Top Economists at Work

This is another one from the draft folder. I'm not sure what else I'd planned to do with it, as it looks more or less finished. No doubt I expected I'd pedantically go on about economists not understanding capitalism or the state, but it probably speaks for itself as is.

The Guardian ran an article the other day last year reporting that "top economists" are urging that the work-week be reduced to 20 hours a week, and the remaining work shared. The article is quite comical. Behold:

A thinktank, the New Economics Foundation (NEF), which has organised the event with the Centre for Analysis of Social Exclusion at the London School of Economics, argues that if everyone worked fewer hours – say, 20 or so a week – there would be more jobs to go round, employees could spend more time with their families and energy-hungry excess consumption would be curbed. Anna Coote, of NEF, said: "There's a great disequilibrium between people who have got too much paid work, and those who have got too little or none."

No doubt! Oddly, the article says nothing about whether those now working too much will have the same income as they currently do, or, if not, how they'd pay their bills. Weird.

Many economists once believed that as technology improved, boosting workers' productivity, people would choose to bank these benefits by working fewer hours and enjoying more leisure. Instead, working hours have got longer in many countries. The UK has the longest working week of any major European economy. Skidelsky says politicians and economists need to think less about the pursuit of growth. "The real question for welfare today is not the GDP growth rate, but how income is divided."

These two paragraphs say quite a lot about economists' capacity for not knowing what the fuck they're talking about.

On Marx and foundering reading projects

Or, hey, how's that plan for reading Capital coming along?

Not so well. I read Harvey's The Limits to Capital earlier this year and had high hopes for moving on to Marx's great work. Attention spans and sleep patterns being what they are, these hopes have come so far to nothing. But I do take the book down at intervals, thinking maybe today? maybe tomorrow? No, I want to have my energies.

This post has been prompted by my reading of this entertaining post at Rough Theory, about Marx's dismissive handling of Malthus in chapter 25 of Capital (link via BLCKDGRD). A sample:

Marx goes on to “remark… in passing” that Eden “was the only disciple of Adam Smith to have achieved anything of importance during the eighteenth century” (766). The comment appears casual, trivial, and beside the point – a curiosity we could surely skip lightly past on the way to the substantive material in the next paragraph. Except that a massive multi-page footnote blocks our way and, when we decide that a footnote of such prodigious length might be important, finally locate the footnote marker at the end of the “passing remark” above, and cast our eyes down into the marginalia, we discover that special circle of textual hell into which Marx has decided he will deposit Malthus...

Malthus is therefore introduced into this chapter with an insult: Eden is the only disciple of Smith to amount to anything – making Malthus a disciple of Smith who... didn’t...

Heh: "special circle of textual hell". Note to self, when finally reading Capital, along with listening along to David Harvey's lectures, remember to go back through the archives at Rough Theory.

Bloggery and linkage

At A Tiny Revolution, Jonathan Schwarz yesterday took note of "Another Triumph for American Journalism". And last week he noted the similarities between Goldman Sachs's responses to certain interview questions from Matt Taibbi and Saddam Hussein's responses to questions from the FBI, after they forced him to watch a documentary, and quipped, all too accurately: "The funniest part is, you could legitimately argue that Goldman Sachs has killed more people than Saddam."

ladypoverty on jackassery; also on the puzzling perspective on current events offered by Elie Wiesel's account, in Dawn, of the use of terrorism by Jews against the British in Palestine after WWII. I'd like to quote numerous other pithy ladypoverty utterances, but the relevant posts are way too short to justify my quotation of them here. You should check in there regularly yourself.

For those few of you who are not planning on reading David Harvey's The Limits to Capital this summer ("Capital Summer"?), at Lenin's Tomb lenin summarizes a talk given by Harvey, which also happens to serve as an excellent précis of many of the arguments in that book. (See also my own somewhat rambly post from April touching on the same book.)

And, finally, here is a video of an excellent talk given by Chris Knight, discussing Marxism and science, religion and communism, sex strikes and the evolutionary emergence of language and origins of culture, and more. The video is about 75 minutes long, but well worth your time. Unsurprisingly, the link comes to me via Stuart at From Despair to Where?, where in the comments an interesting discussion occurred about the reception of Knight's theory, in particular as outlined in his great book Blood Relations (which, again, I discussed at length here). In the talk, incidentally, Knight refers to an article titled "Painted Ladies" in New Scientist that summarizes some of the argument. That article appeared in October 2001, and a pdf can be viewed here. If you're interested, but wary about jumping right into Blood Relations, the talk plus the "Painted Ladies" article are a good way, I think, to gain some familiarity with these important ideas.

I imagined I would provide more links here today, but then I lost the will, so this will have to do. Enjoy!

Giovanni Arrighi

Lost in the shuffle of recent events has been the death on June 18th of Giovanni Arrighi, described as "one of the foremost scholars of the history and future of capitalism" at Verso's blog.
I actually haven't yet read anything by Arrighi myself, though his monumental books The Long Twentieth Century: Money, Power and the Origins of Our Times and the more recent Adam Smith in Beijing are on my ever-lengthening list of books I feel that I need to read in order to understand our time (while I'm here, allow me to again point you to jane dark's excellent recent post on world system hegemons, which draws on Arrighi's arguments in both of these books). In March 2008, not long after Adam Smith in Beijing appeared, I happened to catch a panel discussion with Arrighi, David Harvey, and Joel Andreas at 2640 in Baltimore (Arrighi taught at Johns Hopkins University, Andreas still does, and of course Harvey taught there for the better part of two decades). It was a fascinating and occasionally heated discussion. I took copious notes intended for use on this blog, but I was never able to get my act together to organize them. (However, it turns out you can view a film of the event here; it's worth looking at if you have the time.) I was especially interested in this discussion, precisely because of its focus on China. As I've mentioned here previously, I'm greatly interested in China, but I've been unsure how to proceed. I'd like to read a history of the communist revolution and the cultural revolution that takes it seriously, without being fawningly Maoist or something. Perhaps Arrighi's later book covers some of the history; no doubt the book is equipped with a substantial bibliography (I'm also aware that, as one would expect, Monthly Review Press has some titles that look just right for this investigation, such as perhaps this one or this one or, especially, this one.)

One thing I remember from the panel discussion was Arrighi's contention that China's emergence as an economic power has been in large part dependent on the advances of the revolution, which resulted in a generally healthy and educated populace. Harvey and Andreas didn't dispute this point, but they were far less sanguine about the prospects of China becoming a major power, given its, in their view, particularly virulent form of capitalism. (This contention of Arrighi's reminds me, incidentally, of this talk given by Dmitry Orlov, in which he argues that the USSR, because of its socialism, however deeply flawed, was much better prepared to handle its collapse than the USA will be to handle its inevitable collapse, when it comes.)

