fascist state | The Real Movement

June 23, 2015

James Petras and the dying Cult of the Three Saints

James Petras has an article in which he tries to describe what he calls the rise of the non-leftist Left, The Rise of the Non Leftist Left
The Radical Reconfiguration of Southern European Politics.

By the non-leftist Left, Petras means the new players in Europeans politics, like SYRIZA and Podemos, who defy “traditional” Left politics. According to Petras, these new elements, “no longer are based on class conscious workers nor are they embedded in the class struggle. With the decline of unions in the advanced countries, he argues we are witnessing the emergence of a “middle class radicalism”. This middle class radicalism is accompanied on the Right, by escalating state repression instead of state economic intervention. The repressive intervention of the state aims to completely dismantle the social welfare programs that emerged immediately after World War II. The non-leftist Left that has emerged to resist this sort of state intervention advocates a horizontal-style but practices top down politics aimed at securing state power. On the Right, the fascists no longer pursue national autarky, but willingly strip their countries of national sovereignty.

I think Petras missed the opportunity to coin a useful term here. In place of “non-leftist Left”, I would have called it the neoliberal Left. Same letters could be used “NLL”, but “neoliberal Left” like its predecessor “social-fascism” more accurately describes what is taking place. The term, social-fascist, was self-explanatory: fascist economic policies advocated by the socialist parties of the Second International. In the same way, “neoliberal Left” describes the neoliberal policies of a rump collection of Third International political formations.

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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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January 24, 2015

Greece is already a failed state: SYRIZA must let it die

By the time you read this, SYRIZA will likely be the governing party in Greece. That said, SYRIZA will find its desk filled with a large number of pressing problem, the most important of which — according to common wisdom — is what to do about the debt. Here is my suggestion: Tell Greece’s creditors to screw and let the state go bankrupt. The only path for SYRIZA out of the crisis is to let the already failed Greece state fail officially as well.

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September 22, 2014

MMT and the United States as the international monetary sovereign

NOTE FOR THE READER: I want to reiterate that fascism, in the sense I use the term, only describes a state managed economy. I need to clarify again that my argument is not that modern money theory (MMT) is wrong, but that it correctly describes how fascism works. Nor do I wish to suggest that fascism means MMT is Nazism — many people who could never be described as Nazis embrace MMT insights. A fascist state, as I use the term, must be contrasted with a commune of the social producers, not with ‘democracy’ or a bourgeois republic. In fascism the bourgeois state manages the economic activity of the whole society, while a commune of social producers is self-managed. If the reader fails to keep these critical ideas in mind when reading this post, nothing much of my argument will make sense to you.

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A ‘sufficient’, but not ‘necessary’ cause?

At this point, I want to discuss a critical weakness in Tymoigne and Wray’s “Modern Money Theory 101: A Reply to Critics”, that is exposed when a third, external trade, sector is introduced to the simple two-sector MMT model of an economy. In the simple two-sector model, the means of exchange used by society in its exchange relations is assumed to be supplied by the state. According to MMT, the preference for state issued inconvertible fiat currency — over commodity money or bank notes — is that the state imposes taxes for which it only accepts its currency as payment. This, the writers argue, is sufficient to explain what “drives” state fiat as currency:

“The simple fact is that almost all monies of account are ‘state monies’ and almost all government currencies do have taxes or other obligations standing behind them. Further, even if one can find a money of account and a currency that has no fee, fine, tax, tribute, or tithe backing it, that would not invalidate MMT. Perhaps Palley does not understand the difference between ‘necessary’ and ‘sufficient’ conditions: a tax (or other involuntary obligation) is sufficient to drive a currency; it might not be necessary. MMT theory relies on the sufficient condition, not the necessary condition.”

For the moment, I will overlook the questionable assertion that “almost all monies of account are ‘state monies'”. For July alone, in the US, consumer credit outstanding — a money form that is not in any way a ‘state money’ amounted to $3.2 trillion. This private money is, of course, denominated in US dollars, but it is a privately issued money form that seldom takes the form of state currency.

