Thursday, 20 October 2016

Capitalism as Relative Overpopulation - Part 2

The thesis we have been advancing in the last few interventions is that the essence of capitalism is "relative overpopulation". Here are two recent articles in support of our more theoretical analysis.The first is by Satyjat Das on the so-called "sharing economy", which is anything but what it calles itself - if only I could get hold of the neck of those rotten bastards that run airbnb and the pigs that sponsor them and the likes, I would then not be responsible for my actions, friends.

The second is more directly on the projected overpopulation of conurbations by a technocratic architect who can see the problem but has not a clue about its real cause. Here they are:

The sharing economy benefits its creators, but this may be at the expense of those who do the work or provide the service — as well as the broader economy.
The real reasons for the sharing economy are simple.
The existing industries targeted by these platforms are frequently inefficient. Over time, regulations have accreted, evolving to serve narrow interests rather than to maintain service standards and protect users. Competition has fallen, and development has been impeded.
Proponents argue, with justification, that sharing-economy competitors frequently provide a superior product. This highlights the need to reform existing regulatory frameworks. It is not self-evident that replacing the existing system with non-professional service providers and substituting a new monopoly for an existing one is the optimal response.
The sharing economy has developed in response to weak economic growth and a depressed labor market. Workers unable to find work or needing supplemental income use these platforms to earn additional income.
The arrangements are intended to avoid labor laws that cover minimum wages, working conditions and benefits. Technically, the worker isn't “employed” but a “contractor” not subject to these regulations, though there is debate in some jurisdictions about the exact legal status and rights of sharing-economy workers.
The sharing economy is part of the trend to contractual and temporary work, which masks the real health of the employment markets. It is also part of a global process of reducing overall labor costs.
The development affects both unskilled and skilled work. Professionals, such as engineers, radiologists and designers from Eastern Europe, Asia, Africa and Latin America, are undercutting peers in advanced economies. It is what financier Jay Gould once envisaged: “hire one half of the working class to kill the other half.”
Sharing-economy platforms exploit these factors. In the latest gold rush, venture-capital investors are betting that low prices — due to paying providers less and avoiding expensive regulations — will create mass markets for services once reserved for the wealthy. Uber has raised more than $15 billion in equity and debt, valuing the business at around $70 billion despite the fact that the company’s car-sharing business isn't currently profitable.
Cheerleaders frame the sharing economy in lofty utopian terms: The sharing economy isn't business but a social movement, transforming relationships between people in a new form of internet intimacy and humanitarianism.
Exchanges are economic. Buyers are primarily concerned about access to services at low costs rather than social objectives. Providers are motivated by money, using their assets and labor to get by in an unforgiving and poor economic environment.
Read: 11 things fans of the sharing economy get wrong
The major financial backers of the sharing economy aren't philanthropists. They are Wall Street and Silicon Valley’s 1%, related venture-capital firms and a few institutional investors, such as sovereign-wealth funds. The amount of capital provided is substantial. Given the normal five-to-seven-year cycle for such investments, the pressure to deliver results will increase, bringing it into conflict with the social or altruistic objectives espoused.
Ultimately, the sharing economy will influence how traditional businesses operate. Traditional automobile makers could offer a car-sharing service, such as BMW’s Drive Now. Users can access a car as needed, paying only for usage. These types of changes may decrease rather than increase revenue as it substitutes hiring arrangements for outright purchases.
But perhaps the real issue is that the sharing economy reverses progress in labor markets. Whatever the gains from increased efficiency, it recreates a Dickensian world for a part of the population. Formal employment protects labor from exploitation and deprivation to varying degrees. The sharing economy transfers the risk of economic uncertainty from the employer to the employee with potentially tragic consequences.
Most important, the underlying economic premise is false. Consumption constitutes 60%-70% of activity in advanced economies. In 1914, Henry Ford doubled his workers’ pay from $2.34 to $5 a day, recognizing that paying people more would enable them to afford the cars they were producing. Reduction of income levels and employment security ultimately reduces consumption and economic activity, impoverishing most within societies.

