Showing posts with label Marxism. Show all posts
Showing posts with label Marxism. Show all posts

Sunday, 29 August 2010

Trotsky’s socialism

Seventy years ago the Russian revolutionary Leon Trotsky was murdered.  
Esme Choonara looks at his life, ideas and his legacy
Leon Trotsky addresses Red Army troops in 1918
Leon Trotsky addresses Red Army troops in 1918


Seventy years ago this week an agent of Russian dictator Joseph Stalin murdered the exiled Russian revolutionary Leon Trotsky by smashing his skull with an ice pick. 

Trotsky was at his home in Mexico when the assassin came into his study and attacked him. This was not Stalin’s first attempt.

Only a few weeks earlier, a group of his Mexican followers had launched an armed attack on Trotsky’s household, killing a guard.

In fact, Stalin was so determined to crush Trotsky and his legacy that he had already murdered, or driven to suicide, most of Trotsky’s immediate family.

He forced Trotsky into exile in 1929 and slandered him as a fascist spy and enemy of the workers”.

An exhibition at a museum in St Petersburg last year exposed some of the ludicrous lengths the Russian regime went to wipe out any trace of Trotsky’s real legacy.

Among the exhibits was a teachers’ union scarf from 1925 bearing portraits of revolutionary leaders. The picture of Trotsky had been carefully cut out and replaced with blank cloth.

Hundreds of photographs from the revolutionary years were also doctored to remove Trotsky from his place in history.

Yet by the time he was killed Trotsky had been in exile for 11 years.

He had only a small handful of supporters scattered in different countries and no real influence on world events. His allies in Russia had either been killed or broken by Stalin’s terror.

So why did Stalin still see him as a threat?

Saturday, 1 May 2010

Is capitalism on the path to collapse? – Video from Wellington public meeting


Grant Morgan, author of UNITYblog's current Feature Essay, has just completed a short speaking tour. 

His talks in Christchurch and Wellington drew on, and developed, his 20,000 word essay on why global capitalism is tipping towards collapse, and how we can act for a decent future.

He argues that for the first time in capitalism’s 500-year history, a perfect storm is beginning to engulf the world system.

The main elements are system-level crises of profitability, ecology, resources, imperialism and legitimacy. Their concentration and intensification look set to trigger world system collapse within a historically short time period.

Humanity will face a life-and-death struggle as we confront economic chaos, global warming, resource scarcity and imperial breakdown.

Can we survive the chaos, conflict and carnage of looming collapse? Can Earth’s citizens collectively built a decent future in the face of elite counteractions? Yes, says Grant.

He resurrects Marx’s analysis of social change to explain the growing intersection of system-level crises which will collapse global capitalism as surely as previous civilisations were brought down by their own perfect storms.

“At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production,” said Marx. “Then begins an era of social revolution.”

An era of social revolution will be triggered by the perfect storm appearing over capitalism’s horizon as it collapses the economic, ecological and imperial foundations of the world system. The need to unite or die will call forth a Global Uniting of the mass of humanity which ushers in a society of solidarity.

Watch video footage of the Wellington talk below (apologies for the background hum in the audio track)

Thursday, 4 March 2010

Marx’s Ecology and The Ecological Revolution

An interview with John Bellamy Foster by Aleix Bombila for En Lucha (Spain).
From MRzine
John Bellamy Foster, is editor of Monthly Review


En Lucha: In your book Marx’s Ecology you argue that Marxism has a lot to offer to the ecologist movement. What kind of united work can be established between Marxists and ecologists?

JBF: I think it is important to recognize that Marxists and ecologists are not entirely different groups. Of course it is true that there have been Reds who have been anti-ecological, and Greens who have been anti-Marxist. But it is not uncommon for the two to overlap, and increasingly to converge. Many socialists are environmentalists and many environmentalists are socialists. Indeed, there is a sense in which Marxism and ecology, both classically and today, lead to the same conclusion. For Marx, the goal was the creation of a society in which the metabolic relation between humanity and nature (i.e. production) was rationally regulated by the associated producers. The original title of my book that you refer to was supposed to be Marx and Ecology, but I changed it to Marx’s Ecology because of the depth of Marx’s ecological conceptions.

I would argue that a critical Marxist approach, especially in our time, requires an ecological worldview, while a critical human ecology requires an anti-capitalist and ultimately socialist orientation (i.e., a Marxist one). In terms of united work that Marxists and ecologists can share, I would say social justice and environmental sustainability: saving humanity and saving the earth. You can’t expect to achieve one without the other, and neither is possible under the existing system. Probably the strongest single voice for an ecological relation in the world today is Evo Morales, the socialist (and indigenous) president of Bolivia. After the failed Copenhagen conference on climate change, Fidel Castro said that we used to think we were in a struggle simply to determine the society of the future, but we now know we are in a struggle for survival. We have reached a point where historical materialists are taking global leadership in defining the ecological needs of humanity.


Saturday, 23 January 2010

PUBLIC MEETING: Is Capitalism on a Path to Collapse?


INVITATION TO PUBLIC MEETING:

Is Capitalism on a Path to Collapse? 

A quintet of contradictions are besetting global capitalism: the profitability crisis, resource crisis, ecological crisis, imperial crisis and legitimacy crisis. As a result of these interconnected crises, could capitalism collapse within a historically short time span? What will replace it? Join us at the Socialist Centre to debate these questions.

