocked’ alternatives out of the system. A good example is the future President of Uruguay, Jose Mujica, who was a Tupamaro (communist revolutionary). He was tortured and locked in a hole for 12 years; he is now pleading with capital to invest in Uruguay and expressly defends private property as inviolable and sacred. It is no coincidence that the Latin American states that today have proto-revolutionary socialist governments, like Venezuela, or Bolivia, were largely immune from the ‘shocks’ of Operation Condor.

However, the greatest err in the Cold War for the vantage point of the United States was to materially support the Islamic mujahedeen in the mountains of Afghanistan against the USSR in the 1980s. This support for Islamic fundamentalism created the basis for a truly transnational organization, with highly efficient and secretive means of money transfers, arms trade, and ideological proliferation—all of which was supported by billions of US aid. The support for these rebels, who expressly rejected the Enlightenment, served America’s anti-communist cause and with the defeat of the USSR in Afghanistan both sides felt that they had won the war with the elan of God on their side. For the United States, the Islamic radicals were an after-thought, especially with the ‘end of history’ and the emergence of its hyperpower status. However, the battle for the radicals was just beginning, the real battle would be for the heart and soul of the entire Islamic world and that would put it in conflict with the other power, the United States.

The spread of this Islamic ideology of salafism—to go back to the ways and means of the first virtuous generations of Islam—and wahhabism—the extremely orthodox application of Hadith and Qu’ranic jurisprudence, emerging from the Hanafi school—was enabled by the United States and her allies to undermine progressive movements in the region, i.e., Israel funded Hamas to undermine the power of the P.A. In the zeal of the Western powers to undermine communism, they created a new enemy, one that the West finds it impossible to communicate with in a ‘deliberative’ manner. One reason is that the Islamic radicals reject the liberal notions of humanism and rationalism as the basis for social relations, but rather emphasize a pre-Enlightenment ideal of hierarchical relations—Allah→man→woman—and a cosmological order ordained by God, embodied in Shari’a. Equality only exists within Islam and under Shari’a, under the notion of Dar-al-Islam (House of Peace); whilst the rest of the world is characterized by its rebellion and ignorance of the universal laws, or Jahiliyyah—this part of the world is known as the Dar-al-Harb (the House of War), which is fundamentally inferior—albeit, not inalterably so, giving the ideology a sense of justice. The very notion of unconditional universal human rights is foreign and “evil”, because not all are equal in Islam and it undermines the divine authority and world-order as ordained by Allah. Therefore, the purpose of the radicals is to take back the Islamic world from the Jahiliyyah brought forth by European and American imperialism and the virus of the Enlightenment. Therefore, there is no basis for discussion, since the terms themselves are contested; there is no basis for a “rational” discourse, along the lines prescribed by the liberals to solve conflict, because there is a total lack of a hegemonic base from which one can start that discussion.

This ideology spread, because within many of these countries, there were no convincing alternatives to counter American liberal-capitalist hegemony. The critiques that the radicals state are not that far-off from the critiques of the left, but they have been articulated in a reactionary manner. The physical elimination of many of the left’s prominent intellectuals, their censorship and marginalization has denied the ability of these frustrations to be articulated in a progressive manner. Therefore, with the left-option closed and with a total absence of liberal-democratic methods of representation, a residue of the anti-communist struggle of the Cold War, in the Middle East, we saw the emergence of modern terrorism. As Chantal Mouffe argues:

Terrorism has always existed, and it is due to a multiplicity of factors. But it undeniably tends to flourish in circumstances in which there are no legitimate political channels for the expression of grievances. It is therefore not a coincidence that since the end of the Cold War, with the untrammeled imposition of a neoliberal model of globalization under the dominance of the United States, we have witnessed a significant increase in terrorist attacks. Indeed, the possibilities of maintaining sociopolitical models different from the Western one have been drastically reduced...

Rand is a Marxist, and Hayek is a totalitarian

2010-02-05T15:37:00.001-05:00

Before I engage in a polemic against Hayek, I just want to do deal with his hypocrisy that is characteristic of many neoliberal theorists. I will start with Ayn Rand, the anti-altruist, the one who believes that doing things selfishly is the best thing for the individual and for society at large, especially within capitalism, which she termed “the unknown ideal”. I call it ‘Adam Smith on crack’. However, Rand did not live the life she claimed was optimal, she once went against her rational, objectivist mores. A glaring example comes from Anne C. Heller:

When Bennett Cerf, a head of Random House, begged her to cut Galt’s speech, Rand replied with what Heller calls “a comment that became publishing legend”: “Would you cut the Bible?” One can imagine what Cerf thought — he had already told Rand plainly, “I find your political philosophy abhorrent” — but the strange thing is that Rand’s grandiosity turned out to be perfectly justified. In fact, any editor certainly would cut the Bible, if an agent submitted it as a new work of fiction. But Cerf offered Rand an alternative: if she gave up 7 cents per copy in royalties, she could have the extra paper needed to print Galt’s oration. That she agreed is a sign of the great contradiction that haunts her writing and especially her life.*

A sign of a true philosopher is one that isn’t hypocritical, one who would rather die than contradict their own message; that is what is supposed to separate those have “examined” life and those who haven’t. Socrates died, willingly, at the hands of the state for a law that he knew was unjust, but accepted the punishment of the polis because it was the law in which he lived under and accepted; Che died while fighting for the cause of communism in the mountains of Bolivia, fully knowing that he could be killed; and the list goes on.

All this begs the question for Rand, what was her excuse; it was not like the choice was between life and death. She was being totally unselfish—in this context, this is a bad thing—by accepting an ‘irrational’ choice. It was in her instrumental rational, material interest that she accepted the offer presented by Cerf, instead she chose what was in her irrational, emotional interest. Therefore, not only did she make her life worse, she made everyone’s life worse by not accepting more money.--according to Randian logics. Rather ironically, Rand’s ACT proves Marx right: unalienated labour is an expression of the self that becomes part of ones own identity and therefore, is defended more than anything else. It also proves that it is a priori wrong, indeed even if Rand didn’t accept this, to have someone determine—alienate—your labour from yourself, because they have some power that is denied to you, viz., capital. Whether one would like to admit it or not, Rand’s act is an authentically Marxist one.

The contradictions among neoliberal theorists do not end there. Another arch-neoliberal theorist, Fredrich von Hayek, the greatest defender of classical liberal values, actually materially supported the Pinochet regime in Chile. The significance of this cannot be understated. As Frank Cunningham wrote on neoliberal theorists complicity with the Pinochet regime:

Like Friedman and Hayek, they journeyed to Chile after the 1973 coup there to give economic advice to the military government. Indeed, General Pinochet held a personal meeting with Hayek, and Buchanan gave a talk at the headquarters of the Admiralty in Vena del Mar where the coup (proximately) originated.

No one can deny that the Pinochet regime was totalitarian with a level of repression that surpassed that of any socialist state at the time. Hayek aruges in ‘The Road to Serfdom’ that in an economy characterized by economic planning, it is inevitable that dictatorship arises:

The cry for an economic dictator is a characteristic stage in the movement towards planning, not unfamiliar in this country...I think you would find this common feature - you would find them all agreeing to say: 'We are living i n economic chaos and we cannot get out of it except under some kind of dictatorial leadership'.

This is exactly what economic liberals, the infamous Chicago Boys, were demanding in Chile, and throughout Latin America, during the 1960s and 1970s. It was they who were calling for dictatorship to stop the form of planning they didn’t like. Indeed, it is a myth that the ‘free market’ capitalist system is not planned, as if it were some spontaneous system that is inherent in human relations. Polanyi’s famous rebuke to Hayek was proven in Chile, “[The] lassiez-faire economy was the product of deliberate State action...lassiez-faire was planned.” (147). In order to plan for the free market, they had to overthrow democracy, which had definitively moved against the free-market in that era. What occurred in Chile was an authentic 'counter-revolution' and like all revolutions it requires violence. Hayek's work warns about the inherent violence and terror embedded in socialism, but the reality is that in order to establish liberalism, 'democracy has to be liberalized', as C.B. Macpherson wrote, and that takes foundational violence, dispossession and the destruction of the alternative orders. The purpose of the regime was simple to Hayek, to re-establish liberal hegemony, and what does liberal hegemony mean? Hayek provides an answer:

...and it is the great merit of the liberal creed that it reduced the range of subjects on which agreement was necessary to one which it was likely to exist in a society of free men.

This is hegemony, and here Hayek is making clear that liberalism is a hegemonic order, meaning it is a contingent one. A hegemonic order also determines the limits of discourse, and Hayek argues that first liberalism must be established before democracy can function as a 'utilitarian' system of governmetn that is should be. The result, a ‘democratic’-neoliberal Chile where its government essentially became a rubber-stamp for the policies enacted by Pinochet and forced in the democratic era, via Pinochetismo. Which accords with Hayek’s criticism against planning:

Parliamentary discussion maybe retained as a useful safety valve, and even more as a convenient medium through which the official answers to complaints are disseminated. It may even prevent some flagrant abuses and successfully insist on particular shortcomings being remedied. But it cannot direct. It will at best be reduced to choosing t he persons who are to have practically absolute power.

Ironically, Hayek became the same sort of person he was warning against. This is the irony of history and the hypocrisy of liberal theory.

*http://www.nytimes.com/2009/11/01/books/review/Kirsch-t.html

The Paradox of Chavez

2010-01-28T21:59:00.001-05:00

The news coming out of Venezuela lately has been of a country racked by a series of scandals; these include: the temporary closure of certain television channels for not showing presidential speeches—this was done because these stations had over thirty-percent Venezuelan content and the communications law states that those stations must show the speeches or face sanction, ergo, it fit well within Hayek’s notion of a just law, as it apply to all equally—; blackouts are becoming more common as a severe drought is starting to undermine the state’s capacity to deliver power and water; Venezuela is still one of the only states in Latin America that is still in recession; the emergence of a dual exchange rate to incentivize exports and industrialization, and dis-incentivize imports—with the exception of certain vital imports, i.e., food, however, this is expected to lead to even higher levels of inflation; etc. With all of this, many ‘business-analysts’ are suggesting that Venezuela is a black hole from which capital does not return, thus, investment should not be going in. This logic is exemplified by the proceeding quote from Mike Percy, Dean of the Business School at the University of Alberta (neoliberal):

"In Venezuela, you can put (money) in, but the odds are, you're not getting it back" he said.*

However, recently ENI S.A., a multinational petroleum company from Italy, and PDVSA, the national oil company (NOC) of Venezuela, intends to invest in $18 billion to develop oil from the world’s biggest reserve of oil, the Orinoco Belt. As the article from Mercopress elucidates:

The Eni/PDVSA agreement involves 18 billion US dollars worth of projects to pump and refine oil from the Orinoco Belt in central Venezuela. The venture expects to pump 240,000 barrels a day after spending 8.3 billion USD to develop the Junin 5 block... Eni also plans to build a 9.3 billion USD, 350,000 barrel-a- day refinery to convert crude oil from the existing Petromonagas project in the Orinoco into higher-value products. Italy’s Eni will hold 40% of the venture and PDVSA the rest.

Never-mind the investments that are planned from Petrobras from Brazil, Gazprom from Russia—“A preliminary joint venture deal on the Junin 6 block was signed in September between state-run Petroleos de Venezuela, or PDVSA, and a consortium of Russian oil firms, including Lukoil Holdings and Gazprom OAO...The Junin 6 block could eventually produce 450,000 barrels a day of heavy crude, and would require investment of some $30 billion, Venezuelan officials have said”**—, and CNOOC from China—“With China, Venezuela looks to develop the Junin 4 block, a $16 billion project with a potential to produce 400,000 barrels a day. The statement said Venezuela is looking to build an electricity-generating plant with China in the Orinoco to be used for refineries.”**

If, as Mr. Percy implies, investing in Venezuela is a metaphorical black hole for capital, why do major producers invest in Venezuela? On the flip side, is Chavez really anti-capitalist, why is he courting so much foreign capital? There are a lot of mixed messages coming out of Chavez. Chavez has stated that he doesn’t want to “expropriate everything”, claiming such claims are “not true.”*** However, Chavez has recently proclaimed himself to be a “Marxist”****, certainly this is ‘contradictory consciousness’ at its height, or is it?

Firstly, I do not think that Chavez is actually anti-capitalist, regardless of what he says or the Western media say. Chavez represents a new, post-1989, ersatz-radical left, one that has come to terms with capitalism—certainly with a more humane face—, but not with American ‘imperialism’. The real enemy for Chavez is not capital, the fundamental conflict is not internal to the polity or the system—as evidenced by his quote that he does not want to “expropriate everything”—, but rather it is external, the United States. Therefore, Chavez is actually playing from the rightist playbook by defining the enemy as external, an external that disrupted the natural ‘course’ of the Bolivarian revolutionary society. Yes, the United States does represent, signify capitalism, but it is not capitalism itself.

However, due to some ‘cunning of reason’, maybe—I emphasize the maybe— Chavez has no choice but to be a capitalist in order to destroy capitalism. Venezuela is not a developed country, by anyone’s account; it has an artificially high per capita income due to the rents extracted from the oil industry. Historically speaking, counter-hegemonic projects have only emerged in the developing world, e.g., Russia, China, Venezuela, etc. Thus, they have been characterized by multiple relations that Marx did not expect a future socialist society would have to face, i.e., underdevelopment, dependency, imperialism, dualistic economies, etc. Chavez is actually pursuing a policy that Soviet Russia and China wanted to or have pursued. As explained by Perry Anderson, in his recent article entitled “Two Revolutions”,

As a fully independent state, in tight command of its territory, it could be confident of its ability to control flows of alien capital by political power, much as Lenin had once hoped to do in the days of NEP; and, with a continuing grip on the strategic—financial and industrial—heights of the economy, of its ability to dominate or manipulate domestic capital.

Thus, within under-developed socialist states, they have little choice to be in favour of capitalist relations to develop their economies. However, as China now shows, this idealism of being able to ‘control capital’ without ‘becoming capital’ is a losing strategy. Indeed, the fetishism with ‘growth’ and ‘development’ may be the achilles heel of socialism. Indeed, China has become the ideal capitalist state, because it is obsessed with growth. What socialism has done historically, because it has been limited to underdeveloped countries, is actually introduce capitalism with a strong-centralized state that is independent of imperialist pressures. Creating the conditions for highly successful capitalist development, but the cost is the loss of the socialist project in the meanwhile. This can be explained by Zizek on the historic failure of Mao’s ‘Cultural Revolution’:

What Mao did was to deprive the transgression of its ritualized, ludic character by taking it seriously: revolution is not just a temporary safety valve, a carnivalesque explosion destined to be followed by a process of sobering up. His problem was precisely the absence of the "negation of the negation," the failure of the attempts to transpose revolutionary negativity into a truly new positive order: all temporary stabilizations of the revolution amounted to just so many restorations of the old order, so that the only way to keep the revolution alive was the "spurious infinity" of endlessly repeated negation which reached its apex in the Great Cultural Revolution.

This lack of a ‘positive order’, or the creation of a new hegemony and new social relations that allowed the rise of capitalism and its logics to reemerge, or arguably speaking, to merely reassert itself after a revolutionary lull. The project in Venezuela is twelve years old, we must see where it goes; indeed, if it even survives. In my opinion, it is going in the direction of Chinese-styled developmentalism, which to much of the modern left is the ‘best’ they can hope for.

Stay tuned...

*http://en.mercopress.com/2010/01/28/canada-confident-of-its-oil-potential-development-in-spite-of-venezuela)

**http://online.wsj.com/article/BT-CO-20100127 707060.html?mod=WSJ_World_MIDDLEHeadlinesAsia

***http://www.bloomberg.com/apps/news?pid=20601086&sid=aoTTUDfS0qNs
****http://en.mercopress.com/2010/01/28/tough-year-ahead-for-venezuelan-president-hugo-chavez

Bai-Bai Liberal Democracy? The Real Crisis of Democracy

2010-01-17T12:32:00.003-05:00

The Economist magazine recently published an article entitled, “Democracy’s Decline, Crying for freedom” (http://www.economist.com/world/international/displaystory.cfm?story_id=15270960). The article, informed by Freedom House’s latest report card on the spread of liberal-democracy suggests that for the past half-decade the ‘exonerable’ push towards liberal-democracy has not only stalled, but also has been marked by significant set-backs, i.e., Thailand, Honduras, Russia, etc. The rise of China’s form of authoritarian capitalism, informed by the Singaporean-model, is beginning to undermine the ‘ethical-intellectual’ leadership of Anglo-American hegemony that has been deeply entrenched since 1989.

Russia is a case in point, after the collapse of the USSR in 1991, the Russian government sought to implement neoliberal reforms. It was during this era that the promise of massive aid and investment from the West, along with the ideological fervor of the magic of the ‘free market’ to correct all the ills from the Soviet era were strong—albeit, I would not suggest they were hegemonic, arguably most citizens of the USSR wanted a more democratic-socialism and not free-market capitalism. Boris Yeltsin put it best:

We rule out any subordination of foreign policy to ideological doctrines or a self-sufficient policy. Our principles are simple...the supremacy of democracy, human rights and liberties, legality and morality (qtd. in Donaldson 230).

I think Althusser’s ingenious argument applies here like at no other time, “those who are in ideology believe themselves by definition outside ideology: one of the effects of ideology is the practical denegation of the ideological character of ideology by ideology”(131). Critically, this is the mentality that many liberals hold: that they are not immersed deeply in ideology, that they hold some ‘enlightment’, abstract truth that no one else has; however, the effect has been to delegitimize liberalism as its abstract theories have not panned out as they planned. As Badiou warns, “Without a generalized application there is no testing ground, no verification, no truth. In that case ‘theory’ can only give birth to idealist absurdities” (2005). One such absurdity is the abstract notion that we can organize society in some liberal-utopia, based on human’s being rational, utility-maximizing robots. Therefore, the denegation of ideology by liberals is one the major reasons we have such a huge backlash against liberal-democracy and market-economies today. Not only is it arrogant and wrong, its prescriptions are doomed to failure because it ignores and inverts the core lesson of materialism: “The movement of knowledge is the practice-knowledge- practice trajectory” (Ibid).

Back to Russia, the majority of the parliament, which was freely elected during the Soviet era, understandably, opposed these abstract, neoliberal reforms. Yeltsin, in order to pass the reforms, basically scrapped the Russian constitution and bombed the Duma (parliament) to pass the IMF-US Treasury sponsored reforms; indeed, for all the posturing the United States may make about its defence of democracy, it was clear that “the United States had expressed its willingness to condone the Yeltsin administration's decision to take ‘resolute’ steps against the Duma so long as the Kremlin accelerated economic reforms” (Simes 2007). It should be remembered, this was the apex of neoliberal hegemony, where the very notion of ‘freedom and democracy’ was explicitedly defined as being a ‘market economy’ and that those institutions that prevented the flourishing of the ‘free market’ were anti-democratic and atavistic, according to the logic of the ‘end of history’. As The Economist argues in the aforementioned article, “Another caveat is that democracy has never endured in countries with mainly non-market economies”. Paradoxically, it seems that the market cannot emerge from a democratic society that has not first been ‘liberalized’—the essential lesson learned from C.B. Macperhson in his work on the subject of democracy.

