Nobody could plausibly argue that capitalism is a system operates according to principles of justice. The call to rectify historical injustices (e.g. slavery and its afterlives) registers as little more than noise to an economic mechanism that only speaks the language of profit. Capitalism is an inhuman system in which the demands of capital accumulation act as the steering mechanisms for investment, employment and production. Resources are haphazardly shuffled around in the pursuit of profitable investment opportunities. Human needs as such are not registered by the system's internal logic. Accordingly, where there are no short-term profits to be made, there is no investment or employment. As G.A. Cohen puts it, "The same system that overworks people in the interests of profit, also deprives them entirely of work when its not profitable to employ them."
Enter Detroit. For many, Detroit is synonymous with urban decay, business failure, high unemployment, economic misery, and crumbling infrastructure. Large parts of Detroit are in such bad shape that they appear as though they've been bombed out. Think Europe post-WWII. As TNR notes, "Unemployment in Detroit stands at a staggering 28 percent. And, in key measures of economic vitality in the nation’s 100 largest metropolitan regions, Detroit finishes dead last." If you haven't ever been, it's instructive to move about in the city using Google maps street view. What seems like it should be a dense urban area on a map looks like a remote rural area with high grass growing out of broken roads and sidewalks. It's chilling. Moreover, as we've recently learned, 25% of the population of Detroit left the city in the last 10 years. The population is now roughly 700,000 (identical to its 1910 levels, before the auto industry really took off), down from its peak in the 1950s at nearly 2,000,000. Of course, population loss is but one of the many problems facing Detroit and, indeed, it is more a symptom than a cause.
What is the problem? The basic problems are the decline of manufacturing due to capital flight and rapid suburbanization over the last 50 years, but especially after the early 1970s. Why did this happen? Who is to blame?
Global capitalism went into deep crisis in the early 1970s. The long post-WWII boom during which living standards grew modestly for many had come to an end. As David Harvey has pointed out in various places, from a ruling class perspective the crisis of the 1970s was caused in part by the "excessive" power of organized labor. Labor was "too powerful" and was able to bargain too effectively. In other words, labor's power was getting in the way of profitability insofar as trade unions were able to win decent contracts with relatively high wages, good benefits, pensions, and all the rest of it. The power of labor and social movements meant that the state was, relatively speaking, under pressure from below to meet some degree of human needs it had ignored in the past. Moreover, the relative power of the nation state in the global system meant that it was not easy to move capital around globally.
The big problem for the ruling classes in this situation was that they were being taxed too heavily and made to negotiate with labor on terms that were far too close (for the liking of the ruling class) to equality. Mind you it was never anything like "dual power" between labor and capital --capital was always firmly on top-- but even this modestly equitable arrangement was not to the liking of capital once a global recession set in and profits were down across the board. Something had to give.
One strategy was to loosen up immigration controls. Xenophobic immigration barriers were lifted in the US in the 60s in order to try to undercut the bargaining power of organized labor and drive down wages. It didn't work. Thus, the ruling class pushed for the "liberation" of the financial institutions so that they could more easily move capital all over the globe. This enabled off-shoring and outsourcing so that capital could get access to the global "reserve army" of labor. This enabled it to avoid having to face head-on the social power of labor in the advanced capitalist nations. This was later coupled with another strategy: direct assaults on organized labor (e.g. Thatcher vs. the Miners, Reagan vs. PATCO), many of which were very successful in breaking the back of the labor movement for years to come.
These processes lead to the sharp decline of US manufacturing in the 70s. Millions of jobs were lost as the ruling class closed factories, downsized and moved their capital elsewhere. Former industrial centers were reduced to rubble. Those who could afford to move elsewhere in search of work did so, but many were barred from moving.
Suburbanization (which is bound up with this process of de-industrialization) is also a key to understanding this cluster of mutually re-inforcing processes that caused US cities to crumble in the 70s and 80s. Suburbanization, from the very beginning, was always a process shot through with racism and class contradictions. Roughly speaking, suburbanization and all its attendant spin-offs (cars, refrigerators, interstate highways, etc.) underwrote a large degree of the post-war economic growth from 1945-1973. This meant depopulating urban areas (where there were relatively few places to absorb large amounts of surplus capital) and reconfiguring large swaths of people in low-density built environments requiring heavy-car use, all populated by large single-family homes. Suburbanization also dispersed large sections of concentrated working-class populations in dense urban areas, shuffling them to a consumer-dominated social landscape in which public space and the potential for organized revolt were both in short supply.
But, of course, black people were shut out of this new social environment entirely. Federal law as well as extra-legal coercive enforcement mechanisms ensured that this new suburban space would be closed off to all black people, regardless of ability to pay. Federal law also consolidated and reinforced racist attitudes and norms by staking the value of white homeowners' property on there being near-zero levels of black people living in proximity to them (Federal law used a home appraisal system when subsidizing mortgages in which an "A" or "B" rating could only be given in the event the area surrounding the house was less than 2% black... more than that was automatic cause for a low rating). In the context of widespread struggles against racism in the 60s and early 70s, many racist whites decided to flee to the all-white suburbs. To be sure, "white flight" was also a result of the devastating effects of de-industrialization. But there could have been no "black flight" since black people were barred by racist laws, white violence as well as various economic barriers from leaving declining cities for the suburbs. The cumulative effect of punishing poverty, racial oppression, and police brutality ultimately resulted in a series of urban rebellions in the 1960s that shook the urban power structure to the core. Whereas this discontent produced concessions from elites in the 60s, as time went on the strategy from above shifted to one of indifference and abandonment of black populations enraged over the horrible conditions in which they were forced to live. Today, the ruling class only concerns itself with poor urban black populations to the extent that it can criminalize millions of people and shuffle them into the (increasingly profitable) prison-industrial complex.
This is the context in which we must understand Detroit.
What should be clear is that few if any of the causes of misery are peculiar or "internal" to Detroit. And for this reason, the solutions to Detroit's woes cannot be wholly internal; they must come from without. They must, in other words, be part of a much larger mobilization to curb the global economic forces that have sapped the city's ability to flourish. Broken cities don't rebuild themselves, nor do jobs materialize out of thin air. These things require large-scale investments of capital. What Detroit really needs is a Marshall Plan.
As TNR has put it:
"Institutions developed at the height of Detroit’s postwar prosperity remain--and provide the city with advantages that similarly depressed industrial cities cannot claim. It has educational institutions in or near the city (the University of Michigan, Wayne State) and medical institutions (in part, a legacy of all those union health care plans) that are innovative powerhouses and that currently generate private-sector activity in biomedicine, information technology, and health care management. And there is already a smattering of examples of old industrial outposts that have reacquired relevance. An old GM plant in Wixom has been retrofitted to produce advanced batteries. There’s a new automotive-design lab based in Ann Arbor."This is just to say that the public infrastructure and productive forces in Detroit, dilapidated though they are, are nonetheless developed to a relatively high degree given the city's past. The biggest problem is that this productive capacity lies misused or unused entirely.
So, what Detroit needs is a massive influx of public funds. Some will say: but how could we afford this? I think this is a short-sighted objection. We can afford to drop bombs, kill people and destroy infrastructure in the Middle East and elsewhere, but somehow we're supposed to believe that we can't rebuild things and help people here at home? This isn't even to speak of the fact that our society still produces enough of a surplus to fund both the imperialist adventures and a far more ambitious domestic spending agenda (that's just to say how large the surplus is, not that we shouldn't want to end the wars). The surplus exists, but it's use is presently dictated by the constraints of profitability. A just society, in contrast, would mobilize the surplus to assuage suffering and cultivate human flourishing.