And here is the second contribution from "The Guardian":

This week in Quito as many as 45,000 people have gathered for Habitat III, the global UN summit which, every 20 years, resets the world’s urban agenda.
Why should we care? Well, to start with, in the next 20 years, we will witness more than two billion more people moving to cities. Depending on what we do to accommodate them, this could be good – or very bad – news.
It’s good news because people are demonstrably better off in cities than outside them. For the poor, cities are efficient vehicles to satisfy basic needs. Having people in a concentrated space makes the implementation of public policies more effective (think of access to sanitation, and the consequences for reducing child mortality and epidemic disease).
For the middle class, meanwhile, cities are a concentration of opportunities for jobs, education, healthcare and even recreation. They offer the promise of social mobility. And for a certain elite, cities are a powerful vehicle to create wealth; their critical mass generates the appropriate environment for knowledge creation and prosperity in the broadest sense of the word.
In short, cities are like magnets, with the potential to take care of everything from the most basic needs to the most intangible desires.
Now for the bad news, which we could call the “3S menace”. The scale and speed of this global urbanisation, and the scarcity of means with which we must respond to it, has no precedents in human history.
Of the three billion urban dwellers today, one billion live below the poverty line. In two decades’ time, five billion people will be in cities, with two billion of them below the poverty line.
To accommodate such growth humanely, we would need to build a city of one million people every week, spending no more than $10,000 per family. If we don’t solve this equation, it’s not that people will stop coming to cities; they will still come, but they will live in awful conditions.
What’s at stake here is not just poverty but inequality too. Cities express in a very concrete and direct way the distance between the haves and have-nots.
Urban inequalities are often reflected in brutal ways – from the distance people must travel to work every day, to the lack of quality public spaces, urban amenities and civic services. No wonder so much anger and resentment is accumulated in the peripheries.
Of course, this is problem is not exclusive to developing countries. Rich countries, despite having solved all their basic needs, experience a similar accumulation of social pressure as if it was a ticking time bomb. 

Tuesday, 18 October 2016

Capitalism as Relative Overpopulation

Let us look once more at that quote from Knut Wicksell’s Interest and Money because it displays vividly the utter incomprehension of the bourgeoisie and its acolytes of exactly what kind of monstrous social system they have erected – one that, as is clearly visible to all who dare look – is heading fast toward the precipice of catastrophe:

The two rates of interest [the natural and the monetary] still reach ultimate equality, but only after, and as a result of, a previous movement of prices. Prices constitute, so to speak, a spiral spring [136] which serves to transmit the power between the natural and the money rates of interest; but the spring must first be sufficiently stretched or compressed. In a pure cash economy, the spring is short and rigid; it becomes longer and more elastic in accordance with the stage of development of the system of credit and banking. (Interest and Money, pp.135-6)

Prices, then, are the monetary expression of an underlying substance of economic reality. Prices are like Platonic shadows, like Kantian phenomena, to which is opposed a physical reality that can be distorted when prices diverge from the “real” value of underlying “goods” – but a reality that will “ultimately” impose itself on these “mere phenomena” on these monetary “disturbances”. Here is once again the dichotomy between “appearance” and “reality” that Nietzsche so fiercely derided as symptomatic of the deleterious hypocrisy of Christian-bourgeois society.

For, if it is possible for money to distort prices from their “ultimate equality”, then it is blindingly obvious that there is no such “ultimate equality”, that indeed capitalism is a world of mere shadows in which prices – far from heading toward the ultimate equality of underlying use values – are the expression of social relations of production, of political relations between human beings. There is no “real economy”, therefore.

Neoclassical economics, with its “marginal utility” and “marginal efficiency of capital” (a notion absurdly entertained by Keynes of all people) and of “factors of production” – neoclassical economics is one giant metaphysical construction whose pernicious influence over socio-political analysis and social policy over the last one and a half century is slowly but surely leading capitalist society to self-destruction.

If there is one reality that is coming prepotently to the fore, it is this: the capitalist economy is based on the accumulation of social resources on the part of the bourgeoisie to enable it to expand its political control over a greater number of human beings to be used as labour power for the expanded production of those resources. Capitalism is entirely dependent therefore on the relative growth of overpopulation, that is, of an excess workforce able to depress the living standards and political emancipation of the existing labour force. On one hand, the bourgeoisie seeks to co-opt its labour force with higher real wages whilst on the other it must create the conditions necessary for the expansion of the potential labour force, the reserve army of the unemployed and underemployed, to ensure the political subservience of those already in employment. This is the essence of capitalism: relative overpopulation.

So why must this come to a brutal end, to a war of all against all? Because the bourgeoise on one side relies on the allegiance of workers in its metropole to exert its domination over the periphery. But at the same time, the bourgeoisie also needs the periphery to exert dictatorial powers over the greatest portion of the world’s population – precisely in order to ensure that the workforce in the metropole remains loyal. It is evident therefore that there is a devastating, explosive contradiction between “liberal democracy” in the relatively underpopulated “West”, and utter crushing dictatorship in the relatively overpopulated “emerging economies”. This contradiction that was always present but was either suppressed or distorted is now becoming so explosive that its blinding truth can no longer be hidden from view!