It was this critical juncture in 1993 that set the path for the rise of the oligarchs and illiberal-democracy in Russia, personified by Vladimir Putin. It should be remembered that Putin did not change a letter of the Russian constitution; the ‘original sin’ of Russian democracy was based in the liberal-totalitarian zeal of the 1990s. Unlike in pervious eras, where authoritarian had some redeeming social qualities, i.e., socialism, equality, material security, etc. Today, the market-reforms in Russia has created a new oligarchic class whose interest is to reinforce the capitalist aspects of the 1990s, not necessarily the ‘free-market’ aspects. As The Economist points out:

Today, the idea that politicians in ex-communist countries would take humble lessons from Western counterparts seems laughable. There is more evidence of authoritarians swapping tips. In October, for example, the pro-Kremlin United Russia party held its latest closed-door meeting with the Chinese Communist party. Despite big contrasts between the two countries—not many people in Russia think there is a Chinese model they could easily apply—the Russians were interested by the Chinese “experience in building a political system dominated by one political party,” according to one report of the meeting.

Now this may be, and probably is, liberal propagandizing, since it is based on ONE report of the meeting, but the fact that the two did meet suggests something. It suggests that the core arguments of liberalism no longer bear fruit, the myth has been demystified. The rise of China has undermined just about every-core liberal concept and it shows with the inability of The Economist to defend of liberal-democracy from the onslaught of what Slavoj Zizek calls ‘capitalism with Asian values’, which he describes as follows:

The virus of authoritarian capitalism is slowly but surely spreading around the globe. Deng Xiaoping praised Singapore as the model that all of China should follow. Until now, capitalism has always seemed to be inextricably linked with democracy; it’s true there were, from time to time, episodes of direct dictatorship, but, after a decade or two, democracy again imposed itself (in South Korea, for example, or Chile). Now, however, the link between democracy and capitalism has been broken.

One telling example of this inability lies in the belief that only in a liberal-democratic society, one can have technological capitalism, however, China is disproving that premise and The Economist cannot easily deny this:

Believers in democracy as an engine of progress often make the point that a climate of freedom is most needed in a knowledge-based economy, where independent thinking and innovation are vital. It is surely no accident that every economy in the top 25 of the Global Innovation Index is a democracy, except semi-democratic Singapore and Hong Kong... China, which comes 27th in this table, is often cited as a vast exception to this rule. Chinese brainpower has made big strides in fields like computing, green technology and space flight...And no country should imagine that by becoming as autocratic as China, it will automatically become as dynamic as China is.

Why not? This is not explained, and this is where the ideology comes in. However, now the ideology cannot explain away China, so what is left, this contradiction; indeed, one can, and I will turn the last quote on its head for the liberals: ‘And no country should imagine that by becoming as liberal-democratic as the United States, it will automatically become as dynamic as the United States is”.

Ergo, why is liberal-democracy in the state it is in? Because it doesn’t feel the need to defend itself adequately, it denies its essentially ideological and political character and assumes it is inherently superior devoid of any real, not ‘idealist absurdities’, as a justification.

Well, the world moves on.

Is this the death of the neoclassical paradigm? Part I

2010-01-08T12:53:00.001-05:00

I am currently reading Hyman Minsky’s most important work, Stabilizing an Unstable Economy. With the current backlash against the once hegemonic Chicago-School of economics that solely emphasized the microeconomic aspects of economics—the pro-capitalist, uncritical apology for Adam Smith’s notion of the ‘invisible hand’ of the free market. They totally reject the macroeconomic/structural—Keynesian/Marxist—legacy of economic analysis and Paul Samuelson’s so-called “neoclassical synthesis”. Largely informed by the liberal-fundamentalism of Hayek, Friedman--both of whom taught at Chicago--and Mises, they believe that any government intervention that does not apply to all equally leads to totalitarianism and sub-optimal economic outcomes, viz., ‘The Road to Serfdom’; however, it is a thesis that runs contrary to historical evidence (read: http://perspectivos.blogspot.com/2009/12/on-hayek-part-i.html).

They also argue that capitalism is the only true system of freedom where individuals are free to choose to do what they want. However, C.B. Machperson’s critique of Friedman points out that capitalism is built and depends on a inherent inability of persons to be free--the proletariat--and a duality of power between those who lack capital and those who have capital, which relegates those without capital without a choice when it comes to work--exploitation--caused by dispossession and coercion from the state and its ‘structural reforms’; thus, as Machperson states, “Professor Friedman's demonstration that the capitalist market economy can co-ordinate economic activities without coercion rests on an elementary conceptual error”. I will quote Macpherson here at length:

The proviso that is required to make every transaction strictly voluntary is not freedom not to enter into any particular exchange, but freedom not to enter into any exchange at all...What distinguishes the capitalist economy from the simple exchange economy is the separation of labour and capital, that is, the existence of a labour force without its own sufficient capital and therefore without a choice as to whether to put its labour in the market or not. Professor Friedman would agree that where there is no choice there is coercion. His attempted demonstration that capitalism co-ordinates without coercion therefore fails.

This also disproves Hayek’s rather eclectic notion that capitalism and liberalism basically evolved peacefully from the immutable forces of idealism and was not implemented as a conscious, material, program by capital and the liberal-state; however, as Polanyi states that “[the] lassiez-faire economy was the product of deliberate State action” (147).

However, the aforementioned critiques undermine the premises of the their theory, but it is the theory itself that is now under attack. Paul Krugman’s latest blog post entitled “This is the way the Chicago School ends” (http://krugman.blogs.nytimes.com/2010/01/07/this-is-the-way-the-chicago-school-ends/) suggests that we have a Kuhnian ‘paradigm shift’ happening. The Chicago School, as Krguman, et al., suggest cannot explain away the inability of the theory to explain the causes of the financial crisis. This inability is suggestive of ‘anomalies’, which Kuhn describes occurs when “normal science leads only to the recognition of anomalies and to crises. And these are terminated, not by deliberation and interpretation, but by a relatively sudden and unstructured event like the gesalt [sic] shift” (122). This is now happening, running on all cylinders, as the attacks are coming from all sides: the neo-keynesians, institutionalists and marxists and this is starting relentless attack is bearing fruit. The attack, spearheaded by Paul Krugman and Joseph Stiglitz is reversing the neoliberal ‘counter-revolution’ of the 1980s. So wide-ranging is the assault on the traditional neoclassical ideology that Joseph Stiglitz, the anti-Hayek within the pro-capitalist camp, now goes so far as to question many of the basic postulates of the paradigm. The first is the notion of marginal returns and secondly, the invisible hand:

Neoclassical economic theory, which has dominated in the West for a century, holds that each individual’s compensation reflects his marginal social contribution...But Borlaug [inventor of the Green Revolution] and our bankers refute that theory. If neoclassical theory were correct, Borlaug would have been among the wealthiest men in the world, while our bankers would have been lining up at soup kitchens” (Stiglitz, 2009)

—and—

The first lesson is that markets are not self-correcting. Indeed, without adequate regulation, they are prone to excess. In 2009, we again saw why Adam Smith's invisible hand often appeared invisible: it is not there. The bankers' pursuit of self-interest (greed) did not lead to the well-being of society; it did not even serve their shareholders and bondholders well. It certainly did not serve homeowners who are losing their homes, workers who have lost their jobs, retirees who have seen their retirement funds vanish, or taxpayers who paid hundreds of billions of dollars to bail out the banks. (Stiglitz, 2009)

What all these counter-hegemonic ideologies have in common is the belief that the free-market, capitalist system is not perfect and that it is inherently and internally prone to crisis that, if the market is left to its own devices, the economy would likely implode akin to what occurred in the Great Depression. As Minsky writes:

Instability is due to the internal processes of our type of economy. The dynamics of a capitalist economy which has complex, sophisticated, and evolving financial structures leads to the development of conditions conducive to incoherence...But incoherence need not be fully realized because institutions and policy can contain the thrust to instability. We can, so to speak, stabilize instability (10).

This is a radical break, because it essentially proves that Marx was right in regards to the inherent tendency within capitalism to contradict itself and lead to repetitive and successively worse crises as the contradictions amplify themselves—overaccumulation/underconsumption, which is a mirror of Keynes argument of the crisis of savings/investment caused by a lack of aggregate demand. However, unlike the marxists, they believe that capitalism can be successfully regulated and lead to a essentially crisis-free system, if only one can properly regulate it. What is needed is a ‘visible hand’ to create incentive structures to channel homo economicus to socially optimal outcomes and maintain a relatively crisis free capitalism, and to regulate away the ‘casino’ aspects of finance capitalism in particular. The question is, is this actually possible within a capitalist state?

On Hayek, Part I

2009-12-28T11:40:00.002-05:00

Fredrich von Hayek warned us that any government intervention in the economy will lead to a ‘Road to Serfdom’. However, as history has shown us, government interviention in the economy does not inevitably lead to totalitarianism. For example, Sweden has one the biggest state-sectors in the world and still retains an ultra-liberal society. In addition, socially-just government internvention in the economy does not reduce economic efficency; as Jeffery Sachs puts it: “Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness“. Historically speaking, the opposite is true; protecting capital from the masses, more often than not, leads to totalitarianism and authoritarianism and economic stagnation—Nazi Germany, Fascist Italy, Bureaucratic Authoritarianism in Latin America, etc. What is more disturbing is that Hayek himself was part and parcel, an ‘organic intellectual’, of one of the most repressive authoritarian regimes of the 20th century: Pinochet’s Chile. In order to understand this paradox, we have to understand what Hayek meant by ‘freedom’ and ‘liberty’.

To Hayek the market system is freedom, and any interuption in that system is totalitarian. However, Hayek goes further by arguing that only in the market system can reason emerge, as Frank Cunningham points out:

Yet another argument connecting catallaxy and neoliberalism proceeds by an historical, evolutionary argument of Hayek’s that links market competition and rationality. On the story he sketches, the few people who are skillful at taking appropriate means to achieve their given ends (that is, skilful at rational thought) will make gains in competition thus obliging others to ‘emulate them in order to prevail’ so that ‘rational methods will progressively be developed and spread by imitation’: it is not ‘rationality which is required to make competition work, but competition....which will produce rational behaviour.

Of course, this ignores that what counts as ‘success’ is determined by the hegemonic ideology and values embedded in the system; ergo, what Hayek is essentially saying is that ‘profit’ is reason, as if 'profit' is the only definition of reason. However, as we have seen with the current crisis, at the micro-level, profitability and the herd-mentality of the markets leads to a risky game where one can lose it all and indeed, banks would have lost it all, if it wasn’t for the public baling them out; and secondly, it leads to irrational macro-economic and social crises that undermine the future expansion of “rationality”/profit, contradicting Hayek’s thesis--Keynes and Marx's critique of neoclassical economics over-emphasis on the micro-level. Nevertheless, to Hayek, any intrusion on the market system, as defined by microeconomics, is an attempt to stop human reason from flourishing.

In addition, democracy is not—to Hayek or neoliberals—an inherently positive thing; it exists in order for the machinery of government to change hands peacefully and to prevent any one government from turning into an authoritarian government by subjecting them to popular referendums. In addition, Hayek is also a strong constitutionalist, arguing that the constitution is essential to preventing a authoritarian regime from emerging and also, as a check against the ‘tyranny of the majority’—problematically for this line of argumentation is that the inverse is also true; those who draft the constitution, since it does not come from God, impose a tyranny of the minorty on the majority.

The fundamental fear that all liberals share is that democracy has the potential to create a subjectivity that seeks greater and greater democraticization of life and equalization of power. Democracy, deprived of its liberal baggage within a class divided society was unacceptable for capital and liberals, as C.B. Macpherson writes: “Democracy originally meant rule by the common people, the plebians. It was very much a class affair: it meant the sway of the lowest and largest class” (The Real World of Democracy 5). What they, liberals, want to prevent, at the very least, is a ‘radical demoracy’, as elucidated by Mouffe and Laclau, who argue that “the moment when the democratic discourse becomes available to articulate the different forms of resistence to subordination that the conditions will exist to make possible the struggle against different tpes of inequality” (Hegemony and Socialist Strategy, 154). Therefore, what must be created first place is the liberal state, then democratization. As Macpherson argues, “In our Western societies the democratic franchaise was not installed until after the liberal society and the liberal state were firmly established. Democracy came as a top dressing...It was the liberal state that was democratized, and in the process, democracy was liberalized” (Real World of Democracy 5).

Hayek sought a means to protect liberalism from the encroachment of democratic subjectivity that was certainty in the ascendency during most of the twentieth century. The logic for equalization, via democratic subjectivity, was simple; as pointed out by de Tocqueville, “It is impossible to believe that equality will not finally penetrate as much into the political world as into other domains. It is not possible to conceive of men as eternally unequal among themselves on one point, and equal on others; at a certain moment, hey will come to be equal on all points”. As the twentieth century lagged on, new and increasginly more complex demands were being exacted on the state from the popular classes that had, in Gramscian terms, had become an ‘integral state’—welfare state—that increasingly took on the responsibilities for correcting social and economic ills.

However, within a capitalist system, capital cannot create what Gramsci calls an ‘expansive hegemony’, where the hegemonic bloc is able to articulate and represent the interests of all into a “genuine ‘national-popular will’ ” (Mouffe); it relies on a ‘passive revolution’, or ‘transformism’ of demands into the system, which Mouffe describes as. “...a bastard form of hegemony and the consensus obtained with these methods was merely a ‘passive consensus’. In fact, the process whereby power was taken was termed a ‘passive revolution’ by Gramsci, since the masses were integrated through a system of absorption and neutralization of their interests in such a way as to prevent them from opposing those of the hegemonic class” (Mouffe).

By mid-century, especially the 1960s and 1970s, demands were beginig to surpass the ability of the state to ‘transform’, or institutionalize demands, because they were beginning to radically challenge the class and ideological hegemony of the system, by taking the ‘democratic revolution’ seriously. As David Harvey argues,

Discontent was widespread and the conjoining of labour and urban social movements throughout much of the advanced capitalist world appeared to point towards the emergence of a socialist alternative to the social compromise between capital and l abour that had grounded capital accumulation so successfully in the post-war period. Communist and socialist parties were gaining ground, if not taking power, across much of Europe and even in the United States popular forces were agitating for widespread reforms and state interventions. There was, in this, a clear political threat to economic elites and ruling classes everywhere, both in the advanced capitalist countries (such as Italy, France, Spain, and Portugal) and in many developing countries (such as Chile, Mexico, and Argentina). In Sweden, for example, what was known as the Rehn–Meidner plan literally offered to gradually buy out the owners’ share in their own businesses and turn the country into a worker/share-owner democracy. But, beyond this, the economic threat to the position of ruling elites and classes was now becoming palpable...The upper classes had to move decisively if they were to protect themselves from political and economic annihilation.

To be continued...

On climate change, Part II

2009-12-20T15:43:00.000-05:00

Climate change, however, is not the godsend that the left may think it is. There are three major issues that the left must face if it is to continue on its climate change crusade: first, the science is still being contested by some scientists—legitimately or not—, which enables capital and its organic intellectuals to articulate climate change as a plot of the left or, at best, as mistaken science; the second concerns the more intellectually honest right’s ability to accept climate science as it is, but articulate that the answer is more capitalism, not less; the last issue is the question of global development and the inherent injustice of allowing the developed world to pollute indiscriminately during its phase of industrialization, while forcing currently developing countries to curb their output or potential output during their phases of industrialization, essentially paying for the sins of the West. Therefore, climate change is also being articulated in the Global South as the West’s rouse to undermine development in the South.

The question of whether or not warming has been occurring in accordance with human action should be questioned, as all science should be; however, at a certain point, a scientific judgment must be rendered hegemonic in order to do something. The theory of climate change has become hegemonic—like Darwinian evolution—and now we must take this premise and work with it; certainly this does not discount that all science cannot be turned on its head, a la Kuhn. However, unlike the social sciences, where one can clearly make the case that all is contestable and self-evidently ideological, with the natural sciences the case is much harder to make, since the units of analysis are empirical and can be tested and measured again and again with consistency in outcome.

Nevertheless, the contestability of climate science is causing serious political problems, particularly in the United States. A perfect example of this is Pat Buchanan on Chris Matthew’s, Hardball:

  http://www.youtube.com/watch?v=rZfdMU5RwvM&feature=PlayList&p=4C25C7E01854E45A&index=20

Pat’s discourse is the type of discourse that we, on the left, should be the most worried about. It represents the height of the destructive logic of selfishness and individualism, which leads humanity to damnation under capitalist subjectivity; indeed, all of the negatives associated with capitalist subjectivity and history are embedded in his arguments, the type of ‘human nature’ that Cohen has given up fighting. For example, he doesn’t want money to go to Third-World countries, and with Buchanan you know race is involved, and believes that every country should look out for itself. Like microeconomists, they don’t understand that the environment does not end at borders and that what make sense at the ‘micro’ level, is counter-balanced at the macro-level. A perfect example is Matthew’s argument about the deforestation of Brazil’s rainforest. The discourse is good enough to quote:  

Matthews: Do you challenge that it’s better not to have them [the rainforests] raped and torn down, do you want everything developed?  

Buchanan: No I don’t, I would tell Brazil stop burning down the rainforest, I wouldn’t have to bribe them.

Let us stop there for a moment, Buchanan, the arch-capitalist, is appealing to non-capitalist methods of motivation. To a capitalist, only market incentives work to incentivize people to do something, thus, is Buchanan no longer a conservative-capitalist ideologue, by appealing to higher moral sentiments, therefore, ideology? Therefore, denying the validity of instrumentalist/rational choice perspective of politics that the right depends on? Buchanan forgets that the rainforests are being burnt down for profit—or, reason in instrumentalist political science terms; thus, is profit, ergo, capitalist instrumentalism bad in some circumstances? If profit is bad in some circumstances based on an “unknowable” notion of public good, a la Hayek, then what is left of the right? Interestingly, he claims that he doesn’t want to “bribe” them to change their behaviour —it is important to note that ‘bribe’ is, ironically, the market mechanisms of buying parts of the rainforest to compensate developing countries for the opportunity cost of not developing their rich natural resources, which are being proposed by the negotiations at Copenhagen. One wonders, what is the alternative in Buchanan’s world? Non-market mechanisms of ‘coercion’, as liberals like to call it, i.e. regulation in favour of the public good over individual good? Moving on:  

Matthews: Well suppose they [Brazil] won’t do it.  

Buchanan: Well if they don’t do it, they’re responsible for it.

Matthews: ...are we on this planet together, or is it every man for himself?   

Buchanan: It is every country for itself.

Matthews: It is!?!

Buchanan: It sure is.

The same illogic pervades in microeconomics, an overly simplistic abstract world-view looking at what is in the interest of the individual firm, or in this case, a country and somehow the ‘invisible hand’ will make sure that this will translate into a public good. That for some reason what happens outside the firm, or the country, won’t affect the firm or country; therefore, denying the very existence of society. Indeed, we should not forget Thatcher’s infamous, “there is no such things as society, only individual men and women”. The very notion of the social is totally obfuscated and the separation of economics from society, or in this case country A’s climate from the global climate, is part of liberalism’s never ending reification of knowledge. This act that renders us defenseless and increasingly in danger of collective suicide masked as individual prosperity. However, we know it doesn’t happen that way and this has always been a fundamental critique of the left.