Perhaps the biggest problem facing Detroit is indifference. This has both racist as well as capitalist overtones (to the extent that we can disentangle the two). The racist dimension lies in a tendency for whites to gawk at black misery in such a way that poor blacks become dangerous, dark "others". This was, of course, true even during the "golden years" of Detroit when the auto industry was booming. But this deep indifference has increased with the rapid decline of the city. This tendency undermines bonds of solidarity between whites and black people, since many whites tend to see black misery as "their problem" and not a social problem of wide significance to all. The result is that black people aren't seen as fellow comrades, fellow citizens whose plight is of interest to everyone. So when a city as heavily black (over 81%) as Detroit is in deep trouble many whites see it as a problem that doesn't concern them. This was true in post-Katrina New Orleans as well as in many other cases. There is a profound lack of solidarity here: the suffering of the black population of Detroit is not internalized and identified with enough by whites. What's needed is a Left politics grounded in uncompromising solidarity.
The capitalist dimension is similarly dehumanizing. Capitalist investment is blind to human needs as such. It only aims to maximize profit. So human suffering that cannot be exploited profitably simply doesn't register. The system doesn't take note of it- and capital is not invested to assuage it. As far as the "Free Market" is concerned, Detroit is invisible. It doesn't matter how talented or deserving residents are- capital investment is not an ethically sound process in which the deserving get their just deserts. It is thoroughly impersonal, and has no regard for human development. This is reification at work- the tendency to see ensembles of social relations and even human beings as mere exchangeable objects to be exploited when its profitable or cast aside when its not. This is what Adorno called "bourgeois coldness". Clearly it is to blame if we're to understand why the people of Detroit have been allowed to undergo such steady decline and misery for the past 40 years.
Thursday, August 25, 2011
I'm currently halfway through Pat Devine's incredible book Democracy and Economic Planning. It should be required reading for everyone on the Left. It is rigorous, clear, well-written and refreshingly radical. The goal of the book is to determine what sort of economic structure is required for a genuinely self-governing society. His argument, contra defenders of market socialism, is that democratic planning (which combines elements of centralization as well as de-centralization, local as well as national-level coordination) is what's needed. He insists on genuine participatory political democracy at the society-wide level, as well as serious industrial democracy at the level of the workplace. He also offers arguments to help navigate the potential tensions between society-wide goals and the goals of particular self-managed, worker-run firms. Devine sharply criticizes the statist Stalinist regimes that constituted so-called "really existing socialism", while at the same time offering a withering Marxist critique of capitalism. He also offers a detailed analysis of attempts at worker self-management in Hungary and Yugoslavia, showing what we can learn from their mistakes. I'm surprised that the book has not received more attention; but in an era in which the spell of neoliberalism is being shattered to pieces, the arguments in the book are more poignant than ever. There is a democratic alternative to the boom and bust cycles, deep crises, exploitation, war, environmental degradation and oppression characteristic of a global system dominated by capitalism. Read Devine's book to get a sense of the basic contours of what the socialist Left is fighting for. It's not a detailed blueprint for a new society, but it is an excellent example of spelling out concretely how it might be possible to institutionalize the basic aim that animates socialist, i.e. a self-governing society in which the means of production is under the democratic control of the people.
Here. The protests are the biggest since the Pinochet dictatorship fell. This is also the first two-day general strike since Pinochet as well. I dunno, though, maybe the Wisconsin Democratic Party should get in touch and ask them to call it off and try a top-down, year-long process of recall instead.
Tuesday, August 23, 2011
(Neo-classical) economists love to talk about efficiency. Markets, we're told, are nothing if not efficient. Businesses that succeed, supposedly do so because they're efficient. Talk to an economist, and you'll hear a lot about "efficient allocations" of resources, and "maximizing efficiency", and so on. What does all this talk mean? Why is it billed as such an important criterion for evaluating social institutions and public policy?
It's worth noting that economists themselves haven't always taken "efficiency" to be the most important goal of policy. As Andrew Levine notes: "For economists who came of age during the Great Depression and their students, unemployment was the major theoretical and practical concern. Nowadays, efficiency has taken its place." Levine is correct. It hardly needs to be said that full employment has long since ceased to be even a rhetorical goal of public policy. But if the old demand for full employment was concrete and easy to endorse, the new lingo of "efficiency" is abstract and unconnected with the needs and interests of working people. Again, as Levine puts it, "it is hard, at least for strangers to the economics profession, to understand why economists today focus so doggedly on a structural property of economic systems that represents real world concerns in only the most indirect and attenuated fashion."
So what is that economists mean by "efficiency"? For all their talk about being a rigorous science, conventional economists are actually quite unclear about what their favored criterion means. As Levine points out, "sometimes it is used loosely as a synonym for productivity...sometimes it invokes a cluster of non-technical ideas- delivering the goods, avoiding waste (of time, effort and resources), running smoothly, and so on." But in more technical contexts, it means "Pareto optimum". In the reigning jargon, an allocation of "resources" is "efficient" if it is "Pareto optimum", that is, "if any change would make someone worse off (holding technologies, preferences and the (initial) distribution of resources constant)." Or, put another way, a "Pareto optimum" or "Pareto efficient" allocation is one in which no individual can be made better off by redistributing resources without making another worse off.
Now, I want to draw your attention to two things at this point. First off, take note of the fact that the ordinary, non-technical uses of "efficiency" do not necessarily coincide with the technical definition embodied in the idea of "Pareto efficiency". That is, there is a substantial gap between our ordinary understanding of the word "efficiency" and the way that the term is used in technical contexts in neo-classical economics.
Second, note that "Pareto efficiency" isn't necessarily always a good thing. As Levine points out, "the most vile situations can be Pareto-optimal if a change would make someone worse off". That is, Pareto-efficiency is compatible with any degree of equality or inequality. Thus, an extremely unequal distribution could be Pareto-efficient just in case it is not possible to make one person better off without making another person worse off. Pareto efficiency also fulfills a subtle ideological role in justifying capitalism, often being invoked as a theoretical tool for justifying the dogma of "trickle down". It can be used to argue against re-distributive taxation on grounds that huge increases in the wealth of the rich (and thus huge increases in overall economic inequality) either increase or have no effect on the welfare of the worst off.
It's also worth pointing out that the way mainstream economists interpret "better off/worse off" is problematic. They're supposed to be measuring human well-being, but they use problematic surrogates such as possession of money or the satisfaction of "revealed preferences". And individual's "preferences", according to economists, are "revealed" in market transactions. It is assumed that these preferences are fixed and to be taken as given. But in reality, individual "preferences" are shaped by and formed within social conditions. Moreover, they are open to rational criticism and democratic debate; surely no critical approach to understanding society can take preferences as mere givens. So, the economist's metric for measuring how "well off" a person is is deeply flawed. Contrast it with the Marxist/Aristotelian view of human well-being, where a person is well-off to the extent that she is able to develop and exercise her talents and natural powers (e.g. creative faculties, physical capabilities, capacity to form meaningful relationships, intellectual powers, etc.). The juxtaposition makes clear that mainstream economists work within a framework for understanding human welfare that is thoroughly pro-capitalist, in that it contorts the definition of human well-being to fit the structural needs of the capitalist economy. It has the ideological effect of leaving us unable to articulate grievances or unmet needs, because it defines our needs and welfare in terms friendly to market society.
So much for Pareto efficiency. But what about the "ordinary" conception of efficiency? Why shouldn't that be the fundamental measuring stick by which we evaluate economic and political institutions?
Because "efficiency" in the ordinary sense is of merely instrumental value. It has no intrinsic value. Doing some task efficiently is good, but only insofar as the task is itself a good one. So, if the goal of some institution is to treat human illness, then doing so efficiently would appear to be a good thing. Efficiency, in this case, would be instrumentally valuable for achieving the goal of treating human illness. But the metric of efficiency doesn't tell us whether or not treating human illness is a good or bad thing. This is made clear by way of another example. Suppose the goal of some institution, imagine a colonial military venture, was to oppress some group of people. We can, of course, imagine the goal of oppression being carried out more or less efficiently. And we wouldn't want to say that efficiency is a good thing in this case, because the goal that is being efficiently achieved is abhorrent. So what we come to see is that the metric of efficiency tells us nothing of the worthiness of the goals of some process or institution. But the overall goal or end that some process aims at is crucial, indeed far more important than whether it is efficient. Because if the goal is unworthy, it doesn't matter whether its efficient.