8pm Friday 5 February 2010

Socialist Centre, 86 Princes St, Onehunga, Auckland

Organised by Socialist Worker. 

Speakers:
  • GRANT MORGAN, International secretary of Socialist Worker.
  • JOHN ROBINSON, global trends researcher, author of The Limits to Growth and Excess Capital.
  • ROB GEORGE, eco-activist & union organiser.
Each speaker will talk for a maximum of 30 minutes, followed by open discussion and questions from the floor.

The speakers have submitted these summaries of what they'll be talking about on the night:


GRANT MORGAN:  A perfect storm is beginning to engulf global capitalism for the first time since its birth 500 years ago. The main elements are existential crises of profitability, ecology, resources, imperialism and legitimacy. This quintet of contradictions looks set to trigger world system collapse within a historically short time span. Increasingly the strategic problem confronting socialists will be how to lead society out of the chaos, conflict and carnage of looming collapse. That will become a life-and-death struggle as we face global warming, resource scarcity and imperial strife. Using the principles of asymmetric warfare, our starting point should be a broad left offensive for immediate rollbacks of neoliberalism.



JOHN ROBINSON:  It has long been known that a global catastrophe is coming as overpopulation and ecological destruction reach a crisis point. We head into a perfect storm in 2030, because all of these things are operating on the same time frame.  Capitalism is an unstable hybrid, centrally controlled by the military-industrial complex.  Its ongoing crisis is described in John’s 1989 Excess Capital.  The next stage will be a deepening of fascism, a demand for strong leadership in a collapsing world.  There is an alternative, lazy socialism, but there is no blueprint for action as ‘green’ organisations snuggle up to the status quo.


ROB GEORGE:  The growth logic of capitalism suggests quite strongly that the present capitalist project, even with a greener face, will meet ecological limits. This growth logic points toward a potential ecotastrophy. Under such a scenario, those people who are presently in a tenuous position will suffer most. Their particular stories will be part of the narrative of capitalism’s growth logic acting on the human population. Human agency and struggle will partially determine how bleak or optimistic this narrative is. Ecotastrophy need not be inevitable - it can be a matter of choice.

At the conclusion of the meeting there will be a social with snacks and drinks provided.

For more information, contact:

Vaughan Gunson
National chair of Socialist Worker
socialist-worker@pl.net
021-0415 082

Wednesday, 8 April 2009

David Harvey: Their crisis, our challenge

In a far reaching interview with Red Pepper, David Harvey argues that the current financial crisis and bank bail-outs could lead to a massive consolidation of the banking system and a return to capitalist ‘business as usual’ – unless there is sustained revolt and pressure for a dramatic redistribution and socialisation of wealth. Does this crisis signal the end of neoliberalism? My answer is that it depends what you mean by neoliberalism. My interpretation is that it’s a class project, now masked by a lot of rhetoric about individual freedom, liberty, personal responsibility, privatisation and the free market. That rhetoric was a means towards the restoration and consolidation of class power, and that neoliberal project has been fairly successful. Continue at http://www.redpepper.org.uk/Their-crisis-our-challenge

Monday, 19 January 2009

Production-Side Environmentalism: Can we produce less and consume more?

by Don Fitz from Climate and Capitalism 12 January 2009 Corporate “environmentalism” is consumer-side environmentalism. “Make your dollars work for the Earth.” “Buy green!” “Purchase this green gewgaw instead of that ungreen gadget.” “Feel guilty about driving your car.” Consumer-side environmentalism is loath to discuss production. Consumer-side environmentalism does not challenge the manufacture of cars. Rather, it assumes that producing more and more cars is a sacred right never to be questioned.

Sunday, 7 December 2008

Who caused the great crash of 2008?

by Lee Sustar from Socialist Worker (US) 5 December 2008 There are plenty of people who should be held accountable for turning an ordinary recession that began a year ago into a global catastrophe. Topping the list is former Federal Reserve Chair Alan Greenspan, who fed the bubble by keeping interest rates at rock-bottom levels, urging home buyers to take on adjustable-rate home loans and refusing to use the Fed's powers to oversee a mortgage industry rife with fraud.

Monday, 1 December 2008

Production-Side Environmentalism: Can we produce less and consume more?