Anyway, this great, great interview (link via Verso) of Arrighi by Harvey, which appeared in the New Left Review this Spring, has me dying to dive into his work sooner rather than later. The interview covers a lot of ground, from his work in Africa, where he cut his teeth in the 1960s ("the mathematically modelled neo-classical tradition I’d been trained in had nothing to say about the processes I was observing in Rhodesia, or the realities of African life"), up through to China and the current financial crisis. Here is a short excerpt:

One of Marx’s conclusions in Capital, particularly Volume One, is that adoption of a Smithian free-market system will lead to increases in class inequality. To what degree does the introduction of a Smithian regime in Beijing carry the risk of even greater class inequalities in China?

My argument in the theoretical chapter on Smith, in Adam Smith in Beijing, is that there is no notion in his work of self-regulating markets as in the neoliberal creed. The invisible hand is that of the state, which should rule in a decentralized way, with minimal bureaucratic interference. Substantively, the action of the government in Smith is pro-labour, not pro-capital. He is quite explicit that he is not in favour of making workers compete to reduce wages, but of making capitalists compete, to reduce profits to a minimum acceptable reward for their risks. Current conceptions turn him completely upside-down. But it’s unclear where China is headed today. In the Jiang Zemin era, in the 1990s, it was certainly headed in the direction of making workers compete for the benefit of capital and profit; there is no question about that. Now there is a reversal, one which as I’ve said takes into account not only the tradition of the Revolution and the Mao period, but also of the welfare aspects of late-imperial China under the Qing in the eighteenth and early nineteenth centuries. I’m not putting bets on any particular outcome in China, but we must have an open mind in terms of seeing where it’s going.

In Adam Smith in Beijing, you also draw on Sugihara Kaoru’s work in contrasting an ‘industrious revolution’, based on intensive labour and husbanding of nature, in early modern East Asia, and an ‘industrial revolution’, based on mechanization and predation of natural resources, and speak of the hope that there could be a convergence of the two for humanity in the future. How would you estimate the balance between them in East Asia today?

Very precarious. I am not as optimistic as Sugihara in thinking that the East Asian tradition of ‘industrious revolution’ is so well entrenched that it may, if not become dominant again, at least play an important role in whatever hybrid formation is going to emerge. These concepts are more important for monitoring what’s happening than saying, East Asia is going this way, or the United States is going the other way. We need to see what they actually do. There is evidence that the Chinese authorities are worried about the environment, as well as about social unrest—but then they do things that are plain stupid. Maybe there is a plan in the works, but I don’t see much awareness of the ecological disasters of car civilizations. The idea of copying the United States from this point of view was already crazy in Europe—it’s even crazier in China. And I’ve always told the Chinese that in the 1990s and 2000s, they went to look at the wrong city. If they want to see how to be wealthy without being ecologically destructive, they should go to Amsterdam rather than Los Angeles. In Amsterdam, everybody goes around on bicycles; there are thousands of bikes parked at the station overnight, because people come in by train, pick up their bicycles in the morning and leave them there again in the evening. Whereas in China, while there were no cars at all the first time I was there in 1970—only a few buses in a sea of bicycles—now, more and more, the bicycles have been crowded out. From that point of view it’s a very mixed picture, very worrying and contradictory. The ideology of modernization is discredited elsewhere but so far is living on, rather naively, in China.

Marx is Icky

As I've mentioned previously in discussing my recent forays into Marx and Marxian economics, I've found the work so helpful and to be of such great explanatory power that it seems to me that capitalists, simply in order to understand their own system better, would do well to be up on their Marx. But of course classical or neo-liberal economists are not capitalists, but apologists for capitalism, technicians who differ on only particulars, for all their claims to be scientific and empirical. For them as for so many of us, it seems clear, capitalism is simply the natural order of things. Though, as Harvey makes abundantly evident in his The Limits to Capital, there have been numerous bourgeois critiques of Marx and Marxian theory over the years, I get the sense that real liberal engagement with the work has long since dried up, as if merely touching Capital, let alone taking the ideas seriously enough to work through them, is tantamount to signing the forms for a re-education camp or personally approving of the evils of Stalin or Pol Pot.

Now via jane dark I learn of the news that Emmanuel Saez has been awarded the Clark medal, which apparently is of some importance in the world of economics. We are told by Economic Principals that "his most striking finding has been to confirm the widespread intuition that income inequality has been increasing". This is astonishing. That this is news, that is, worthy of an award in economics. As jane says, the rising inequality over the last 30+ years has been common knowledge for quite a long time. But of course, that it's common knowledge is not so damning on its own; after all, science is always somehow or finally validating what has been or ought to be (or once was) common knowledge, so nothing new there. However, as jane also points out, there have been numerous studies on this very topic over the last decade or so; it has been explored in incredible detail by researchers and economists on the left. But of course Marx is icky. What you have then is a purported science, which because of ideological blinders refuses to take notice of important work. Again, to close, jane puts it best:

The whole news event of this prize, then, is on par with granting the latest Fields medal for long division. What to make of this? Is the fact that the guild of professional economics doesn't know the extant scholarship relevant to their own field more shocking than the fact they are just reaching these easily reachable and socially fundamental conclusions out now? Or is the oddest element the hubris whereby knowledge can't be true — despite empirical evidence — until a guild member says it? In any case, welcome to reality, economists: you are making any attempt to take seriously your institutional field rather challenging.

Placeholding thoughts on science and philosophy and politics, etc

A few things have been on my mind, jostling for position amidst the fog, angling for inclusion in essays. A longer post or two may come out of these, but no promises or threats.

1. I may have missed the best time to acquaint myself with the language of philosophy, but this is not altogether a bad thing. My perspective on things is different for not having already immersed myself in it. For example, in reading blogs such as Levi Bryant's Larval Subjects and Graham Harman's Object-Oriented Philosophy, I have learned that being a realist means that one holds that the world exists--objects exist--independent of man's relation to them (but not necessarily those traits that we perceive); I have further learned that this runs counter to the main currents of continental philosophy. I find this astonishing (assuming I understand things correctly). In the deleted iteration of his blog, Harman suggested that "this results from the combined fear & boredom with which most humanities types face the natural sciences". No doubt this is true. I find myself more interested, by far, in continental than in analytic philosophy, yet it would never occur to me to doubt the independent existence of external objects. (This Larval Subjects post helps clarify the realism thing for me. His casual use--not at all unique to him--of the word knowledge bothers me. Something else to return to here.)

2. Science, it follows, is very important. This sounds like a ridiculous thing to say, but I say it to make it clear that I personally value science very highly and am aware that some of my posts in recent months might give one the impression that I do not. I come out of that utilitarian, empirical, Anglo-American mode which I have elsewhere decried. Part of that is a strong devotion to science (which is not to say that I have been specifically trained in any of the natural sciences). So science is unquestionably important, but I have some political, philosophical, and ethical questions for it, some which I've always had, if largely unarticulated, some of which have come to mind more recently. In my view, science is too often seen as this pure mode of inquiry, independent of political and economic concerns, untainted by prejudice or point of view or money, unrelated, in its historical development, to other historical arcs. Of course it is not. Worse, the history of science and of technological change is seen as inexorable, inevitable, as if it were not heavily implicated in the history of capitalism (which, recall, requires continual technological and organizational change in order to maintain the rate of accumulation).