As Henry Veltmeyer states: “non-dialectical, non-Marxist [liberal] thinking is unable to grasp reality in its vigorous dimensions as a totality. It tends to decompose reality into various parts and fragments, reifying them as if they had an independent existence—the economy, politics, society, culture—each viewed from a distinct angle, with its own domain and intellectual apparatus...abstract in form without substance (513). This is best summarized by Slavoj Zizek, as usual. He argues:

...if one wants to establish civil peace and tolerance [under a liberal hegemonic order], the first condition is to get rid of "moral temptation": politics should be thoroughly purged of moral ideals and rendered "realistic," taking people as they are, counting on their true nature, not on moral exhortations. Market is here exemplary: human nature is egotistic, there is no way to change it - what is needed is a mechanism that would make private vices work for common good (the "Cunning of Reason"). One should follow this line to its conclusion: a fully self-conscious liberal should intentionally limit his altruistic readiness to sacrifice his own good for the others' Good, aware that the most efficient way to act for the common good is to follow one's private egotism. The inevitable obverse of the Cunning of Reason motto "private vices, common good" is: "private goodness, common disaster. (The Market Mechanism for the Race of Devils)

Elecciones en Chile, 2009. ¿Que Paso?

2009-12-14T12:56:00.004-05:00

On the streets of Santiago, supporters of the arch-neoliberal candidacy of multi-billionaire Sebastián Piñera were celebrating the electoral victory of the right wing coalition against the once hegemonic ‘left-wing’ Concertación party. The Concertación, a left-wing coalition of Socialists and Christian Democrats, ruled Chile, uninterruptedly, since the return to democracy in 1989. They fielded former President Eduardo Frei (1993-1999), who left office with an approval rating of only 28 percent—imagine fielding George W. Bush for the presidency again and you get a feeling of how ‘unwise’ the decision was.

Unsurprisingly, the Concertación was only able to receive a mere 29.6 percent of the vote, largely in line with Frei’s popularity back in 1999. The Concertación was unable to get the message that voters wanted ‘real change’ and it nominated a former President who instituted much of the neoliberal reforms that Chilenos today are itching against. However, many commentators are making egregious mistakes in deciphering what is happening in Chile. They assume that the defeat of the Concertación is a defeat of the left and the ascendency of the right in Chile; if one were to actually look at the results the opposite is true.

To some commentators, Piñera’s ‘victory’ proves that the change Chilenos want is more neoliberalism, more of the same policies that have engendered the same pessimism and hopelessness that millions of Chilenos voted against. If one were to take the time to look back at the trends electorally we can see that the right-wing parties in this round actually got a smaller share of the vote than previous elections, post-1989:

RN+UDI, as a percentage of the total vote

1989: 44.83
1993: 40.84
1999 (1): 47.51
2000: 48.69
2006 (1): 48.64
2006: 46.50
2009 (1): 44.05

One can clearly see that for all the hype, the right in Chile has actually lost a lot of ground and has been reduced to generally the same constituency that it had in 1989; thus, it also obvious that the left in Chile has increased in strength, but not in cohesiveness. Chilenos do not want to have a more neoliberal government, what Chilenos want is another alternative. The Concertación is unable to offer that alternative, because it was the same party that legitimized and institutionalized neoliberalism structurally and democratically; however, it would be unfair to state that the Concertación was not forced to enact these policies, since Pinochet and Pinochetismo were potent forces politically after 1989. The Partido Communista, with the baggage of the Allende era, also is unable to offer a viable alternative, that being said, the party has increased its voting share from 5.4 percent in the 2006 election to 6.21 percent in 2009.

Enter Marco Enríquez-Ominami, popularly known as MEO. He protrudes an Obama/Clintonesqe style and offers not only a more progressive economic platform, but also a socially progressive platform as well. He was part of the Socialist Party wing within the Concertación party, but left the party raising objections to the candidacy of Frei. MEO did not have a clear platform, nor did he have an actual party organization behind him, but he was arguing for a new Chile, who has claimed to have sympathies to Chavez. I do not believe that MEO offered anything of real substance other than to become an ‘empty signifier’ for a nascent populist movement seeking change that no other party was able to give.

It is obvious that the Chilean ‘third way’, neoliberal state is reaching its limits of co-optation and demands are beginning to go beyond what the neoliberal ideology and state is able to concede. The second round will determine whether or not Piñera can articulate his vision of Chile as one of ‘change’, I do not think he will succeed, because the trend is to the left.

On climate change, Part I

2009-12-07T11:32:00.002-05:00

Climate change has become the rallying point for the left in the aftermath of the ‘end of history’ in 1989. Apparently, it seems, humans aren’t good agents to overthrow capitalism and save society from the ever-encroaching tyranny that is ‘privatization’, as defended by liberals. This defeatism is best manifested by J.A. Cohen in his work, If you’re an Egalitarian, how come you’re so Rich?:

I remain skeptical of the human-nature premise of the selfishness defense of inequality, for something like the old reasons. But I am no longer so skeptical of the sociological premise...if people are by now irreversibly selfish (not by nature but) as a result of capitalist history, then, so I now think, structure alone could not suffice to deliver equality, in the face of selfishness. Even on reasonably sunny views about the limits of human nature itself, capitalist history would have thrown us into a cul-de-sac from which we could not exit and regain the road to socialism. (119-120).

The aforementioned quote is truly a concession to Fukuyama’s ‘the end of history’, and I think that most people of the ‘left’ agree with Cohen. Since the left has given up fighting this ‘human nature’ element of liberal-capitalism—even if it admitted as a sociological construction of capitalism—, it has thus conceded defeat to the forces of reaction and regression. The best that we can do is admit defeat, via Giddens ‘Third Way’ liberal-democracy, which seeks to ameliorate capitalist exploitation of Polanyi’s ‘fictitious commodities’—land, labour, and capital—, by exporting the worst elements of capitalism to the Third World and living in our debt-fueled, post-modern, ‘creative economy’. Since human beings cannot be the agents of change, a new agent of change is needed, one whose internal mechanisms can be predicted and act as a deus ex machina to save us from ourselves—no longer is the social-system that is capitalism the enemy, but rather our own inferior ‘human nature’. However, to admit such a fundamental and definitional defeat is not manageable by the left, because it would render the left irrelevant; the left needs a “fetish” in order for it to live with its apparent defeat: enter the environment.

The logic is as follows: the environment is a non-negotiable element in our collective space that has its own laws of regulation that transcend human manipulation and articulation, viz., that cannot be hegemonized. However, due to man’s uncontrolled exploitation of the Earth’s resources, primarily fossil fuels, the self-correcting mechanisms of the planet are no longer functioning properly and leading us towards the apocalypse. One of the effects, that affect every human regardless of class position, is climate change. Climate change, as agreed by most scientists, is a result of human action, linked to the industrial revolution; however, what is obfuscated is that this is fueled by the unending accumulation of capital in private hands as its motivation. Thus, climate change is like a semi-religious condemnation of capitalism from the abstract planet. Therefore, we must either conform to nature, or suffer the consequences of its wrath. What we are unwiling to do is actually conform, we are trying everything in our power to prevent the dirty truth of capitalism from exposing itself, with greater and greater unpaid debts, a la Wallerstein, accumulating in the future.

For the left this is the perfect agent of change, it has all the power of God and cannot be re-articulated. Nature, not man, has become the Jacobian agent of unrelenting, blind terror that delivers justice on a massive scale with no sense of hesitation. Of course, we all know that this is scientifically true and we, as a species, rich or poor, deserve this wrath. Why? Because we, as a species, have alternatives to this system that could help stop things from getting worse. First, the left has to fight the fundamental battle, which Cohen has given up, that human nature is not set in stone, but rather is a result of hegemonic articulation and was and can be changed. If we accept the liberal/neoclassical notion of human nature, of homo economicus, then the capitalist ‘free market’ is the only way that we can organize society and that means ‘the end of history’, literally. Secondly, assuming we have transcended capitalist subjectivity, we could democratically organize our societies in such a way to live within our means and socialize the means of production to take away the incentives that exist to ‘cheat’. Thirdly, we could strive for a more cosmopolitan world, something that can only be realized under socialism, rearticulating our sense of identity from our ‘nations’ to humanity in general, thereby allowing for a global distribution of resources.

I am not foolish enough to think that this is possible within the time frame given to us by an increasing number of climatologists, before we are essentially doomed. The recent climate change conference in Copenhagen will not result in substantive change, because real change means a post-capitalist society and those who are negotiating at the conference tables cannot even imagine such a reality. As Zizek once wrote, paraphrasing, ‘it is easier to imagine the end of the world, than the end of capitalism’. The movie 2012, which I saw in theaters here in Uruguay, is a perfect testament to that axiom. The main characters looked at who was being allowed on the ‘arcs’, the rich who paid $1 billion for a "ticket", and knew that those who merited survival—like the Indian scientist who discovered the tectonic shifts in the first place—were left to die. The interesting thing about this is that the main characters knew it was wrong, yet did nothing and worse, could not even articulate what was going on: capitalism. As Marx wrote about ideology, “they do not know it, but they are doing it”.

Michael Moore's 'Capitalism: A Love Story', Review-Part II

2009-11-15T17:30:00.000-05:00

Ironically, the argument that the government could not do anything was proven time again by Republican mismanagement of the economy, the budget, national emergencies, etc. Indeed, it was to be expected, if you believe that government cannot do things right and you are in charge of government the result will be bad government. Thus, in their quest to reduce the size of government, the right and eventually the left increasingly privatized more and more of governments responsibilities leading to perverse incentives and bad outcomes; something that Moore showed effectively with the ‘PA Child Care’ example. Arguably, the Republican’s purposefully engaged in mass deficit spending so that the next government would have to cut spending, ergo, cut off the remaining remnants of the ‘New Deal’, which would then have the effect of further lowering taxes on the rich. The greatest effort was Bush’s effort to privatize social security, FDR’s greatest achievement, so that Wall St. could get trillions of dollars of new money to move around, unproductively. Since raising taxes in the United States was increasingly not an option for Republicans or Democrats, the only option--politically--was to cut spending. Herein lies the another defeat of the left in the United States. It occurred when the left, via Bill Clinton’s triangulation, accepted the meaning of the ‘government’ as defined by the right; as Slavoj Žižek argues: “The true victory...occurs when the enemy talks your language. In this sense, a true victory is a victory in defeat: it occurs when one's specific message is accepted as a universal ground, even by the enemy” (Žižek 2007).

This is where Moore’s movie really makes a difference, it finally puts ‘capitalism’ into contention in the American political arena. This is crucially important, because it creates the conditions for real change. The right created those conditions in the 1970s and 1980s by making the term ‘government’ contentious, or what Ernesto Laclau calls a ‘floating signifier’; meaning that the content of the term is contested between different antagonistic camps in a hegemonic battle that structures the political. Throughout the movie Moore parodies and attacks the very idea that capitalism is a benevolent system that it is still somehow presented as being the same system, as imagined by Adam Smith of small firms that cannot influence prices, sentiments and are constrained by competition--premises effectively destroyed by Marx, Veblen, Sraffa, Harvey, Nitzan, etc. Moore then makes the case that capitalism proper is a system in which greed, avarice and anti-social behaviour ‘cannot be regulated’, because capitalism is what nurtures those sentiments in teh first place--it ‘retroactively’ creates its own presuppositions.

However, the weakness in Moore’s movie is that he is actually not asking for the destruction of the capitalist system, while at the same time seeking to destroy it--it reminds one of the eternal crisis of Social Democrats during the interwar period. In reality, Moore’s message is reformist, Moore wants to bring about a social democracy in the United States. Indeed, Moore used FDR’s rousing speech on the ‘Second Bill of Rights’, where FDR emphasized the importance of having positive rights along with negative rights, using FDR’s speech as a rallying point of his movement. FDR was a reformer that greatly improved the lives of millions of Americans, but he was still a capitalist--meaning he supported the essential social system of exploitation based on private property and private appropriation of the social surplus; the market system, as the superior means by which one allocates resources; and the existence of inequality and exploitation and domination of labour by the bourgeois, albeit certainly not to the same morally unacceptable extent that currently exists. Moore points to Italy, Germany and Japan’s constitutions where elements of FDR’s ideas were incorporated and uses them as examples of how society should look like, but they are still capitalist states themselves.

The thrust of Moore’s movie is, in reality, an argument against neoliberalism, against the concentration of society’s productive assets into fewer and fewer hands through the process of what David Harvey calls ‘accumulation by dispossession’ and ‘spatio-temporal fixes’--best exemplified by Flint, Michigan. In addition, it is an argument against the justificatory discourse of neoliberalism that ‘greed is good’, there is no ‘we’ just ‘I’, and that profit motive--code for bourgeois income--is the be-all-end-all of our socio-economic existence; indeed, the best parody in the movie was Moore using Jesus Christ as a hack for the profit motive. Neoliberalism enabled this to occur by eroding the regulations, particularly financial regulations, and the social compact that enabled the stabilization of capitalism during the ‘golden era’. Moore’s compelling case is that capitalists depended on the exploitation of labour, land and capital in a certain place at a certain time to become rich and once that particular social arraignment no longer serves their interests they destroy that very socio-economic infrastructure, leaving those who created that wealth with nothing but misery, unemployment, debt and eventually abject poverty. Thus, what Moore is pointing to is that there is a unpaid ‘social debt’ that if left unpaid, could create a serious backlash against the system. Something even Citibank in its ‘plutonomy’ article noted: 

Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was – one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation (on the rich or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous laborers, in a push-back on globalization – either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments (10).

Implicit in this quote, one can sense an agitation and apprehension with “political enfranchisement”, a recognition of the incommensurability between democracy and neoliberalism. This does not bode well for the future of our democracy if the rich are unwilling to compromise as social antagonism will certainly increase and both sides of this social antagonism may harden their absolutist positions. Not only that, the advances made by the American working class during the New Deal era have eroded as inequality has gone back up to pre-depression levels through the gradual erosion of the welfare state. The left has failed because it has accepted the socially-constructed pressures of globalization as truth--the ‘Third Way’--, as inevitable conditions of capitalism. Materially, the destruction of the union movement through deindustrialization and regressive tax policies have eroded the institutional means that labour was able to defend its interests against capital.

However, Moore at the same time raises the important question about capitalism proper. The real question embedded in Moore’s polemic is, can this socio-economic crisis be avoided within capitalism? Certainly, the immutable laws of capitalism, accumulation, lead it endemic crises of overaccumulation and underconsumption. Thus, the economic part of the socio-economic equation leaves me with no doubt that, no we cannot avoid crisis within capitalism. However, that alone is not enough to create the sort of systemic crisis that could undermine capitalism as a system. A truly revolutionary and/or hegemonic moment occurs when capitalism is unable to absorb, or ‘transform’ demands within the political system. A well functioning liberal-democratic state was able to ward off the crisis of the Great Depression, because it was able to absorb the demands stemming form the population before those demands manifested into something entirely different. This is Gramscian notion of ‘transformism’ is termed as ‘democratic demands’ by Laclau. What Moore is advocating is for this sort of welfarist, liberal-democracy that can deal with particular demands within a capitalist system, with the added element of worker-democracy. Thus, Moore is ironically trying to save capital from it own avarice and greed and if capital had any vested interest in its long-term existence, it should listen to Moore instead of dismissing him.

If we want to be truly anti-capitalist, then we have to stop believing in it:

While capitalism is resolutely "materialistic" (what ultimately matters is wealth, real power, pleasures, all other things are just "noble lies," chimerae covering up this hard truth), this cynical wisdom itself has to rely on a vast network of belief: the whole capitalist system functions only insofar as one plays the game and "believes" in money, takes it seriously, and practices a fundamental trust in others who are also supposed to participate in the game. Capital markets, now valued at an estimated $83 trillion, exist within a system based purely on self-interest, in which herd behavior, often based on rumors, can inflate or destroy the value of companies —or whole economies —in a matter of hours. (Zizek 303)

Comrade Glenn Beck...well, in another dimension sure

2009-11-12T17:34:00.004-05:00

Glenn Beck, the latest media superstar in the United States, represents to liberals a racist, jingoist, parochial, sexist and ignorant person. He—along with his female counterpart, Sarah Palin—have become the personification, a caricature of everything wrong with the right-wing and American politics in general. Glenn’s rants against Obama as a ‘socialist’, ‘Nazi’, ‘fascist’, ‘racist’, etc., sound like the ramblings of a mad-man more than anything, appealing to the very bottom fringes of the American body politic. Beck freely admits that he is a clown, a self-taught man, who merely seeks to ask questions against ‘power’. However, I would not be surprised if given another set of historical circumstances, Glenn Beck would have been a communist, the same type of person he so derides.

First, before we delve into that, what is Beck actually trying to say? The criticism that Beck elucidates is anger against a lost, puritan notion of America, a righteous America that has been taken away from ‘real Americans’—WASPS—and given to undeserving poor, minority, illegal immigrant others. Beck, by necessity, has an essentialist—meaning non-debatable—notion of what America is, and who is a ‘real American’. This is why Beck is a conservative, because he sees the fundamental antagonism in society as an external one. This antagonism comes from outside the totality of what he considers ‘America’, these individuals and ideas are ‘invaders’ into America, seeking to weaken it, these include: blacks; Latinos; homosexuals; feminists; and liberals, generally whites who he considers to be traitors and no longer American. This is not unlike the vision of the Jews in Germany, who were legally German, but simultaneously not ‘German’, or the socialists/communists in Nazi Germany. Thus, when Beck and the 9.12 protesters call Obama a ‘fascist’, a ‘Nazi’, etc., it is clearly a case of projection.

Ironically, in order to prove his point, Beck used television commercials from the 1950s-1970s to remind Americans of a simpler time; importantly, it is what he obfuscated from that ‘simpler time’ that is telling, that was the heavy state and union involvement in the economy and the hegemony of FDR’s liberalist-modernist project rejecting the very thin critiques that Beck uses against the state and Obama. Indeed, it was a simpler time because the state was more wiling to manage and regulate capital in such a way to alleviate the boom and bust cycle of capitalism that we have gotten used to in the post-Reagan era and to redistribute income in a way that enabled a positive feed-back loop of increasing consumption coupled with increased real incomes for all sectors. Yet, it is Obama who is threatening to undermine the capitalist economy by trying to rebalance the economy. Capital itself is victim in all this according to the corporate apologist Beck who ignores capital’s own dynamics of under-consumption and speculative excess under the guise of the ‘free market’; what is also obfuscated is Bush’s creation of large, unpaid wars in Iraq and Afghanistan, Medicaid expansion and his regressive multi-trillion dollar tax-cuts that are being paid for with debt. Beck goes further and suggests that Obama is also trying to undermine the Constitution—how exactly, no one knows—, even though Bush did more than any president in history to do that, i.e. the Patriot Act, domestic wiretapping/surveillance of ordinary people, torture, etc.

Beck, taking a cue from Ron Paul—le nuveau Goldwater—blames the government for all the ills that America faces today, from economic depression to social and moral decay. The free market, competition, the ‘American Way’ has not been tried since Reagan and that is why the United States is a proverbial ship without a sail, it has lost its moral compass and is adrift in the sea of Marxist-relativism. American democracy, as it currently exists, is a sham, because ACORN, Marxists, certain un-liked corporations have captured it; the real loser here are the ‘real Americans’ and the tradition of the ‘founders’.