Overpopulation as the real essence of capitalism is bringing about the devastation of the planet. As Tom Friedman once far-sightedly put it, “The Earth cannot afford 8 billion Americans”! In other words, no matter what the apologists of this insane social system might say about “capitalism is dragging billions of people out of poverty”, the reality remains that the living standards of workers in the metropole are collapsing. And they have to collapse! Because the Western bourgeoisie can accumulate capital through the complicity of inhumane dictatorial regimes the world over. Far from the end of the Cold War, we have now entered the most lethal “Hot Peace” whereby vast populations languishing in the periphery (China, India, Africa, Middle East) seek to compete with Western labour forces. The quicker we understand this self-destructive dynamic of capitalism, the higher will be our already very slim chances of surviving the madness of capitalist social relations of production. 

Sunday, 16 October 2016

The Natural Rate of Interest and the Secular Stagnation of Capitalism

Let’s get a little technical now. The recent upheaval and gyrations of capitalist industry and finance are now unequivocally attributed to the “secular stagnation” of “the economy” - not, as you can see, of the capitalist economy, but of “the economy” tout court, as if the only economy possible had to be a “capitalist” economy. Thus, bourgeois economic pundits of every hue, from Lawrence Summers to Paul Krugman, admit that there is a stagnation of “the economy” and that this stagnation is likely to endure and may well be terminal, which is what “secular” signifies – something that lasts per saecula, for centuries. But they fail to make the all-important connection between secular stagnation and capitalism – as if the only kind of “economy”, the only kind of human social production possible was and had to be capitalist in essence.

At the heart of this secular stagnation, its manifestation is the inexorable decline of “the natural rate of interest” in “economies” across the world. Now this is the kernel of the question: what exactly is “the natural rate of interest”, is it really “natural”, and why is it in irretrievable decline? Keynes said famously in the General Theory that -
Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.
Behind every entrenched economic policy there lies a totally unknown and obscure economic “scribbler”. But the interaction runs both ways: in other words, it is always essential for us “scribblers” to understand and try to make sense of the “madness” of frenzied politicians. So it is essential that we understand what kind of socio-political presuppositions and realities lie behind these seemingly harmless “scientific” expressions adopted uncritically by both economists and politicians.
In seeking to define “the natural rate of interest” as the centerpiece of his theory of value and capital, and therefore of his monetary theory, Knut Wicksell adopts wholesale the most insidious principles of the negatives Denken that, after Schopenhauer, had allowed Eugene Bohm-Bawerk (known in his time as “the bourgeois Marx”) to develop his theory of interest (in Capital and Interest). Life is essentially “suffering” (Leid), it is “strife” (Streit) or “work” (Arbeit) seen as toil. Human beings are fundamentally and thoroughly selfish. Human being is not a common condition, an ineluctable community (Gemeinschaft). On the contrary, only the intellectual abstraction from the daily struggle for survival can induce feelings of “com-passion” or “shared sorrow” (Mit-Leid) between human individuals. It follows that only those individuals who can “abstain” from pleasure, who can “renounce” the illusive search for happiness – only those superior souls can gain an advantage over other hedonistic spirits. The Askesis is an ascending of the mound of sorrow, it is akin to climbing a mountain (Nietzsche’s Zarathustra ascends to the mountains at the inception of his magnum opus). Every ascetic renunciation (Entsagung) therefore, must lead to a reward in the struggle for survival, in the universal Eris that is social life. There is no community of inter-ests (literally, inter homines esse, to be among human beings, to commune with them): there is only self-interest.
The State therefore – the “public thing” or res publica - is not the highest expression of community (contra Hegel) – far from it! The State is the necessary instrument required to avoid the war of all against all (Hobbes), to control self-interest so that it does not lead to internecine conflict, to the destruction of human society (Gesellschaft). Self-interest and property are prior to the establishment of the State, and therefore the task of the State is to protect the “natural rights” of individuals in society. These natural rights relate, first, to the preservation of private property through free market exchange; and, second, they relate to freedom of expression. Political economy is the science of ensuring that the State acts in accordance with the laws of the market because only the guarantee of the free exchange in the market will ensure the preservation of freedom of expression. This is the essence of liberalism as the paramount political ideology of capitalism. Liberalism and Neoclassical economic theory go hand in hand.