3. Allow me, then, to use this theme as an excuse to once again refer to Graham Harman and two posts he wrote (one, two) reporting on a lecture he attended in Ireland given by James Lovelock. The topic, of course, is climate change and how we're basically fucked. Harman makes the lectures and Lovelock's books sound both fascinating and frightening (there is nothing about climate change that is not finally frightening, if one pays the least attention to the science and isn't simply trying to make excuses in order to avoid massive change), but there is one thing in particular I want to highlight here. Among the points Lovelock makes, according to Harman, is this:

Guilt is unhelpful. We got to this point because we all naturally struggled to survive and flourish, farming and industrializing for this reason. Anger at energy companies is misplaced. They only produce so much carbon dioxide because we all demand energy in our own lives.

Similarly, in this article at TomDispatch, Chip Ward, while arguing correctly that perhaps we should not be trying to "recover" the economy as it was because of its inherent ecological untenability, says this:

Believing that we are unbounded by nature's limits or rules, we built an economy where faster, cheaper, bigger, and more added up to the winning hand. Then -- until the recent global meltdown at least -- we acted as if our eventual triumph over anything from resource scarcity to those melting icebergs was a foregone conclusion.

He goes on for a bit longer in this vein. Who is this "we" of whom he and Lovelock speak? We did not build the economy. While we do certainly all naturally struggle to survive and flourish, there is absolutely no reason to believe that industrialization was necessary to that struggle--meaning both that there is no reason to assume that industrialization necessarily occurs out of that struggle, nor that industrialization has aided us, for humanity as a whole, in that struggle. And in no sense can it be said that we merely "got to this point" because of decisions we made. Capitalism was imposed and resisted. Industrialization was imposed and resisted. This imposition and resistance continues.

4. This post at Voyou Désœuvré, on Andrea Dworkin and Joan of Arc and Machiavelli and constructions of masculinity, reminds me, yet again, that I've been wanting to read Dworkin and other radical feminists for some time. To my mind, the way forward must be radically feminist, which to me means that at minimum change must be woman-focused, which itself inevitably means focusing on issues surrounding pregnancy and birth and childcare and other things of immediate importance to mothers. That is, the larger conception of feminist politics should focused less on "the workplace" (the right to work being on the one hand largely redundant, since most women have no choice, and on the other hand normalizing highly dysfunctional male work values) than on childcare work and on health issues for women and children--i.e., issues affecting most women. Anyway, Voyou isn't talking about this here but ends by making use of Wendy Brown's criticisms of Catherine MacKinnon and "the doomed attempt by some feminists to achieve feminist ends solely by appealing to the very liberal legal structure they themselves recognize as irredeemably patriarchal". Good stuff.

5. More science pointers, to finish up. I have found a few more recent Larval Subjects posts about neurology utterly fascinating, full of all kinds of stuff that I know is absolutely right, but which also raise in me the germ of objection at a certain basic level. This one has me wanting to read books by neuroscientist Gerald Edelman, for example his A Universe of Consciousness: How Matter Becomes Imagination, discussed in the post. Late in the entry, LS makes this crucial observation: "philosophers all too often privilege the standpoint of the adult and the 'healthy', ignoring childhood development". And this post about the "bidirectionality of causal relations between different levels" of different kinds of systems, such as DNA and the environment, has me nodding along, yes, yes, yes, yes. A longer quote to spell more of it out (since I have not described it at all):

[Biologist Gilbert] Gottleib is pointing out the manner in which the environment (not to mention RNA, cells, networks of cells, and organs) can actualize and activate DNA in a variety of ways producing very different outcomes. Pause and consider that for a moment. Rather than an inexorable unilateral development from DNA to structure and function, we instead get bidirectional feeding forward and backward producing an aleatory outcome that can only be described as a genuine creation. Factors such as environmental temperature, light and darkness, the presence or absence of particular nutrients and chemical substances, the presence or absence of dampness, the presence of various predators, altitude, caregivers, etc., all make important differences in the final actualized individual or phenotypical outcome. But to speak of a phenotypical outcome is already to speak poorly, for ontogenesis is a lifelong process for the organism that doesn’t simply end with maturity. But in addition to all of this, all things being equal, cultural formations, social relations, social encounters, etc., as environmental factors, feed back all the way to the genetic level as well. I am not simply a product of my culture at the level of my mentality, my subjectivity, but at the level of my cells and my DNA as well. Were I born in the 18th century, my DNA and my cells would be actualized differently as a result of a variety of different environmental factors ranging from diet to how I am brought up. My phenotype, my mature organism, would not be the same.

It's nice to see the adaptationists (who, as LS notes, end up "naturalizing and essentializing human practices, social organizations, and forms of subjectivity in ways that can only be described as reactionary") taken to task, and those steeped in cultural studies and social sciences should indeed be chided for ignoring out of hand neuroscience and evolutionary biology (as they have also been chided by, for example, Marxist anthropologist Chris Knight, who in his brilliant and important book Blood Relations, recall, called the general leftwing response to modern evolutionary theory a disgrace). To my mind this is all blindingly obvious (note, also, that in my post about patterning texts I effectively make part of the same argument). Or, more charitably, it's a more detailed version of the nature and nurture argument. Anyone who has a child, or indeed as ever watched children with any attention, can see that the child both has its own personality, distinct from those of his or her parents, and is always learning, always figuring things out. Nature versus nurture has always been a false dichotomy, one that's always bothered me, since before I understood the first thing about evolution.

This post was going to be even longer and include stuff about literary and more explicitly political stuff on my mind of late--including Blanchot's communism, Heidegger, the bourgeois novel, genre--but they'll have to wait as it's time to close this one out.

Ecologically Untenable

In truth, of course, it's not quite the state of the economy that elicits my real apocalypticism. The economic crisis could in fact be a distinctly positive event, in the big picture, since a massive economic downturn seems to be the only thing capable of putting the breaks on accumulation and production. Because the real engine driving capitalism is, as Harvey puts it, "accumulation for accumulation's sake", the endless need for growth, expansion, technological change. This needs to stop. It is destructive, irrational; it's going to kill us. Derrick Jensen says we're all insane; I'm not sure he's wrong.

Is it obvious I'm talking about the environment? Widespread ecological breakdown is immanent, a breakdown which is not being taken sufficiently seriously.

On this theme, here is John Bellamy Foster, in the March 2009 issue of the Monthly Review:

In addressing capitalism as a failed system I have focused first on the deepening economic crisis. But this is not the worst of the world’s problems. The greatest peril is the growing threat of planetary ecological collapse. Here the danger is much greater than in the case of the world economy but the sense of alarm and the call for immediate and massive action is less widespread. As the Swedish Tällberg Foundation stated in its 2008 report, Grasping the Climate Crisis: A Provocation,

The world [at present] faces a breakdown of the global financial system. The consequences are staggering, with ripple effects the world over that deliver the severest blows to the poor. Fear is rising. One would have expected somewhat of the same level of anxiety with regard to the looming breakdown of major parts of the Earth system—rapid deforestation, overfishing, freshwater scarcity and the disappearing Arctic sea ice. Reports of such events and processes are abundant, but the level of concern is still conspicuously low.