The solution? More capitalism, not less; more exclusion, not less; more war, not less. We have to go back to the ideals expressed in the ‘Constitution’, assuming that the content of the constitution is fixed and is not itself a ‘floating signifier’. However, like in Eastern Europe, who is facing its own disillusionment with capitalism—as per my previous post—the right’s critique is totally misguided. As Zizek argues in an article for the New York Times on the 20th anniversary of the fall of the Berlin Wall:

The new anti-Communism provides a simple answer to the question: “If capitalism is really so much better than Socialism, why are our lives still miserable?” It is because, many believe, we are not really in capitalism: we do not yet have true democracy but only its deceiving mask, the same dark forces still pull the threads of power, a narrow sect of former Communists disguised as new owners and managers — nothing’s really changed so we need another purge, the revolution has to be repeated ... What these belated anti Communists fail to realize is that the image they provide of their society comes uncannily close to the most abused traditional leftist image of capitalism: a society in which formal democracy merely conceals the reign of a wealthy minority. In other words, the newly born anti-Communists don’t get that what they are denouncing as perverted pseudo-capitalism simply is capitalism.

This is why I say Beck, at a different historical moment, could have actually been a communist. The critique that Beck offers, stripped of all its reactionary nonsense, is essentially a critique of capitalism itself and the façade of liberal-democracy in its neoliberal, ‘consensual’ frame of the post-political Presidency of Barack Obama—Obama is NOT a leftist. The problem is that discourse in the Untied States, in large part due to the surrender of the left during the Cold War to the universal language of the right, viz., socialism is evil, and in much of the world today, rejects the left alternative a priori. The result is Glenn Beck and the 9.12 movement, the Fox News network and Paulista’s, many of whom are actually from the left.

The importance of Beck can be summarized in thie quote from Zizek’s book, In Defence of Lost Causes: “What the new populist Right and the Left share is just one thing; the awareness that politics proper is still alive”. The problem is, there is no more left—although, that is not an inevitable condition, it can be reversed—, thus, the solution is either right-wing proto-fascism or what we have now, consensual politics of ever-encroaching corporate power and domination.

On Capitalism's impossibility....

2009-11-07T15:37:00.000-05:00

Slavoj Zizek is a very important influence on my thinking and academic work, because he takes it step further, viz., by not compromising with liberal-democracy, than most critical theorists are wiling to go today. One of his ingenious insights is on how capitalism's own impossibility and inherent contradiction, its own lack of totality is, simultaneously, it's structuring condition. The following passage is a quote from his book and will certainly influence my academic work: 

Recall the classical Marxist account of the overcoming of capitalism: capitalism unleashed the breathtaking dynamics of self-enhancing productivity—in capitalism, "all that is solid melts into air," capitalism is the greatest revolutionizer in the history of humanity; on the other hand, this capitalist dynamic is propelled by its own inner obstacle or antagonism—the ultimate limit of capitalism (of capitalist self-propelling productivity) is Capital itself, that is, capitalism's incessant development and revolutionizing of its own material conditions, the mad dance of its unconditional spiral of productivity, is ultimately nothing but a desperate fuite en avant to escape its own debilitating inherent contradictions . . . Marx's fundamental mistake was here to conclude, from these insights, that a new, higher social order (communism) was possible, an order that would not only maintain, but even raise to a higher degree and fully release the potential of the upward spiral of productivity without it being thwarted by socially destructive economic crises. In short, what Marx overlooked is that, to put it in standard Derridean terms, this inherent obstacle/antagonism as the "condition of impossibility" of the full deployment of the productive forces is simultaneously its "condition of possibility": if we abolish the obstacle, the inherent contradiction of capitalism, we do not get the fully unleashed drive finally freed from its shackles, but rather we lose precisely this very productivity that seemed to be simultaneously generated and stifled by capitalism, for it simply dissipates . . . And it is as if this logic of the "obstacle as a positive condition" which underlay the failure of socialist attempts to overcome capitalism, is now returning with a vengeance in capitalism itself: capitalism can fully thrive not in the unencumbered reign of the market, but only when an obstacle (from minimal welfare-state intervention, up to and including the direct political rule of the Communist Party, as in the case of China) constrains its unimpeded rampage (190).

1989: Twenty-years on, history thrives!

2009-11-04T21:01:00.002-05:00

A recent poll done by Pew Research on the attitudes of Eastern Europeans after two decades of liberal-capitalist reforms suggests that the shine is off the market-utopia. Indeed, the poll goes much further than I even expected; in it most E.Europeans actually expressed their belief that their economic situation was better under bureaucratic-socialism than under neoliberal capitalism. This flies in the face of all conventional--ideological--wisdom that is propagated here in the West about the inherent superiority of our system. Here is the actual quote:  

Majorities or pluralities in six of the eight Eastern European countries surveyed say the economic situation of most people in their country is worse today than it was under communism. Hungarians offer the most negative assessments – 72% say most in their country are worse off today. Majorities in Bulgaria and Ukraine share that view (62% each), as do about half of Lithuanians and Slovaks (48% each) and 45% of Russians. (40)

This is actually very telling considering that all these countries, with the exception of the Ukraine, have far surpassed their 1988-89 per capita peak. Therefore, this suggests that the problem with the capitalist economies is that the gains of that growth have not trickled down, but upwards. This puts into question the very importance of economic growth without equity, indeed, what is the purpose of growth if the people do not benefit. This measure is a very large indictment against the capitalist system, because the persons are saying that they are actually worse off.

Although, to be fair, the condemnation of the capitalist system is not equal, as the burdens do not fall equally within the capitalist system. There are differences among the generations and sexes. According to the poll:  

As is the case with opinions about the move from a state-controlled economy to a market economy, women, those who did not attend college and those who are 65 or older are generally more negative in their assessments of whether most people in their country are better off or worse off today than they were under communism. The views of those in urban or rural areas vary slightly, if at all. (Ibid)

The part about women is instructive, women in the socialist bloc were certainly more free than women in the capitalist West. The socialist states facing severe labour shortages needed women to participate and the state created institutions that allowed women to become ‘breadwinners’, with child-care being largely done by the state, free of charge. Never-mind the large state funded youth-organizations that further enabled women to pursue careers and have more free-time, a luxury that most women in the West do not have. The importance of these organizations were so important that even the East German currency highlighted the importance of family and the state’s provision of child-care as a defining characteristic of its system (http://www.banknotes.com/ddr32.htm)

As the ‘wall fell’ in 1989, those institutions were privatized or simply eliminated. Women did not simultaneously lose their responsibilities as ‘breadwinners’, instead they now had to juggle family and work like their counterparts in the West. The Pew poll goes on to note about the gender gap:  

As was the case in 1991, women are generally less enthusiastic about the move from a state-controlled to a market economy. For example, 52% of Hungarian men approve and 38% disapprove of the economic changes that have taken place in their country since 1989. Hungarian women express more negative views – 41% approve and 45% disapprove of the changes. In Ukraine, just 30% of women approve of their country’s move to a market economy, while a majority (52%) disapproves; Ukrainian men are nearly evenly split (44% approve and 41% disapprove). In Russia, however, the gender gap on views about economic changes since the collapse of communism has evaporated. In 1991, Russian men and women were more divided than men and women in any other country surveyed – 64% of men approved of the changes, compared with 46% of women. Today, about half of men (49%) and women (50%) express positive views of Russia’s move to a market economy (38-39).

Another interesting, although not entirely surprising conclusion, is the rise of nationalism and ethno-centrism in the former socialist bloc. With the erosion of the ideal of socialist-internationalism, the ‘other’, instead of being an ally in the struggle for emancipation, became the competitor for scarce resources. What is interesting is how the Pew poll measures this. They asked Russians if ‘Russia is a naturally imperialistic nation’ in 1991 and today, the results are frightening: 

As for the Russians themselves, there has been an upsurge in nationalist sentiment since the early 1990s. A majority of Russians (54%) agree with the statement “Russia should be for Russians”; just 26% agreed with that statement in 1991. Moreover, even as they embrace free market capitalism, fully 58% of Russians agree that “it is a great misfortune that the Soviet Union no longer exists.” And nearly half (47%) say “it is natural for Russia to have an empire [up from 37 percent in 1991]”  (2)

The collapse of a viable, uncompromising left-alternative throughout the world in the last quarter of the twentieth-century saw the emergence of a reactionary, rightist discourse that re-articulated what it means to be anti-systemic: from anti-capital, for capital; and in a typically fascist twist, obfuscated and denied class by appealing to ethno-centrism. This is the esssence of the left-right distinction put forward by Zizek:  

They [the Leftist and Rightist] not only occupy different places within the political space; each of them perceives the very disposition of the political space differently--a Leftist as the field that is inherently split by some fundamental antagonism; a Rightist as the organic unity of a Community disturbed only by foreign intruders (Zizek, 113).  

Anti-establishment can be articulated in both senses, although, only one is truly anti-establishment, the left--that is not to suggest that the left will reach the positive utopian space communism, but it certainly is a progressive force fighting for more not less equality and liberty. However, appealing to the racialized other as the enemy is the time-honoured tradition of the reactionary wing of politics. This aspect of post-modern politics is not limited to the former Soviet bloc, even in the United States, the anti-'illegal immigrant’ mania of CNN’s Lou Dobbs, among others is indicative of this regressive political trend with the collapse of the left--this anti-illegal immigrant position is ironic on many levels, including, but not limited to: the pilgrims were, essentially, ‘illegal’ colonizers; the United States, like Russia, illegally colonized, dispossessed and appropriated the lands that were occupied by the now ‘illegals’. Indeed, the left should be articulating the aforementioned ironies, or founding sins of history, to get over the reactionary logic's of the right and to build bridges between peoples, viz. cosmopolitanism. This can only be accomplished by a left that is unafraid of being a left, that does not accept the terrain of the enemy, for to accept it is to lose the battle before it has even begun.

If we want a more just society, the left must not be so polite as to assume that antagonism is over and we can have, what Chantal Mouffe calls ‘consensus politics’. All politics, where I agree with Ernesto Laclau, is based on antagonism and, essentially, populism. If we want to build a cosmopolitan era, we must still have an antagonism and that antagonism must within not without, and that antagonism must be capital and all it symbolizes. As the polls from Russia show, socialist-internationalism was well entrenched in 1991; today, with the logics of liberal-nationalism, we have seen a great regression back into the abyss of reactionary subjectivities.

Michael Moore's 'Capitalism: A Love Story', Review-Part I

2009-10-28T01:34:00.000-04:00

The latest movie from Michael Moore, Capitalism: A Love Story, is an enthralling expose into the current structure of American capitalism. The movie pulls at the heart-strings of the viewers by showcasing working and middle class Americans being evicted from their homes after taking loans from predatory lenders. It shows how their loved ones, without their knowledge, have life insurance policies taken out on them by corporate America in what they call ‘dead peasant’ policies, to make millions off the death of their employees. Corporate America then leaves the families with the debt of healthcare and burial without offering any financial support from the death they profited from. The movie also, effectively, targets those individuals who exploit the foreclosure crisis, otherwise the poverty and desperation of others, as ‘vultures’--a term that the ‘vultures’ have proudly coined themselves.

It also brings to light the reactionary logic of capitalism’s 'organic intellectuals', like Stephen Moore’s--editor at The Wall Street Journal--rant against democracy as a obstacle to the true ‘freedom’ of the market. Lastly, it uncovers the elite’s self-laudatory proclamation of a ‘plutonomy’ in a leaked Citibank memo to their top-investors. The memo tells them that, due to the gross inequality of income in the ‘plutonomies’--United States, United Kingdom, Canada, Australia, New Zealand--, the problems that affect the ‘average’ worker, i.e. high oil prices, rising food costs, lower wages, etc., will not seriously undermine the economy; thus, since much of the country’s effective demand now emanates form the top 1-20%, it negates the need to structurally change the economy in a way to make the lives of millions better, so the paper argued. However, it is an assumption that has proven false in the current economic crisis. Why? Because the top 20%, and especially the top 1% depend on rentier income, basically redistribution from workers to themselves, via the debt mechanism. Since workers no longer could afford to pay back their loans, the contradictory logic of the 'plutonomy' exposed itself leading to a virtual implosion, an implosion that was stopped by another massive regressive redistribution of income, via tax-payer bailouts.

Moore goes to contrast this sad, socially regressive state of affairs to the boom-time of the ‘golden age’ of capitalism, when the gains of the ‘New Deal’ were starting to bear fruit. These fruits included the increasing standard of living for virtually everyone in the society, the emergence of the civil rights movement and the socialization of large parts of the economy for the benefit of the ‘social good’, e.g. healthcare, education, the highway system, etc. All of this was possible due in large measure, to the taxes levied on the rich--the marginal income tax rate in the 1950s was ninety percent--to pay for the necessary social infrastructures like schools, hospitals, highways that engender greater economic growth through greater productivity and innovation, while at the same time retaining effective demand among the mass of the population creating a virtuous cycle of economic growth. It was also possible due to the ideological legitimization of having the state play an important role in our lives economically and socially, in an egalitarian way--otherwise termed as 'modernism'--embodied in Keynesianism. Arguably, it was during this time when the greatest innovations in our history took place, largely within the non-profit, public sector, i.e. artificial and human space flight, particularly the innovations brought about by the landing on the moon; telecommunications, particularly fibre optics and satellite communications; computers; the internet; polio and small pox vaccines, which saved tens of millions, etc. Many of these publicly funded advances were later privatized to benefit dominant capital, even-though they invested little or nothing in the creation of these technologies; starving the state of possible revenues from providing these services.

The importance of high progressive rates of taxation cannot be understated: when capital retains most of its income it tends to go, rationally, to where it can make the most income (profit) and within a capitalist system that tends to be the financial markets, especially when they are deregulated as they were during the neoliberal era. It is no coincidence that as the income and corporate tax rates in the United States have fallen, gross fixed investment--not even counting net fixed investment--has fallen; while, financial investments--the capitalization of the stock markets--has increased. Finance went from being a means--the allocation of capital to productive and sound investments--to an end unto itself, to the detriment of employment. When the state had control over much of the capital's income, that capital was invested in productive and democratically demanded social programs that actually smoothed capitalism's vicious cycles of crisis, both economically and socially. It is no conicindence that East Asia's, particularly China's, massive economic growth is due to the state's control of the financial sector in the allocation of resources to strategic industries.

However, Moore makes a false distinction that the current era of capitalism is not some idealized ‘real capitalism’, but a perverted form of capitalism nearer to bureaucratic-corporatism. The reality is that the particular period of capitalist development that Moore idealizes, the ‘golden era’, was a result of decades of struggle from labour and other progressive social forces that coalesced around the populist movement around FDR in 1932; thus, it was not a natural state of capitalism--an argument that Moore and other progressives make, but it is a position that is actually impossible to conceptually grasp, since capitalism is a social system based on relations of power and not on 'natural' laws--and the current capitalist reality is a ‘perverted’ form of capitalism proper. With progressive forces accepting that capitalism is actually functional on its own, in some idealized neoclassical form, legitimizes the libertarian, Haykeian argument that less government and more market is needed; even-though as Gramsci argues:

"Thus it is asserted that economic activity belongs to civil society, and that the State must not intervene to regulate it. But since in actual reality civil society and State are one and the same, it must be made clear that laissez-faire too is a form of State "regulation", introduced and maintained by legislative and coercive means. It is a deliberate policy, conscious of its own ends, and not the spontaneous, automatic expression of economic facts. Consequently, laissez-faire liberalism is a political programme, designed to change-in so far as it is victorious-a State's leading personnel, and to change the economic programme of the State itself-in other words the distribution of the national income" (Prison Notebooks 160).

This is the confusing part of Moore's discourse and according to David Cheal, arguably this is due to 'contradictory consciousness' among the working masses--this should not be confused with 'false consciousness'. Moore is right to question capitalism proper and seek its destruction, but Moore then contradicts himself with the aforementioned arguments that capitalism can be saved by becoming MORE capitalist. What we must realize is that the only thing in capitalism cannot change, at pain of death, is accumulation. The means by which accumulation occurs--Keynesianism, neoliberalism, etc.--is not set in stone. Marx's axiom that capitalism is a system that ‘turns all that is solid into air’ holds true today more-so than it did even when he wrote it 160 years ago.

Just a basic observation...

2009-09-21T02:04:00.001-04:00

I am writing my dissertation on the divergent macroeconomic policies that Uruguay and Argentina took in the aftermath of the 2001 economic crisis. One of my hypothesis is that neoliberal reform in Uruguay was stunted from being completely hegemonic in Uruguay as it was in Argentina. I argue that was not that Uruguayan political system did not want radical neoliberal reform to happen as it did in Argentina; indeed, much of the same constellation of forces was forcing Uruguay to pass reform: the IMF, domestic capital, international capital.

However, it can be argued, that one of the key forces was absent in Uruguay that was present in Argentina under Menem was the successful articulation or interpellation of popular identities of dissatisfaction with the statist-developmentalist model. The reason I say 'successful articulation' by Menem is because Menem was elected in 1989 not as a neoliberal reformer, but as a committed Peronista--statist; ergo, the statist-developmentalist model wanted to be compounded by the majority of the citizenry in 1989, in part, due to the failed incipent neoliberal reforms under Alfonsin. Since Uruguay avoided the hyperinflationary crisis of 1989 that buffeted Argentina's economy and society, there was not the necessary crisis to delegitimize and articulate an anti-statist discourse in the 1990s. Therefore, appeals to neoliberalism took on a much less populistic and more technocratic character that certainly was not convincing to the citizenry.

When President Lacalle was in power (1990-1994) he attempted to pass legislation through the legislature by using the IMF as the stick to discipline his own party and the opposition. Lacalle was successful in his attempt to force the legislation through, as the Uruguayan legislature passed legislation allowing for the privatization of SOEs, principally ANTEL, the national telephone company. The impediment to that reform was Uruguay's deeply embedded popular-democratic, i.e. illiberal, system of referenda. The attempted privatization of Uruguay's SOEs failed because the citizenry did not see the need for it, as the firms were generally regarded as relatively efficient and also they had symbolic value for Uruguay's sense of nationalism. The political forces at play that wanted the radical reform to pass, arguably, could not convincingly make a case to privatize these firms as they could in Argentina since Uruguay, in 1989, avoided the serious economic crisis that impacted Argentina body politic so heavily.

This is not to suggest, of course, that Uruguay did not experience neoliberal reforms; it certainly did experience privatization, deindustrialization, financialization, etc. However, the depth of that reform and the effects were stunted by the active intervention by the citizenry, in a fashion unique in Latin America. I wanted to see if this can be empirically proven. So I went to the Fraser Institute to get actual statistics over the size of government owned businesses and investment as a percentage of GDP, and then I did a moving average to smooth the lines so that one can see the trends of privatization.