The natural rate of interest is that profit on the part of the capitalist that is consistent with the pre-political state of nature and possession without the interference of the monetary rate of interest set and regulated by the banks. Profit is the just reward in the form of future “consumable output” to the capitalist for postponing the immediate gratification of endless wants: the natural rate of interest is the average profit of all capitalists combined expressed as a rate. Here is how Shackle neatly and accurately summarises Wicksell’s neoclassical theory of the natural rate of interest:

The more highly articulated, specialized and elaborate the system of equipment becomes through which men apply their effort to their natural environment, the larger the ultimate reward to a given effort, but to carry the elaboration from a given degree to a [10] still higher one implies the foregoing of, say, N units of consumable output which would have been available in year T in exchange for the prospect of an extra m units per year in perpetuity, beginning in year T + 1. The ratio m over N then represents, nearly enough, what Wicksell called the natural rate of interest. It is a measure of the 'worthwhileness,' at any stage of the development of the economy's total assemblage of productive equipment, of adding one more 'unit* to that equipment. How are such units to be defined? In making such an addition to their total equipment the people composing the economy are, in effect, postponing the consumption of some of the output which their current input of productive services entitles them to consume. The average time elapsing between the moment when a dose of work or of the services of nature is put into the productive process, and the moment when the dose of consumable product attributable to that dose of work comes out, is thus lengthened, and this average time, Bohm-Bawerk's 'average period of production,' can serve as a measure of the size of the total capital equipment.

It is quite obvious what the non-sequiturs in Wicksell’s reasoning are. He was a mathematician easily deceived by Bohm-Bawerk’s intricate metaphysics. The first non-sequitur is that products for immediate consumption may take a longer production period than products for future consumption – they may involve more “sacrifice” than future products. This is the opposite of the thesis sustained by Bohm-Bawerk and uncritically adopted by Wicksell. Both fail to see that production is also a form of consumption: no production is possible without the consumption of existing resources. The problem then is not one of “sacrifice”, but rather one of “substitution” or choice over which social resources to utilize for which production. If I choose to build a house rather than to plant a tree, I am not in any way “sacrificing” immediate consumption (the tree will yield fruit for immediate consumption) for future production (the house satisfies a less immediate need than the fruit). There is simply no real meaningful connection between the vast variety of human needs and the time it takes to secure their satisfaction! Lionel Robbins’s later redefinition of economic science as the science of the use of scarce means for alternative uses in his famous Essay involves an implicit critique and refutation of Bohm-Bawerk’s theory of interest because, for Robbins, it is not “the average period of production” that matters to economics but rather the “choice” over the use of resources. Robbins sees the absurdity of Bohm-Bawerk’s “metaphysics”, yet his “pure logic of choice” turns economics into a pure disembodied formal “logic” wholly removed precisely from those “choices” that involve material human needs!

The other non-sequitur, underlined unwittingly by Shackle when he enucleates Wicksell’s theory, is the wholly groundless assumption that production is an individual pursuit where the proprietary right to a product is determinable. Shackle says that producers “postpone” immediate consumption to which they are “entitled”. Yet no such entitlement exists in reality because human production is entirely co-operative and it is absolutely impossible to draw any link between the diversion of social resources to alternative uses and any “entitlement” to the consequent product.

Let us now get back to the natural rate of interest. M then stands for that part of “consumable output” that is diverted to production for future needs: m is “profit” which divided by N over time, a given year, gives the rate of profit or “natural rate of interest” which in turn, as is apparent from Wicksell’s elaboration, is really the average rate of profit for aggregate capital investment. But Wicksell does not consider that under capitalism it is not m that is important. Rather it is m/N, that is, the rate of profit itself! Capitalists are not interested in “ultimate consumption” or “consumable output” as Wicksell puts it above. They are not interested in the physical pro-duct for its use value and least of all for its personal consumption. Or rather, the capitalist is interested in “consumable output” not for personal consumption as a concrete object, as a use value, but rather as a pure exchange value for the political power it may give her or him over the productive capacity of a society, or its “consumable output…in perpetuity”. That is to say, the capitalist is “interested” only in the product as abstract wealth that can be used to perpetuate profit and to accumulate capital. The accumulation of capital on the part of capitalists – their aim to increase the rate of interest or the average rate of profit – has nothing to do with the eventual consumption of “consumable output”. Instead, it is the pursuit of greater production of consumable output with the aim of obtaining growing political control over the social resources involved in production through its exchange.

But this power over production is not and cannot be expressed over “things” because “things” do not bestow political power: things are mere inert objects. It is proprietary or legal power over things as abstract wealth, as a means to political control over people involved in production that grants power to the capitalists. Mere ownership of things and consumable output and means of production does not constitute capitalism. Capitalism is the use of privately owned social resources for the sake of accumulating “value” through profit expressed as a rate over time. The average rate of profit is “the natural rate of interest”. But the capitalist’s aim in accumulating capital is to ensure greater political control through production – in other words, greater political control over means of production and their output. The essential element of producing for profit is therefore control over living labour through the exchange of “consumable output” and the means of production used to produce that output with that human living labour used in the process of production of that consumable output. The “exchange” of consumable output or dead labour with living labour – through money wages – means that workers are legally separated from the means of production and from production itself, both in terms of ownership and in terms of deciding what is produced and how.