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September 16, 2014

Public Debt and Financial Accumulation: The fascist implications of the MMT two sector model

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Continuing with my critique of Tymoigne’s and Wray’s defense of modern money theory, which can be found here. In my last post, I argued that MMT has no explanation for how the state became monetarily sovereign and thus avoids examining the implications of this development. The very way the paper is organized leads to the conclusion that consumption must come before production and buying must come before selling.

This is explains why Tymoigne and Wray begin their discussion with an examination of the monetarily sovereign state and then proceed to introduce the so-called private sector into their analysis. This method of presentation of their argument makes it appear as if the state’s activities precede that of society. In fact, the premise of the state’s activities is the overproduction of real capital — a mass of excess capital in the form of money, means and labor power. We can trace this excess not to some distant historical event, surrounded by the mists of time, but to the Great Depression. In the paper, however, the writers never discuss this ‘prehistory’ of the fascist state because they begin with the assumption the fascist state already exists.

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September 11, 2014

Catastrophe: Modern money, the state and labor theory

1. Modern Money Theory, or the state as monetary sovereign

I am reading, “Modern Money Theory 101: A Reply to Critics by Eric Tymoigne and L. Randall Wray”. I like this paper because it is a comprehensive defense of the ideology of the modern money school (MMT). Because it is a comprehensive statement of this school, it is possible to show modern money theory is a theory of fascism on steroids.

I want to state at the outset that by fascism I do not mean Nazism or any other peculiar manifestation of fascist politics from the 1930s. (Indeed, the ideas associated with modern money theory are popular across the entire spectrum of American politics — from the Tea Party to the progressive Left.) Rather, I will show that MMT expresses a fundamental tendency inherent in the capitalist mode of production toward the displacement of the capitalist class as managers of the production of surplus value by the state.

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August 7, 2014

VI: Kliman’s staggering 2009 admission that the rate of profit did not fall before the financial crisis

Can state deficit spending be used to artificially add to the mass of profits? And if so, would deficit spending account for the rather ambiguous (even contradictory) results labor theorists’ produce when they try to empirically substantiate Marx’s thesis on the falling rate of profit?

In his 2013 paper, the Australian labor theorist, Peter Jones, provided a persuasive argument that the fascist state can indeed augment or subsidize the rate of profit through its deficit spending. And he argues this capacity can explain much of the ambiguous results labor theorists have produced over the last three decades as they attempt to empirically demonstrate or disprove Marx’s argument on the role played by the falling rate of profit in capitalist crisis.

According to Jones, government borrowing mystifies economic relations by making it appear as if the state can consume surplus value without reducing either profits or wages. If labor theorists do not account for this false appearance, they are implicitly accepting the Keynesian assumption embedded in mainstream economics that government borrowing can create new surplus value.

In his 2012 paper, “Could Keynes end the slump? Introducing the Marxist multiplier”, Gugliemo Carchedi discussed how Keynesian deficits spending works and, like Jones, concluded this deficit spending cannot create money (or, more accurately, value) out of nothing. However, he went one step further: Carchedi argued that once the state began to repay its debt, it would have to raise taxes for this purpose. Whatever additional ‘demand’ the state created by deficit spending during an economic downturn would turn out only to be deferred taxation on the population. Essentially, since the state is not a producer of commodities, it could only bring spending forward; this credit funded ‘prosperity’ would have to be repaid at some point by higher taxes.

Carchedi’s argument may or may not be correct in the long run, but Jones’ paper suggests Washington has been able to run deficits — and, therefore, artificially prop up profits — over a fairly long period of time without running into the need to balance its budget. For more than thirty years, the US has been able to spend more than it takes in without apparent difficulty or obvious limits.