What this graph shows is that the intensity, or the 'shock' as Naomi Klein terms it, was noticeable in Argentina but, not in Uruguay. The reason, I argue, is that the popular-democratic institutions helped to temper the reform efforts to avoid the worst of the reforms from occurring. The IMF/WB were more than aware of the power of referendums to prevent its reforms from being passed in Uruguay. As Gordan Crawford notes:

[I]f any challenge to neo-liberal economic orthodoxy emerges, the ‘soft glove’ of participation slips off to reveal the ‘hard fist’ of coercion, as shown by the Bank’s opposition to Uruguay’s system of referenda...It comes as no surprise that the Ban is in fact hostile to such a democratic mechanism [direct democracy], given that it has held back neo-liberal economic reforms. Such direct democracy is considered as an impediment, a problem of ‘institutional design’, implying the need for constitutional reform in order to ‘rule out’ the possibility of future popular control over economy policy-making” (134-135).

Crawford then goes to make a convincing case that this notion of limited, i.e. liberal governance, ideologically, was legitimized by Hayekian notions of the state that were hegemonic within the governing International Financial Institutions (IFIs). Nevertheless, the referenda proved to be essential to the prevention of the so-called 'shock doctrine', which used crisis and lack of democratic oversight to pass radical reforms. Ergo, the greater the democratic input, the higher the chances are that pro-market reforms will not get passed tout court. Counterintuitively, it was the very prevention of neoliberalism from becoming totally hegemonic, due to popular intervention, which engendered its legitimization in the post-2001 era in Uruguay, or so I will argue. While, in Argentina the opposite occurred, and in the post-2001 era we saw the neo-structuralist/populist shift under Kirchner. Certainly, this is only one aspect, but I believe it to be the core aspect in my studies.

Capitalism: A Love Story

2009-09-10T03:33:00.002-04:00

Graphing exploitation

I am going to attempt to contextualize the movie from my perspective on the current crisis:

The graph shows the difference between what we make for capital (productivity) and what we get paid (wages) in real terms (adjusted for inflation). The differential between the two is profit, which is income that goes to shareholders, executives. This excess capital is, in large part, reinvested into what Keynes called the 'casino' of finance capitalism. With the progressive deregulation of finance over the past 30 years, culminating in the elimination of Glass-Steagall Act in 1999, the stock market increasingly became the locus of business for global capital. The returns that could be made by 'beating the average' speculation on the markets was far in excess of what could be made in investing in productive investment. Therefore, the amount of capital invested in 'fixed investment'--investment that creates physical capital, and therefore employment--as a percentage of GDP has progressively gone down since the 1980s. Indeed, since the year 2000, the amount of jobs in the United States has not increased, but the amount of people who went onto the market increased by 12 million, which helped to depress wages further and helps explain why 'real unemployment' in the US is reaching 16 percent! Thus, the gap represents the income that goes to the top 1% of our society, which helps explain why inequality in the US is at the highest level since the 1920s, poverty is at alarmingly high levels, wages as a share of GDP is at near historic lows and where so much money came from to inflate the financial markets. The historic 'social compact' of capitalism, that the rich would be frugal and invest for the employment of the workers has obviously broken down. As Paul Krugman states: "Neither the administration, nor our political system in general, is ready to face up to the fact that we’ve become a society in which the big bucks go to bad actors, a society that lavishly rewards those who make us poorer."

Contrary to the explanations of neoclassical economists and other apologetics for neoliberal capitalism, this situation is a choice, a creation of political struggle between financial capital and labour not a 'natural' outcome of the 'free market'. The attack against the union movement in the 1980s by neoliberal governments like Thatcher (breaking the coal miners strike, 1983) and Reagan (breaking the air traffic controllers strike); and with the opening up of capital markets worldwide through free trade agreements and IMF enforced Structural Adjustment Policies (SAPS) that forced developing countries to adopt neoliberal policies at the pain of insolvency; workers in the West could no longer demand higher wages due to the internationalization of capital and the effective expansion of the labour market. What the graph shows is that the neoclassical defense of capitalism, that workers wages reflect their productivity is patently false. Workers get pay commensurate with their productivity by FIGHTING for it, there is nothing 'natural' about the market system.

The myth that 'increasing your skills' will lead to higher wages is to engage in an endless game of chasing your own tail. The fact is that, thanks to IT, skills are increasingly cheap and easy to acquire. This means that more and more people will acquire the skills internationally, undermining the position of a 'skilled' worker unless he goes onto to an even higher level of skills that eventually will not be sufficient, as persons in the Third-World can undercut his labour costs with the same skill set. The only way for workers to have wages to rise in line with their productivity is to threaten capital with strikes and stoppages, to support pro-labour governments, and to make transnational unions that make it increasingly difficult for capital to play one set of workers against other workers.

However, the top 1% have other ways of getting our money apart from pure exploitation. For instance, they have 401k accounts. The 401k is essentially a big swindle as most investors have the faintest idea of what they are investing in and with all those trillions of retirement funds sloshing around the markets, the losses of the average worker's retirement account is a gain for hedge funds and other 'insiders'. These elite group of investors and banks have the institutional power to determine where the markets go, the 'free market' at work. As Peter Gowan argues:

"the New Wall Street System was dominated by just five investment banks, holding over $4 trillion of assets, and able to call upon or move literally trillions more dollars from the institutions behind them, such as the commercial banks, the money-market funds, pension funds, and so on. The system was a far cry from the decentralized market with thousands of players, all slavish price-takers, depicted by neo-classical economics."

Thankfully, Bush's plan to privatize social security--a multi-trillion entitlement--was stopped. Bush's plan amounted to a taxpayer subsidy for the speculative players on the market, essentially the privatization of taxpayers. But, just imagine if it had been privatized; with the implosion of the stock market in the past years, millions of seniors would have been forced to work, or worse.

Another way that workers are being swindled is credit. This crisis is essentially a crisis of underconsumption, meaning that what is being produced is unable to bought by those who produce it. The graph is a visual representation of that crisis; however, this crisis of underconsumption had, until now, been avoided for three decades due to an ever expanding line of credit to consumers to the point where you could buy a house without having to present a name or income: the infamous NINJA loan. However, with the increase in interest rates in 2007, consumers were no longer able to afford the payments and the entire financial system was thrown under the bus. The banks, in order to lend more and reduce individual risk collateralized the debt, throwing good debt with bad into CDOs and other financial 'innovation'--the justification for the 'liberalization' of financial markets was so that 'innovation' would lead to greater access to credit and lower cost to consumers. In so doing, the financial industry essentially reduced individual risk and lower costs for consumers, but massively increased systemic risk, which in the end was the immediate cause of the crisis. The inability to determine the value of the financial asset, due to the mixing of good and bad debt, lead to the de facto insolvency of the banks. Therefore, the real cost to the average consumer is in the trillions,largely in the form of interest bearing debt that will have to be paid by future generations, due to the bank and shareholder bailouts.

Here is the problem that Michael Moore will probably deal with, that the bailouts did not come with any real strings. The result is that the financial industry is making profits again, but in the same way they made them before. As Paul Krugman stated in a recent op-ed;

"The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?...it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away...it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely...What’s clear is that Wall Street in general, Goldman very much included, benefited hugely from the government’s provision of a financial backstop — an assurance that it will rescue major financial players whenever things go wrong...You can argue that such rescues are necessary if we’re to avoid a replay of the Great Depression. In fact, I agree. But the result is that the financial system’s liabilities are now backed by an implicit government guarantee.If these lobbying efforts succeed, we’ll have set the stage for an even bigger financial disaster a few years down the road. The next crisis could look something like the savings-and-loan mess of the 1980s, in which deregulated banks gambled with, or in some cases stole, taxpayers’ money — except that it would involve the financial industry as a whole."

Back to consumer credit. Credit amounts to another way that income is filtered back to the top 1%. The logic is simple, you are paid insufficient wages, therefore you require credit to maintain a decent standard of living. The payments you make go to who? The banks and credit card companies and those profits go to the owners of the institutions. But it gets even more perverse, banks and other financial institutions are increasingly making more and more of their profits BECAUSE workers are broke, as Jon Stewart said recently on The Daily Show, "they are making BECAUSE the customers are broke". They are making much of their profits on overdraft fees and other fees based on people's inability to pay!

How does one get trapped into the credit crunch? The credit is given to you at attractive rates, we all get those 'limited time offers' to induce you to get into the trap of debt. This has a historical parallel with the beginnings of capitalism with the 'wage advance'. As Stephen A. Marglin argues, "Wage advances were to the capitalist what free samples of heroin are to the pusher; a means of creating dependence...Wage advances legally bound the worker to his master" (79); and credit legally binds the consumer to finance capital in a embrace that can only be broken through self-imposed poverty--since, as we have seen, wages are insufficient to cover more than the most basic of costs--, bankruptcy or the accumulation of even more debt to pay off the older debt. A friend of mine who works for a credit card company once told me what her boss stated, and I paraphrase "we want them pay until they die". The intention is for an individual to basically only pay the interest and the fees, because if someone actually pays their principle, then they don't make money.

Peter Gowan puts it best:

"The stock-market bubble of the 1990s raised the paper value of the private pensions of the mass of Americans, thus giving them a sense that they were becoming richer and could spend (and indebt themselves) more. The housing bubble had a double effect: it not only made American consumers feel confident that the value of their house was rising, enabling them to spend more; it was reinforced by a strong campaign from the banks, as we have seen, urging them to take out second mortgages and use the new money for consumption spending...This Anglo-Saxon model was based upon the accumulation of consumer debt: it was growth today, paid for by hoped-for growth tomorrow. It was not based upon strengthening the means of value-generation in the economies concerned. In short, it was a bluff, buttressed by some creative national accounting practices which exaggerated the extent of the American boom and productivity gains in the us economy.36"

Trickle-up economics continues...

The Subversion of Democracy: Uruguay, 1971

2009-08-26T04:09:00.001-04:00

http://www.teledoce.com/home/?v=http://multimedia.teledoce.com/videoflash/2009/08/25/libro.flv

Very interesting interview about the plans of the Brazilian military, with American support, to invade Uruguay if the left-wing Frente Amplio or if Blanco candidate, Wilson Ferreira were to win the 1971 election. The invasion was to supposed to occur only if the electoral fraud against Ferreira failed, as the FA was not a serious contender for the presidency at that point in time. In line with the reactionary movement of the dominant classes at the time. The once hegemonic liberal-Battlismo that structured the popular interpellations of 'the people' and democracy was undermined by the more populist Ferreira and of the FA into a more socialist, or nationalist interpellation that directly threatened American interests and the efficacy of the anti-communist/populist crusade of the reactionary powers internal to Latin American and external to it. As the author notes:

"Leicht explicó que, entre 1964 y 1971, el Ejército de Brasil apostó tropas en la frontera con Uruguay, y que, además, con la iniciativa del embajador argentino en Brasil, Osiris Villegas, se elaboró el "Plan 30 horas", para invadir el territorio uruguayo en caso de que ganaran las elecciones o el Frente Amplio o el Partido Nacional, de la mano de Wilson Ferreira Aldunate. "Brasil y los Estados Unidos no iban a permitir un nuevo gobierno de izquierda. Estaba la experiencia de Chile y Perú, y no podían dejar que en otro país más triunfara la izquierda. Y no se trataba sólo del Frente Amplio: Wilson era muy resistido en su discurso, no era agradable para los intereses de los Estados Unidos".

Source:http://www.montevideo.com.uy/nottiempolibre_70914_1.html

Fact is that the electoral fraud was successful, as the final results of the 1971 election show:

Partido Colorado: 40.96
Partido Nacional: 40.19
Frente Amplio: 18.28

The election results show that at least 59 percent of the Uruguayan population wanted greater government control over the economy, tending towards socialization. This is, arguably, the end result of democraticization and popular incorporation. The only way to stop this was to literally coerce society to accept capitalist dominance. As Laclau argues about Latin America at the critical juncture of the 1970s, "the Latin American masses have developed the antagonism inherent in democratic interpellations to a point where it is very difficult for any faction of the bourgeoisie to absorb and neutralise them. This has led, in turn, to a consolidation of the power blocs and an accentuation of their repressive policies towards the dominated classes' (Laclau 194). Brazil was the nexus of the reactionary movement in the continent as its 1964 coup d'etat against populist Goulart started a twenty-year program of dominance and repression by increasingly alienated dominant classes from the democratic system, unencumbered with the pretense of hegemony and whose primary goal was depoliticalization and establishing a Hayekian, 'technical democracy' where substantive issues of capitalist hegemony would be forever be closed.

Obama is pissing me off, so I need to rant!

2009-07-29T14:26:00.000-04:00

The recent cover of Newsweek magazine shows a blue ballon with a title saying that the recession is over, not so fast. The "green-shoots" in the economy, like those that Obama is talking about, higher stock market valuations, higher house prices, etc., suggest, at least superficially that the recssion is over; however, it is not. The recession is not solved because the fundamental problem underlying the recession has not been solved, primarily that workers are not making enough to consume what they consume. The problem is summed up by liberal economist Nouriel Roubini:

"Monetary and fiscal stimulus in most countries has done little to slow down the rate of job losses. As a result, total labor income – the product of jobs times hours worked times average hourly wages – has fallen dramatically...falling labor income implies falling consumption for households, which have already been hard hit by a massive loss of wealth (as the value of equities and homes has fallen) and a sharp rise in their debt ratios. With consumption accounting for 70% of US GDP in the US, and a similarly high percent in other advanced economies, this implies that the recession will last longer, and that economic recovery next year will be anemic (less than 1% growth in the US and even lower growth rates in Europe and Japan)."

The problem then, as Roubini sees it will be how the government will manage to contain the crisis of underconsumption, with rapidly deteriorating fiscal accounts and high debt loads the government will be under pressure from capital for higher interest rates that will choke off any recovery. As Roubini states:

"the higher the unemployment rate goes, the wider budget deficits will become, as automatic stabilizers reduce revenue and increase spending (for example, on unemployment benefits). Thus, an already unsustainable US fiscal path, with budget deficits above 10% of GDP and public debt expected to double as a share of GDP by 2014, becomes even worse."

However, Roubini sees the problem yet ignores it at the same time. As Louis Althusser states about any "theory", particularly in reference to economics:

"They [e.g. exploitation, surplus, class, etc] are invisible because they are rejected in principle, repressed from the field of the visible: and that is why their fleeting presence in the field when it does occur (in very peculiar and symptomatic circumstances) goes unperceived, and becomes literally an undivulgeable absence -- since the whole function of the field is not to see them, to forbid any sighting of them"

The crux of the problem--something that Roubini refuses to see or is unable to see because his theoretical lens denies that visibility of the problem--is that workers are not being compensated in accordance with their productivity and the implications that holds. Therefore, we have an imbalance in the economy, where the surplus is going disproportionately to the rich and finance; this led to the speculation that lead us to this crisis in first place. This is known as "financialization" of the economy and this has been happening since the 1980s when the collapse of the labour movement and globalization led to a structural readjustment of incomes to the rich. Globalization did not just emerge, it is a consequence of the strengthening of the labour movement in teh West during the Keynesian era. As Giovanni Arrighi notes,

"For what could more effectively restore company profit margins, lowered by the unruliness of the labour force, than the decentralization of production?...a company can only re-establish the internal hierarchial order so necessary for its functioning by organizing its productive and distributive operations at a work level...in order to escape the decline of the rate of profit in teh 'mother-country' " (Geometry of Imeperialism, 144).

The objective, therefore, was to undermine high-income labour that was undermining accumulation in the West. This was not hidden by politicians or economists, it was proclaimed with pride as "supply-side economics"--neoliberalism. The new saviours of the economy were the rich. The logic went, give the money to those who invest, cut their taxes and let the free market flourish. We now are living with the consequences of that logic, the 'rich' have not invested more than before Reagan in fixed investment (productive investment); indeed, they have invested less, ergo less employment and lower incomes. The money that they have retained through the tax cuts have increasingly gone to the stock market, bond markets, etc., where speculation and higher profits reign. Employment has, in turn, become increasingly service based with low wages and precariousness as the rule.

What has been occurring in the US is that workers are making less in real terms than they were 30 years ago and the share of national income going to wages is at near, if not, historic lows. Workers are being "exploited" more than they were since at least the 1920s. Ergo, we have a crisis of under-consumption, although this crisis took a while to materialize and as a result the crisis is embedded very deep into the heart of the economy. The consumption of workers has been propped up through the credit mechanism and for 30 years it has worked at preventing the crisis from occurring, as long as the credit loop remained stable, but it was not going to and it set up, from the very beginning its own demise. This is how:

Workers are paid less, more money goes into profits and therefore investment in financial instruments. Finance capital gives back to the workers incomes through the debt mechanism, with interest, sucking more income out of the working classes. Finance gave consumers increasing larger and larger amounts of credit with lower and lower standards as the limits of the system began to show, e.g. NINJA loans. Then finance bundled these debts as securities selling them off for profit. This reduced individual risk for the firm, leading to riskier and riskier loans, but this increased systemic risk. Since the credit agencies were paid by the banks, they made these inherently unstable securities Triple-A, the highest rating you can get. The assumption was that workers would do everything in their power not to default on their homes and other assets. Eventually, workers could no longer sustain the debt payments as interest rates went up in 2007, the bet of the financial industry failed. Defaults occurred, especially with 'sub-prime' mortgages leading to the foreclosure crisis and erasing hundreds of billions worth of wealth and due to the downward pressure on house prices, home owners could no longer depend on their houses to pay for their consumption. Eventually, those Tripe-A securities became junk and the system almost collapsed; because no one knew the actual value of those securities, the assets of firms were under scrutiny and therefore the firms became insolvent. The government stepped in to re-capitalize the firms and take the "bad assets" off the books to make the firms solvent again.

Therefore, what Obama sees as green shoots signaling a revival of the economy is really just the rehashing of the old economy. As Paul Krugman states about the recent mega-profits of Goldman Sachs:

"The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?...it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away...it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely...What’s clear is that Wall Street in general, Goldman very much included, benefited hugely from the government’s provision of a financial backstop — an assurance that it will rescue major financial players whenever things go wrong...You can argue that such rescues are necessary if we’re to avoid a replay of the Great Depression. In fact, I agree. But the result is that the financial system’s liabilities are now backed by an implicit government guarantee.If these lobbying efforts succeed, we’ll have set the stage for an even bigger financial disaster a few years down the road. The next crisis could look something like the savings-and-loan mess of the 1980s, in which deregulated banks gambled with, or in some cases stole, taxpayers’ money — except that it would involve the financial industry as a whole."

Firstly, what this crisis amounts to then is the effective privatization of state coffers by finance capital. The thing is now that the banks are now, as Krugman states, are implicitly covered by the tax payer. This is akin to what happened in Argentina when the state was captured by finance capital and socialized private debt--otherwise known as 'right-wing populism'.

So what Obama is bleating on about is not a recovery, but the stage for a even greater crisis in the future. Obama has NOT fundamentally changed the structural problem at the heart of the American economy, instead he has PRESERVED the same system that got us into the crisis in the first place. Ultimately, workers are not being paid enough. The solution is to emphasize consumption, to redistribute wealth to workers, to increase government spending on social programs and to tax the rich to pay for it; otherwise that excess income will go into speculation and we have this problem all over again. Indeed, the crisis that Roubini talks about, that the country is on the precipice of a financial collapse is true if you assume that tax rates are immutable. Its time to come to grip with reality, the rich have not lived up to their share of the social contract and have caused immense damage to the general economy for their own parochial interests. There has to be a strengthened union movement to reverse the 'taproot' of the problem, which is underconsumption. Otherwise, we will be in the same boat again very soon. As Roubini warns:

"The irrational exuberance that drove a three-month bear-market rally in the spring is now giving way to a sober realization among investors that the global recession will not be over until year end, that the recovery will be weak and well below trend, and that the risks of a double-dip W-shaped recession are rising."