Because Wicksell does not see the difference between “consumable output”, that is, produced “things” in capitalist industry, and profit as an end in itself, that is, money as a measure of profit, he cannot see the difference between the “natural” rate of interest and the “monetary” rate of interest – because he believes that ultimately money can only stand for “consumable output” - because that for him is the true aim not just of the capitalist economy but of every possible economy! Wicksell cannot see that money does not just distort some “real, natural” economy: instead, money is the expression of the fact that a capitalist economy is a political reality that can be affected by the manipulation of money as the most powerful immediate tool of capitalist relations of production.

THERE is a certain rate of interest on loans which is neutral in respect to commodity prices, and tends neither to raise nor to lower them. This is necessarily the same as the rate of interest which would be determined by supply and demand if no use were made of money and all lending were effected in the form of real capital goods. It comes to much the same thing to describe it as the current value of the natural rate of interest on capital. (Interest and Prices, at p.102)

But then, why is money different? Why does it make a difference? Indeed, if money is only a “veil”, only a means of exchange and nothing more, pnly a “token”, why is it not possible to eliminate it altogether and simply have an economy that transacts “in kind”? Wicksell does not address this essential matter – despite the fact that he realizes just how “essential” the question of money is!

It is possible for a considerable difference between the uncontrolled rate and the contractual rate to persist, and consequently for entrepreneur profits to remain positive or negative, as the case may be, for a considerable period of time. It has already been mentioned that this possibility arises out of the fact that the transfer of capital and the remuneration of factors of production do not take place in kind, but are effected in an entirely indirect manner as a result of the intervention of money. It is not, as is so often supposed, merely the form of the matter that is thus altered, but its very essence. (Interest and Money, p.135)

Wicksell is saying that the natural physical rate is more “binding”, more “physiological” in terms of social resources and individual choices than the artificial monetary rate which can be altered through fiat money by central banks – and is therefore more political or arbitrary or manipulable. The natural rate is “uncontrolled”, whereas the money rate is “contractual” and therefore controlled.

Yet Wicksell still does not even pose himself, let alone answer, the “essential” question: why is monetary rate different from the natural or physiological rate? He can only opine that

[t]he two rates of interest still reach ultimate equality, but only after, and as a result of, a previous movement of prices. Prices constitute, so to speak, a spiral spring [136] which serves to transmit the power between the natural and the money rates of interest; but the spring must first be sufficiently stretched or compressed. In a pure cash economy, the spring is short and rigid; it becomes longer and more elastic in accordance with the stage of development of the system of credit and banking. (Interest and Money, pp.135-6)

This is rank and arrant nonsense, of course, quite typical and indeed distinctive of all bourgeois economics. Because money is not this or that piece of physical machinery or merchandise which economists loosely call “capital” and “goods”, or of consumable output. Money is value itself, it is the social cipher fungible for the control of social resources that can be used as means of production and consumption by living labour – and therefore for the political command over living labour on the part of the profit-seekers, the capitalists.