by Don Fitz from Climate and Capitalism 12 January 2009 Corporate “environmentalism” is consumer-side environmentalism. “Make your dollars work for the Earth.” “Buy green!” “Purchase this green gewgaw instead of that ungreen gadget.” “Feel guilty about driving your car.” Consumer-side environmentalism is loath to discuss production. Consumer-side environmentalism does not challenge the manufacture of cars. Rather, it assumes that producing more and more cars is a sacred right never to be questioned. Production-side environmentalism places blame on the criminal rather than the victim. It looks at the profits oil companies reap from urban sprawl rather than demeaning people who have no way to get to work other than driving a car. Production-side environmentalism looks at an agro-food industry which profits from transporting highly processed, over-packaged, nutrient-depleted junk thousands of miles rather than the parent giving in to a child bombarded with Saturday morning pop-tart-porn TV. Production and consumption: A broken connection Okay. Corporations are the root of environmental evil. What’s the point of differentiating between production and consumption? Aren’t they just two parts of the same process? Production goes up so consumption can go up — right? Since the United States is a “consumer society”, environmentalists typically assume that decreasing consumption would force a decrease in production and these two steps would merge into an integrated whole. Through more than 99% of human history, this simple connection characterised economics. If people wanted more, they produced more, they had more, and they consumed more. During the last century, this connection has been increasingly broken. It has become possible to steadily increase the amount of production (about 2-3% annually) with little to no increase in meaningful consumption. 'Meaningful' consumption The word “meaningful” is key in understanding whether consumption goes up, goes down or stagnates. If a stove is manufactured to last 10 years instead of 50 years, a couple may purchase five stoves instead of one during a 50-year marriage. This is an increase in consumption in only the most frivolous, non-meaningful way. In the world of real people, as opposed to the fantasy world of economists, there has actually been a decrease in meaningful consumption. There were four times when the couple was without a stove. Since WWII, and especially since the 1960s, the United States has witnessed a massive overproduction of what is profitable and an obscene shrinking of what is needed. There has been a mushrooming growth of nuclear weapons and other war toys that nobody can eat, wear or live in. Being able to get from here to there has been replaced with traffic jams and commercials telling us how happy we are to consume individual automobiles. The construction industry has shot up as buildings last fewer years. Food epitomises simultaneous overproduction and underconsumption as Americans are increasingly obese and less nourished. Clearly, production can go up while [meaningful] consumption goes down or stagnates. But, could the opposite be true? Is it possible to decrease production while increasing consumption? Yes. Society can reduce the total amount of time spent manufacturing objects at the same time individuals in that society have more to consume. While this was not true for our ancestors, it is the most important principle of environmental economics at the dawn of the twenty-first century. This basic principle pervades all aspects of climate change, peak oil, toxins and species preservation. The reason why it is an economic rule now, but not previously, is simple. Some time after WWII there began to be sufficient production to meet the basics of food, clothing, shelter and medical care for every person on the planet. The only way the market has continued to expand during recent decades has been through the expansion of goods and services that do nothing to improve the quality of life, often worsen it, and always put profitability before human needs. By reducing and fundamentally changing entire areas of production, it is possible to reduce the overall mass of stuff while having zero effect on meaningful consumption. Dramatically reducing production would profoundly reduce CO2 emissions, extend the use of available oil by centuries, and eliminate human expansion into species habitat. If people working at and living near manufacturing facilities were the ones making decisions about production, it would become possible to eliminate toxins that poison humans and other species. Preaching to people that they “have to learn to do without” what a corporate society forces them to purchase will accomplish little more than antagonising them. In contrast, organising people to make corporations “learn to do without” the profits from destructive production is an essential for confronting ecological crises. Let’s look at a few economic sectors. Militarism The military is the only sector of the economy where emissions of greenhouse gases (GHG) can be reduced by greater than 100%. This is because militarism is the only type of activity whose primary purpose is destruction. When a road is bombed in Serbia, energy is used to rebuild it. Energy usage translates to the emission of GHG, primarily carbon dioxide (CO2). When a home is leveled in Afghanistan, reconstruction requires energy. Every hospital brought down and every person maimed in Iraq means CO2 emissions during the treatment of patients and construction of new treatment facilities. Military production is unique. If it were halted, GHG emissions would be reduced by an amount equal to (a) GHG emitted from repairing what the military bombed, plus (b) GHG produced during its regular activities of building bases, using weapons and transporting troops and equipment. Though the official figure for the US military budget is US$623 billion, the War Resistors League [1] calculates total military-related spending at $1118 billion by including NASA, Department of Energy nukes, vet benefits and interest on past military debts. Another $110 billion should be tacked on for extra spending on the war in Iraq. The gross domestic product (GDP) is $13,246.6 billion. [2] Putting these together leads to an estimate that just under a tenth of the US economy is military-related spending: [$1188B + $110B] / $13,246.6B = 9.80% This only accounts for military sales to the Pentagon. Since US arms manufacturers are major providers for regimes throughout the world, military spending actually accounts for considerably more than 10% of the GDP. Militarism may contribute more than any other 10% of the economy to oil depletion, creation of toxins and habitat destruction. Yet, the one area of the economy where a greater than 100% reduction in greenhouse gases is possible is the area least likely to be discussed in connection with climate change. Food The most basic necessity is food. It illustrates what “decreasing production” of a commodity means. It does not mean decreasing the amount of the commodity produced. The “production of food” encompasses the labour and other inputs that go into what Americans eat, including: * huge agricultural equipment, its manufacture, and the oil to operate it; * chemical fertilisers and pesticides, research to create them, and everything to transport and store them; * genetically engineered seed, its research, and Monsanto’s legal team and seed police which perpetrate criminal trespass to steal plant samples; * the entire chain of food processing and packaging (up to 99% of the cost of some products); * transportation of 1400 miles from “farm to fork” for the average morsel of food; * manufacture of trucks, boats, planes, roads and docks to transport food; and, * growing eight to 10 times as much grain to produce a pound of beef protein as would be contained in the grain itself. Adding everything together means that it could be possible to produce as much or more food than the United States currently consumes with less than 10% of the inputs that currently go into agro-industry. It would greatly increase the amount of “meaningful” food we eat. Clothing Until the last few decades consumer goods were designed to endure. Post-WWII corporations faced the dilemma that increasing the durability of products would mean that people would have what they needed with little reason to purchase more. By the 1960s planned obsolescence had slammed clothing, appliances and household items full force. People of my generation and older can tell dozens of stories of things that “used to last” — shoes, dishes, coffee pots, desks, furniture, everything bought for the home or office. The most vile form of commoditisation is the disposable bag, bottle, cup, plate and camera, designed to be used a single time and then spend centuries contaminating groundwater or choking distant aquatic life. Business is not immune to the ever-decreasing durability that plagues consumers. Computers and computer software suck capital from industry as they drain family budgets with their out-of-date-by-design formatting. Take all the useless junk that people are persuaded that they need, add it to those useful goods with a premeditated plan to fall apart, and ask “How much manufacturing is truly needed for the consumer goods that make for a quality life?”