The most serious ecological threat is of course global warming, which is inducing widespread, multi-faceted climate change, with disastrous implications for life on earth. But in a wider sense, the global environmental crisis involves manifold problems and cannot be reduced to global warming alone. These multiple hazards have a common source in the world economy, including: the extinction of species, loss of tropical forests (as well as forest ecosystems generally), contamination of and destruction of ocean ecology, loss of coral reefs, overfishing, disappearing supplies of fresh water resources, the despoliation of lakes and rivers, desertification, toxic wastes, pollution, acid rain, the approaching exhaustion of easily available crude oil resources, urban congestion, the detrimental effects of large dams, world hunger, overpopulation, etc. Together these threats constitute the greatest challenge to the survival of humanity since its prehistory.

The whole thing is worth reading. Meanwhile, mainstream ecomomists keep on keeping on, as if an expansion of greenhouse emissions is still acceptable, or ecologically viable. As Foster puts it:

despite the seriousness of this contradiction between the capitalist economy and the planet, establishment economists generally argue against any major attempt to avert climate change, i.e., to bailout nature.

To say nothing of the outright obtuseness of politicians and pundits. If I appear to wish for the immediate end of capitalism, even if I know we're not ready for it and know that it's unlikely in the extreme, and I do, it's because its continuation, even for the short-term, is ecologically untenable. And yet we blithely go about our business. We are insane.

The world is never over!

At zunguzungu, Aaron Bady offers a useful reminder for those of us, like myself, who have a tendency to give occasional vent to our apocalyptic jones:

The world is never over! The “deckchairs on the Titanic” metaphor is a nice way to belittle people who prefer to rearrange deckchairs rather than address the iceberg, but the world is not a ship, ontologically defined by whether it is sinking or floating; the world is a place in which history has a way of going forward, even if those living in it have difficulty imagining how.

[. . .] Life always goes on, somehow, and maybe badly, but the character and dynamism of its continuity is of profound importance for those of us who want to live in the future.

I should say that I intend my catastrophic comments here as a little different than what Aaron is talking about. He is posting in response to Brad DeLong's semi-apocalyptic outburst about the Geithner Plan. DeLong cannot imagine the world working differently (perhaps, because it simply shouldn't--he might say doesn't, can't--work otherwise) (I don't pay too much attention to DeLong, usually, since he first came to my attention some years ago for his stupid attack on Chomsky; his more recent attack on David Harvey didn't help matters (latter link via)--Harvey commented to that, and followed up here). For my part, I'm trying to imagine the world being otherwise than it is, both ideally (how I would like it to be or think it ought to be) and in the reality in which we might find ourselves in the coming years or decades (how I think we might be able to live in such an eventuality). In addition, my desire to try to figure out a way to live differently pre-dates the actuality of this particular crisis. Admittedly, my ability to imagine is severely hampered by the current system itself and my position within it. The problem is huge, the task before us enormous.

Aaron closes his post by observing that everything he's read tells him

that we do live in a world economic system that’s just lost all four engines. But the difference between a controlled crash-landing, where most of the passengers have a good chance of survival, and pretending that the engines still work (because the alternative is too dire to imagine) is extremely important, and needs to part of this discussion. To ignore it would be stupid, almost suicidal. Or rather, it’s a kind of thinking that those members of our society equipped with parachutes are more likely to indulge in, isn’t it? They can afford the fallacy. They’re not the ones flying coach.

This, for me, is the key thing. It appears that the capitalist system, which necessarily undergoes periodic crises, may have entered its terminal crisis. This could mean any number of things, of course. When we factor in environmental limitations (the barely yet registered effects of global warming) and whatever the truth may be about the remaining availability of oil, the system, in one way or another, could and likely will limp on, more and more destructively, for decades. The very rich are not likely to be as negatively affected by such an increasingly unstable system. But the rest of us are going to need to make potentially radical adjustments in how we live, and those adjustments can be very painful indeed, or a lot less painful, depending on how we respond collectively to the problems. In my view, efforts at re-localization are crucially important ways in which we can make that crash turn into a softer landing. Hence the focus on food.

Analysing Sentences

In The Limits to Capital, in a footnote addressing a book claiming to subject Marx's analysis of technological change to "the standards and rigor which distinguish twentieth century analytic philosophy", David Harvey says the following:

"Analytical philosophy may be good at analysing sentences but is not so good, apparently, at capturing the total flow of an argument."

Ha!

Basic Capitalist Principles

This interview with Noam Chomsky about the financial crisis is, as always, full of good points, interesting observations, and important reminders about recent history (link via Steve Mitchelmore). Much of it is familiar territory for him, adapted for the current situation, but like a favorite band's greatest hits, I love to hear the oldies again and again. For example, I've always been fond of how he emphasizes the role of the public sector in the economy, as he does here:

[T]he core of the economy relies very heavily on the state sector, and transparently so. So for example to take the last economic boom which was based on information technology — where did that come from? Computers and the Internet. Computers and the Internet were almost entirely within the state system for about 30 years — research, development, procurement, other devices — before they were finally handed over to private enterprise for profit-making. It wasn't an instantaneous switch, but that's roughly the picture. And that's the picture pretty much for the core of the economy.

The state sector is innovative and dynamic. It's true across the board from electronics to pharmaceuticals to the new biology-based industries. The idea is that the public is supposed to pay the costs and take the risks, and ultimately if there is any profit, you hand it over to private tyrannies, corporations. If you had to encapsulate the economy in one sentence, that would be the main theme.

There is, however, one aspect of this interview that troubles me. Talking about the IMF and how it operates as "the credit community's enforcer", Chomsky says the following:

If a loan or an investment from a rich country to a poor country goes bad, the IMF makes sure that the lenders will not suffer. If you had a capitalist system, which of course the wealthy and their protectors don't want, it wouldn't work like that.

For example, suppose I lend you money, and I know that you may not be able to pay it back. Therefore I impose very high interest rates, so that at least I'll get that in case you crash. Then suppose at some point you can't pay the debt. Well in a capitalist system it would be my problem. I made a risky loan, I made a lot of money from it by high interest rates and now you can't pay it back? Ok, tough for me. That's a capitalist system. But that's not the way our system works. If investors make risky loans to say Argentina and get high interest rates and then Argentina can't pay it back, well that's when the IMF steps in, the credit community's enforcer, and says that the people of Argentina, they have to pay it back. Now if you can't pay back a loan to me, I don't say that your neighbors have to pay it back. But that's what the IMF says. The IMF says the people of the country have to pay back the debt which they had nothing to do with, it was usually given to dictators, or rich elites, who sent it off to Switzerland or someplace, but you guys, the poor folks living in the country, you have to pay it back. And furthermore, if I lend money to you and you can't pay it back, in a capitalist system I can't ask my neighbors to pay me, but the IMF does, namely the US taxpayer. They help make sure that the lenders and investors are protected. So yes it's the credit community's enforcer. It's a radical attack on basic capitalist principles, just as the whole functioning of the economy based on the state sector is, but that doesn't change the rhetoric. It's kind of hidden in the woodwork.