Saturday, 1 October 2016

Habitaculus: Postcard from Japan - Part One

Human beings are adaptable. We adjust to changes in our circumstances and, less immediately, our environment. This is a boon, of course. Yet on the other hand it can be a curse – because adjustment and habituation can lead us to tolerate the intolerable. If you don’t believe me, come to Japan and see for yourself.
In his perverse ideological quest for Lebensraum (living space), Hitler struck upon the chink in the capitalist armour:- overpopulation. As we have tried to explain repeatedly on this site, the essence of capitalism is the “exchange” of dead labour (human pro-ducts) for living labour (the simple fact that, as all Western philosophy from Plato to Heidegger has affirmed) we are “born free)…. And yet, as Rousseau remarks, “everywhere we are in chains”. Through the Warsaw Ghetto – by forcibly piling millions of European Jews in an impossibly restricted space -, Hitler and the Nazi dictatorship were able to show to the German Volk that, first, space is essential to human dignity and therefore Germans had better join him in his “struggle” (mein Kampf); and second, by hiding Nazi brutality, that people like Jews accustomed to living in restricted space are less than human or “sub-human”.
Whilst formally and stridently repudiating Hitler and Nazi ideology, the Western capitalist bourgeoisie owes its existence – its “fortune” or wealth in the form of capitalist accumulation – to the simple truth that capitalism is founded on profit as the “rational” (Weber) numerical accumulation of monetary ciphers in exchange for the higher political control of human labour reduced to mere “want”, to abject “need” – to poverty either absolute or relative, either present or threatened.
Well may the bourgeoisie insist that global capitalism has lifted one billion people out of poverty: the saddest reality remains that in the meantime the world population has increased by many billions(!). Thus, this capitalist ideological claim represents nothing more than the most thoughtless cynicism. The reality against which many “peoples” are now rebelling is as simple as this: the capitalist promise of wealth and success for all – Elon Musk’s absurd miserable crap about colonizing Mars – is founded on this equally simple set of lies: the simpler and greater the lie, the greater its efficacity on the addled minds of the human “mob” that the bourgeoisie has created – either through the culture industry in the West (think of Hollywood and “pop music” and “pop culture”), or by simply exploiting the long subjugated masses of Asia (chief among them Japan, South Korea and, more recently, China) that have long suffered and endured what was once known as “Oriental despotism”.
The Western capitalist bourgeoisie has long dreamed of the kind of absolutely corrupt power that Oriental despots, from Darius and Xerxes to Mao Zhe Dong, from the Pharaohs to Stalin and, who knows, even Duterte, - the power that these despots could possess in the Orient to rule roughshod over their thoroughly disenfranchised and enslaved masses. Donald Trump is a reminder of just what the capitalist debasement and disgregation of social political life and cultural solidarity can achieve. Only belatedly has it begun to realise the extent of its folly. And yet a mere cursory reading of the opinion pages in papers of clear “liberal” credentials such as the New York Times and the London Financial Times shows the degree to which the Western bourgeoisie (what they insist on calling “elites”) is callously and obstinately attached to the ideal of capitalist-bourgeois “liberal democracy” that is – as we have shown on these pages – a contradiction in terms, an oxymoron. Liberalism, as the political ideology of capitalism, is quite thoroughly inconsistent with democracy – except the “democracy” of the choice” between Hillary Clinton and Donald Trump.
The capitalist bourgeoisie relies for its power to thrive on the relative overpopulation of “the labour force”. This is the meaning of “profit”. Profit would indeed be not only impossible but meaning less if it did not stand for greater political power over a growing “reserve army of workers”. This, in a nutshell, is perhaps Karl Marx’s greatest realization in his analysis of capitalism – yes, that Karl Marx that the Western bourgeoisie never misses an opportunity to deride, and that the Asian bourgeoisie (China) still invokes on the assumption that the vast majority of Chinese never had and never will be allowed to have any opportunity to study and discuss.

But now the global bourgeoisie is caught in a deathly bind: on one side, it needs to expand the global working population – capitalism is the true “civilization of labour”, if you did not already know it (just look around!). And on the other side, it is this expanding overpopulation that – through mass migration and the rapidly declining living standards of workers everywhere – is relentlessly destabilizing “liberal democracies” and, increasingly, the capitalist industrial and financial order.

Sunday, 11 September 2016

FT Article on Chinese Communist Party by Jamil Anderlini

This great article can be found via the link above. Or else here. Worth reproducing litterarim with apologies to the FT:

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While he was still alive, Chairman Mao Zedong’s greatest worry was that a capitalist revival would take hold in China and wipe away his utopian vision of communism.
As China marks 40 years since his death on September 9 1976, it is clear his worst fears have been realised.
Mao is still officially regarded as the founding father of modern China but the stark contrast between his egalitarian economic ideas and today’s freewheeling capitalism make the ruling Communist party extremely wary of too much sentimentality.
Commemorations this year have been tightly curtailed and state media warned on Friday against anyone holding “extreme views” of the former dictator.
This reflects the fact that Mao is more popular now than at any other time since his death, which brought an end to the disastrous decade of turmoil known as the Cultural Revolution.
Historians estimate that Mao was responsible for between 40m and 70m deaths in his numerous political purges and a famine in the late 1950s caused by his “Great Leap Forward” economic policies.
But for many in China, especially young people who are not taught about these “mistakes”, Mao represents a fairer and less corrupt age.
“A lot of today’s societal problems in China were all caused by departures from the spirit of ‘Mao Zedong Thought’,” said Sima Nan, a celebrity blogger and devout “neo-Maoist”. But “in contrary to the wishes and efforts of those who vilify Mao, Mao now increasingly possesses a kind of divinity.”
In recent years Taoist-style temples devoted to Mao have sprung up across the country, an ironic development given that Mao was a staunch atheist who sought to stamp out religion and “superstitions”.
On Friday, tens of thousands of ordinary people flocked to Mao’s home village in rural central China to bow and pray before his statue under the watchful eye of a large police presence.
Meanwhile Alibaba, the US-listed ecommerce group, has incurred the wrath of neo-Maoist groups for scheduling an “alcohol festival” on Friday to promote online liquor sales. The Mandarin Chinese pronunciation of “nine” is the same as that of the word for alcohol.