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August 2, 2014

V: How Peter Jones demolished Andrew Kliman’s book in 22 brief pages

Does the collapse of the gold standard and the switch to commodity money have any implications for labor theory? The Brazil labor theorist, Paulani argues it does not:

“when, historically, the umbilical cord that linked the money form to the commodity form was cut (in 1971), the dollar value of goods shifted in relation to other currencies, but they kept between themselves the relations which their labour values (prices of production) produced earlier, backed in gold…”

According to Paulani, then, the prices of commodities may have no longer been convertible into gold after 1971, but they did not shift relative to each other. If, before the collapse of the gold standard, four candy bars exchanged for one pair of socks, this much remained unchanged afterwards. Whether this is true is not the point, since, stated in this simplistic form, it can easily be disproven; however, many such changes can be written off to supply and demand “shocks” of one sort or another. Since any such shock is accidental, Paulani’s argument can be reduced this: whatever change did occur, they were accidental and did not result from the collapse of the gold standard. In fact, since relative prices fluctuated constantly even before the collapse of the gold standard, this is a reasonable explanation.

However this argument by Paulani in her 2014 paper is directly challenged by Peter Jones in his 2013 paper, The Falling Rate of Profit Explains Falling US Growth”. Jones argues the collapse of the gold standard directly explains the difficulty labor theorists are having substantiating Marx’s falling rate of profit thesis.

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April 19, 2014

How John Weeks misunderstands neoliberalism

Professor John Weeks has written some papers on neoclassical economics that have been useful to me in understanding its core assumptions. In particular, I have found his paper on neoclassical theory of money to be extremely helpful. In that paper, Weeks made it clear that since in neoclassical economics anything can be money, the fascist state must ensure its currency alone is money. Which means what serves as money within the world market cannot be open for negotiation. This argument goes a long way toward showing why the United States will not give up the special place of the dollar in world trade. I don’t always agree with Weeks conclusions, but I think his grasp of neoclassical theory is extremely worthwhile.

So, when I came across this three part interview on neoliberalism that Weeks held with The Real News Network it piqued my interest. Unfortunately, it turns out to be another example of how Week’s mastery of the assumptions of of neoclassical theory often has to be separated from his conclusions.

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April 12, 2014

Yaffe and Bullock on the ‘Contradictory’ Role of the State

Yaffe and Bullock’s paper sought to explain why 1970s stagflation could only be explained by the conditions of capitalist production:

“The crisis has to be located at the level of capitalist production. To show how the central tendency of the rate of profit to fall can express itself as inflation and eventually stagflation (stagnation and inflation), we need to examine how the capitalist experiences this tendency and attempts to maintain profitability by increasing prices. We then have to consider how these prices set by the individual capitalist can be realised – that is how commodities can be sold – exchanged for money – at these prices.”

However, in an attempt to refute the theory that inflation was caused by rising wages, they ignored the implications of their argument for the general state of the capitalist mode of production itself. When Yaffe and Bullock wrote the paper, they wanted to show how inflation was caused by the mode of production and attempts to maintain profitability in the face of chronic overproduction. Unfortunately their aim in the paper never actually directly addressed the implications of stagflation for the mode of production itself.

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The Real Movement

Tag: fascist state

June 23, 2015

James Petras and the dying Cult of the Three Saints

May 16, 2015

The Myth of Secular Stagnation, Part One

September 22, 2014

MMT and the United States as the international monetary sovereign

September 16, 2014

Public Debt and Financial Accumulation: The fascist implications of the MMT two sector model

September 11, 2014

Catastrophe: Modern money, the state and labor theory

August 7, 2014

VI: Kliman’s staggering 2009 admission that the rate of profit did not fall before the financial crisis

August 2, 2014

V: How Peter Jones demolished Andrew Kliman’s book in 22 brief pages

April 19, 2014

How John Weeks misunderstands neoliberalism

April 12, 2014

Yaffe and Bullock on the ‘Contradictory’ Role of the State

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