My problem is the notion that this kind of activity is "a radical attack on basic capitalist principles". He notes that the rhetoric doesn't change, which no doubt refers to the rhetoric of the free market. Of course he's right about that. But I think it's incorrect to think that capitalism has anything to do with free markets. I know this seems counterintuitive, but that's only because we've had it hammered into our heads our entire lives that capitalism equals free markets equals freedom. So here, even Chomsky appears to have bought into that rhetoric to some extent. Capitalism is above all about forcing workers into the market. Where we should be able to have free access to food and shelter, as basic human rights, we are forced instead to contend with the housing and food markets; with both food and shelter subject to market forces, with once common land unavailable for use, enclosed, we are forced to sell our time, our lives, to others' in order to make the money necessary to afford food and shelter.

The state has always been necessary to protect the private ownership of productive property and to enforce the effective propertylessness of the rest of us. The dynamism of the public sector that he refers to above is simply another manifestation of this. He says you might instead call it "state capitalism" because of the massive state investment in the economy. This is fine, I suppose; some economists have called the old Soviet Union "state capitalist", too. It's all about control of productive capacity not being in the hands of those actually doing the work. It's about the removal of agency. In any event, to modify one of Chomsky's remarks, the last thing capitalists want is to truly compete in a free market. This is why, during the Progressive Era, leading figures like J.P. Morgan argued for and designed the regulatory apparatus. It was a disaster for them when they competed on the open market. Granted, there are numerous owners who do not understand this, and blather on and on about free markets, no doubt believing it, like lunatic Libertarians or something, but we needn't concern ourselves with them. (I hope it's obvious that none of this should imply that free markets are in any way desirable, anymore than capitalism is.)

I'm reminded, incidentally, of a passage from Marshall Berman's 1978 essay "All That is Solid Melts Into Air", collected in his Adventures in Marxism (I believe the essay was expanded into the later book by the same title). He is discussing Marx and bourgeois nihilism and Marx's apparent belief that the "bourgeois really believe . . . in an incessant, unrestricted flow of commodities in circulation, a continuous metamorphosis of market values." He continues:

If, as he believes, the members of the bourgeoisie really do want a free market, they will have to enforce the freedom of new products to enter the market. This in turn means that any full-fledged bourgeois society must be a genuinely open society, not only economically but politically and culturally as well, so that people will be free to shop around and seek the best deals, in ideas, associations, law and social policies, as well as in things.

This would hold true for communists and communist ideas, too. Marx further believes that thus people will choose revolutionary and communist ideas, because they are the best ideas, they will sell, and the revolution will be inevitable. My summary is simplistic, but still, it's evident that Marx, even as the great analyst of capitalism that he was, also bought into the free market rhetoric. Berman notes that:

In fact, in bourgeois history [the] principle [of unprincipled free trade] has generally been more honored in the breach than in the observance. The members of the bourgeoisie, especially the most powerful, have generally fought to restrict, manipulate and control their markets. Indeed, much of their creative energy over the centuries has gone into arrangements for doing this -- chartered monopolies, holding companies, trusts, cartels and conglomerates, protective tariffs, patents, price-fixing, open or hidden subsidies from the state -- all accompanied by paeans in praise of the free market. Moreover, even among the few who really do believe in free exchange, there are fewer still who would extend free competition to ideas as well as things.

A paragraph later, he says that "[a] more typical bourgeois pattern is to praise freedom when in opposition and to repress it when in power" and chides Marx for surprisingly "getting carried away by what bourgeois ideologues say, and losing touch with what the men with money and power actually do." Berman suggests that this is a dangerous problem, for if the bourgeoisie effectively closes off access to new ideas, then

it will be harder than ever for communism to take root. Marx would say that their need for progress and innovation will force them to open up their societies even to ideas they dread. Yet their ingenuity might avoid this through a truly insidious innovation: a consensus of mutually enforced mediocrity, designed to protect each individual bourgeois from the risks of competition, and bourgeois society as a whole from the risks of change.

In the climactic chapter of the first volume of Capital, "The Historical Tendency of Capitalist Accumulation," Marx says that when a system of social relations acts as a fetter on "the free development of productive forces," that social system has simply got to go: "It must be annihilated; it is annihilated." But what would happen if, somehow, it didn't get annihilated? Marx lets himself imagine this for barely an instant, only to dismiss the possibility. "To perpetuate" such a social system, he says, would be "to decree universal mediocrity". This is perhaps the one thing that Marx is utterly incapable of imagining.

I found myself, while dipping my toes last year in Marx, marveling at how prescient his analysis was. It seems even more relevant to current-day conditions than it did in his own day, and yet it seems he was unable to anticipate this key feature of our decrepit, collapsing system: its thoroughgoing mediocrity.

Any good Kassandra

With the deepening financial crisis and the ascenscion of Barack Obama, there has been a lot of talk about a return to Keynesianism, a "New New Deal". I have my doubts that any likely program will have enough impact, especially given the persistence of the hugely expensive wars the U.S. is waging in Iraq and Afghanistan and Obama's apparent intention to get tough with Iran and Pakistan. But there are other concerns, as well. I've chided myself in the past for my tendencies towards "catastrophism" (what a co-worker unhelpfully calls "fatalism"), but sometimes the sky is falling, and it's important to try to figure out where one should be when that happens.

Stan Goff has been writing about this kind of thing for a while. Here is what he had to say recently:

In keeping with the duties of any good Kassandra, let me say that we are far, far, far worse off than in 1930; so Keynesian pump-priming isn’t going to work. Moreover, there is no World War II Redux in the wings to act as the US deux ex machina to build us up on the corpses of 60 million people… yet.

And, anyway, we've already been in a war economy as things have fallen apart, and there is less room for "growth" than there was back then. We already have the appliances, the cars, we have massive consumer debt, and so on. There are numerous other differences between now and 1930, some listed by Goff. Then he says:

But here is a big intangible: In 1930, the majority of the population in the US was not as utterly dependent and helpless as it is now. Consumerism has created a nation of cyborgs who will go mad when the grid begins to shut down. They are epistemologically disabled; and they are psychologically fragile. They are self-centered and avaricious, with extremely low frustration tolerance levels.

Now, with this crisis in mind, how do we think about something as nessesary by one measure and insane by another as propping up the automobile industry? Automobiles are essential to support our existence such as it is… halt them today, and many will literally die. But they are also a key part of our problem with greenhouse gases, habitat destruction for roads and the attendant sprawl, transportation of food, etc. etc. At the same time, they will stop one day, as sure as the sun rises.

When the bailout of the big three automakers was being discussed, analyzed, and ridiculed to death, I despaired at the notion that, in part because of union jobs, the proper thing to do was to support the bailout. Because the automobile industry is one of the most irresponsible industries in history. Not only because of their utter stupidity as business, but also because of the simple fact of its existence, that new cars get made and sold and bought, continuously. (Don't get me started on "housing starts".) But Goff is right: in the short-term, if Americans' cars are taken away, most of us are fucked. Given the long-term unviability of oil as an energy source, and the prospects of environmental catastrophe, it seems obvious to me that we should be trying to find ways to lessen our reliance on cars. I don't see such a thing happening. We'll continue as we are, until forced to go without, and then where will we be?