. The answer has to be that production could decrease by at least 70% (maybe 90%) with zero decrease in the quality of life and the increase in mental health that would come from knowing that you probably don’t have to fix or buy something tomorrow. Shelter Current standards for urban planning anticipate that 2% of buildings in the US will be replaced every year. That means the average house is expected to last 50 years. Does that make a 50-year-old home an old building? Many European buildings went up 500 years ago. That proves, again beyond any doubt, that 500 years ago architects knew how to design buildings that would last for 500 years. Unless lead poisoning has irretrievably damaged the brains of architects, they should be able to replicate that in the 21st century. Or maybe the problem isn’t individual architects, but a building sector pushing to have each generation of homes constructed to worse standards than the generation before. After I spoke about global warming at an area high school, the principal privately challenged my figure that US buildings are designed to last 50 years. “I went to a city council meeting last week”, he told me. “And they were approving construction of a new government building that the architect said would last 20 years.” “And did the architect promise it would be covered with eco-gadgets?”, I wanted to know. “Solar panels. Double-flush toilets. It would have everything.” The amount of energy saved with green gadgets is lost many times over by erecting new buildings when existing ones will do fine. What could be more absurd than building tens of thousands of new eco-homes at the height of the 2007-08 real estate collapse when more homes are clearly not needed? Imagine a “green building” plan that said: 1. No building could go up unless there was an absence of unused comparable building space within 50 kilometres; and, 2. Any new building would have to be constructed to a 500-year standard. It should be obvious that if buildings were constructed to last 10 times as long we would need one tenth as many new buildings. Intelligent planning should be able to ensure a home for every family (increase in consumption) at the same time there is much less construction (decrease in production). Health care The life expectancy in the US is 78 years. The life expectancy in Cuba is 78 years. The annual cost of health care in Cuba is $193 per person. The cost of health care in the US is over 20 times as much, more than $4500 per person per year. A reasonable American could conclude that when s/he spends $100 on health care, less than $5 goes to keeping her/him healthy and over $95 goes to the cancerous bloating of the sickness industry. [3] This suggests that the US could decrease health care costs by 90% and still spend twice as much per person as does Cuba. Just how could the US make such incredibly deep cuts in the cost of “medical production” without damaging (and even improving) the quality of health care? Eliminate health insurance companies. This parasitic growth diverts billions of dollars to enormous office buildings, their construction and maintenance, and labour wasted judging who gets treatment and who is left to die. The entire industry should be surgically removed. Focus on community preventive care rather than hospital care. Hospitals are necessary for many emergency treatments. Childbirth and locked mental health wards are examples of what the industry has medicalised in pursuit of profit. Eliminate most medications. Require physicians to document that available non-medication treatments have been exhausted prior to writing a scrip. I dumped my last primary care physician after he started yelling at me for refusing to take meds for blood pressure (which is now under control by changes in diet and exercise). Replace most specialists with neighbourhood primary care physicians. Everyone living in a US city should be able to reach a primary care physician by walking or cycling for less than 15 minutes. The fact that the medical establishment cannot conceptualise this shows its contempt for preventive care. Demanding that the government increase funds for a bad healthcare system will make insurance and drug companies richer but it will not make people healthier. That can only happen by totally redesigning health care into a much smaller system than it is now. Transportation The automobile industry would have us believe that improving transportation means increasing the number of cars on the road. Corporate environmentalists nod in agreement, accepting the car culture as an Act of God but wishing it would be based on hybrid, electric or hydrogen cars. Shallow green plans to cope with transportation are consistently devoid of any thought of reducing the production of cars. A deep green approach to transportation would focus on eliminating [at least] 95% of cars in US cities. Such a plan might look something like this: * Redesign cities to rebirth local businesses so that people can make 80% of their trips by walking or cycling. * Ensure that frequent and cheap mass transit allows for people to use it for 80% of other trips. * Establish car sharing or ride sharing for the 4% of trips remaining. * Only after the above are adopted, eliminate parking spaces except for emergency, construction and car-shared vehicles. Would this increase or decrease the “consumption” of a transportation system? Orthodox economists would insist that it would not be increasing consumption because people would not be driving in ever-increasing circles. This rigid mindset fails to realise that transportation means getting from point A to point B, or from all the points A to all the points B you need to get to. The more that destination points are spread apart by urban sprawl and the more that roads are choked with cars, even “green” cars, the longer and more miserable trips are. Despite what economists might tell you, this is increased consumption of agony, not increased consumption of transportation. Try this way of thinking about it. On your lunch break, you want to run over and say “Hi!” to your mom and pick up your shoes from the repair shop. But each is 20 kilometres away from where you work, so you can only do one. In a deep green city redesigned so that everything is closer together, they are each 1 kilometre away and you can bicycle to do both. In the minds of corporate economists and shallow green environmentalists, you would be consuming more of the transportation system if you do one trip of 20 kilometres. In the minds of rational human beings you would be consuming more transportation if you met both goals in two short trips. Not necessarily a good thing to do Though I am one of many who have misdiagnosed environmental problems as being rooted in over-consumption, consumption is not the primary issue. The source of the disease is overproduction. Resolving environmental problems requires us to stop seeing them as the same. Nevertheless, just because you have the ability to so something does not necessarily mean that it is a good thing to do. As a society, 21st century United States has the ability to simultaneously decrease production and increase consumption. But the fact that we can do it does not necessarily mean that consuming more or even the same amount is a good idea. A quick glance at the designed waste and destructiveness of the US economy suggests that we can reduce production by 50-80% (perhaps by 90%) while the average person would have more consumer goods at any one time. If getting serious about addressing climate change and related catastrophes became the norm and if reducing production were to be seen as a