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An Untold Marxist Story of Financial Crises: Japan, the United States, and the European Union

This is the story that Marxists haven't told yet. In my view, though, this story is perfectly consistent with not only most Marxists' theories of capitalism but also their traditional (usually implicit) policy preferences.

Let's evaluate policy responses in the wake of the most recent financial crises of Japan, the United States, and Europe, beginning not in 2008 but in 1991, with the ranking based on policy impacts on the overall economy and more importantly on the working class.

Central Banks

1. The Fed: Could have been better, but it's clear Bernanke knew what he needed to do and was determined to do it
2. BOJ: Confused and feckless
3. ECB: OMG, WTF

Stimulus and Output

1. Japan: The sum total of public spending for this purpose is respectable, and so is per capita GDP (as opposed to total GDP) growth
2. US: Way too small, ending too soon, leaving the US infrastructural deficit intact, though it's not as if it did nothing to sustain GDP and consumption as the Right claims
3. EU: Terrible squeeze of the periphery from Day 1, disaster capitalism par excellence

Composition of Fiscal Policy + Labor Market Policy + Budget Financing Method

Here there is no ranking. It's a story of "every unhappy family is unhappy in its own way." This is basically where the Japanese working class were done in: even as the government spent a great deal on contingent public works, structurally it made (by the standard of rich nations already small) social benefits smaller, especially for old people, while facilitating the rise of contingent labor without establishing a new social safety net for the precariat; and moreover taxes on corporations were cut while those on workers were raised. The same is now being done to American and European workers, though exactly how it's done politically varies.

Conclusion

Don't make it sound like a Great Depression is what the working class should fear facing a financial crisis; if you do, you are only defending a Maginot Line and motivating workers to turn to bastard Keynesians rather than Marxists. A modern state knows how to avoid a Great Depression, by breaking up a panicked financial crowd by a big monetary water cannon, except in cases where it wants to deliberately inflict a depression on workers for the purpose of effecting structural change, as the ECB is doing to the euro periphery.

Make sure the working class bark, and bark up the right tree. The right tree in the case where the state has its own money and controls its own monetary policy, with little to no pressure from foreign creditors, (as in the cases of Japan and the United States), is people determining the composition of fiscal policy, the labor market policy, and the budget financing method. To get the working class to bark up the right tree, Marxists must fight against right-wing populist mystification about "always uniformly bad and morally hazardous bailouts," (bailouts are not at all alike in their impacts on workers -- it all depends on how they are done and how they are financed; and, if workers are well organized, politically conscious, and militant, they can turn them into opportunities to assert social control over the bailed-out enterprises and/or sectors), without leaving that battle to Keynesians.

No Green Goddesses

Here is an important intervention by Janet Biehl, published in the latest issue of Le Monde diplomatique: "No Green Goddesses: Ecofeminism Isn't Feminist or Eco Either." Unfortunately, the English version is for subscribers only, and the French version won't be available till next month. But the Portugese and Italian versions are already online. A funny thing is that people who wouldn't put up with the god of the Abrahamic religions often love Pachamama. One reason is that Pachamama is cast as female while the God of Jews, Christians, and Muslims is commonly cast as male. Goddesses can be useful for reactionary, patriarchal thought, though. Amaterasu is female and kind of cool in the original tellings of the myth about her, but Japan's ruling class at one time successfully built patriarchal capitalism and imperialism in part using an ideology based on the claimed kinship with her. Another reason is that there are two kinds of "otherness": one (e.g., Muslims, hijab) is cast as frightening; the other (e.g., indigenous peoples of the Americas, Indian saris) is cast as cute. A deeper reason, though, lies in what Janet Biehl touches on in her article: the Left's neglect of the questions of the gendered division of labor and social reproduction. Given that most struggles on the Left today are defensive rather than offensive, there is a tendency to employ the rhetoric of uncommodified = good versus commodified =bad and adopt the posture of defending the remaining space of the former against the encroachment of the latter. But a lot of oppression of women takes place in the sphere of uncommodified relations, which gets scant attention in the aforementioned rhetoric.

Kucinich to the Left of All Too Many Socialists

Dennis Kucinich isn't a socialist and doesn't claim to be one, but his position on Libya is more sensible and also more in keeping with socialist activism than the kind of argument we have heard, and are still hearing sometimes, from all too many US and other socialists about the Libyan debacle ("revolution" in their lingo). The way the US government went to war against Libya was undemocratic and is now illegal too, and that's the point that Kucinich is focusing on, unlike those socialists who think that democracy begins with uncritical support for other people's rebellions far from home, regardless of the political character of their leadership.

Kucinich's resolution got voted down 148-265. It's noteworthy, though, that more Republicans (87) than Democrats (61) voted for his resolution, too, not just John Boehner's counter-resolution (presented to weaken support for Kucinich's) which only criticized the POTUS without committing the USG to withdrawing troops from the Libya war.

It all says a lot about the state of the left-of-center side of US politics, from Trotskyists to Democrats.

Embedding Environmentalism in Marxist Theory of Development

Environmentalism should be embedded in a Marxist theory of socioeconomic development like Kalecki's, revisited by Jayati Ghosh in "Michal Kalecki and the Economics of Development." The main question underlying Kalecki's theory, as Ghosh sums up, was this: "which groups in society (or outside) would bear the burden of increasing capital formation through reductions in consumption"? This question can and should be supplemented by anthropocentric environmental concerns, i.e. quality of life questions: Which groups in society (or outside) would bear the burden of increasing capital formation through reductions in the environmental quality of life? Which groups in society (or outside) would bear the burden of increasing the environmental quality of life through reductions in consumption? Explicitly asked thus, the fact that it's all a matter of politically determined trade-offs becomes clear. Such an approach would be more useful to leftists actively involved in governments, political parties, and social movements than an approach that seeks to develop an enviro-Marxist crisis theory.

Not an Arab 1848

The 2010-2011 Arab revolts have been compared to many historical events. One of the analogies brought up by pundits is the 1848 wave of revolutions in Europe. But it doesn't look like an Arab 1848 in one crucial respect. Not a single monarchy has been toppled, and, with the exception of Bahrain, monarchies have so far faced far less challenges than republics, allowing the former to regroup and work with the empire for counter-revolution.

What Youth Revolt?

The 2010-2011 Arab revolts were billed as youth revolts, a kind of belated sixties for the Arab world so to speak, but the new leaders that they are likely to bring into power -- including in Tunisia and Egypt, the most successful cases -- will be all older than Bashar al-Assad. Very ironic.