So the fetishism of efficiency has the effect of obscuring the goals of certain social processes or institutions. Within the idiom of efficiency, in fact, we can't even have a discussion about what the goals are; they are taken as given. Thus, if you think that the function or goal of the health care system should be to treat sickness and ill health, you'll quickly find that there is no space for you to express such a position within a narrow debate about whether the present for-profit health care system is "efficient" or not. The same could be said of public transportation. It is sometimes said that public transit is not "efficient" because it doesn't run the way that a for-profit firm runs (e.g. fare prices are set lower than their market value, services are allocated more according to need than effective demand, etc.). But that judgment typically smuggles in and ascribes irrational goals/functions to public transit systems. The basic function or goal of public transit should be to create a maximally accessible system that helps everyone get where they need to go in a safe, comprehensive way. But if that's so, it hardly makes sense to complain that it doesn't produce profits. That's not the point of it! So, to ask whether it is efficient or not would really be to ask whether or not it fulfilled its function well. But more often than not, talk about "efficiency" smuggles in tacit goals and preferred functions. Thus, public transit can be attacked as "inefficient", where the thing it doesn't do efficiently is accumulate surpluses.
So where does this leave us? Efficiency, in the ordinary sense, clearly matters. For whatever it is that we're doing, it would be irrational for us to want it to be done inefficiently. Even if we're aiming to lay about on the couch and veg out, there are more or less efficient ways of doing it (e.g. it wouldn't make sense to do sixteen jumping jacks every 10 minutes in order to achieve the goal of laying on couch). But efficiency is not, as we've seen, intrinsically valuable. It is only valuable insofar as what we're doing is valuable. So what really matters is the choice of goals or ends. And that holds both for individual goals (e.g. how to live one's life, what sorts of relationships to cultivate, what career path to choose, etc.) as well as collective/social goals (e.g. what should the basic goal of social institutions be? what kind of life do we want to live together? what forms of association do we want to enter into with one another?, etc.). All of this drops out of discussions about mere efficiency. In order to know what goals are worthy of our assent, we need robust democratic debate between free and equal citizens. But, as economists will quickly point out, such a radical democratic vision is not compatible with structuring social life around market forces. Economists take this to be a problem with democracy; but socialists see things precisely the other way around. That is, socialists see that as a reason to reject the fetishism of the market as the central organizing structure of society.
Saturday, August 20, 2011
Thursday, August 18, 2011
Quoted from David McNally's excellent Global Slump (which I'll be posting about soon):
- "The central problem of depression-prevention has been solved" announced Nobel Laureate Robert Lucas, in his 2003 presidential address to the American Economic Association. Meanwhile, the originator of the Efficient Market Hypothesis, Eugene Fama, haughtily dismissed those who predicted a financial crisis, telling an interviewer "The word 'bubble' drives me nuts" -just as one of the greatest financial bubbles in history was exploding.
- One defining feature of every capitalist boom is the absurd outbreak of triumphalism that accompanies it. We live in a "new economy", pundits proclaim, a perpetual motion machine of ever-expanding economic activity. Recessions are a thing of the past... Just as such voices were heard repeatedly prior to the meltdown of 2008, so they bleated out their convictions on the eve of the Great Crash of 1929. Capitalism had "mitigated" its "childhood diseases", opined economist Alvin Hansen at the time. Not to be outdone, the month of the Great Crash, October 1929, economics luminary Irving Fisher declared, "I expect to see the stock market a good deal higher than it is today within a few months." Fisher was ever so slightly off the mark: it would be over twenty-five years before stock market prices reached those heights.
- Mainstream economics has no inherent capacity to make sense of full-fledged breakdowns in equilibrium. Radical political economy, on the other hand, expects economic crises. But this is because it does not expect markets to be inherently stable, efficient and rational. However, mainstream economics and its quantitative analysis ("quants") refuse to acknowledge the possibility of phenomena that violate the predictions their equilibrium generate. Indeed, after the stock market crash of 1987, two quants offered a proof that it was statistically impossible -i.e. that what had happened could not have happened!
- In 1998, for instance, world markets were rocked b the collapse of Long Term Capital Management (LCTM), a multi-billion dollar hedge fund that was run by two Nobel Prize winners, Myron Scholes and Robert Merton. Using Scholes's celebrated formula for derivatives pricing, LCTM made a massive bet that blew up in August 1998 when the firm lost a staggering $1.9 billion in a single month.
In the previous post, I poked holes in the attempt by many on the Right to ground politics on an allegedly fundamental right to private property. Now, it hardly needs to be said that what moves ordinary people in political argument is not lectures about natural rights. Far more moving is talk of freedom, liberation, emancipation. And for good reason. Liberation is, after all, a far more worthy and valuable goal than the abstract, troubled notion of a "natural right" to property.
Unsurprisingly, Right-wing defenders of private property in the means of production have tended to try to clothe their arguments in the language of freedom. More often than not, it is simply assumed that there is a one-to-one identity between private property rights and freedom. As I've argued elsewhere, once we reflect on this assumption it quickly becomes clear that it is false. But let's spend a moment spelling out why.
What is freedom? Right-wingers can't respond to this question by saying "freedom is not having one's right to property infringed upon", for this is circular. We already know that Right-wingers think there is a fundamental right to private property. What we want to know is why we should believe them that there's an intrinsic link between the institution of private property and freedom. So, the answer to our question can't be that freedom is private property and private property is freedom, for that begs the question.
Suppose, then, that a Right-winger tries the following argument: Private property rights equip an owner of some thing with freedom to do as she pleases with that thing without interference from others. To violate the right, then, is to curtail freedom. That's the connection between property rights and freedom.
So far so good. But this argument is hopelessly incomplete. First of all, the argument lacks the appropriate scope to help us know what a free society would look like. It only focuses on one particular owner of some good and tells us that interference with her ability to dispose of that good as she pleases would limit her freedom. It surely does. But societies are much bigger, much more complex affairs than this example lets on. When one individual owns a thing, that presupposes the non-ownership of all other individuals in the society. Ownership, then, isn't a relation between individual persons and objects. It is a social relation: it relates owners to non-owners in specific ways, detailing what each party may and may not do. So, every claim to ownership entails a claim to non-ownership, a claim to exclusion, on the part of others. But, non-ownership, insofar as it excludes non-owners from the use of certain goods, is freedom-limiting. If I lack food or shelter, private property law will coercively prevent me from camping out on a rich person's land and eating fruit from trees growing on it. If I want to find shelter and food on the land of the wealthy, I am coercively prevented from doing so by the regime of private property. That is a very real limit on my freedom: I am coercively prevented from doing that thing that I'd like to do by external force. Families that are being forcibly removed from their homes during the economic crisis hardly need to be told that this coercive process severely limits their freedom to live without interference.
So what does the Right say about such cases? They say that the restriction on the freedom of the non-owner is right and just. The state should intervene on the behalf of the owner. But why? Because, they'll likely say, the "owner has rights". But why?
Here they can tell a story (like the ones refuted in the previous post) about why we supposedly have such rights. Or they can tell a story about why the owner supposedly deserves her land because she worked for it, etc. But what they can't say is that we have such rights because they promote freedom, since the very case we're considering is one in which the freedom of a non-owner is denied! It's vacuous to say that "freedom is curtailed for the sake of freedom" -for what is it that decides that the freedom of the owner should trump that of the non-owner?
Let's change gears for a moment. Suppose you wanted to create a society with maximum overall freedom in it. Ownership, as we've seen, is a social relationship that regulates owners and non-owners. So there's a question of whether different ways of organizing these social relationships make for more or less freedom. Which of the following arrangements, for example, generate more overall freedom?
- A society in which 2% of the population owns 98% of the property.
- A society in which the ownership of property is more or less equally distributed.
But how is it putatively "natural" property rights are supposedly so fundamental and important that we can't even violate them to promote greater individual freedom? My response would be that they aren't so fundamental or important. In fact I don't even think there's any reason to think that there are such things as "natural" property rights at all. Property is a social institution governing the use of certain things. It can be configured in all kinds of different ways--depending on the kind of society we're talking about. It seems to me insane to claim that human beings by nature come packaged with "rights" to particular, specific institutional arrangements that fit cleanly with the functional demands of a modern capitalist economy. For most of human history such a thing would have made no sense.