virtue, people might think, “Now that shirts last four times as long and only cost a little more, I can afford to have 80 shirts instead of 30. But do I really need 80 shirts?” [4] Once production for human need replaces production for corporate profit, it becomes possible to reconnect production and consumption. When people again produce what they need, reducing what they consume means less will be produced. Multiply 80 shirts by 1000 commodities and hundreds of millions of consumers and we have Phase 2 of the reduction of production. Phase 1 was the reduction of production with an increase of consumption. Phase 2 is an intensified reduction of production based on a reduction of consumption and an improvement in the quality of life. How might it look? Phase 2: Less production, less consumption and a better life Militarism. With the US having a military budget greater than the rest of the world combined, 800 military bases on which the sun never sets, and enough nuclear weapons to disintegrate every person many times over, it could reduce its spending by over 90% with zero threat to national security. A Phase 1 reduction in military production by 90% would be accompanied by spending some of that money at home in useful areas of the economy and some abroad to repair the damage done. Phase 2 reduction would begin if people asked, “If we are already providing the basic necessities of life with other economic changes, instead of using military savings to produce additional goods, why don’t we produce nothing extra at all and use the savings to reduce the work week?” [5] Food. There might be as much as a 90% drop in food inputs by reducing meat, transportation, pesticides, fertilisers, equipment, processing, packaging and genetic contamination. As people watch this happen with no decrease in the quantity but a huge increase in the quality of food, the stage will be set for Phase 2. Wes Jackson, Stan Cox and their colleagues at The Land Institute have provided brilliant guidelines for developing hybrid lines of perennial food plants that would reduce the amount of land tilled, leading to less erosion and less land being needed for food production. Add this to the expansion of numerous techniques of organic and indigenous farming throughout the world to yield continuous ways to reduce agricultural inputs. [6] Consumer goods. Core to the concept of increasing consumption while decreasing production is requiring consumer goods to be manufactured to standards of life expectancy that are many times what they are now. During Phase 1, people could well see their work week getting shorter while they accumulate even more stuff than they have now. Railing against people for personal accumulation does little good for many reasons, one of which is if this person buys less, then that person (or that government, that business or that bank) buys or invests more. It is only when production as a whole drops that reductions in personal consumption can lead to further drops in production. In this context, people might well decide to share tools and washing machines and children might enjoy clothes passed down from older siblings, which, multiplied millions of times, intensifies the downward trend in production. Construction. When we ask how many centuries instead of how many decades a new building should last, it is also time to start thinking about the second phase of decelerating construction. The question for that phase is: If we focus on retrofitting existing structures, how close to zero new construction can we get? How do we modify what we already have to create housing collectives, co-housing communities and urban ejidos [communal land]? In a post-market economy, new social relationships in living would become the dominant factor in architecture. More dense living and a smaller space per person would be the “sine qua non” of deep green urban redesign. Transportation. The great transportation contradiction is that the more people who own cars, the longer it takes to get from point A to point B. As mentioned, increased car ownership increases the distance between destination points as well as obviously putting more cars on the road. The drive can take a dive only if people can get there without four wheels. Phase 1 of transportation reformulation means designing communities for walking and biking in order to reduce car ownership. Phase 2 begins when people collectively identify needs that can be met without their going anywhere. For example, imagine food warehouses replacing supermarkets. Households combine electronic grocery lists into a neighbourhood order that the warehouse delivers and is then disaggregated by neighbours. Instead of thousands of cars each filling a massive parking lot, a few dozen delivery trucks fill orders. Health care. A big reason for bad health care is the industry organising itself separate and apart from communities. If neighbourhood health centres were to replace distant offices, insurance companies, quick fixes, drugs, hospitals and overpaid specialists, people could then ask how else they could chip away at the sickness business while improving the quality of their lives. Though redesigning neighbourhoods so people can walk to their doctor and kicking softdrink machines out of schools are part of this, changes can be much bigger. Communities could ask: How can a neighbourhood share the care of severely disabled people rather than constructing more nursing homes and treatment centres with three shifts per day and a management team that answers to insurance companies? Democratic economy The greatest barrier to coping with climate change, peak oil, toxins and habitat destruction is the total mass of production. This mass is increasing; its increase vastly outpaces any real or imagined increase in consumption; and its increase is made worse by peddling green gadgets as some sort of solution. A deep green view understands that too much production is the core problem. Necessary changes do not require any reduction in “consumption”, at least in any meaningful sense of that word. If a corporate economy cannot allow production to decrease, it only makes sense that preserving the Earth requires replacing corporate power with a democratic economy. A knife going into a person’s stomach can be the death blow of a thief or life-saving surgery. Which is to say: An action can have opposite effects, depending on its context. A plea to replace or reduce individual consumptive habits in a society where market forces dictate that every decrease in energy here is offset by an increase somewhere else is a plea falling on deaf bank statements. But if we could replace production for profit with production for what we need and want, people would have the power to alter society to change its wants and even redesign its needs. With the link between production and consumption restored, lowering consumption would indeed affect production — but only in a deep green society. This is production-side environmentalism. [The article is based on a talk Don Fitz gave on June 29, 2008 at the Surviving Climate Change roundtable in St Louis, USA. It was published in Synthesis/Regeneration: A Magazine of Green Social Thought ] Notes 1. http://www.warresistors.org/ 2. Bureau of Economic Analysis, the US Department of Commerce,http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm (Table 3). 3. Dresang, L.T., Brebrick, L., Murray, D., Shallue, A., & Sullivan-Vedder, L., 2005. Family medicine in Cuba: Community-oriented primary care and complementary and alternative medicine. Journal of the American Board of Family Medicine, 18 (4), 297-303. 4. While there could be a 90% or greater reduction in several economic sectors, economies of scale may mean that a much smaller drop in basic industry could be achieved, perhaps meaning that less than a 90% overall decrease would occur. 5. If militarism accounts for 11% of the GDP and it were reduced to 1% of the current GDP, that would be a reduction of the GDP by 10%. That could translate to 10% more goods being produced or it could translate to a reduction of the 40-hour work week to 36 hours, or it could translate to 5% more goods being produced and shipped abroad as reparations for US war crimes simultaneous with a 5% decrease in the work week to 38 hours. 6. Cox, S. Sick planet: Corporate food and medicine. Ann Arbor: Pluto Press, 2008. Glover, J.D., Cox, C.M., & Reganold, J.P., August, 2007. Future farming: A return to roots? Scientific American, 297 (2), 82-89.