I don't have time to say more about this right now, but I expect I will be returning to this topic often in the future (lucky you) . . .

Adrift on the neoclassical sea

A couple of quotes from jane dark's recent post:

Even economists able in some regard to have seen the crisis with a clear eye are still largely compelled to speak of it in almost purely cyclical terms. . .

And:

It is tempting to assert that this waveform horizon results from being adrift on the neoclassical sea; had they their feet planted in the critique of political economy, they would see the drive of the world capital system toward terminal crisis. But this too may be a mistake, albeit one of scale rather than simplicity. The inability to think the crisis in relation to geopolitics and state power afflicts various Marxian analysts as surely as it does the doyens of the core institutions. That there will not be a recovery in the full sense is explicable only through the coordination of economic and state power, and indeed the horizon of knowability here is not that of an unforeseeable economic unfolding but the difficulty in conceiving of what form the transfer of global power away from the U.S. will take.

In The New Imperialism, David Harvey points out that when capitalism has hit its inevitable crises of overaccumulation, capital has invariably sought to solve its problems overseas, with imperial adventure and investment. In part this is because in general, as a class, the ruling class simply refuses to give up on the class war. Where the problem could perhaps have been fruitfully addressed via extensive investment in the social sphere, ideologically this is simply a non-starter. This is one of the many aspects of capitalism that reveals that the notion that the market involves rational actors, behaving rationally, making rational decisions, is nothing more than a fiction. Nevertheless, crisis is inevitable. The current crisis is one more necessary crisis, pointing towards, as jane puts it, a terminal crisis, not simply an awful downturn in the cyclical (read: natural) order of things.

Public Vice

I have to admit that there have always been apparently basic things about economics that have been incomprehensible to me. One example of this can be exemplified by an image that has, for me, been symbolic of the Great Depression as a whole: piles of apples, with prices set ridiculously low, yet going to waste, rotting, because still no one can afford them. Deflation, of course (link via American Leftist).

A few weeks ago, Paul Krugman, every Liberal's favorite economist, wrote about the decline in American consumption, the "long-feared capitulation of American consumers". In doing so, he touches on another example of what I'm talking about. He provides some numbers showing this decline in consumption and reminds us that this is unusual, since Americans "almost never cut spending". Americans, of course, have been without any manufacturing base for some time and have thus long since been relegated to the role of the world's consumers. Krugman doesn't say anything about this. He does, however, try to explain why the "timing of the new sobriety is deeply unfortunate". He writes:

. . .one of the high points of the semester, if you’re a teacher of introductory macroeconomics, comes when you explain how individual virtue can be public vice, how attempts by consumers to do the right thing by saving more can leave everyone worse off. The point is that if consumers cut their spending, and nothing else takes the place of that spending, the economy will slide into a recession, reducing everyone’s income.In fact, consumers’ income may actually fall more than their spending, so that their attempt to save more backfires — a possibility known as the paradox of thrift.

Here, Krugman helps me to better understand what my problem has been. We are continually told that, collectively, we do not save enough--Americans' savings rate is effectively zero--while at the same time we are constantly told to consume more, that consumption will save us. Krugman's paragraph essentially makes it plain that the economic system does not serve people, rather people serve the system. Not that this was news to me.

My problem with the phenomenon of the rotting apples was that, in my youth and ignorance, I did not understand why the price of the apples mattered; I didn't understand why they couldn't simply be given to people. And yet, I felt that there must be some obscure reason, and I had no doubt it would be a good one and that if I studied economics I would grasp it. The fact, however, is that there is no good reason. But we've so internalized the idea that capitalism is the natural order of things that we simply accept the notion that food can and will go to waste alongside masses of people starving to death.

Krugman's article points to another element of capitalism that is deeply troubling. Any system in which "individual virtue can be public vice", in the manner in which he is discussing, is simply and profoundly wrong.

Since what I'm suggesting with the example of the apples sounds dangerously like communism, allow me to close with a quote from an article by David Graeber (link via From Despair to Where?--apologies to Stuart for quoting much of the same passage!):

Consider here the term "communism." Rarely has a term come to be so utterly reviled. The standard line, which we accept more or less unthinkingly, is that communism means state control of the economy, and this is an impossible utopian dream because history has shown it simply "doesn't work." Capitalism, however unpleasant, is thus the only remaining option. But in fact communism really just means any situation where people act according to the principle of "from each according to their abilities, to each according to their needs"—which is the way pretty much everyone always act if they are working together to get something done. If two people are fixing a pipe and one says "hand me the wrench," the other doesn’t say, "and what do I get for it?"(That is, if they actually want it to be fixed.) This is true even if they happen to be employed by Bechtel or Citigroup. They apply principles of communism because it’s the only thing that really works. This is also the reason whole cities or countries revert to some form of rough-and-ready communism in the wake of natural disasters, or economic collapse (one might say, in those circumstances, markets and hierarchical chains of command are luxuries they can’t afford.) The more creativity is required, the more people have to improvise at a given task, the more egalitarian the resulting form of communism is likely to be: that's why even Republican computer engineers, when trying to innovate new software ideas, tend to form small democratic collectives. It's only when work becomes standardized and boring—as on production lines—that it becomes possible to impose more authoritarian, even fascistic forms of communism.

(This passage is strikingly similar to that found in a pamphlet I read a few years back--called, I think, "What is Anarchism?". The simple idea was that anarchism is what we do everyday in order to get things done. I found this to be a remarkably liberating idea. Meanwhile, the other day I rejected a comment from a brave anonymous soul, which read as follows: "Please leave the Western world. We have no room for socialists. We like our people independent of mind and carefully guarding and accumulating property." No doubt.)

Excess of Faith

Responding to k-punk's response to Barbara Ehrenreich's piece on "How positive thinking wrecked the economy", Mark Thwaite writes:

A considered and detailed debunking of the term "confidence" really needs to take place. That the global economy is in such tatters because of a lack of "confidence", a lack of faith in other words, is astonishing proof of the validity of Marx's theory of reification, but beyond that it shows that a profound irrationality sits at the heart of the global social system. A social system that claims it can never be bettered or changed or destroyed is, it clearly turns out, based almost entirely on our faith in it! The astonishing amount of energy -- and money -- being mobilised by governments, politicians and journalists to try to keep us keeping the faith shows clearly that it is time for us all to dream again of better worlds.

I would say, rather, that the economy is in tatters not because of a lack of faith, but because of an excess of faith, a misplaced faith in capitalism. This faith isn't limited to those traders who, in fits of panic or elation, cause the stock market to bounce up and down in such dramatic ways as we've seen so much of in the last two weeks. This faith is just as much in evidence in those of us who invest in the market in our own, perhaps small, ways. We have "confidence" that the market will recover, sure, but we have, ironically, ultimate faith in the rationality of capitalism. We're sold a bill of goods about freedom, about the naturalness of the capitalist economy (economic Darwinism, you know: competition is only natural, etc.), and we buy into it wholesale. How many of us who would call ourselves resolutely anti-capitalist nevertheless have bought into the chimera of the 401(k)? We can all retire rich, is that it? All of us? We'll all draw out at the height of the market? How do we think it's possible? How did we ever think there was ever going to be enough money to cover us all in our dotage, with the fantasy of compound interest? This is misplaced faith, potentially far more damaging than what most religions cook up.