The lessons from Honduras

2009-07-09T16:46:00.001-04:00

Over the past month I have been reading Hayek's works, and I am noticing how pervasive his ideology is. The recent coup d'etat in Honduras compounded that view. The rhetoric used by the supporters of the regime is starkly reminiscent of Hayek. When they claim that the coup d'etat in Honduras is actually protecting democracy, it might seem contradictory, but thanks to the logic of Hayek, it does make sense; of course, I do not agree with his arguments. The basic premise is that democracy can only exist within liberal society where the free market; the rule of law that is applicable to everyone equally--the 'false universalism' of liberal-capitalism--; and limited popular democracy. Any attempt to regulate the economy and to massify the political will inevitably lead to tyranny of the majority and eventually to authoritarianism; therefore, a strong constitution that brackets off 'substantive' issues is needed to protect 'liberty' from the tyranny of the majority. Due to the political impossibility of agreeing on what the 'public good' is, within a democratic framework, will lead to the political system investing its decisions to a strong-man who has total control of the economy, thus, people's lives. Thus, the overt class politics of Zelaya, wanting to redistribute income and power under the 'guise' of democracy is an unacceptable encroachment on liberty, and goes against the 'laws of the market' leading Honduras to a 'Road to Serfdom'. As Hayek states:

In this sense an act of the duly authorized legislature might be as arbitrary as an act of an autocrat, indeed any command or prohibition directed to particular persons or groups, and not following from a rule of universal applicability, would be regarded as arbitrary. What thus makes an act of coercion arbitrary, in the sense in which the term is used in the old liberal tradition, is that it serves a particular end of government, is determined by a specific act of will and not by a universal rule needed for the maintenance of that self-generating overall order of actions, which is served by all the other enforced rules of just conduct. (Libearlism, Hayek)

Thus, since the policies and objectives of Zelaya were particular and not universally applicable, meaning it recognizes inherent asymmetries in power, it is autocratic even if under the rule of the demos. The implicit assumption in Hayek, and the junta is that they are not exercising their own form of serfdom on the majority of the people. The superficiality of liberalism's formal equality, focusing on negative rights that are easily applied universally to all, condemns millions of people to a very real life of 'serfdom'. Zelaya's politics are more overtly classist, but that does not mean that the normal operations of the liberal-capitalist state isn't classist. Particularly under the neoliberal frame, the state as Marx suggested is ultimately the 'executive committee' of the bourgeoisie; however, because these operations are considered 'normal', and 'rational' they are not considered classist.

Liberal democracy obfuscates, through the democratic franchise, and legalistic process the power of the ruling classes that define what those 'universal' laws are. Perry Anderson's elucidation of Gramsci's thoughts in this work, The Antinomies of Antonio Gramsci is instructive. In it, he argues that the enfranchised masses believe that, "they exercise an ultimate self-determination within the existing social order...[that due to] the democratic equality of all citizens in the government of the nation—in other words, [a] disbelief in the existence of any ruling class” (Anderson 30). What Zelaya, Chavez, etc., are doing with their referendums is challenging liberal democracy on its own terms. The elites in these societies know that they the lack critical mass of support among the population and what the new left in Latin America is doing is--within the pluralistic, liberal democratic framework--using the liberal notion of consent=legitimacy, and changing the hegemonic system of oppression. They are exposing to the world the ruling classes that bely liberal-capitalism's 'democracy', that it is a rational and neutral plane from which all interests are equally considered and is ruled by laws and not power/politics. It is no wonder that Allende, Chavez, and Zelaya were overthrown, eventhough they worked within the paradigm of liberal democracy. As Perry Anderson's elucidation of Gramsci's thoughts in this work, The Antinomies of Antonio Gramsci, reminds us that:

To forget the ‘fundamental’ or determinant role of violence within the power structure of contemporary capitalism in the final instance is to regress to reformism...Deprived of this, the system of cultural control would be instantly fragile, since the limits of possible actions against it would disappear...[therefore] the ultimate determinant of the power system: force. This is a law of capitalism, which it cannot violate, on pain of death. It is the rule of the end-game situation (Anderson 43).

Indeed, this is what occurred in Honduras, existing capitalist relations were under threat in the country and therefore, the ruling classes had to react at pain of death, or so their pathologies told them. The greatest fear of capital is exactly what Zelaya, and Chavez are doing, mobilizing the subaltern in a counter-hegemonic discourse. Liberal democracy according to Hayek means that, "Democracy is concerned with the question of who is to direct government. Liberalism requires that all power, and therefore also that of the majority, be limited" (Liberalism). The issue, that is not addressed by Hayek, is who is doing the articulation of how government is to be limited. Where does it say that the elite of the society are the sole arbiters of defining what the limits of the state should be? Herein lies the challenge by the left in Latin America to existing liberal-capitalism, as the subaltern are being mobilized against the parasitic elites of their societies who would rather invest their money in condos along Miami beach than reinvesting the profits at home. The subaltern are exacting their democratic prerogative to challenge existing relations, so they are in essence democratizing liberalism. What the proto-revolutionary left in Latin America is doing is challenging and keeping liberal-democracy up to its suppsoed core ideological justification, which is premised on, as elucidated by Abraham Lincoln's famous dictum that the state is ‘of the people, by the people, for the people’.

Zelaya was overthrown, not because he broke the constitution--many presidents do that all the time, and there are legal mechanisms to depose of a leader who is charged of breaking the constitution. The real reason for his sudden, violent overthrow was because his referendum was too much of a immediate, and legitimate threat to existing power relations in the country. If Zelaya was a demagogue as they claim, and if he was unpopular as they claim he was, why overthrow him? If the referendum was going to fail, wouldn't that signal the end of the reformist project, and his political career? It is important to remember, as Anderson points out, proving Gramsci right, that, “it is in the nature of the bourgeois State [and system] that, in any final contest, the armed apparatus of repression inexorably displaces the ideological apparatuses of parliamentary representation [and the judiciary]” (Anderson 76).

Gramsci's analytical framework's predictive powers are reinforced by the difference between the coup d'etat engineered against Chavez in 2002, and Zelaya in 2009. In 2002, when Chavez was overthrown, the subaltern masses poured in from the ghettos that surround Caracas like water into a bowl, culminating in front of Miraflores to demand the return of Chavez. The subaltern in Honduras, in contradiction to The Economist propaganda, have also taken to the streets in the major urban centres of Honduras. Chavez was back in Miraflores three days after his ouster, yet Zelaya remains in limbo, why? The reason is that, as Anderson pointed out earlier, the foundation of the state is force, not ideological power. Ideological power is essential to the long-run viability any hegemonic order, by definition, but once that ideological facade collapses, force and dominance is the end game. In order for Zelaya to have a triumphant return to power like Chavez the military has to be on his side and they are clearly not. Chavez was brought back because there were serious splits within the military. People power alone is not sufficient, people power--the notion of people power is always partial and particular due to 'class conflict'--has to be able transcend its own corporatist interests to convince the members of the armed apparatus that this is the end game and that they are fighting for the losing side of history.

The lessons for progressives should be clear from what is occurring in Honduras. Some racists or ignorant persons may argue that what is happening in Honduras is because it is a 'banana republic' and simply cannot happen here. However, it certainly has been attempted 'here', for example the attempted coup against FDR in 1933-34 by big business. What is happening in Latin America is what a real left should look like, a left that does not accept the naturalization of existing capitalism as is. As Chantal Mouffe, and Ernesto Laclau argue about the sad state of ersatz leftism in the West:

We never thought, through, that discarding the Jacobin friend/enemy model of politics as an adequate paradigm for democratic politics should lead to the adoption of the liberal one, which envisages democracy as a simple competition among interests taking place in a neutral terrain--even if the accent is put on the 'dialogic' dimension. This, however, is precisely the way in which many left-wing parties are now visualizing the democratic process. This is why they are unable to grasp the structure of power relations, and even begin to imagine the possibility of establishing a new hegemony. As a consequence, the anti-capitalist element which had always been present in social democracy...has now been eradicated from its supposedly modernized version...This argument takes from granted the ideological terrain which has been created as a result of years of neo-liberal hegemony, and transforms what is conjunctural state of affairs into a historical necessity. Presented as driven exclusively by the information revolution, the forces of globalization are detached from their political dimensions and appear as fate to which we all have to submit. So we are told that there are no more left-wing or right-wing economic policies only good and bad ones! To think in terms of hegemonic relations is to break with such fallacies. (16).

I hope we can break with such fallacies, and Latin America is providing the light by which we can. However, we must remember that we live in a society of power not of reason.

Our 'popular religion' Part I

2009-05-26T20:58:00.001-04:00

Chantal Mouffe wrote, “a hegemonic principle does not prevail by virtue of its intrinsic logical character but rather when it manages to become a ‘popular religion’ ” (309).

What does this mean? Well, in essence, what matters is not the logical/rational rationale behind an ideology, but rather whether or not it captures the popular imaginary of the population. In our society, the 'popular religion' is the belief that "rational" decisions dominate our lives; from the judiciary, business, legislature, and the broader technocracy. The foundation of our modern, liberal "democratic" society is founded on three "inherently rational" beliefs:

- Rule of Law
- Free Market
- Democracy

The 'war on terror' has undermined the belief in the rule of law, the bank bailouts undermined the belief in the free market, and democracy has constantly, however, increasingly undermined through the operation of state capture by dominant capital, via lobbying, corruption, etc. The facade that belies our modern society, "reason" has been losing its veneer over the past decade, and the power that operates behinds it is showing its ugly head.

The rule of law has been fundamentally undermined by the Bush and Obama administrations. The Bush administration by abandoning human rights in the interests of American corporatist interests-I am under no illusions, human rights also served American interests, but in a different guise. The Bush Administration's 'torture memos' that supposedly gave the administration the legal cover to engage in torture; this highlights how irrational a belief in the " cold rationality" of the law is, and how utterly useless the law can be when it can be so easily manipulated by opportunistic politicians and lawyers. Never-mind, that the Bush Administration also undermined the efficacy of international law by illegally invading Iraq on false pretenses. The 'popular religion' propping up the liberal system is based on the belief that we live in a system of laws that apply to everyone, regardless of power, and interest. Unfortunately-or-fortunately, that belief has been eroded by the corrosive power of raw, unbridled jingoistic-capitalist power.

The Obama Administration has accentuated the collapse of the rule of law, by denying the American people, and people of the world justice. Obama wants to "look forward, without looking back" or some nonsense akin to that statement. How can a nation, which prides itself on its constitutionalism, and its adherence to the rule of law, let criminals go free? A dangerous precedent is being set by the constitutional-scholar president, if you engage in illegal activity, and you are powerful enough, you will get away with it. The slippery slope towards tyranny has begun. What could be another motive for Obama doing this? Possibly to cover his own cards, see Obama has not actually changed much of the rules of the Bush Administration's 'war on terror' game. Obama may be scared that if he puts on trial the criminals in the former administration, he along with his advisors could be next-just because he is a Democrat does not mean he cannot be a criminal.

The free market is supposed to be the aspect of politics that cannot be fundamentally questioned in our new "consensus" democracy. Indeed, the very notion of the "Third Way" and of "consensus" is to denote that the capitalist-market society is hegemonic, and unquestionable. The free market and property, it is argued by "free market fundamentalists", is the foundation of our very civilization and our freedoms; to reduce the scope of the market, or constrain property is to lead to tyranny-a la Hayek.

September 11th, conservatives like to argue changed everything. It exposed that America was "asleep", and did not recognize that it was at war. This has a kernel of truth in it, it cannot be denied that Bush was on vacation at his Texas ranch-only seven months into his presidency-and was handed a memo explicitly warning that Al Qaeda wanted to attack inside the United States, and choose to ignore it. However, Katrina also changed everything. The real tyranny, the tyranny of free market capitalism, of a absent welfare state, the latent racism in American society manifested itself on the roofs of New Orleans, in the floating cadavers scattered across the city. For the first time Americans were exposed to the biting poverty of the "ghetto". The classist society-where freedom exists for the few, while real tyranny of poverty and hopelessness for the many-is the real result of "free market capitalism". The free market, left to its own devices reinforces already existing winners power, power begets power, and leaves the poor in a competitive struggle for scarce jobs, lower wages, and debt. Indeed, it should be of no surprise the United States is a much more unequal, and poorer society than it was in 1980. I understand that some will retort that is an outrageous statement, but the standard of living rising in the US since that time has been due, primarily, to consumer debt and not real income, which has been stagnant and even declining. September 11th was an aberration, Katrina is a manifestation of a daily tragedy.

Giovanni Arrighi argues that financialization of an economy signals its autumn period, and springtime for another economy. The Bush tax cuts, along with the Reagan tax cuts was supposed to increase investment in the economy. However, capital seeks the highest returns, and with so much extra cash they invest that extra income into the markets. It is forgotten that prior to the Great Depression, we also had a supply-side, Republican policy that lead to speculation on the markets. The endemic crisis inherent within capitalism began to grow ever-deeper under the Bush reign, underconsumption. However, it was a different form of crisis, unlike traditional crisis' of underconsumption and overproduction, the American consumer was still able to buy due to ample consumer credit, the importation of cheap Chinese goods and credit, and access to house equity. Under the Bush years the "ownership society" was becoming a reality, however, we now know how this was occurring-subprime.

By 2008, the deck of cards, the supposedly AAA derivatives that propped up the multi-trillion system began to collapse. The SEC was not doing its job, it lacked the laws, powers, but most importantly the will to investigate. The market was literally was allowed to go forth, however, this was the modern "free market" where corporations with massive power both economically and politically were able to manipulate and strong-arm everything in its path in the vainglorious path to riches. The banks cared only for profits, and it did not matter who it trampled on to get those profits. The bankers, traders, and other parasites became the new gods in our society. However, as my previous blogs show, on Veblen and Krugman, such a society was essentially a society that idolized the 'scam artist'. This idolization of the parasite can be seen with such guru-ideologies as Richard Florida's "Creative Class", and the celebrity-ization of anti-socialities on Donald Trumps "The apprentice". This accords with Veblen's argument that the labourer, the one who creates goods is looked down upon. Indeed, in the United States, the source of accumulation, the working class, is increasingly genderized and racialized. In addition, the belief that we have transcended the "class economy", or the "post-materialist" society is based on the debt economy based on the denial of a higher standard of living of people in the third world who send us the debt with their blood, sweat, and tears.

To be continued...

Scattered, non-sensical thoughts...

2009-05-25T14:55:00.001-04:00

Chile

2009-02-16T01:49:00.000-05:00

This is my conceptual for a paper in my development course:

Chile offers academics a rare real world example of the liberal democratic market system losing hegemony culminating in the election of Marxist president, Salvador Allende in 1970 with the express objective to replace the capitalist market system. The Allende regime, lasting for about three years, was able to begin a process of democratic socialist transformation via the nationalization of strategic industries, such as copper, and creating the mechanisms for a new technological central planning system distinct from the Soviet GOSPLAN system—cybersyn; nevertheless, still retaining the democratic character of the former liberal regime. The presidential election of 1970, and the net gain in the parliamentary elections of 1973 for the Communist Party—in the midst of the largely, externally induced economic crisis—displayed that socialism as an alternative had growing popular support. However, the Chilean democratic-socialist revolution highlighted the collapse of liberalism and capitalism as a hegemonic, ‘common sense’ force, it also displayed the need for a mass movement to protect the revolution from being subsumed by internal and external threats. Indeed, as Polanyi suggests, capitalism is a system characterized by a ‘double-movement’. The attempt to socialize Chile pushed the Polanyist oscillation—of embedding the economy back to society—to an extreme that invited an equally forceful lurch back to the disembedding of the economy from the society by the capitalist classes.
The coup d’etat staged against the Allende regime on September 11, 1973 was the culmination of not merely a local struggle for hegemony/domination, but was a metaphor for the global struggle for ideological control, which in the 1960s and 1970s reached a fevered pitch. The coup d’etat represented the first salvo in the capitals ‘counter-revolution’ against the ascendant socialist, and hegemonic Keynesian discourse. The golpistas in Chile were supported by a myriad of local and external powers, whose express objective was to reestablish the market system as dominant means to organize society through domination. It was also an attempt to subordinate labour via the co-optation and elimination of society’s defence mechanisms, which included, the cooptation of the independent union movement and civil society. The physical elimination, or ‘cleansing’, from the nation’s body politic the intellectual and cultural vanguard of the socialist/working class movement, which were essential to creating a new hegemonic discourse. Lastly, and most importantly, the ‘counter-revolution’ meant replacing Chile’s developmental, and labour policies with the ‘scientific’, utilitarian, cosmopolitan, capitalist class bias of Friedmanite economic reforms. This meant subordinating Chile’s economy into a renewed neoliberal globalization discourse, subsuming Chile’s economic development for the interests of international accumulation, and reestablishing the classic ‘division of labour’ of the world economy via the liberalization of Chile’s trade and capital accounts after the capture of the state by the ‘Chicago Boys’ in 1975.
By September 11, 2001, twenty-eight years after the destruction of La Moneda by the Chilean Air Force, commanded by ‘market fundamentalists’ in Santiago, the World Trade Centre in New York City, the symbol of neoliberal globalization was brought down by an aerial attack by ‘Islamic fundamentalists’. The supposedly hegemonic neoliberal edifice, built on the triumphalism and mythology of what Francis Fukuyama called the ‘end of the history’ after the collapse of communism in 1989, was itself beginning to crumble. These failures include the failure of neoliberalism to resolve the debt crisis and revamp growth after the 1980s. The robber baron, ‘shock-therapy’ capitalism that characterized the post-communist transitional economies, amplified tense class and ethnic tensions, which proved that China’s gradualist approach under the rubric of authoritarianism was optimal. The exacerbation of the financial and social crisis in East Asia via IMF Structural Adjustment Policies culminating with the coup of Suharto in Indonesia, highlighting that capital controls, as those employed by China and Malaysia were necessary for small, and vulnerable economies. The subsumption of class politics by ethnic and religious identity politics exacerbating ethnic tensions worldwide, for example, the former Yugoslavia, Rwanda, and India. The double-speak of liberal internationalism exemplified by the Kosovo War, helping shift Russia away from liberalism towards nationalism and helping to sow deep cynicism towards international law and its institutions. Lastly, the deep scars left over by the mythologized ‘peaceful and democratic’ implementation of neoliberalism throughout the periphery, i.e. Venezuela 1989, Argentina 1991, Russia 1993, etc. began to erode the legitimacy of neoliberal globalization.
It was during this crisis at the turn of the century, that an initially tempered ‘double movement’ towards the subordination, or embedding, of the market system to democratic forces began to take on serious momentum under Hugo Chavez in Venezuela.