Tuesday, August 16, 2011
The idea of a "right to private property" is often lumped in with other allegedly fundamental rights (e.g. right to free speech, due process, etc.). But do human beings, by nature, have such a right? What is the basis of the often-invoked right to property? Everyone knows that in existing capitalist societies (take the US for example) there is an intricate system of property law. Although ownership is often thought of as a relationship between an owner and some owned good, ownership is actually a relationship between owners and non-owners. Ownership specifies what the owner (and everyone who's not the owner) can and can't do with some owned thing (e.g. I can use my pencil for writing but I can't use it to stab you, you may not use my pencil without my consent, etc.) Ownership, then, is about social relations. The concept of ownership would not make sense on a planet inhabited by one lone human being. But if social justice is, in part, about what kind of social relationships we want to stand with respect to each other, shouldn't the basic structure of ownership be up for grabs in a discussion of social justice? Isn't it obvious that political struggles for justice should seek to reconfigure the ownership relations?
Not according to many on the Right. They often claim that the powers of property owners are sacrosanct and should trump all other concerns. At least two different strategies of argument are typically pursued here. I'm separating them out for the sake of clarity, but it should be noted that Right-wingers tend to run them together and confuse the two.
The first may be called "consequentialist" or, if you like, utilitarian. It argues that private property rights must be kept at arms length from the political will of the demos. Why? Because private property rights, in the context of a large-scale capitalist economy, tend to produce the greatest overall output, making everyone better off than they would otherwise be. Reconfiguring private property rights in the means of production, say, would threaten the ability of the system to "deliver the goods" and, consequently, would tend to decrease overall utility. According to this utilitarian-style argument, firm private property rights are not, strictly speaking, natural or sacrosanct (because if an empirical argument showing that they lead to sub-optimal economic consequences came along, it would invalidate them). But, since proponents of this argument do think that emphasizing private property rights tends to produce the greatest overall economic pie, they think such rights are here to stay. This argument is distinctive because it doesn't claim that property rights are self-evident or natural. They are only valuable, this argument implies, insofar as they produce certain good consequences at the marco-level. Far-Right thinkers such as Von Mises and Hayek, as well as big international institutions like the IMF, have made arguments of this kind in defense of "stable" property rights. Say what you like about this argument, at least it is clear and falsifiable.
The second argumentative strategy takes it cue from natural law. It argues that there should be firm private property rights not because of the macroeconomic consequences that such rights produce, but because human beings naturally possess such rights. Traditionally, natural law was based on theology. Such and such rights are supposed to accord with God's law. Of course, religious rationale for legal institutions has tended to lose its authority since the onset of modernity and for good reasons. First, even if there is a God, and even if "he" did build a natural moral law into the furniture of the universe, there's still a difficult question: how do we know the precise, specific content of this law? It's not as if we can simply look at nature and see specific institutional proposals like "a right to private property" written into the landscape. So the question remains: how do we know that the specific content of natural law includes an individual right to appropriate all sorts of things (from natural resources, to personal items, to telecommunications grids, to large-scale means of production) and claim them as our private property? Why isn't there, as Hillel Steiner has argued, a natural right of access to the means of production? And how could a natural law theorist even dispute Steiner's argument without offering reasons in favor of her preferred list of rights, thereby invalidating the whole natural law enterprise? If the natural law theorist begins to respond to critics of her list with reasons in defense of her position, she puts the whole enterprise in jeopardy since the list of natural rights (in traditional versions of the view) is supposed to rest on God's natural law, not reasoned argument.
So, it doesn't take much reflection to see that the "natural right to private property" rests on thin air. Rather than being handed down from God, a more plausible story is that the typical list of allegedly "natural rights" are just institutions preferred by dominant groups at a particular time who then go on to claim that their preferences are the natural, timeless will of God. It's brilliant, really: you get to put whatever you like on the schedule of natural rights, and then no one can really question them because, according to your story, they are simply the dictates of God's natural law. To invoke such natural rights in an argument against the Left is simply to invoke Hocus Pocus. And it won't do to set the theology aside and claim that such a natural right is simply "self evident", for it clearly is not.
Of course, there are secular defenses of the right to private property that aren't based on utilitarian reasoning. One route, taken by Hegel, is to argue that private property rights are crucial to moral development. This is a highly idiosyncratic argument, and it's not often that those on the Right invoke it, so we can set it aside. Another secular route would be to lean on the idea of "self ownership". Self-ownership says that we own our own person in the same way that we own external objects in the world. We may therefore do whatever we like with our own body, and, accordingly with our own labor. When we labor to produce something, we mix what we own (our body) with what we don't own (some external object). Through this mixing we can be said to come to have a legitimate claim to own the external thing we labored to produce. Thus, when someone does something with my property without my consent, they're actually injuring my personal integrity (since my property, on this model, is supposedly an extension of my individual ownership in my own person). In this way, self-ownership could serve as a foundation for the idea of a fundamental right to property.
Self-ownership has a certain appeal at first because it seems to explain the (plausible) thought that we should enjoy a control over our own person that should never be violated by another. In the context of abortion rights, in particular, self-ownership looks like a plausible premise (e.g. I own my body, so the government shouldn't tell me what I can and can't do with it). But, upon reflection, it actually turns out that self-ownership is not the best explanation of this thought, and it actually entails a host of quite implausible consequences as well. For example, self-ownership equates our ownership of our person with our ownership of things. It therefore reifies our person, and equates it with exchangeable objects in a way that is implausible. Human beings enjoy a status distinct from mere objects and commodities, and self-ownership simply doesn't capture this status. Moreover, self-ownership implies that I may justifiably sell myself into slavery. Robert Nozick famously bites the bullet here and accepts that this conclusion follows from his so-called "libertarian" position. Thus, a slave society, in his opinion, could be a just society (even if everyone except one person was a slave). Many think that alone is a reductio ad absurdum. And then there are big problems with the labor-mixing story. How exactly is this supposed to work? If I come upon an unowned clearing in the woods and want to claim it for myself by building a fence around it, what do I thereby come to own? The whole field, or just the area right underneath the fence where I mixed my labor? Or suppose that I dump a can of tomato juice into a lake and it disperses widely... do I then come to own the whole lake or only those parts where the tomato molecules have dispersed? Or suppose I fly a helicopter around spraying water droplets... You get the picture. This notion of labor-mixing is a half-baked idea at best.
But let's grant the idea of self-ownership for a moment and see how well it actually justifies private property rights in capitalist societies. Suppose I'm a capitalist, how is it supposed to turn out that my self-ownership and personal integrity is violated when I am taxed? It's highly unclear. First off, it's not as if I mixed my labor with anything that I own. I'm after all, not a producer. I don't labor to produce the commodities that my company sells on the market. Yet, in capitalist societies, I of course have exclusive ownership rights over all the products my employees produce. In what way does self-ownership help us justify this right of ownership over the surplus value produced by my employees? Again, it's highly unclear. Sure, I own my person (we've granted that). But how is my personal integrity supposed to be violated by paying taxes on the profits my company earns as the result of others labor? If anything, self-ownership suggests that I, qua capitalist, am doing something unsavory by appropriating the surplus value produced by the labor of my employees. If anything, the fuzzy idea of self-ownership provides a quasi-argument not dissimilar to the Marxist charge of exploitation. As many so-called "left-libertarians" have argued, a political theory founded on self-ownership seems to end up being far more critical of capitalism, and far more left-wing, than hard-right "libertarians" like Nozick and Hayek have realized.