“Only those soulless counter-revolutionaries and traitors celebrate the day of the passing of the Chinese people’s great leader Chairman Mao so what on earth are you doing [Jack Ma, Alibaba’s founder and executive chairman]?” said an article posted on two of China’s leading neo-Maoist websites.
The tension over how to remember the “great helmsman” extends beyond China’s borders. In Sydney and Melbourne local governments cancelled planned concerts commemorating Mao’s death after Chinese Australians complained that the content venerating the dictator was insensitive.
Experts on the neo-Maoist phenomenon say China’s current leaders regard this movement as the most potent challenge to their rule, precisely because Mao is still honoured as the founder of the nation even as his political and economic ideas have been abandoned.
As the chairman himself said in 1963: If “the landlords, rich peasants, counter-revolutionaries, bad elements and monsters are all allowed to crawl out . . . then it will not be long before a counter-revolutionary restoration on a national scale inevitably occurred, the Marxist-Leninist party would undoubtedly become a revisionist party or a fascist party.”

Sunday, 31 July 2016

Achilles's Heel: The Coming Collapse of Global Capital

Capitalists are good at selling things. Long before the wealth they controlled was applied to the expropriation of the English peasantry and then to the alienation of their living labour for the purpose of industrial production to cover expanding consumption – long before that time, the industrial bourgeoisie was a class of merchants who profited from moving or trading merchandise between different ‘markets’. Indeed, the earliest definition of ‘entrepreneur’ was given by Cantillon and it referred exclusively to merchants, not to ‘producers’ who in his time were still predominantly artisans.

Even to this day, when we think of capitalists we think almost exclusively of ‘businessmen’ – in other words, we think of either managers and bankers or of merchants ‘cutting deals’ or trading merchandise. We never think of engineers, for instance. The notion of capitalist is thus identified with that of someone ‘selling a product’. The most important aspect of capitalism is not that of producing for need but rather that of creating artificial ‘needs’ or wants, and specifically needs and wants that do not emancipate workers but instead ensure that workers remain chained to or enslaved by wage labour.

Capitalism therefore has the overwhelming intrinsic tendency to present its products and its industries in the most appealing light. That is why the ‘reality’ that we see in advertising is so different from the daily reality most of us must face. And now that capitalist enterprise has come to dominate the entire world of information (which is now ‘misinformation’ and explains why no-one trusts ‘experts’ any longer), even the so-called ‘news’ is entirely removed from reality. This dis-connection or discrepancy between social reality and the image that capitalism promotes (from cigarettes called ‘fresh’ to cars filmed on mountain hills to ‘smartphones’ used to play Candy Crush, to the Republican and Democratic Conventions) is something that is now finally coming back to bite the bourgeoisie very hard. The bourgeoisie reaps what and where it sows.

This discrepancy between capitalist image and human reality was once easy to hide from view – for the simple reason that national bourgeoisies could use the nation-state to export, as it were, all their ‘contradictions’ to other regions of the world, from India to Australia, or even to the American mid-West or to Central and South America and, more recently, to China. Indeed, as Hannah Arendt acutely reminded us (see the first volume of The Origins of Totalitarianism called ‘Imperialism’), in its early phase the capitalist bourgeoisie’s most important export were its angry young leaders who may otherwise have caused havoc at home. This operation was easy in the past because the capitalist West, through its nation-states and their armies and navies, could easily impose control over “the Third World” through either ‘formal’ or ‘informal’ imperialism. As we know, this task is well-nigh impossible now for obvious reasons, the most important of which is that such attempt would run against the very ‘consumerist-pacifist’ (quiet and private enjoyment) ideology of capitalist societies; but also because the Western population has fallen dramatically as a percentage of global population; and finally because the very selfish individualism promoted and sanctified by the bourgeoisie is simply inconsistent with the effort and sacrifice that empire, formal or informal, always entails and engenders.

The mythology of liberalism was built in part on the notion that a ‘liberal’ nation-state was also a ‘minimalist’ nation-state in the sense that it was reduced to the bare essentials to ensure social order. But in reality capitalist or ‘liberal’ nation-states have always been militarily very powerful and extremely aggressive – although now in an increasingly ‘mercenary’ manner through technological superiority and paid professional armies. Were it not for this, it is hard to imagine how the cravenly selfish capitalist bourgeoisie could ever convince its populations to fight for its “liberal democracy”. Thus, not only was the notion of “liberal democracy” a total antithetical myth, but also that of “the liberal State” and of “laissez faire” was an utter lie. As Franz Neumann established (in The Democratic and the Authoritarian State), it was never the case that the Western-capitalist ‘liberal’ nation-state was ‘weak’ in this military and repressive sense.