Credentialism

2009-01-07T00:06:00.000-05:00

Here is an excerpt from my Democratic Theory paper, discussing the notion of 'credentialism':

Education is one, if not the most important preconditions that a functioning democracy needs so it can sustain itself by teaching valuable skills for civic participation; these include basic skills such as literacy, numeracy, and social skills. However, one of the most important skills, that is not be prioritized within the educational establishment in North America is critical thinking skills. One reason is due to ‘credentialism’; education has been degraded from a means to teach civically valuable, democratically necessary skills to those geared towards individualistic, opportunistic ends such as employment leading to educational standardization, intellectual subordination, and civic resignation.
However, it was not always like this. As Jacobs argues, during the 1960s one of the reasons that students protested was that they felt they were “shortchanged in education...The students were protesting attempts to transmit culture that omitted acquaintance with personal examples and failed to place them on speaking terms with wisdom” (Jacobs 47). The problem had its origins, Jacobs claims, in the 1950s when “it dawned on university administrators...that modern economic development...depended on a population’s funds of knowledge—a resource that later came to be known as human capital” (61). The term ‘human capital’ has the effect of instrumentalizing, and commodifying education and the intellectual faculties of the individual. By subsuming the intellectual into the interest’s capital, intellectual pursuits were increasingly standardized, and uncritical; critical skills were not valuable to capital whose interest is to mass-produce standardized knowledge, much as nails and bolts are standardized for machines, because they cheaper and easily transmutable. The students recognized this and felt ‘shortchanged’ because they intuitively knew this is not what education is about, and they are not machines.
Nineteen-sixty eight would be the culmination of revolutionary fervor among students from France to Mexico, and it was this intellectual liberation movement that was seen by the elite as subversive to democracy; this is best elucidated in the Trilateral Commission’s infamous 1973 report, The Crisis of Democracy. The report warned,
The development of an "adversary culture" among intellectuals has affected students, scholars, and the media...[these] value-oriented intellectuals who often devote themselves to the derogation of leadership, the challenging of authority, and the unmasking and delegitimation of established institutions, their behavior contrasting with that of the also increasing numbers of technocratic and policy-oriented intellectuals...this development constitutes a challenge to democratic government which is, potentially at least, as serious as those posed in the past by the aristocratic cliques, fascist movements, and communist parties (Huntingon, et al. 6-7).
The solution to this crisis lay in changing education from a liberating experience to one where authority and capitalist values dominated, enter the technocrat—as the aforementioned quote mentioned as the non-subversive element. ‘Credentialism’ is, in part, a reaction to the experiences from the 1960s. Students in the 1960s, at the height of the welfare state, had ample access to state subsidies, and universities were authentically public institutions were well funded. With the rise of neoliberalism and the retrenchment of the state from its educational responsibilities, students and universities were left with the bills. This led to a sea-change in thinking among students, “In another decade, [the 1980s] however, students dropped that cause [educational emancipation], apparently taking it for granted that credentialing is the normal primary business of institutions of higher learning and that its cost is an unavoidable initiation fee into acceptable adulthood” (Jacobs 47). To make sure that students would see their education as a means not as an ends, the increase in student debt acts as a coercive reminder to students that “the only guarantee behind the loan is the valuable credential itself” (Ibid).
Thus, the revolutionary élan of modern students is stunted by debt bondage. The neoliberal, individualist ‘Creative Class’ theorem seems to be a better fit for a generation of students more concerned with paying the bills and individual emancipatory pursuits that can be bought and sold than democratic social change. Instead, students, by necessity, after graduation are more likely to become technocrats than become intellectuals, and today it has become common sense to do so. The problem is that these members are part of the ‘creative class’ and the ‘Creative Class’ is anything but creative.
Jacobs introduces Thomas Kuhn’s notion of ‘paradigms’ when she discusses the credentialed, ‘Creative Class’ agent. She states,

...previously established scientific verities are themselves capable of hampering scientific advancement. He called such verities paradigms and drew attention to the fact that they shape people’s entire worldviews. Most people do not enjoy having their entire worldview discredited; it sets them uncomfortably adrift. Scientists are no exception” (70).

As eluded to before, modern education with its mass production bias, and ‘human capital’ bias does not bring about truly innovative or critical skills out of their students who later go on into the workforce. However, due to their education and status in society become part of the ‘Creative Class’, and even our civic leaders.
Therefore, with weak critical skills, a credential, higher incomes, and a paradigmatic view of the world the ‘Creative Class’ is actually an anti-democratic force for two reasons. Firstly, with their credential they are able to appeal to authority over members of the community who do not have this credential, thereby cutting off democratic discourse. Further, since their education is paradigmatic, but do not realize this, they believe they know the facts of a situation with advanced theoretical knowledge. As Kuhn states, “What were ducks in the scientist’s world before the revolution are rabbits afterwards” (111). Thereby, their problem solving can potentially cause more problems than the initial problem caused.

Krugman: The Madoff Economy -- The Economy of Parasite

2008-12-22T22:28:00.000-05:00

An amazing op-ed article by the Nobel Prize winning economist, Paul Krugman explaining how the financial industry, and the neoliberal economy was basically built on a massive fraud perpetrated on investors and the public at large. The strange, self-serving incentives on Wall Street, and other financial markets have destroyed a once productive economy. Today we face total debt in the hundreds of trillions, we have allowed major corporations to become so big that they have essentially socialized our economy in the worst possible way with private benefits and public costs (bailouts), 50% of the world's market capitalization has been wiped off, millions of jobs have been erased off the payrolls, and we aren't done yet.

How bad does it have to get for people to seriously consider viable alternatives? The stock markets are hyper-inefficient at allocating capital (as we have seen), the free market is never free, and the credit-card economy had reached a brick wall. The solutions are simple, but politically hard. Redistribute income, impose income caps, increase the minimum wage and tie it to inflation, increase taxes on non-productive/parasitic sectors (FIRE), increase taxes on the super-rich who have been the ones who have dis-saved NOT the poor who have saved--running contrary to that beautiful notion of "common sense", and the nationalization of the financial industry, or at least heavy regulation. If we ignore the lessons of this crisis our entire society will suffer a hole deeper than we can ever hope to dig ourselves out of. Quoting Keynes, "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done." (Keynes 193)

Oh and Merry Christmas!

http://www.nytimes.com/2008/12/19/opinion/19krugman.html?pagewanted=print

The Madoff Economy

By PAUL KRUGMAN
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.

Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?

The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.

Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.

But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.

O.K., maybe my example wasn’t hypothetical after all.

So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.

We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.

But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.

At the crudest level, Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.

Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.

After all, that’s why so many people trusted Mr. Madoff.

Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we’re looking at now are the consequences of a world gone Madoff.

So long, farewell, Auf Wiedersehen, goodnight

2008-09-16T00:12:00.000-04:00

There's a sad sort of clanging
From the clock in the hall
And the bells in the steeple, too
And up in the nursery
An absurd little bird
Is popping out to say coo-coo

coo-coo Regretfully they tell us
coo-coo But firmly they compel us
to say goodnight
coo-coo
Too you

So long, farewell
Auf Wiedersehen, goodnight
I hate to go and leave this pretty sight

Goodbye

Goodbye

Goodbye

The War in South Ossetia

2008-08-24T22:01:00.001-04:00

Russia’s Geo-Political Position

The Russia of 2008 could not be further away from the dark, grim reality of Russia in 1998. The collapse of the Ruble, the record low oil price, the brisk movement of “the West’s” borders encroaching towards the borders of the former Soviet Union looks unstoppable. Russia was in a midst of an existential crisis, unsure of its status as a Western power, a Eurasian power, or whether or not it was even a power at all. From the depth’s of disappear also arises a means to rise from the ashes.

The appointment of Vladimir Putin in 1999 to the position of Prime Minister was possibility the best move that President Yeltsin ever made. Nineteen ninety-nine did bring about the end of the neoliberal, pro-western alignment in Moscow. The liberals were maligned by the inability of market reforms to jump start the economy, the brushing aside of Moscow’s objections to the use of force against Serbia, the terrorist attacks in Moscow by Chechen rebels, and finally the slowly rising oil price all enabled a strategic change in Moscow’s thinking.

What is not and what is being said in the Western mainstream media/analysis:

Mainstream media outlets in the West deride the rise of Russia as being the coming of the second Cold War, that Russia is the aggressor nation breaking the sacred bounds of international law. Russia after the invasion of Iraq made it clear that it would also preemptively attack nations that it considered threats to its national security. When George Bush said this in 2003 to the run-up to the war, it was lauded by the media as the only logical course of action in the post-9/11 world.

The war in Georgia was qualitatively different; Russia was defending its citizens in South Ossetia, citizens who voluntarily accepted Russian passports. Thus, Russia’s war justified on grounds more than sufficient because Russia is indeed defending its citizens in a foreign country. The Georgian’s started the war against South Ossetia, read Russia. It was not as if Saakashvili did not know that the citizens of South Ossetia were Russian, and even more egregious, that Russian military personnel were located as peacekeepers in the region. It was that negligence, if not criminality, that led to the invasion of Russian forces in to Georgia. Saakashvili even lacked the legal right to attack South Ossetia, as it went the 1992 peace agreement which set-up a buffer zone to protect the enclave from Georgian aggression.

The notion in the Western media, is that tiny democratic Georgia is being invaded by Russia, that’s the headline; within the footnote it says, due to a Georgian attack on South Ossetia. The reality is that Saakashvili’s Georgia is nominally democratic, with a record of flouting the rule of law, restricting the freedom of speech, the press, and questionable electioneering. However, since Saakashvili is unwaveringly pro-American, neoliberal, and actively supports the subversion of Russian interests in the Caspian/Caucausus region, these blights on Saakashvili’s democratic record are routinely overlooked by the mainstream Western press.

Some of the conservative commentators even go as far to defend Georgia’s action justified on the mere fact that it is a “democracy” and Russia is a tyranny. In reality, neither Russia nor Georgia are model liberal-democracies, but to explain away Georgia’s actions solely on its faux liberal democratic credentials is propaganda.

The Western media also makes the claim that Russia has lost the PR battle, that its already negative image has been compounded by its “neo-imperialist” act of aggression against Georgia. Russia’s actions may indeed have turned off some members of the Western community, but in many parts of the world, where American hegemony is consistently challenged, Russia’s actions are popular. Russia received its most vivid and unequivocal support from anti-hegemonic factions in the global south—Venezuela, Hamas, Hezbollah, Syria, Belarus, etc.--indicating that Russia’s actions are realigning Russia’s position as a counter-hegemonic force.

Hypocrisy abounds:

Certainly, Russia is not without its own contradictions, it claims to care about the human rights and safety of its citizens from aggression. This obviously begs the question, Chechnya? There are some differences between South Ossetia and Chechnya legally and geopolitically, but Russian’s claims to protect the lives and property of its citizens “anywhere at any time” rings hollow with its own record within its own borders. Russia’s demand for the self-determination of the South Ossetians also rings hallow considering Russia’s own minorities who may also demand such a right that Moscow has denied them.

The United States is also highly hypocritical, and its hypocrisy has even been noted by the mainstream media; principally the hypocrisy stems from the administration giving Moscow a tongue-lashing for invading a “sovereign state” like Georgia, one need only point to Iraq to end that argument. The difference that is made, either implicitly or explicitedly, is that since Georgia is “democratic” its sovereignty is qualitatively different from autocratic Iraq. This argument degrades international law to an even more base level, by creating a legal apartheid, whereby state-rights are guaranteed by their adherence to certain, read American, standards of government and the free market.

Lessons Learned:

Russia may very well be recovering lost ground since 1991, the Russians now are increasing their links in the Middle East, principally Syria; Venezuela, where Chavez is actively campaigning for the basing of the Russian fleet; and even Cuba where overtures of a reestablishment of Russian bases has been growing. What is more important for Russia is that its influence in the CIS has grown exponentially. The lesson has been learned for any former Soviet state that seeks to undermine Russia’s geo-political position; Russia will be relentless in its perceived self-defense.

The other lesson is that the United States and NATO will not come to the defense of these nations in any real substantive way. No American will sacrifice Atlanta, GA. For Tbilisi, Georgia. This is a major strategic reverse for the United States, and its Eurasian strategy of encirclement and re-routing energy resources away from the Russian near-monopoly.

The other lesson that is being is not being learnt in the halls of Washington D.C. is that state-owned companies like Gazprom represent the new form of the state, the corporate state of the early twenty-first century. The interests of Gazprom are the interests of the Russian state and visa versa. While the United States decentralizes and privatizes the most elementary functions of government, the rising powers are doing the opposite. America’s pyrrhic affair with neoliberal decentralization is already leading to crisis and disenchantment may soon follow, and a different American state may form; however, one should not hold their breath!

Challenging hegemony...by catering to it...?

2008-06-26T20:28:00.000-04:00

Latin America again may be on America's radar.

There have been a recent string of discoveries of large reserves of oil and natural gas in the Southern Cone (Brazil, Uruguay, Argentina) in the last 6 months. The most notable of these has been the massive find of oil off Brazil, known as the Tupi and Sugarloaf fields. According to Bloomberg:

"A tripling of proved reserves from 12.6 billion barrels would move Brazil into the world's top 10 nations in oil supplies, according to estimates from London-based BP Plc. Brazil, Latin America's largest economy, would overtake Nigeria, currently No. 10 with 36.2 billion barrels, and put it close to Kazakhstan, which has 39.8 billion barrels."

This has massive implications for geopolitics of the world and Latin America in particular. Since the oil is readily accessible to the American market, conceivably it can supplement or replace Venezuelan oil supplies to the US. Hugo Chavez is not a dumb one, he has signed an agreement with China to supply China with 1 million barrels of oil a day, and before people say that he can't because the oil is too heavy, China is building a refinery in Southern China for the express purpose of refining Vene. oil. What this means is that since Venezuela's oil production has been falling, if Venezuela wants to keep its commitment to China it has to reduce exports to the US.

This is actually against US interests because in so doing, Chavez is enabling China to become vested in the future of the pseudo-socialist regime of Hugo Chavez, meaning political, material,and possibly even military support to his administration and project. Hugo Chavez is also making overtures to Moscow:

"President Hugo Chavez says that Venezuela is fortifying "all levels of cooperation" with Russia, including the purchase of more arms."

"Venezuela spent $4.4 billion in weapons purchases from 2003 to 2006 to modernize its armed forces, according to a report by the U.S. Congressional Research Service."

"Venezuela's military fired its first test missile from a recently acquired Russian Sukhoi fighter jet and launched its first seaborne missile in 13 years, showcasing new capabilities in exercises carried live on state television."

The Chavez regime has every reason to beef up its military in light of the record of the Bush regime and traditional American imperialism in the Caribbean basin. It would rather impossible to have a socialist revolution without the force of arms to protect yourself against American intrigues (lest we forget Chavez was overthrow by an American supported coup d'etat in 2002). By appealing to China for diplomatic assurances, and Russia for investment (Gazprom, which is really an arm of Russia's corporate state, and foreign policy apartus) Chavez is building a truly powerful coalition of international forces to protect him against the United States.

Brazil though has the capacity to undermine Chavez, with the large reserves of oil recently found in Brazil's waters, it could change the whole dynamic. For Venezuela, the more centrist, but still socialist Brazilian government could spread Brazilian semi-peripheral imperialism to safeguard against "revolutionary" socialism of Hugo Chavez, while still appealing to the redistributionist demands of the populations. The oil find will give Brazil major power status, and its oil monopoly Petrobras the ability to challenge Exxon and other major Western oil firms (it is already bigger than Chevron). Brazil can also challenge American or support the United States in the region, certainly Brazil wants to replace the United States as the hegemonic power in Latin America, and has succeeded imo in Mercosur. The United States needs Brazil more than ever, also considering that Brazil will now export major amounts of ethanol to the United States:

"America’s thirst for ethanol is set to grow in line with targets in last year’s Energy Independence and Security Act. Brazil would like to sell more to Europe and Japan too...This year Brazil hopes to export up to 3 billion litres of ethanol to the United States. But this market depends on the corn price being so high as to make it profitable to pay the import tariff...For those worried about climate change, Brazilian ethanol is worth buying only if it is as green as it claims to be. It is certainly much greener than its corn-based rival in America: it packs 8.2 times as much energy as is used in its production, compared with just 1.5 times for corn ethanol, according to the Woodrow Wilson Centre, a Washington think-tank."

So Brazil has the capability of become America's new Saudi Arabia...instead its MUCH COOLER!

The Endemic Crisis of American Capitalism

2008-06-23T00:43:00.001-04:00

With the massive increases in the price of oil and other commodities, it is becoming obvious to just about everyone-with the exception of the Treasury-that these price forces are a result of institutionalized speculation. Looking at this historically, this point was inevitable considering that since 1975 there has been looming financial crisis that have not fully corrected themselves. Conservatives deride the government for being pro-lazy, etc. The reality is that the government works in the interests of corporations and their interests.

Since the first oil crisis in 1973, the American economy has transformed itself from a industrial society with a fairly equitable distribution of income and a strong progressive bent, whereas today the United States could not be further from that. In that process of rising inequality, deindustrialization, and increasing poverty has seen the role of FIRE (financials) increase exponentially to becoming the major industry in the United States. As the financial sector was gradually deregulated and given freer and freer reign with less and less government oversight the curses of rampant financial speculation has created a monster beneath the surface of a calm economy.

Consider the number of unresolved crisis' in the financial sector since 1975:

-1982: Debt Crisis
-1987: S&L Crisis
-1998: LTCM Crisis
-2000: DOT-COM Bubble
-2001: ENRON/TYCO/Global Crossing
-2007: Sub-prime mortgage Crisis
-2008: Oil Bubble
-20??: Next Crisis

Each succeeding crisis has gotten worse, and there are troubling reasons why. First, the Fed and the government since the early 1980s has engaged in the logic of "Too Big To Fail" T.B.T.F, whereby they save banks and after Bear Sterns, investing institutions. This is known as a moral hazard, if these massive amalgamated corporations with such leverage over the whole economy know that the government and the tax payer will bail them out, they will continue their highly speculative behaviour for short-term profit. The welfare state does not exist for the poor, rather it exists for the rich who make stupid decisions.

Secondly, with the take over of Bear Sterns by the Fed and J.P. Morgan, the concentration of power increases exponentially in smaller and smaller hands. Each succeeding crisis has lead to collapses of financial corporations, and the selling of assets to a smaller and smaller group of what is termed "dominant capital". Thus, as these mega-corporations become more and more mega...the government will have no choice to come in and save them.

Thirdly, the government has been increasingly lax in the regulation of the markets. Hedge-funds are basically free of any regulatory oversight, as evidenced in the LTCM affair in 1998:

Hedge funds are not regulated by anybody. Indeed, they are legally exempt from the two major pieces of legislation which govern other firms in the financial industry: the Securities Exchange Commission Act of 1934 and the Investment Company Act of 1940. In order to remain exempt from the Investment Company Act, hedge funds must have fewer than a hundred investors, or, alternatively, their investors must be worth at least five million dollars each. (In order to avoid the reporting requirements of the Securities Exchange Act, hedge funds must have fewer than five hundred investors.) The securities laws were designed to protect ordinary investors from Wall Street tricksters. Rich people were viewed as smart enough to look after themselves. (New Yorker, 1999)

About the current crisis in oil:

"A June 2006 US Senate Permanent Subcommittee on Investigations report on “The
Role of Market Speculation in rising oil and gas prices,” noted, “...there is
substantial evidence supporting the conclusion that the large amount of
speculation in the current market has significantly increased prices.”