But, of course, so-called "libertarian" arguments that rely upon self-ownership don't use such real-world examples. The arguments they use to support their favored policies always begin with some individual who is alone in the universe. They frequently use the example of Robinson Crusoe, which is laughable. This individual, they argue, begins in a world where nothing is owned, mixes her labor with a raw natural substrate, and thereby comes to legitimately own it. How, they then ask, can it be just to intervene violently to force her to give up this thing she owns? Doesn't this violate her person in an intrusive way? Maybe it does. But we have to be clear that we're not talking about reality. We're talking about an almost sci-fi scenario that is contrary to fact. We're also talking about a scenario that is internally contradictory: an isolated individual allegedly in a "state of nature" who, despite her isolation, still brought with her all of the fruits of social life (e.g. language, culture, the concept of "ownership", etc. etc.). Such contrary to fact scenarios prove nothing about complex modern societies in which everything is produced through dense networks of social labor. No individual, completely on her own, could even produce a pencil if she tried. Too much socially produced knowledge, technology, and raw material extraction are required for one individual to accomplish alone. So the so-called "libertarian" argument is a non-starter.
So where does this leave the "right to private property"? I think it makes it look rather implausible indeed. I haven't said anything to impugn the utilitarian, economistic argument, but I think you can see that it is wildly implausible. Natural law is a non-starter, for it rests on spooky metaphysical ideas which, even if they were plausible, hardly justify something so specific and modern as a "right to private property". And the idea of self-ownership, apart from being ill-founded itself, doesn't even do the work of justifying property rights that it purports to do.
So there is no sacrosanct, natural right to private property. It is wrong for me to come into your apartment and fool with your toothbrush. But that would be wrong in a socialist society as well. And we don't need some fancy natural right to property to say why. Moreover, private property in the means of production is a much different affair from possessing certain kinds of personal property (e.g. your toothbrush). And owning credit-default swaps and collarteralized debt obligations is not the same thing as enjoying exclusive control of the sandwich you just spent the last hour making yourself for lunch. Rather than help us make sense of these cases, the idea of a "right to private property" obscures things. I think the Left should be confident in denying that there is such a right at all. It is basically non-sense. What the Left is after is a society free of domination of all forms, an egalitarian social order in which oppression and relations of exploitation are a thing of the past. Subordinating all politics to the protection of allegedly natural property rights stops us from even approximating that goal. Harping on the idea of this right is nothing more than an apologia for a system whose legitimacy is losing ground by the day.
Monday, August 15, 2011
Let's hope Richard Falk is eventually proven wrong (although, for the time being, his analysis strikes me as correct). That is, let's hope a powerful, organized anti-war movement emerges that is capable of undermining the legitimacy of this costly and inhumane venture.
One of the ideas floating around out there is that the punishing wave of austerity being pushed through by Obama and the Democrats has a "silver lining" in that it includes cuts to defense spending. First off, it's not difficult, even in ruling class circles, to make the case for reducing "defense spending" when the budget is as bloated as ours is at present. Finance capitalists are so hell-bent on deficit reduction that it is reasonable, even within a ruling class perspective, to think that defense spending can be trimmed down a bit.
Second, we have to keep in mind that Washington is committed to financing the continued occupation of Afghanistan. Even if cost-cutting moves are made, they pale in comparison to the cost of that conflict alone.
Finally, as Doug Henwood points out, "in 2000, we spent 3.7% of GDP on the military. The Pentagon didn’t have to hold bake sales. We’re now spending 5.4%. Merely going back to 2000 would save 1.7% of GDP, or $255 billion. If over the next decade we spent 3.7% of GDP instead of 5.4%, we’d save $3.6 trillion." Now, you'll have noted that this sort of reduction is not even discussed as an option among the two corporate parties. It's taken for granted that the military-industrial complex must more or less remain intact as it is. Both parties are committed to maintaining the US's Cold War military buildup indefinitely. Both parties are committed to the subjugation of the peoples of the world to the interests of domestic elites in the US. Nothing will change as long as progressives believe that they can challenge imperialism by voting Democrat.
And, in reality, even a 1.7% decrease in defense spending (as a fraction of GDP) is modest. The US government outspend nations that could conceivably pose a military threat by more than 3 to 1. Left-liberals should be suspicious of cheap attempts to quell their discontent by pointing to a few minor cuts to a bloated Pentagon budget. A genuinely progressive diagnosis yields the following demands: end the wars, tax the rich, no austerity.
The project for socialism set out in The State and Revolution and "Can the Bolsheviks Retain State Power?" (both written in August/September 1917) was, by any standards, extraordinary. It was a project that sought to eliminate the relations of power, of domination and subordination, that had always characterized society. Socialism was identified with self-government. All the powers hitherto arrogated to the state were to be reclaimed by the people in arms. The armed assemblies of the popular masses were to debate and decide upon public business (the legislative function); and they executed punishments and provided for their own defense (the coercive functions of the police and army). There were to be no more special powers and the complex checks and balances that had characterized the liberal constitutions and made parliaments into the ineffectual "talking shops" were to be swept away. They were now irrelevant and harmful, for their whole point and purpose had been to construct so many bulwarks and obstacles to the power of the people. They comprised the web of mediations through which popular power was purposely emasculated. Now, according to the Bolshevik programme, the power of the people was to be direct, immediate and unrestricted. It was meant to be a clarion call to the people of the whole world to recover their potency as makers of their own politics and as participants in a transformed democracy.-From Neil Hardings essay "The Marxist-Leninist Detour" in Dunn (ed.) Democracy: The Unfinished Journey. (Cambridge UP: 1992).
This ideal of a completely self-governing society free from all forms of domination is more relevant today than ever. That this was a vision Lenin shared is clear to anyone who has read State and Revolution. It is often claimed that there is no room for democracy in Marxist thought, but I can't think of a more radically and uncompromisingly democratic political vision in human history. No constraints on the power of the people are countenanced: not the allegedly sacred "natural right to property", not the needs or interests of dominant groups (whether their dominance is based on gender, race, etc.), not the toxic forces of militarism /nationalism. It is a thoroughly internationalist vision in which the ultimate goal is the complete and full liberation of all human beings.
Of course, it's a complex and important question for socialists why the promise of early years of the Soviet experiment was ultimately extinguished by counter-revolution from within. Internationally and internally isolated, devastated by civil war and famine, the promise of the early days of the revolution was lost. The ideas of workers control and radical democracy fell by the wayside. Soon enough, workers were being disciplined and exploited. It is in this context that Stalin rises to power, who has the distinction of having murdered more Marxists and revolutionaries than the Tsar ever did. The top-down authoritarianism that marked the rest of the years that the Soviet empire existed was anything but socialist. But this oppressive, ossified bureaucratization doesn't tarnish the early vision that united the oppressed and exploited of Russia in rising up against the ravages of capitalism and war. That basic emancipatory vision is more valid today than ever.
On Friday, the Federal Bureau of Investigation (FBI), an agency of Obama's Justice Department, announced that it was investigating as a “national security” issue unsubstantiated charges of sabotage leveled by Verizon against striking workers. FBI Special Agent Bryan Travers issued a provocative email connecting the alleged incidents to the September 11 terrorist attacks.
“Because critical infrastructure has been affected, namely the telecommunications of both a hospital and a police department, the FBI is looking into this matter from a security standpoint as part of our security efforts leading up to the 9/11 anniversary,” the email stated.
A day later, the New York Post reported that New York City has begun deploying police officers, including members of an anti-terror unit, to escort strike-breakers across picket lines and monitor picketers.
According to the Post, police officers are “monitoring Verizon garages and following its trucks with cops from all over the city, including members of the Critical Response anti-terrorism units.” The newspaper quoted one police officer complaining, “We have to follow Verizon trucks all day.”
The government and police are seizing on the charges of sabotage to increase pressure on the workers, even as they ignore numerous instances of picketing workers being injured by managers or strike-breakers.
The company's overall workforce now majority nonunion, CWA and IBEW members need to see workers at VZW as potential allies and future union brothers and sisters. We need to turn the tide back toward a majority union company. Many (if not all) in-store technical workers will lose their jobs at the end of the month when the company reorganizes tech support, so there has never been a better time to demonstrate the benefits a union can provide.
Unions also need to go back to the tactics from 1989 and encourage customers not to pay their bills in solidarity with the strike. Now, with online billing, the company has a rock-solid income--but a campaign of de-enrolling in Easy Pay by the union could make waves. The 45,000 union members themselves are customers, with connections to literally hundreds of thousands of other households.