Friday, 1 February 2008

Who caused the great crash of 2008?

by Lee Sustar from Socialist Worker (US) 5 December 2008 There are plenty of people who should be held accountable for turning an ordinary recession that began a year ago into a global catastrophe. Topping the list is former Federal Reserve Chair Alan Greenspan, who fed the bubble by keeping interest rates at rock-bottom levels, urging home buyers to take on adjustable-rate home loans and refusing to use the Fed's powers to oversee a mortgage industry rife with fraud. Then there are the former Treasury Secretaries from the Clinton administration, Robert Rubin and Larry Summers, who teamed up with Greenspan to block regulation of so-called derivatives--complex financial instruments based on underlying assets like mortgages. Backing them up was former Sen. Phil Gramm, the Texas Republican who, as chair of the Senate Banking Committee, pushed through legislation repealing the Depression-era Glass-Steagall Act that restricted commercial banks from entering the high-stakes financial activities of investment banks. Former President Bill Clinton, who signed Gramm's bill into law, bears responsibility as well. This Clinton-era deregulation opened the way for operators like former Countrywide Financial CEO Angelo Mozilo, whose company pushed sub-prime loans on people who qualified for better deals. Countrywide paid mortgage brokers a higher commission on high-interest sub-prime mortgages, since those mortgages were more profitable to sell to Wall Street investment banks--like the now-bankrupt Lehman Brothers, where CEO Dick Fuld pushed the company into the obscure but highly profitable market for collateralized debt obligations (CDOs), which packaged together large numbers of prime and sub-prime loans as investments for Wall Street's biggest players. And there's Robert Rubin--again. This time, as chair of Citigroup's executive committee, Rubin egged on executives as they plunged the bank ever deeper into the market for CDOs. "According to current and former colleagues, [Rubin] believed that Citigroup was falling behind rivals like Morgan Stanley and Goldman Sachs, and he pushed to bulk up the bank's high-growth fixed-income [bond] trading, including the CDO business," the New York Times reported. Those assets turned toxic with the housing bust and resulting credit squeeze. Now, Citigroup is the latest financial institution to be bailed out by the Bush administration, with a rescue package that will put $45 billion of government money into Citigroup--and put taxpayers on the hook to insure $306 billion in bad assets. But back at the start of the decade, with the table set by Clinton's economic policies, Wall Street could gorge itself on an ever-expanding financial menu, as the new Bush administration looked on approvingly. Even when the financial crisis first broke out in the summer of 2007, Bush and Treasury Secretary Henry Paulson insisted that the problem would be "contained" in the sub-prime mortgage market. It was only after the failure of the investment bank Bear Stearns in March 2008 that Paulson and Federal Reserve Chair Ben Bernanke lurched into action with an array of new lending programs and multibillion-dollar bailouts of Fannie Mae, Freddie Mac, AIG and, now, Citigroup. According to Bloomberg news service, taxpayers are on the hook (so far) for an astonishing $7.7 trillion--a figure equivalent to more than half the total U.S. economic output, or gross domestic product, for 2007. But despite this immense sum, the crisis has gotten worse--not least because free-market ideologues like Bush and Paulson delayed taking decisive action before carrying out its series of confused and contradictory "rescues." So yes, the people who presided over this crisis should be held accountable. But the global scale of the crisis points to a far more fundamental problem--the crisis-prone nature of capitalism itself. With even the most pro-capitalist analysts and commentators panicked about the prospect of a repeat of the Great Depression, it's important for those on the left to revisit the work of capitalism's first great scientific critic and revolutionary opponent--Karl Marx. TO UNDERSTAND the dynamics of today's crisis, it's helpful to look briefly at what Marx's identified as contradictions at the core of the capitalist system. Marx stressed that a key distinguishing feature of capitalism is its reliance on wage labor. Unlike previous societies, in which most production was carried out by slaves, peasants or small crafts producers, capitalist production relies on workers who have nothing but their labor power to sell to the boss. Of course, independent producers and small farmers still exist. But the system as a whole is dominated by big capitalists, who own the factories, offices and other "means of production," to use Marx's term. Where the output of pre-capitalist societies was primarily geared to creating "use values"--items that met an immediate human need--capitalists produce for sale on the market, or for "exchange value." Under capitalism, competing employers command the labor power of workers, who are "free" to work--or starve. What gives capitalism its dynamism is that workers' labor adds value to the commodities they produce, by transforming raw materials into something that can be sold on the market. The value of a given commodity, Marx argued, is determined by the amount of labor time necessary to produce it. And in this process, Marx said, "surplus value" is created. What is surplus value? Capitalists can pay workers wages that are sufficient (in boom times, anyway) to cover the costs of food, housing, raising children, etc., and still have a surplus left over when commodities are sold. Essentially, workers are paid for only part of their workday. This is true whether the boss appears to the workers as a "good" or "bad" one. These basic relationships give capitalism both its