Disintegration of the Illusion

I've been meaning to write something about this long-coming economic crisis we find ourselves in, but things have moved too quickly for your slow-writing, time-crunched blogger. But I like what k-punk says here:

"What we're seeing is not the collapse of capitalism, but the disintegration of the illusion that capitalism is about the untrammeled free market."

Yeah.

And, regarding the $700 billion figure, this quote was priceless:

"It’s not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

See also, among many other worthy items, the following: Michael Hudson at CounterPunch (on the insanity of the giveaway plan), Richard Estes at American Leftist, Naomi Klein at The Nation (article is from July, about "Obama's Chicago Boys"; link via Matt Christie), Cassiodorus' Daily Kos diary suggesting "Maybe we can call it 'late late capitalism' now?". . . . so many others, too numerous to collate or summarize, etc. . .

Meanwhile, Lenin reminds us not to forget about recent American strikes in Pakistan, expanding the illegal, immoral, ineffective, total bullshit war of terror.

The End of Suburbia

Crucial video about a crushingly huge problem--the decline of cheap oil, and the attendant impossibility of maintaining the American way of life, the suburbs in particular. I've been meaning to spend more time about this kind of thing, but haven't been able to organize my thoughts. I hope to rectify that in the future. (Also, I hope to link more to Feral Scholar, where they spend pretty much all their time talking about this kind of thing, and what might be done about it.) In the meantime, be sure to watch this documentary. (Via Jacob Russell, via here)

Dangerous Tendencies

Here's another passage from Terry Bouton's Taming Democracy, on the topic of public attitudes towards corporations in the 1780s (with the Bank of North America as the particular case in point):

. . . people worried that the bank would eventually destroy democracy. Thousands of Pennsylvanians complained in their petitions that bankers [...] had begun "to acquire influence in our public councils, and an ascendancy in the government, subversive of the dearest rights of the people." They were worried that "a small number" of "monied men" and "perhaps a single stockholder" could eventually use the bank's growing economic might to begin "actually governing" the state as a shadow government. Others spoke of how it was "highly dangerous" and "Contrary to [the] spirit of a republican government" to have an "institution" that was "placed out of the reach of the legislature," noting that not even "the former government" had been willing to create a private "influence" so "powerful and alarming."

It was not that these people thought bankers were somehow innately sinister; instead, they worried about [...] the "nature of the institution." As a profit-driven company, the bank operated under "natural principles" of doing whatever it took to make money. [...]

The belief that profit-driven corporations pose a grave threat to democracy led many people to declare that they should all be made illegal. Echoing the phrases in popular petitions, some state legislatures said for-profit corporations were "totally destructive of that equality which ought to prevail in a republic." "The accumulation of enormous wealth in the hands of" a company with corporate status, they declared, "will necessarily produce a degree of influence and power which cannot be entrusted in the hands of any set of men whatsoever without endangering the public safety." Others spoke of the "dangerous tendencies" of for-profit corporations or talked about corporate power as "an engine of destruction" that enabled "a few men to take advantage of their wealth." Even one of the state's leading writers on economics argued that any institution chartered for "its own immediate profit [was] incompatible with the interest of the State." "So powerful and uncontroulable a combination of property in private hands," this economist declared, could only lead to "an undue exercise of influence" over economic and political life--just as private corporations like the Bank of England had an "injurious" hold over the British Parliament.

This anti-corporate belief was so strong that, during the postwar decades, few government actions prompted the kind of swift, widespread, and visceral public condemnation as did the attempts of state leaders to grant corporate status. (pp. 111-112) (Elisions are mine; bracketed words are Bouton's.)

Too many people to buy off

In my last post, I wrote the following incomplete passage:

In the popular conception, independence meant owning property; most people were farmers. Economic independence meant political independence. It was widely felt that one could not be "free" if one was economically dependent. For most people, this meant owning land.

There was a lot I left unsaid here, and I fear that the effect is misleading and undermines the overall point of the piece. I should have taken more time to expand on it. If people, ordinary people, believed that one could not be truly independent if one did not own property, where does that leave us? How is their conception one that should inspire us? When we learn rules that require the ownership of property, don't we instinctively think they are wrong? I know I do. I can remember in my youth being indignant upon first learning that the true beneficiaries of the American Revolution, of the new "democracy", were the propertied classes, that the system was never meant to be broadly democratic, etc.

In any event, Terry Bouton's Taming Democracy helped me to understand better why people would link economic independence with political independence in the first place, but it also discusses their movement beyond the notion that only property owners should be able to vote or take part in the political process. I should have noted that, though many colonial Americans were indeed farmers (and could be said to "own" land), many were not. There were numerous artisans and laborers and apprentices (not to mention slaves, of course). It was felt that these sorts of people would be pressured by their employers or landlords to vote a certain way. It is in this way that they would have been said to not be "politically independent". Even so, with the more radical 1776 Pennsylvania constitution nearly all adult men could vote (including free black men), with the removal of all property requirements. Here is Bouton:

This opening represented a dramatically new way of thinking about voting and citizenship. In the past, governments had focused on limiting the franchise to adult men who own sufficient property because it was thought that only those with property could be truly “independent” citizens. Governments had disenfranchised propertyless “dependents,” whom it was thought would vote as their landlord, employers, or creditors directed. It was said that preventing dependents from voting would keep wealthy men from corrupting the political system. As Pennsylvanians broke from Britain, they also abandoned this old way of thinking about voting. The new focus was to protect against corruption by giving the vote to men who held little or no property. The idea was that an expanded electorate would protect against corruption better because, with so many voters, there would be too many people to buy off. At the same time, it was thought that allowing ordinary folk to vote would give them the power they needed to get access to money, credit, and land and become independent. And with property in many hands, it would be even harder for the affluent to control political life. There were remnants of the old thinking in this new ideal: Pennsylvania’s revolutionaries still considered the propertyless a possible threat. But they now believed that giving the vote to ordinary folk was the only way to keep the wealthy in check. (pp. 53-54)

I think that fleshes things out a little better, so I'll leave the topic for now. . . (Though I hope to return to the idea that "one could not be 'free' if one was economically dependent".)