In addition, we need to highlight the toll Verizon's greed is taking on our families. Not only are strikers losing pay, but on August 30, we lose our health care. Rallies with children and dependant family members could expose the blatant greed of a profitable company depriving thousands of people of necessary care.
Besides reaching out to VZW and the public, we need to focus on the kind of aggressive, disruptive tactics that can win this strike. The outcome of this strike is unwritten, but the pieces are there for an important victory for labor.
Thursday, August 11, 2011
What does solidarity mean for socialist politics? Take the example of the oppression of women. We've all encountered self-styled progressive men who seem to think that the fight against sexism is merely of interest to women. The liberation of women isn't their own responsibility; it's only the job of women to fight sexism and gender oppression. Because they're men, they might even think that they just won't be able to ever understand the oppression of women. So these men think it's OK to stand on the sidelines.
That's not a socialist position. To be a socialist and a man is to be absolutely committed to ending the oppression of women. It is think that you have a responsibility to learn everything there is to know about how women are oppressed by listening and immersing yourself in the history of struggle. To be a socialist and a man is to believe, first of all, that you have a responsibility to refuse participate in the oppression of women. Second of all it is to believe that you have a responsibility to be an active participant in the struggle for women's liberation. You have to think that the fight for women's liberation is your fight too. The same goes for straight people and the fight against lgbt oppression, for white lgbt people in the fight against racism, and so on. To be a socialist is to think that you have a responsibility to stand in solidarity with all groups fighting against oppression, to see their struggle as your own struggle. That's the core meaning of the politics of solidarity, of uniting and fighting.
A major way that racism functions in contemporary societies is that many white people feel indifferent to the suffering of people of color. Their default position is to think that black suffering is their problem, but someone else's problem. This was obvious during the aftermath of Katrina. What this makes clear is that many whites don't see racial oppression and inequality as a problem which they have a responsibility to struggle against. We can imagine them telling themselves things like "well, that's not my problem, that's just a problem for the black community to solve." You see this same thing in the conservative victim-blaming ideologies of "self help".
Socialists completely reject this way of thinking. Solidarity requires that we care about the pain and suffering of other human beings. It means that we take the oppression of any one particular group to be an injury to all. We don't carve up society into different racial groups and say that injustices faced by one group are only of concern to members of that group. The politics of solidarity requires that you see the struggles of the oppressed as your struggle as well. It requires that you make it your business to learn about the history of resistance to all forms of oppression, even those that don't affect you directly. The more people that are enlisted in the fight against oppression the better.
Modern racism emerges out of European colonialism and the slave trade. It grows out of a need to justify the enslavement, domination and subordination of non-white peoples to the ruling classes of Europe. Thus, racism and capitalism co-originate and make each other possible. Modern capitalism comes of age in the context of expropriations of indigenous populations, colonial extraction of natural resources, and the enslavement of human beings. It is for this reason, that race and class are deeply intertwined. The class system has always depended upon racial oppression, and racial oppression has always occurred in the context of class divisions. Thus, to think that you can overthrow one without the other is naive. For example, the Latino and Black liberation struggles in the US, in periods of heightened struggle and radicalization, have always concluded that fully abolishing racism means doing away with capitalism. Read the 13 point program of the Young Lords Party, or the program of the Black Panthers. They are uncompromising anti-capitalists. I think that's the kind of perspective the Left needs today.
Black oppression is not entirely reducible to class oppression, but it is inextricably bound up with it. Capitalism comes into existence "dripping", as Marx vividly put it, "from head to toe, from every pore, with blood and dirt". That is to say, Marx's theory of primitive accumulation had it that capitalism only comes to exist on the back of the dispossession of peasants, the expropriation of indigenous populations, colonialism and slavery. Racism and capitalism are linked from the very beginning.
This view, that racial oppression is not wholly reducible to class exploitation is basically the position defended by Trotsky in debates with Afro-Trinidadian Marxist CLR James within the SWP in the 30s and 40s. Trotsky's position was to reject the nationalist approach staked out by the CP as mechanical and inflexible. Whether socialists should support the self-determination line is a question of whether the masses of black people are demanding it. But Trotsky wanted to walk a fine line here, he did not want to simply reject the call for self-determination out of hand. On the contrary, Trotsky sensed some latent racism amongst leftists who decried self-determination because it "distracted from class". Trotsky said of this phenomenon that "the argument that the slogan for self-determination leads away from the class point of view is an adaptation of the ideology of the white workers". "The Negro", Trotsky argued in 1939, "can be developed to the class point of view only when the white worker is educated", i.e. only when white workers are disabused of racist beliefs, when racism is smashed within the labor movement. For Trotsky, however, the black struggle against racism should not wait for white workers to be won over to anti-racism, it had to begin immediately, and the job of all socialists was to support such struggles in whatever form they took. He thus argued for a "merciless struggle against... the colossal prejudices of white workers [which] makes no concession to them whatsoever".
What is the relationship between race and class? In order to answer this question, we have to talk about social relations, the level of development of the productive forces, the mode of production, distributions of power, geography, culture, the basic structure of political institutions, in short all the things that make up the bread and butter of the Marxist analysis of society and history. That is to say, race must be understood materially and historically, i.e. in terms of the material conditions of society in its historical context.
The material character of racism makes clear why we can't disentangle race and class. This is why we cannot say that race is a mere epiphenomenon that is only to be found in our language, culture and discourse. Race isn't just an idea or concept which we can critically analyze by solely examining the genealogy of its movement in thought and language. Neither is racism a merely individual or ethical problem that happens to afflict certain individuals. Racial domination is materially inscribed in the basic social institutions that constitute modern capitalist societies. It is a structural feature of the system. We therefore can't properly understand contemporary capitalism without understanding the function that race plays within it. Capitalism has always been racialized from the very beginning. But if we can't understand capitalism without understanding racism, neither can we properly understand race without understanding how racism has always been entangled in other social relations of power, in the economic structure of society, etc. That is, we can't understand what the roots of racism are unless we understand the historical development of contemporary capitalist societies (including their imperialist and colonialist projects). No critique of capitalism without the critique of racism; no critique of racism without the critique of capitalism.
Tuesday, August 9, 2011
Over 45,000 Verizon workers, from Massachusetts to Virginia, are out on strike, marking one of largest labor actions in the US in quite some time. SW.org has the story:
Members of the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) walked out August 7 after voting overwhelmingly--including 91 percent of CWA members--to authorize a strike. The workers are technicians and customer support employees in Verizon's wire lines division, which provides Internet and land phone lines to homes and businesses in the Northeast. The telecommunications giant is attempting to strip its employees of benefits the union workforce has successfully fought for over the years, including the imposition of 25 percent of health care costs onto workers who have paid nothing until now; the elimination of traditional pensions; and the weakening of job security.Read more about the strike here and here. There are clearly challenges ahead, as the SW piece makes clear, but the willingness of workers to take on a powerful corporation speaks to a growing discontent with the crisis, austerity and the broadside attack on working class living standards being waged by both of the major political parties.
Here's what readers can do to get involved if you're based in the Northeast where most of the activity is happening:
- Contact the IBEW and/or CWA locals in your area to find out where picket lines and/or rallies are taking place. Explain that you are trying to build support and ask how you can help.
- Visit picket lines regularly. Bring workers water, coffee, refreshments, and whatever you can to help show support.
- Be part of pickets outside of Verizon Wireless stores in your area. The IBEW has said that it's already organizing these in the Boston area.
- You might consider contacting the CWA and IBEW local in your area and ask if they plan any action in your area.
- Keep your eyes peeled for solidarity events. Perhaps there will be solidarity protests outside of local Verizon stores. Get in touch with local left-wing organizations to see whether or not your local Left is involved solidarity efforts.
- Pass resolutions of support in your union or community organization and communicate them to the CWA and IBEW. Monetary donations, even small ones, will be appreciated. If you're a union member, consider taking an organized delegation from your workplace to the picket line.
- Fill out the online petition against Verizon and send it to friends.