What the Senate committee staff documented in the report was a gaping loophole
in US Government regulation of oil derivatives trading so huge a herd of elephants
could walk through it. That seems precisely what they have been doing in ramping
oil prices through the roof in recent months." (Engdahl, May 2)*

Without any meaningful government oversight, these super-elite can do whatever they want and not suffer the consequences. CEO's do not care about the economy, or even their own corporations they care about their own value. Meaning they manipulate the market by creating hype, and when they know things are going to tank they short their stocks or sell their long positions. Then they are exposed, are fired (and paid millions to be fired) and get a new CEO position somewhere else. This is a totally new class of rich, they have no loyalty to country, company, nothing but themselves. These transient CEO's remind me of those unemployed men in the 1930s on the trains looking for work, hobo's. According to eminent American sociologist, Thorstein Veblen on this very subject (written in 1904):

It follows, further, that under these circumstances the men
who have the management of such an industrial enterprise,
capitalized and quotable on the market, will be able to induce a
discrepancy between the putative and the actual earning-capacity,
by expedients well known and approved for the purpose. Partial
information, as well as misinformation, sagaciously given out at
a critical juncture, will go far toward producing a favorable
temporary discrepancy of this kind, and so enabling the managers
to buy or sell the securities of the concern with advantage to
themselves. If they are shrewd business men, as they commonly
are, they will aim to manage the affairs of the concern with a
view to an advantageous purchase and sale of its capital rather
than with a view to the future prosperity of the concern, or to
the continued advantageous sale of the output of goods or
services produced by the industrial use of this capital.

That is to say, the interest of the managers of a modern
corporation need not coincide with the permanent interest of the
corporation as a going concern; neither does it coincide with the
interest which the community at large has in the efficient
management of the concern as an industrial enterprise. It is to
the interest of the community at large that the enterprise should
be so managed as to give the best and largest possible output of
goods or services; whereas the interest of the corporation as a
going concern is that it be managed with a view to maintaining
its efficiency and selling as large an output as may be at the
best prices obtainable in the long run; but the interest of the
managers, and of the owners for the time being, is to so manage
the enterprise as to enable them to buy it up or to sell out as
expeditiously and as advantageously as may be.

(Veblen, Theory of Business Enterprise)

Fourthly, the warfare state has been another source of corporate welfare. The perpetual "War on Terror" and its corresponding imperialist war in Iraq have lead to a privatization of the most basic functions of the liberal state, the monopolization of the legitimate use of violence in the state's hands.Iraq's oil fields now-as mentioned by Cenk-are now back in the hands of Western dominant capital, principally the five-sisters, Exxon, Shell, BP, Total, Chevron.** Iraq is being neoliberalized as it was one of the only state's in the post-Cold War period that refused to accede to American hegemony. A warning about the effects of imperialism within a liberal democratic country was sounded by J.A. Hobson back in 1902, from my essay on the subject of imperialism:

"Understandably, Hobson perceived imperialism to be a destabilizing factor to the
future of Britain as a liberal democracy; the much larger scale of imperialism, the capture
of the state by investing class interests, the forcible submission of large foreign
populations, and imperial competition with other imperialist states. Hobson wrote, “as a
result of imperial competition, an ever larger proportion of the time, energy, and money
of ‘imperialist’ nations is absorbed by naval and military armaments” (Hobson II.I.40).
An observation not lost on Etherington who noted that “two-thirds of government
spending” is due to these military expenditures (Etherington 22). This militarization had
social effects that Hobson saw as being anti-democratic and authoritarian. “Both the
colonial administrator and the professional soldier acquired habits of mind fundamentally
at odds with liberal democracy” (Etherington 23). Hobson also warned about the consequences of this move towards militarism, and the growing tendency towards
illiberality in Europe and Britain in the early twentieth century as inter-imperialist
competition began to grow"

The US government has been engaging in right-wing populism (corporatism) for the last 30 years, prejudicing against the average working man and woman in the United States, destroying the family, and creating increasingly precarious situations for the youth. Meanwhile incomes of the super-rich have increased hundreds of times. In 2006, 50% of the nations income went to the richest 20% and that has increased since then. This is the REAL welfare state, one of neglect, negligence and subsidy at the cost of your living standards and that of your heavily indebted children born with the "original debt".

I love the conflict in Arg. bc it makes Uruguay look SO good!

2008-06-15T23:44:00.000-04:00

"http://www.tn.com.ar/shared/v2/js/ve.js

Venting

2008-06-14T20:02:00.001-04:00

As I continue my odyssey into the world of critical political economy, I realize that in order to see the world from a perspective that is critical from the mainstream will be difficult. I say this not because it is going against the grain, but because it is difficult to find the resources to build an alternative view of society and theory.

It is also going to be exceedingly difficult to do my studies, when the majority of the source that I will be reading or forced to read is based on false analysis. The purpose of academia is to challenge and to open new lines of analysis, but from what you hear from academics this is difficult. There are many reasons for this, principally many of the academics who are taught in x do not want their cherished theories seriously challenged. I do not have any sympathy for these individuals because unlike in other professions or walks of life, ignorance is no excuse!

Para los Uruguayos

2008-06-12T18:52:00.000-04:00

http://www.tn.com.ar/shared/v2/js/ve.js

Marxism ain't dead yet...

2008-05-31T16:30:00.000-04:00

It is ironic that within the context of the largest economic boom since the mid-70s, the left is again rising. It was in the mid-70s when the left reached a tipping point, a negative one. Being brutally suppressed all over the developing world starting with the modern bureaucratic-authoritarian regimes in Brazil/Indonesia in 1964-65. culminating in the coup d'etat in Argentina in 1975, the left was systematically destroyed. The mythology that the left was conquered by, "the logic of the market" has been propagated much. In the West, the left was being subverted by their own failures to go farther than they did, and slowly making concessions to the neoliberalism of Hayek, and Freidman.
Recent articles that I have been reading have been confirming a trend that has become apparent to me, the left is coming back. It is interesting that the great swings from left to right last about 30 years, and about 30 years after the implementation of neoliberalism, the tensions and contradictions that neoliberalism have created world-over are starting to bite back.
Three articles that I read have confirmed this for me, and from the most unlikely of sources. Two are from The Economist magazine, of which I have great respect. The first article, "The post-communist Karl Marx", discusses the increasing popularity of Marxist thought, making the explicit case that it is more read than Adam Smith's work. Since it is from The Economist, he derides Marxism as irrelevant: "It is the breadth of Marx's continuing influence, especially as contrasted with his strange irrelevance to modern economics, that is so arresting." Of course Marxism is not irrelevant to "modern economics" because it was the Marxist critique of classical economics that pushed economists to create neoclassical economics. The article makes BOLD assertions like, "Class war is the sine qua non of Marx. But the class war, if it ever existed, is over." Anyone with ANY sense of history KNOWS that not only has class struggle been the defining characteristic of the 20th century, it is still with us today.

This brings me to the second article that proves the existence of class struggle in the world's future superpower, China. Titled, "Conditions of the Working Class in China" by Robert Weil. The work shows that with the reforms of Deng Xiaoping and the increasing inequality and dispossession that it wrought, old cultural revolutionaries and the "new left" are making connections to raise awareness of an alternative. As stated in the article, "Class conflict and social turmoil have
surged to levels not seen for decades. The workers, peasants, and migrants in China today are mounting some of the largest demonstrations anywhere in
the world, at times involvingclashes with the authorities."
With hundreds of millions of peasants, the reforms of Deng, which started in the 1970s, enabled China to have the manpower to become a major world power. Problematically, like all industrializing states, there are increasing social tensions. What the article is pointing to is the awareness of the old generation of the rights and proto-democratic rule they enjoyed under Mao-although the author does not discuss the negatives of Mao's era-and the new generation's organic ties to the old generation through the mass diffusion of university education to all members of society. What makes China so different is that indeed it has had the experience of socialism, and workers activism. Is this what The Economist was talking about when it stated, no more class war? Nonsense!
The last article actually contradictions the bold assertion of the initial article. The article in question is named, "Communist survival and revival". The article is informative because it dispels the notion that communism is dead, quite the opposite it is in a stage of revival. The new communist movement, it notes, has gotten over much of the bitter divisiveness that has characterized communism in the 20th century: "Eurocommunists can rub shoulders with Stalinists who would once have called them traitors; even different brands of Maoists turn up, ranging from the Chinese party to former admirers of Albania's Enver Hoxha."The revival of the Italian communist party is indicative of a strong connection that the communist party has in continental Europe. This is not to say that communism is a good thing unto itself, as Marxism like neoclassical analysis is riddled with unsuportable assumptions, principally the transformation problem. However, what it does show is that in the myth from the 1980s, of a "property-owning democracy" of Thatcher, people are still capable of thinking beyond themselves.

Traitorous ignorance

2008-05-02T17:58:00.001-04:00

Organically I am from the working class, thus I defend the interests of the working class. I am surprised how some members of the same class, become traitors not only to their class but to themselves. I am currently reading Steve Keen's book, Debunking Economics. After reading the chapter on how economists justify exploitation of labour through anti-minimum wage positions and anti-union positions. All of it is based on the notion of perfect competition, no such situation can theoretically exist and thus, has never existed. The economists make so many morbid and unrealistic assumptions about the functioning of the human being and the economy it makes you want to laugh if it weren't so influential.

For instance, economists would argue that as people make less money they work less. Which, to even the most reasonable of observers is a ludicrous assumption. People work more when they are making less money to survive, economists assume that there is an actual "indifference" between leisure and work, meaning that people choose the amount of time they work. In the real world, people want to work more because they do not make enough. Economists must assume as Keen points out that workers have alternative means of income, they simply do not. Work is not a choice, its a coercive act.

I am not going to explain the whole illogical assumptions and conclusions that Keen points out in his book. It pains me to understand and hold all of the information in my head, so I am not going to be so pretentious as to know exactly how to articulate the idea's presented in the book. You will have to trust that the notions of a downward sloping demand curve, and upward sloping supply curve is nonsense.

What about the traitors? They know no better, they are usually conservatives who in the grand tradition of conversatism, do not know terribly much. I have debated conservatives on the idea of unions for instance. They argue that, in their articulation, that "unions are greedy". Thus, that almost primal understanding of the economy determines the power of labour to demand fair wages and conditions at the ballot box. I do blame these individuals who went to university, for their ignorance. The argument in reality is that there is no perfectly competitive market, we have oligopolies and monopolies, but we do not have the equivalent in the labour market. Instead, we have a "competitive" labour market, where you have millions of people fighting hand over fist for positions, positions that increasingly pay less and offer less.

This asymmetry of power is not being corrected, in part thanks to the economics of false assumptions and ignorance of reality of the real world. We need to counteract the power of amalgamated capital-corporations-with amalgamated labour power. To go beyond the trade-union movement, to get workers to organize, even the unemployed, in the field in which they seek to find employment. LIke a medical association, or the bar association, and use that association of labour to find and demand fair wages and working conditions for labour. Its a working idea.

Until later

Cheers.

An old fascination

2008-04-27T20:31:00.001-04:00

My fascination with the late 1920s and early 1930s is due to the potential for change that existed in that time. After reading the third installment of Hannah Arendt's Totalitarianism, I am beginning to understanding the mentality of the immediate post-WWI generation.

The First World War, unlike the Second World War, lead to a total collapse of an old order. The imperialistic, heavily class-based order of Europe, which Keynes had spoken of so fondly could no longer be salvaged. Although, the initial revolutionary spirit of 1919-1923 was not enough to take hold throughout Europe, and was suppressed rather brutally in the United States, known as the "Red Scare". What Arendt explained was the collapse of the class-system in much of continental Europe, particularly in Germany and Soviet Russia.
As Arendt wrote: "This generation remembered the war as the great prelude to the breakdown of classes and their transformation into masses. War, with its constant murderous arbitrariness, became the symbol for death, the 'great equalizer' and therefore the true father of a new world order" (27).

What was interesting was with the collapse of the class system, came about a nihilist mob system, that rejected the bourgeois ideologies and hypocrisies that maintained authority in the pre-war world. Although, the onset of Great Depression was the final straw that destroyed the mythologies of liberalism, and capitalism. She posits that the solution to this crisis was to reject the old order in its entirety, and to accept questionable ideologies that sought to explain everything in a immutable logic of history and/or nature, communism/racism.

"They were satisfied with blind partisanship in anything that respectable society had banned, regardless of theory or content, and they elevated to a major virtue because it contradicted society's humanitarian and liberal hypocrisy" (29)

The period of 1929-1933 was that period of time when that hypocrisy was exposed to the world. All around the world, the collapse of liberal democracy occurred as a rejection of the past, and the utilitarian assumptions of liberalism. The common assumption is that this happened only in places like Germany or Stalin taking over in the USSR. This happened in Japan with the end of their democracy and the ascension of the cult of the emperor, which was a creation of the post-1868 elite. Japan's coup was certainly reactionary, although I must say, I must re-read the book Hirohito to refresh my memory.

In Latin America the onset of the Great Depression ended the glory-age of lassiez-faire oligarchic classes, and the insertion of the state. One article I read discussed how due to the collapse of class hegemony in Latin American states, the state had to take over to fulfill the gap left by the end of hegemony, or Bonapartism. In Uruguay for instance, the most democratic state in the region, say its democracy collapse due to the pressures of the depression and a dispension of democratic government as ineffective.

The United States was not much different in the sense that under F.D.R. the state became the main foci for organization and growth in society. A little known fact that most American's forget is that there was a planned coup d'etat against FDR by corporate interests, especially DuPont, to replace FDR or to make FDR a figurehead leader. A proto-fascist movement, by using one of America's greatest generals, and symbolic leader of the veterans from WWI to organize like a SA.

The movie's and art of the era also suggest a modernist break with the past. The pre-code movies of the United States will full of heavy sexual innuendo, references to drug abuse, abuse, glorification of violence and gangsterism, the emancipation of women sexually and professionally. It was indeed a period of rejection of the past mores, and a drive to modernism, guided by the ideologies as Arednt argues, the tyranny of logic.

This was set in an era where a quarter of the American population was unemployed, and worldwide a similar percentage of people were left without means. A book entitled "A Commonwealth of Hope: The New Deal Response to Crisis", I believe gives a very good description of the state of America at the time. There are particularly telling passages in the book I wish to share:

"Less visible were the scavengers who haunted alleys behind restaurants or picked over garbage dumps in search of edible scraps. One observer who witnessed such scenes of desolation was especially struck by the elderly woman, formerly of means, who always took off her glasses so that she wouldn't see the maggots crawling over what she was eating" (Lawson 9).

Within that context it is hard to believe that a rejection of the liberal hegemony could not occur. The "free market" was destroying itself through its own internal contradictions. The disconnect between the reality and the theory was too great, it was the end of free marketism, and liberal traditional values. The ruling classes were delusional and so disconnected from the realities around them that J.P. Morgan himself discussed how maintaining the class inequalities were so fundamental to civilization:

"If you destroy the leisure class...you destroy civilization'. When pressed about how to define the leisure class, Morgran said it would include all those who could afford a maid--about twenty-five to thirty million people, he supposed, until informed that there were only about two million servants in the whole country...Under scrutiny, those who had presided over the debacle and now sought to lead the nation back into the same old promised land showed how little they had troubled themselves to learn about eh society that had made them rich" (Lawson 15).

Finally to make a link to Arednt's position on this whole hypocrisy:

"Since the bourgeoisie claimed to be the guardian of Western traditions and confounded all moral issues by parading publicly virtues which it not only did not possess in private and business life" (Arednt 32).

I hope the connections are being made in your mind...

Thus, understand why I am fascinated by that period, a very honest period.

Power relations

2008-04-22T20:59:00.001-04:00

Changing the world has been one of the prerogatives of ordinary men to become extraordinary men. Changing the world to many men is not a question of making it better, but changing it in their image. However, does the changing the world require disempowerment, or the empowerment of the masses?

It is a question that I am only beginning to grapple with. I could be a complete cynic and argue that some men achieve power for the mere sake of power, but I do not believe that most men do this. Power is the most elemental, primal necessity of men. People seek power to fulfill a desire or a need to change themselves and/or the world around them. Although, power unto itself contains an appeal because it appeals to mankind's fascination with control and subduing nature/God.

All the social relations that are of any real significance, sex, business, and politics is based on the notion of power. Power does not only manifest itself through brute force, usually when it is manifested in such a manner it is indicative of the weakness of the person's power. Rather power is manifested through the manipulation of individual talents to maximum effect, and that manipulation is best confirmed by the acceptance by other's of that person's framing of reality. In order to be powerful one has to be cognizant and confident enough to recognize and use those talents.

There are instances, where what could be a person's most powerful asset, for example sex appeal, or greed becomes their greatest enemy. Simply because that power is not rationally harnessed by the individual. Rather, the individual sees these assets merely as ends to themselves, not means. When one pursues sex, or profit as the end and not out of the social implications of that relation they are weakened to the point whereby they can be manipulated to someone who is knowledgeable of their own power. The individual seeks to only submit to the will of the other. This is due to their own inability to admit or seek their own truth and power in fear of the implications of independence and responsibility.Those who are in power recognize these failing's and exploit the weaknesses in the other to their own benefit. The exploited, due to either self-interest,fear, or gullibility simply cannot compete especially when that one in power has set the agenda.

Sadly, in order for power to exist, these, people have to exist. These people who are unable to realize their own potential power, who are tramped on and who are gullible to power, enable the worst excesses of power to exist, needless to say they are usually the first victims in the wrath of power. Indeed, power is a function of exploitation and realization of the other's weakness real of perceived.

One of the problems with the notion of empowerment is that it destroys the basis of power, the asymmetrical relationship. Empowerment is not bringing people up, it is bringing people down. Is this a bad thing? Of course it is not, if everyone is brought to an equitable level of "power", which is a contradiction. Due to the natural inequalities of man, strength, knowledge would have to be conditioned out of the notions of power or they will be used to impose on the equal masses power once again. Thus, to empower the masses seems suspect at this point.

Bourgeois ideology?

Purpose of this blog

2008-04-20T21:20:00.001-04:00

Dear Readers

Thank you for coming to my blog space, perspectivos. The purpose of this blog is to foster open discussion and alternative views of issues that affect all of our lives. Brining about counter-hegemonic, critical, and countercultural discourses is increasingly important in a world increasingly monopolized by a few corporations, especially controlling what we see through the mainstream media.

The other aspect of this blog is also to discuss more less controversial issues such as art, architecture, urban landscapes, sexuality and music. The exploration of culture is important to connect with our collective past, and to embrace the achievements of our forefathers. In addition, understanding and appreciation of more sophisticated forms of culture is becoming a rarity among the youth, this tendency to limit ones perspective to the immediate is a highly disturbing development.

This blog will also discuss the intersection between mass consumerism, capitalism, education, and even religion all come together to subordinate the mentality of millions. Many of us are victims of this intersection, and we constantly see the dehumanization and commodification of our thoughts and actions in our compatriots. Fetishism, mystification and commodification of our lives through hegemony of the system is something that should be and will be challenged.

About the author: I try never to talk about issues that I do not feel comfortable discussing, and I try never to go beyond my own limits intellectually. Although I challenge others to challenge themselves, and not to accept the status quo, and not to engage in self-pity. I am not a terribly out-going person, nor am I terribly charismatic, but I am a very thoughtful.
Thank You,

Sincerely

Uru.Nick