dynamism and its propensity to crisis, Marx argued. In order to compete with one another, rival capitalists are compelled to maximize the productivity of labor--that is, to get more commodities produced from the same expenditure on labor power. They can try to do so by forcing workers to work harder and longer--but the physical limits of (if not resistance by) workers and the length of the day restrict how far this can go. Real breakthroughs in productivity can only come through the use of labor-saving technology that allows workers to produce the same commodity in less time. Thus, Marx described capitalism as constantly revolutionizing the means of production. Capitalists who invest in technological innovations win out over rivals who are unwilling or unable to do so. For capitalists, Marx wrote, the motto is, "Accumulate, accumulate! That is Moses and the prophets!...Therefore, save, save, i.e, reconvert the greatest possible portion of surplus value, or surplus product into capital! Accumulation for accumulation's sake, production for production's sake..." This drive to technological change is the reason why industrial capitalism could start to transform the world in a few decades. However, the rapid accumulation of capital created a boom-bust cycle. Investment would pour into industries that seemed to be the most profitable. As capitalist enterprises grew larger, they increasingly relied on credit to carry out the years-long investments needed to develop, say, a new steel mill. Since all these investments take place without any overall coordination, there's an inevitable disconnection between production and demand--and when the gap reaches a certain point, the boom turns into a bust. In Volume III of Capital, Marx described the perverse nature of capitalist crisis this way: The contradiction of the capitalist mode of production...lies precisely in its tendency towards an absolute development of the productive forces, which continually come into conflict with the specific conditions of production in which capital moves, and alone can move. There are not too many necessities of life produced, in proportion to the existing population. Quite the reverse. Too little is produced to decently and humanely satisfy the wants of the great mass. This "crisis of overproduction" is the defining feature of a capitalist crisis, according to Marx. Factories are shuttered even as workers look for work. People go hungry while food sits unsold in warehouses or rots in the fields. Homes stand empty although millions lack an affordable place to live. In 1880, Marx's collaborator Frederick Engels described capitalism's periodic crises in words that could have been written last week: Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little, the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit and speculation, which finally, after breakneck leaps, ends where it began--in the ditch of a crisis. And so over and over again. Beyond this destructive boom-slump cycle, capitalism had an even more fundamental tendency toward crisis, Marx argued. Because capitalists are under constant pressure to invest in ever-greater amounts of machinery, there is a long-term tendency for the rate of profit to fall. The reason: because labor is the source of the surplus value that capitalists keep as profit, a rising proportion of machinery to workers creates a downward pressure on the rate of profit over the long run. That, however, didn't mean that Marx expected capitalism to collapse of its own accord as profit rates dried up. He identified several countervailing influences--and pointed out that capitalist crises actually clear the way for a revival of growth by bankrupting unproductive capitalists and devaluing capital in general. BY THE early 20th century, capital had become concentrated in ever-larger business entities and centralized into fewer ones. These monopolized companies, the forerunners of modern corporations, were increasingly intertwined in their home nation-states. Military and economic competition between rival countries gave rise to a new, imperialist stage of capitalism and the slaughter of the First World War. Rather than rival capitalists trying to put one another out of business and take over their markets, competing imperial states sought to destroy the economic capacity of their rivals. The war didn't overcome the underlying economic problems of the world system, however. The boom of the 1920s gave way to capitalism's biggest slump ever--the Great Depression of the 1930s. The Great Depression confirmed Marxist crisis theory in all its essentials. It was only overcome through another imperialist slaughter--the Second World War. So as the war drew to a close, the allied powers led by the U.S. created a new, American-dominated world economic order (excluding the Eastern bloc controlled by the USSR). Unlike the prewar era, financial services and capital flows were strictly regulated. But capitalism nevertheless boomed as never before, and the depression was seen as an aberration, the result of poor political leadership. Capitalism, according to its apologists, had overcome its contradictions. The reality was different. As the late British Marxist writer Mike Kidron explained, the Cold War had given rise to a permanent arms economy that gave the system a constant stimulus. But because these enormously expensive nuclear weapons were never used, arms spending acted as a kind of safety valve for the system: It drained capital away from investment in new machinery that would have increased the tendency of the rate of profit to fall. By the mid-1970s, however, the picture had changed. Profit rates had fallen sharply across the advanced industrial countries as a revitalized Germany and Japan, the losers in the Second World War, were able to compete with the U.S. Efforts to stimulate the economy led to a combination of inflation and slow growth, known as "stagflation." Marx's theory of the tendency of the rate of profit to fall was validated once more. The capitalist solution to this crisis was to go back to market fundamentals. Economists like Milton Friedman, for decades seen as a right-wing crank, were suddenly promoted as sages for preaching deregulation of business, privatization of government services and "flexible" labor policies. Politicians like Ronald Reagan in the U.S. and Margaret Thatcher in Britain turned Friedman's ideas into policies by smashing unions, slashing government spending and turning finance capital loose. The Clinton administration shaved off some of the rough edges of these policies, but basically consolidated what is now known as "neoliberalism." For U.S. capitalists, neoliberalism was a spectacular success. The deep recession in 1982 gave rise to a boom, and following the relatively mild (for capitalists) recession of 1991, U.S. GDP increased by 49 percent until the slump of 2001. Total non-agricultural employment grew by 22.5 percent in the same period. By the late 1990s, U.S. profit rates approached those of the late 1960s at the peak of the long boom. Bill Clinton hailed this as the "miracle economy," and once again, capitalist ideologues proclaimed that capitalism had finally cured itself of the tendency to crisis. The dot-com stock market bust of 2000 and the recession of 2001 threatened to undo that success. The number of corporate bankruptcies soared--with Enron and WorldCom among the highest-profile casualties. In response, Federal Reserve Chair Greenspan cut interest rates to effectively zero to stimulate the economy, repeating measures he had taken in the late 1990s when the East Asian financial crisis threatened to sweep the world. For business, Greenspan's rock-bottom interest rates allowed them to clean up their balance sheets and begin investing again--but not in the U.S. Even as the economic expansion began in 2002, job growth remained miserable and wages flat--or worse. According to the Economic Policy Institute, real income for the median family fell by 1.1 percent between 2000 and 2006--and wages remained flat during the 2002-2007 expansion. For the wealthy, however, the 2000s saw continued dramatic increases in income. Between 1989 and 2006, the wealthiest 10 percent got more than 90 percent of all income growth. The richest 1 percent saw their income increase 203.7 percent, while the wealthiest 0.1 percent saw an increase of 425 percent. By contrast, if workers wanted to maintain, let alone improve, their standard of living, they had to take on debt. Personal debt increased by 159.1 percent since 1997, from about $5.5 trillion to $14.4 trillion. In that same period, the ratio of debt to disposable income increased from 93.4 percent to 139 percent. By 2006, the average debt owed by every U.S. adult was about $52,000, compared to average yearly pay of less than $31,000 for non-supervisory production workers. Buying a house that would supposedly keep increasing in value seemed like a way out of this dilemma--and the likes of Angelo Mozilo and Robert Rubin engineered the financial system to take full advantage of working people. WITH CONSUMER demand sustained by debt, the U.S. economy was able to maintain its role as the importer of last resort into the 2000s. For China, the prospect of an endlessly expanding U.S. market was the basis for crash investment programs to build steel mills, airports, roads and factories of all sorts. China's industrial revolution, in turn, spurred demand for oil and other raw materials, particularly from Latin America. Japanese and German companies profited by selling machine tools and other goods to rapidly expanding Chinese capitalism. By early 2007, the world economy was growing at its fastest rate in 30 years. Fueling this expansion was a vast extension of credit from both the $10 trillion traditional banking system and an unregulated shadow banking system of equal size. But as the U.S. Federal Reserve Bank began to raise interest rates and the economy slowed, the dominoes of debt began to fall. What began in the U.S. sub-prime mortgage market became a global financial credit crunch, as capitalists were forced to reckon with the fact that assets of all types were overvalued. Here, too, Marx's analysis of capitalism is validated. Credit, he argued, may postpone a capitalist crisis, but it cannot overcome the contradictions created by capitalism's drive toward production for its own sake. "The means--unconditional development of the productive forces of society--come continually into conflict with the limited purpose, the self-expansion of the existing capital," he wrote. Thus, at some point, a crisis of "overproduction" is inevitable, as capitalists can no longer realize their profits through the sale of goods on the market. At that point, financial instruments of various sorts are depreciated, as are elements of fixed capital. Next, Marx wrote, "[t]he chain of payment obligations due at specific dates is broken in a hundred places. The confusion is augmented by the attendant collapse of the credit system, which develops simultaneously with capital, and leads to violent and acute crises, to sudden and forcible depreciations, to the actual stagnation and disruption of the process of reproduction, and thus to a real falling off in reproduction." Such periodic crises have not always been catastrophic for the capitalist system. Today, however, a prolonged slump seems inescapable--both because the U.S. can no longer drive the world economy through debt-financed consumption, and because the world financial system is staggering under the weight of bad debt. The risk of such a long and deep recession has forced policymakers in the U.S. and Europe to toss free-market orthodoxy aside to try to find a way out. But as Marx showed, capitalism will inevitably generate crises until it is replaced with a socialist alternative.