Like General Electric, which just won givebacks from CWA and other unions, Verizon “isn’t under any financial stress,” according to The Wall Street Journal. The company reported $10.2 billion in profits in 2010 and its net income for the first half of this year was $6.9 billion. Over the past four years, Verizon earned nearly $20 billion for its shareholders (a record of profitably used to justify the $258 million spent on salaries, bonuses and stock options for just five of its top executives, including new CEO Lowell McAdam, during the same period).Still, the anti-worker rhetoric from the Right is sure to continue in spite of the facts. But such nonsense about the "persecution" of wealthy capitalists is to be expected from the ruling class and its lackeys. The reality is that this fightback has the potential to inspire other workers to confront their employers as well:
And like GE, Verizon has pursued a systematic and long-term strategy of de-unionization. It has thwarted organizing at its fast-growing and hugely-profitable cellular subsidiary, Verizon Wireless, while steadily eliminating unionized jobs on the traditional landline side of its business.
A victory by Verizon would send a powerful message of encouragement to every other unionized employer seeking “contract relief,’’ based on balance sheets far less impressive than Verizon’s. In the majority of workplaces, where pay, benefits, and personnel policies can be changed unilaterally by management - without any prior discussion with affected employees - non-union employers would be similarly emboldened to lower their employment standards. On the other hand, if widespread labor and community support helps Verizon strikers maintain a model contract, all Massachusetts workers would have something to celebrate on Labor Day, for the first time in a long while.It also has the capacity to open up a discussion about alternative means of resistance that aren't shackled to two-party straightjacket. As Steve Early and
The CWA has organized successful strikes against Verizon in 1983, 1986, 1989, 1998 and 2000. In 2000, Verizon workers struck for 18 days, costing the company about $40 million. Clearly this action has the ability to inflict damage. But Verizon has been slowly whittling away at its unionzed workforce for some time. The unionized workforce has shrunk from 75,000 to 45,000 since the last walkout. The non-unionzed workforce at Verizon is over 150,000, which could make it easier for Verizon to weather the storm this time around. We'll have to see how things turn out, but this much is certain: nothing will be gained without strong networks of solidarity within and without the union.
Monday, August 8, 2011
Standard and Poor's (S&P) is a private company, which is a division of the McGraw Hill Company. Among other things, S&P is one of the "big three" credit rating companies, which also includes Moody's and the Fitch Group (who have not downgraded US credit). Ostensibly, credit rating companies assess the "credit worthiness" of a particular borrower by determining her ability to pay back a loan.
Like many other features of contemporary capitalism, S&P is an unelected, democratically unaccountable entity that has, as recent events have shown, a large amount of influence over political and economic matters. And, like other democratically unelected entities with enormous influence over political and economic matters, S&P is often draped in the apolitical language of "technical expertise". This is a key cornerstone of neoliberal ideology. S&P, just like the IMF and the WTO, are legitimated by reference to technocratic expertise, not to a democratic will. According to their official self-image, such institutions are neutral bodies filled with smart technocratic experts who have administrative power over purely non-political matters. In the case of S&P, the self-image is one of a neutral, impartial bystander who merely deals in "information services".
But is S&P really just a neutral assemblage of impartial experts and wonks who have no political or economic interests or power of their own? Of course not. As Paul Krugman recently pointed out, "it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?". S&P, like other elements of the financial sector, was a substantial player in the 2007 economic meltdown, fomented in part by labyrinthine non-sense like "collateralized debt obligations". As Krugman puts it, "S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste." Worse still, "S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong."
Now Krugman mainly intends to impugn the credibility of S&P's self-image as a competent body of experts, but in impugning their credibility he unintentionally sheds light on S&P's tendentious political/economic leanings. S&P wasn't merely making poor judgments in giving AAA ratings to mortgage-backed securities, it was fulfilling a determinate function in a financial system hell-bent on massive, short-run profits. This evinces an alleigance to a particular sector of the ruling class, the financial sector (or, if you like, "finance capital"). That's anything but neutral. It is no exaggeration to say that S&P is an instrument for finance capital (e.g. to assess risks from its own narrow perspective, to exert pressure to push for its interests in political and economic contexts, etc.).
So what is the reasoning behind S&P's decision to downgrade the US government's credit-worthiness?
First, let's look at their own words. S&P's report said that "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics." What the hell does "fiscal consolidation" mean? Who knows, but I think it's just short hand for austerity. In the view of S&P, the brutal regime of budget cuts soon to be imposed was not enough to "stabilize the Government's debt dynamics". In other words, S&P is arguing that more cuts were needed to enable to the US to better pay off its debt.
Again, this is extremely tendentious, as Krugman points out. In order to make that claim, S&P has to commit itself to controversial and politically conservative neoliberal theories which, if recent history is any guide, have little grounding in fact. As is well known, massive cuts (to the tune of several trillons) in social spending stand to further cripple the economy, thus reducing government revenue and, hence, its ability to pay down its debt. This completely contradicts the "cut, cut, cut" line pushed by S&P and others on the Right. As Richard Seymour explains:
As we've already seen in Ireland, Greece and Spain, the attempt to pay [government debt] off by cutting spending only further weakens economies that depend significantly on such investment, thus reducing the revenues needed to pay any deficit. It can only contribute to pressures toward a 'double dip', as the Eurozone crisis brings us back to 2007/8. Corporate investment is weak, job growth is terrible, wage growth ditto, and consumer spending is fragile because households are still up to their ears in debt. It would take very little to tip the economy back into crisis. What's more, Wall Street traders appear to be perfectly well aware of this weakness, as they have been panic selling stocks since the debt deal was reached.This is basically another phony crisis manufactured by a specific sector of the ruling class in order to create the conditions in which massive austerity for ordinary Americans can be passed off as legitimate. In Seymour's words, it is a "raw exertion of class power", a threat leveled at society meant to push hard for deeper cuts to working-class living standards.
Just ask yourself: how on earth is it legitimate for an unelected, democratically unaccountable body to have such leverage over the conditions of life for the vast majority? This is the reality of capitalism: a small, unelected body of elites enjoy concentrated economic power owing to their ownership and control of the commanding heights of the economy. A radically democratic social order, a socialist society, would mean an end to all of this. It would mean bringing every basic social institution that affects the life prospects of citizens under the democratic control of the community. It would mean subordinating the workings of the economy to human development, rather than the other way around. No more technocratic experts lording over us, no more ruling elites enjoying private ownership of the basic structure of society.
So this downgrade is, as we've noted, a massive exertion of class power. But what is its goal from the perspective of finance capital? Pabhat Patnaik's view is as follows:
While many progressive economists have been rightly emphasising that in the midst of a recession a large fiscal deficit is necessary for stimulating the economy, and that it cannot possibly do any harm, not even on the inflation front (since the inflation in the US, not alarmingly high in any case, is not caused by excess demand), the financial interests and the media controlled by them have been systematically wanting a cut in the fiscal deficit. This is hardly surprising: finance capital is always opposed to any form of State activism except that which promotes its own interests. It propagates not just the view that what is good for finance is good for the economy, but an even stronger version of it: only what is good for finance is good for the economy.I think this is key. Finance capital loves government intervention and spending when it serves its own interests, i.e. when it involves mobilizing billions to bail out dysfunctional banks and insurance companies. But when it doesn't serve their short-term interests, spending and government activism are bad. Here threats are in order (even if it means leveraging the debt incurred by bank bailouts to force through cuts to the standard of living for the many). We have to interpret the downgrade, I think, as a maneuver by finance capital to secure short-term gains at the expense of long-term stability. In Seymour's terms, "Of course the hedge funds, ratings agencies, banks etc are less than concerned about the effect of underfunded infrastructures such as health and higher education. As far as they're concerned, spending is too high and they don't much care how it comes down. Theirs is a very narrow perspective." It's obvious that they do not even know how to solve the economic crisis from their own perspective. It's as if they are only interested in gathering what they can in the short term, only to "raise the flood barriers, hoard their capital, let others take the pain, and allow governments to police the inevitable fall out."
