The Real Movement

June 11, 2015

To confront Washington, China should cut hours of labor now

From FT Economics today, China is dangerously flirting with deflation:“PBoC admits defeat in war on deflation.”

“China’s central bank this week faced reality and revised down its inflation estimate to half the level targeted by Beijing, implying it is failing — as global peers have before — to combat the threat of deflation.

That is not only bad news for a country struggling to stimulate growth, it also threatens a ripple effect around the world: cheap made-in-China goods contained price rises around the world when that was a force for good.”

China needs a plan B just about now and I think they should revisit the debate between Mao and Deng over China’s most rapid development path.

Maoists will know I am referring to the debate of the 1960 and 1970s over the path for China’s development. The two sides of the debate is pretty simple to describe. The Dengists raised the slogan: “Black cat or white cat; the cat that catches the mouse is a good cat.” Essentially, their pragmatic argument was that it did not matter which measures the state employed, so long as those measures sped the development of the productive forces. This attitude, of course, horrified the Maoists who rightly saw in it the formula for unbalanced growth, rising inequality and, eventually, full capitalist restoration. This debate shaped China history for most of the latter part of the 20th century and played a significant role in the Great Proletarian Cultural Revolution, which shook China and the world for more than a decade. In the end, Deng and the Dengists won, in large part simply by outliving Mao.

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June 8, 2015

The Myth of Secular Stagnation, Part Two

In part one of my blog post, The Myth of Secular Stagnation, I explained the background to the debate among bourgeois simpleton economists. The stagnation debate among bourgeois economists begins with the Great Depression and Keynes’ characterization of the problem of the Great Depression as “technological unemployment”. The source of the technological unemployment was the improvement in the productivity of labor, the industrial revolution wrought by capital. For Keynes in 1930, this was not necessarily a malady in and of itself, it promised a future where labor itself would be abolished. The transition to a society of less work might be very painful, but the distress was only temporary.

By 1933, however, Keynes’ argument had changed: although he continued to insist that, technically, the “economic problem” had been solved he now focused on the problem of restoring capitalist profit. The Great Depression was no longer caused by the lack of investment opportunities, instead there was a lack of sufficient state deficit spending. The Great Depression, now having lasted 3 years, required state intervention; “a blend of economic theory with the art of statesmanship”.

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June 4, 2015

Husson’s and Treillet’s call for labor hours reduction: Important but seriously flawed

I just finished reading this article by Michel Husson & Stephanie Treillet on the significance of labor hours reduction, Liberation Through Vacation. I want to offer some thought on why I think it is, on the whole, as important as it is disappointing. I make these points, not because I disagree with what I think was the intended thrust of their article, but because certain folks will go after Husson’s and Treillet’s argument. For instance, A. Kliman has already taken David Graeber and others to task for their weak arguments on labor as just another attempt to rebrand social democracy. (See Kliman’s, Post-Work: Zombie Social Democracy with a Human Face?) My point here is to expose weaknesses in their argument because Husson and Treillet’s main thrust is, after SYRIZA’s election, the most important development to emerge from the crisis in 2015.

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June 1, 2015

A reply to Reidkane on the class character of proletarians

In 1846, Karl Marx and Frederick Engels met together with a few other communists to lay out their common approach to the social revolution then developing in Europe. The results of their work, as we all know, was an unpublished manuscript now known as the German Ideology. In it Marx and Engels elaborate on a method of social analysis we now refer to as historical materialism.

That document makes a number of claims about the proletarians which we today might consider heresies. Three in particular are the subject of the commenter, Reidkane:

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May 31, 2015

A reader responds to my post, “What is the difference between Association and the State?”

A reader has written a response to my post, What is the difference between Association and the State? I have posted the comment here for convenience and because it raises some important questions regarding how Marx and Engels should be interpreted. I hope to post a reply to the questions tomorrow:

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May 29, 2015

Even 80 years later the Left has learned nothing: A reply to Rschard1

I received a very welcome and interesting comment on my blog post, “Deficit reduction is not austerity; it kills capitalism”, from Rschard1. The commenter argues that my own argument is technically correct but ignores the messiness of historical contingency. I am, the commenter states,

“glossing over the uncomfortable truth that recessions caused by voluntary deflation have, without any exception I know of, led to horrid consequences for the working class.”