Debtor Nation

Michael Hudson is a name I've been seeing a lot of lately, particularly through the recommendations of Stan Goff. Hudson is a Wall Street financial analyst, and author of the book Super-Imperialism (which I really need to read). Today, I read this interview (pdf) with Hudson, conducted by Acres USA (link again found via Stan Goff, in a comment he posted to this post--"Bubble Bubble"--at Feral Scholar). The interview is titled "Debtor Nation: The Hijacking of America's Economy" and is well worth reading. It begins with a discussion of the sub-prime crisis, covers the Chicago Boys in Chile, the looting of Russia, the "anti-country" of Panama (including its purposes for the trade in oil), and hits on Thorstein Veblen, Paul Volcker, Alan Greenspan, and the Democratic candidates for president. Here is a fascinating passage in which Hudson talks about the Unites States' balance of payments deficit:

HUDSON. [...] The United States became a true deficit country after August 1971, when President Nixon took the country off gold. Once European and Asian countries and their central banks could no longer turn in their surplus dollars for gold, they had only one choice, and that was to invest their international monetary reserves in the form of U.S. Treasury bonds. Central banks don't invest in the stock market, they don't buy real estate, and they don't buy companies — at least not until recently. They buy government securities because those are the most secure. So the United States found that the larger the balance of payments deficit became, the more dollars it would pump into foreign economies. The recipients of these dollars, either exporters or sellers of companies, would turn the surplus dollars over to their central banks in exchange for domestic currency, and then the central banks had a problem — what do they do with these dollars? The only thing they could do was to buy U.S. Treasury bonds.

ACRES U.S.A. That would add up to a lot of bonds.

HUDSON. Yes, the balance of payments was so large and pumped so many dollars bonds, or they wouldn't buy these dollars — they would let them be sold on the market, and their currency would appreciate against the dollar. This would have raised the price of their exports to foreign countries, causing unemployment in their export industries. When they complained about the U.S. payments deficit, the U.S. government said "That's your problem, not ours." The United States found that it could run a balance of payments deficit without ever having to pay for it — and today, the U.S. Treasury owes $2.5 trillion to foreign central banks.

ACRES U.S.A. That's an astronomical debt!

HUDSON. There is no way in which the U.S. economy can repay $2.5 trillion. Of this amount, about half is owed to China, and all the while dollars continue to be pumped into the global economy. In effect, the United States is exporting paper dollars, or paper bonds, and other countries are exporting goods and services and selling their corporate stocks and natural resources in exchange. The dollar is getting a free ride from this. As far as it is concerned, the debts owed to foreign central banks are never going to be repaid.

ACRES U.S.A. Don't these nations know this?

HUDSON. Yes, but as yet they have no political response. That would require changing how the overall international payments system works and also break the U.S. economy out of the global orbit, isolating it until it can give a quid pro quo for what it buys. A change would also require restructuring European and Asian domestic economies to replace dollar-export markets with their own domestic market. So foreign countries could indeed refuse to accept more excess dollars, refusing to sell out to Americans, and try to develop their internal market. But the German government is so anti-labor that it refuses to build the internal market, and the Chinese — like the Germans — continue to produce chiefly for export.

ACRES U.S.A. Why did they do this? Why does Germany with its high unemployment rely on this world trade, and the same with China, when they have their own internal economies they might service?

HUDSON. Because they don't seem to care about their internal economies, except to go on waging the old class war. That is how mainstream economics is taught these days — and why I stopped teaching academic economics for many years. Many people have tried to explain why European central bankers are so idiotic when it comes to this system. One suggestion is the "Stockholm Syndrome": When somebody is kidnapped, the victim tends to identify with the kidnapper, the victimizer — and there is an idea in Germany, in England, and other countries that no matter what, they have to do whatever the U.S. government recommends. It's a passive mentality. But for Europe and Asia to behave in this way violates every theory of how international relations are supposed to work. In theory, every nation is supposed to act in its own self-interest. But in today's world it seems that only the U.S. government is acting in this way. It is understandable why the United States would love to pay paper dollars and get foreign resources for nothing. It's not understandable why foreign countries go along.

Mid-Atlantic Radical Book Fair

This past weekend we went to the Mid-Atlantic Radical Book Fair, hosted by Red Emma's Bookstore Coffeehouse at 2640. The event is pretty much what it sounds like: radical publishers and book shops and activists getting together to sell books and meet and greet and talk politics and activism. AK Press, Haymarket Books, and Autonomedia were among the publishers in attendance. As always, it was an entertaining and informative event.

There were various events throughout the weekend: films, readings, discussions, workshops. I attended three discussions. The first was on Saturday, a rather tepid session called "Anarchism and Marxism". A bunch of young people and me sitting around a circle listening to an older activist talk about his group's take on Anarchism and where it overlaps with liberatory Marxism. I mostly agreed with his perspective (more Murray Bookchin than Hakim Bey, if I understood him correctly), but it was necessarily brief. The discussion never really got going, and then it was over. Feeling enervated by the workshop and overwhelmed by the sheer volume of interesting books on display (we're trying not to buy much in the way of new books), I was having a hard time getting into the spirit of the thing. Aimée showed up, and we walked around some more (she bought some children's books, including one about Woodie Guthrie). She had some things she was interested in doing there, while I was already feeling sleepy and out of it. But then we attended an excellent session called "Rethinking War and the Struggle Against it in the Neoliberal Era", led by George Caffentzis and Sylvia Federici. I thought I knew a lot about neoliberalism and the reasons behind the war, but my understanding was considerably deepened by what they had to say and the ensuing discussion.

Caffentzis and Federici are members of the Midnight Notes Collective [the website is pretty rudimentary, though there are plenty of links to interesting articles], a collective which since the 1970s has "directed its political intervention and theoretical work to the anti-nuclear, anti-war, and anti-capitalist movements." The latter quote comes from the back of the book Midnight Oil: Work, Energy, War, 1973-1992 (published by Autonomedia), which I bought at the Fair. I'm a little less than halfway through this book, and I already think it's a must-read. In my "Disaster Capitalism" post I suggested that David Harvey's A Brief History of Neoliberalism and Ellen Meiksins Wood's Empire of Capital were crucial books for anyone hoping to understand the world today. Let me add Midnight Oil to that short list. The authors' analysis of the reasons behind the 1991 Gulf War (including why Saddam Hussein decided to invade Kuwait), the background of the imposition of neoliberalism, the internationalization of class war, etc--all of this is brilliant and fascinating. It will figure in future posts about capitalism

I also walked out with a copy of Federici's book Caliban and the Witch: Women, the Body and Primitive Accumulation. Described as "a history of the body in the transition to capitalism", this book fits right into my growing interest in the origins of and resistances to capitalism. Peter Linebaugh is the author of another such book that I need to read, The London Hanged (about which, see Resolute Reader), and is also a member of Midnight Notes. From Linebaugh's blurb to Caliban and the Witch:

Federici shows that the birth of the proletariat required a war against women, inaugurating a new sexual pact and a new patriarchal era: the patriarchy of the wage. Firmly rooted in the history of the persecution of the witches and the disciplining of the body, her arguments explain why the subjugation of women was as crucial for the formation of the world proletariat as the enclosures of the land, the conquest and colonization of the 'New World,' and the slave trade.

On Sunday, we returned to the Book Fair to hear Dahr Jamail talk about his experiences as an independent journalist in Iraq (including readings from his book, Beyond the Green Zone: Dispatches from an Unembedded Journalist in Iraq), along with members of Iraq Veterans Against the War, who talked about their own experiences in the war, as well as their efforts to organize active duty service members against it. As you might expect, this talk was moving and informative. And . . . and I wish i had more to say about it, but I'm tired and this meandering post is long enough. I may say more later on. But for now check out Jamail's website and his blog and the IVAW site for more information.