What are the solutions to this mess? Krugman blames everything on the Republicans and the Tea Party. In his world, were it not for the simple ignorance of these groups, the progressive soul of the Democratic Party could finally shine through and an era of Keynesian reformism would be upon us. Krugman's world, however, has little in common with the real one on this score. Krugman asks why we don't raise taxes on the wealthy and implement a single-payer heath system, and then answers his question by citing "death panels" and Republicans as the culprits. This is non-sense. The Democrats had super-majorities in the Senate as well as crushing majorities in the House, a popular President and political capital to boot. The subsequent health care shit show that followed was almost entirely the Democrats' fault. Democratic Senator Max Baucus, we do well not to forget, received the most campaign contributions from the insurance industry of any member of the Senate. He was, of course, the chair person who oversaw the writing of the bill that subsequently passed. Moreover, Obama started off in the campaign with a right-wing position on health care. He defended RomneyCare from the get go, nothing more. Moreover, he and other leading Democrats loudly announced at the beginning of the health care "debate" that "single payer is absolutely off the table". It wasn't even discussed as an option. We weren't even to utter the words in the halls of power. Why not? Because the Democrats are not a progressive party. They defend the interests of the rich. Most of the party's big wigs are more in favor of cutting existing social programs than in expanding them. Obama's advisers are almost entirely ruling class alumni, who are sure to find a niche back in the private sector after their role as a "public servant" is finished. Bill Clinton, let us not forget, is a long-time advocate of Social Security privatization. Are you kidding me with all this "blame the Republicans for everything" nonsense? Take a candid look at the Democratic Party's actions and tell me what you see. It's not pretty.
Progressives should divest from the Democrats and discontinue verbal support, financial donations and volunteering. Join a USUncut chapter instead. Participate in a grassroots social movement. Join a Left organization that has a genuine oppositional perspective. It is clear that the Democrats are a political dead end. You give them the biggest majorities anyone has enjoyed in a generation, and they shit the bed. It's time to rebuild the Left in this country.
Sunday, August 7, 2011
Friday, August 5, 2011
Right from my earliest publications I understood "materialism" in the Marxist sense, as a theoretical approach which does not simply affirm the dependence of the superstructure on the base, the lifeworld on the imperatives of the accumulation process, as an ontological constant, so to speak, but which simultaneously denounces this dependence as the latent function of a particular, historically transitory social formation. The transition from a production to a communication paradigm, which I advocate, does of course mean that the critical theory of society must no longer rely on the normative contents of the expressivist model of alienation and the reappropriation of essential powers. The young Marx borrowed this model from the production aesthetics of Kant, Schiller and Hegel. The paradigm-shift from purposive activity to communicative action does not mean, however, that I am willing or bound to abandon the material reproduction of the lifeworld as the privileged point of reference for analysis. I continue to explain the selective model of capitalist modernization, and the corresponding pathologies of a one-sidedly rationalized lifeworld, in terms of a capitalist accumulation process which is largely disconnected from orientations toward use-value.-Jürgen Habermas (1984 interview with Peter Dews and Perry Anderson for New Left Review)
"...which is that we are not now and have never been on the road to recovery." That's what Krugman is saying in his most recent Op/Ed.
Now, he's certainly right that "we are not now and have never been on the road to recovery." That's true. But is it impossible to deny this obvious fact? Of course not. Obama and the Democrats will continue to do it right up until election day in 2012. And large portions of the liberal left will be prodded into plugging fallacious narratives about "green shoots" and "recovery" and the like in order to advertise Obama's "accomplishments" during the campaign.
Readers of Krugman's column will by now have noticed a couple of frustrating trends. First of all, the guy repeats himself quite a lot. Part of that's not his fault. The economy really does suck, Washington really is worsening the crisis by holding tightly to neoliberal orthodoxy, austerity really is awful, etc. He's right that Washington cares about all the wrong things. That's not changing, so neither should critical commentary. I can't blame him for being repetitious in this sense.
But there are other repetitious features of Krugman's work that are less excusable. His perpetual surprise at the "excessive compromise" and "betrayals" of the Democrats (and Obama in particular) lacks rational grounding. Didn't Einstein say something about doing the same thing over and over and expecting different results... The fact is that Krugman, while his solidly liberal critique of existing policy is commendable, has nothing to say about how we can get out of this mess. He doesn't appear to have any views about how social change happens. He doesn't have a critical analysis of the electoral mechanism in our society and how it forecloses the possibility of real change. He doesn't have any perspectives on the role of social movements. Although his work sometimes shows brief glimpses of an analysis of class power, he doesn't follow through on these questions enough to understand why it is that the Democrats are flipping the bird at liberals. For the most part, he just seems perplexed that the Democrats aren't listening to his good ideas.
But the problem isn't that Obama and the Democrats are simply ensnared by "bad ideas". Neither is the problem that they are "cowards" or poor bargaining strategists. The certainly aren't cowardly when it comes to ridiculing and chastising the Left. They certainly weren't timid when it came to saying at onset of the health care "debates" that single-payer was absolutely off the table.
In order to understand the Demcorats' political trajectory as a party, one needs both a historical analysis of role of the Democrats have played at different points in time, as well as an analysis of the role that corporate-backed political parties play in a capitalist system. We get neither from Krugman.
For an excellent historical analysis of the role the Democrats have played, their relation to left-wing social movements, and so on, I highly recommend Robert Brenner's New Left Review article "Structure or Conjuncture?". Lee Sustar's The Democrats: A Critical History is also worth noting. But any critical study of a progressive social movement in relation to the DP will suffice, because the pattern is always the same. The Democrats (or Republicans, as the case may be, historically speaking), pressured by unrest and militancy from below, enact policies meant to quell social unrest and co-opt militant forces into the "official" political realm. The following co-optation typically leads to the terminal decline and passification of the movement in question and, with it, the hopes for deepening the process of reform. It's for this reason that many on the Left refer to the Democratic Party as the "graveyard of social movements".
For an excellent analysis of the role of the state in capitalist society, there are several sources of good, quick information. The basic point is this: regardless of which party is in power, the state is structurally dependent on the capitalist class. What that means is that the state relies upon capitalists to invest, employ people, grow the economy, produce necessary goods, and, importantly, to accumulate profits which can then be taxed to fund the state's activities. When the capitalist class isn't accumulating profits, they don't invest, jobs are lost, tax revenues plummet, and a political and economic crisis ensues. For this reason, state officials are compelled to do what they can to make sure the capitalist class is happy. Making the ruling class happy means creating a "good business climate", or putting in place "pro growth" policies aimed at creating the conditions for the maximal accumulation of profits. Call this the imperative of accumulation. Left to it's own devices, the system tends to encourage state officials to fulfill this function to the detriment of other functions (e.g. looking after the well-being of citizens).
But, as history makes clear, sometimes the imperative of accumulation comes into conflict with what we might call the imperative of legitimation. No society can reproduce itself over time unless it manages to convince a large portion of its citizens that it is legitimate. But when the imperatives of accumulation compel governments to, say, slash social spending and bail out banks, this creates legitimation problems. A contradiction between accumulation and legitimation arises. Governments will attempt to solve this in any number of ways. The main strategies we've seen thus far as "budget cut fatalism" and "deficit fear mongering". Both of these arguments aim to convince citizens, against their better judgment, that the policies meant to re-establish the accumulation process are, in fact, legitimate (in the interests of society as a whole).
Notice that I haven't even mentioned the problems raised by the colonization of state officials by big business. That is a serious problem, and, of course, public financing of elections would be a small step toward reducing the efficacy of some of the more common ways that politicians are bought off. But the problems go deeper than campaign financing and lobbying. There are fundamental problems here that have to do with the ways in which large amounts of social/economic power are concentrated in the hands of a small class that has a monopoly on the control and ownership of the means of production. A truly democratic society wouldn't be one in which democratic bodies were subordinated to a powerful economic class that owns the basic structure of society. Nor would a truly democratic society be one in which citizens are subordinated to the inhuman systemic imperatives of accumulation for accumulation's sake. A genuinely democratic society -that is, a socialist society- would be one in which the basic structure of society was under the democratic control of citizens. It would be one in which the operations of the economic system were subordinated to the needs of human beings, rather than the other way around.