“Der Kampf gegen die Arbeitslosigkeit”

As support for his/her view, the commenter presents the classical case of fascist full employment policies of the German Nazi party. While the German Marxists followed what the commenter argues is essentially my solution for the Great Depression, the fascist introduced a series of measures to create jobs by rearming Germany and preparing it for World War II. These policies rapidly brought Germany to full employment, just as Keynes predicted they could and aided the fascist rise to power. Austerity, as the commenter argues, is great for the more advanced countries, but terrible for countries like Greece.

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May 27, 2015

Deficit reduction is not austerity; it kills capitalism

According to the chart below, each attempt to reduce the federal deficit in the last 30 years or so appears to undermine capital itself:

The correlation suggests that if the Left is committed to a society beyond capitalism, ending all fascist state deficits can be a path to realizing this end. The correlation is explained by the fact that capital at this point is producing more surplus value than can be reinvested profitably in productive employment. The absence of sufficient outlets for newly formed capital is not simply a problem for capitalists like the owners of the largest American corporations who must sit on the uninvested profits: unless the fascist state deficits constantly increase, overproduction of surplus value eventually forces a general devaluation of capital as the mode of production for profit grinds to a halt.

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May 25, 2015

Why can’t communists be more “business friendly”?

This tweet came across my Twitter feed this week and grabbed my attention:

Buenaventura Parsons @Iron__Hammer: Joe Anderson determined to make Liverpool “the most business-friendly” urban environment in the country. You know what that means.

The tweet itself is not all that unusual, but it struck me as interesting because it jarringly raises an uncomfortable question for communist strategy: Why is a business friendly politician politically appealing to what are mostly working class voters in the middle of a crisis? What is the appeal in the term “business friendly”? How can a politician walk among the workers of a town like Liverpool and tell them he is going to make the town “business friendly”? Most of all, what does Joe Anderson know about how the workers of Liverpool think about economic issues that communists do not?

This is the most glaring example of a disconnect between how radicals think the world operates and how it actually operates. Although radicals explicitly or implicitly assume the working class is radicalized by crises, this bourgeois politician has no problem at all saying he aims to make Liverpool the friendliest place for exploiters in all of the UK; and he doesn’t get lynched for this, he gets elected.

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May 22, 2015

MMT and the heresy of the self-financing fascist state

At Nathan Becker’s (twitter: @netbacker) suggestion, I have been reading this piece by Billy Mitchell on modern money theory, Deficit spending 101 – Part 3. If you have any background in the assumptions of mainstream economic theory, you will notice that the piece makes a number of surprising claims:

The idea that a currency-issuing government is financially constrained is a myth. The funds that government spends do not come from anywhere and taxes collected do not go anywhere. Taxes do not finance anything and government spending is independent of borrowing. The government deficit determines the cumulative stock of financial assets in the private sector. Moreover, when government runs a surplus, purchasing power is destroyed forever. Finally, government expenditures do not crowd out private expenditures.

That is a lot of heresy in one short (by Billy Mitchell standards) article. People hearing the MMT argument for the first time must have the same reaction I had the first time I heard Warren Mosler explain it in simple language: “That guy is insane.” Over time, I gradually began to realize what Mosler was saying: modern money (as they call the floating dollar/gold standard) was the practical result of the US withdrawing from Bretton Woods in 1971. When the US went off the gold standard, the fascist state no longer was financially constrained in its spending, i.e., it was no longer constrained by the requirement it exchange its worthless currency for gold. The implications of Moser’s talk was that the fascist state’s capacity to absorb excess surplus value is limited only by the quantity of excess surplus value produced in the entire world market. Previously, a given fascist state could appropriate (i.e., borrow or tax) the surplus value produced by private capitals within their territories (including colonies). Since 1971, however, the United States has been able to do this to the entire planet, because it alone controls the world’s reserve currency.

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May 16, 2015

The Myth of Secular Stagnation, Part One

What is behind the concern over secular stagnation? Is it possible to understand this concern within the context of the labor theory of value? I ask that because almost all discussion of secular stagnation takes place in the context of neoclassical/Keynesian theory. To answer the question, I will look at several papers and article on the subject written from within neoclassical/Keynesian theory that attempt to make sense of the problem.

My perspective, however, will be unique in relation to the writers, because I will argue that stagnation is not a symptom of capitalist crisis per se, but a symptom of increasingly ineffective fascist state management of national capitals. In my perspective, capital has already suffered the breakdown of production on the basis of exchange value. This occurred in the Great Depression and was irreversible. However, after that breakdown, the fascist state stepped in and assumed management of the production of surplus value. The subject of the discussion of secular stagnation is the increasingly ineffective system of state management of capitalist production, not the operation of national capitals, per se.

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