What has changed after World War II where the Western-capitalist nation-state is concerned is that formal empire has become impossible and even informal empire has grown more difficult in the sense that it can be imposed only through minimal and targeted military interventions but far more often through financial flows (the capital mobility that Benjamin Constant confused with ‘democracy’), through espionage and ‘destabilisation’ or else through various forms of political, economic and military pressure from “the international community”. But this very ‘mobility’ of capital which in the days of capitalist imperialism could be used in a mercenary way to exert direct economic pressure on capitalist populations themselves and above all on “the Third World” – this very mobility of capital that Constant thought was the greatest political asset of modern capitalism – this very mobility of capitalist financial flows now constitutes the biggest threat to the political stability of capitalist liberal regimes. We shall turn to this crucial new development in the historical dynamic (or ‘logic’) of capitalism in the next intervention.

Tuesday, 26 July 2016

Lex Luthor and the Joker: The Cultural Contradictions of Capitalism

We use the word “contradiction” in relation to capitalism not in the literal sense that capitalism contradicts itself: it cannot do that because no historical event or agency can ever contra-dict itself. In this sense, both Hegel and Marx abused the literal meaning of the word, although mostly they intended it in the “dialectical” sense. We use it rather in the sense that there are historical tendencies or forces that capitalism unleashes that work in historical, political and socio-economic directions that threaten not just the institutions of capitalism but also and above all its “society”. For we no longer have a “society” – which itself would be an abstraction – but rather a social formation that we have called “the society of capital” in the sense that capitalism has gradually and relentlessly come to dominate every aspect of social life and indeed of global life.

In the narrative of Superman, Lex Luthor constitutes the fifth column, the traitorous internal foe that threatens the very society that nurtures and promotes it. Lex Luthor represents an expression of greed, of rapacity in a purely monetary form that comes to threaten the existence of capitalist society itself. Luthor is not interested in this or that aspect of material wealth: he is interested in wealth in its most ethereal and abstract form - in the form of money. Of course, what is “evil” about Luthor is the fact that in his pursuit of abstract wealth he is prepared to betray the very society that produces the wealth to which he aspires and in which indeed wealth has any significance whatsoever. Luthor is prepared to break the law and any other social norm in order to obtain wealth and, consequently, social power. In this sense, his wealth-seeking constitutes an infringement of “legitimate” laws and social norms. And yet, it is quite clear that the supreme goal of capitalist enterprise and its society is precisely that – the attainment of infinite or indefinite wealth. Clearly, therefore, from the outset and at its very core, capitalist society involves this “contradictory” tendency: namely, that its essential goal is the destruction of social norms and ultimately of the social fabric itself.

Lex Luthor is a “disruptor” – he might as well be a Schumpeterian “innovator” or entrepreneur – a Steve Jobs or a Mark Zuckerman or a Musk or a Bezos. The fact remains that he is not the only one to embrace disruption or transgression of social norms and laws to attain abstract wealth and real power. The horrifying reality is that he represents the extreme version of what every other “citizen” in capitalist society is aiming to achieve – the pursuit and attainment of indefinite and infinite material success. It follows that all of capitalist society is complicit in this insane pursuit – a pursuit that turns every citizen into a cowardly philistine desperate to hold on to her or his possessions and therefore ultimately reliant on Superman to rescue her or his society from total destruction.

Superman or Batman. Superman and Batman. The “complicity” of all citizens in capitalist society in this cowardly pursuit of abstract wealth and power – of what we call “success” – is illustrated quite explicitly by Lex Luthor’s evil counterpart in the Batman cartoon epic. Here the Joker defies Batman’s defense of “law and order” and of the citizenry by pointing out that the crimes or “disruption” he is perpetrating are not motivated by money or wealth but are meant singularly to expose the inveterate and insatiable greed of the very citizenry that Batman so gallantly endeavours to protect. Protect from whom? Asks the Joker. Not from me! You can’t protect them even from themselves! For in their quotidian pursuit of self-interest they have already torn apart the “community” that they pretend exists.

This is nothing more than a prosaic version of Schopenhauer’s and Nietzsche’s invective against the State: Folly! To think that the State and society constitute the sharing of common and agreed values and interests. Madness! To fail to see that the State exists solely with the purpose of keeping its “citizens” from devouring one another like beasts! The State is not Society: the State is Police, and that’s that!

So here is the central cultural contradiction of capitalism: that so long as capitalist society and its citizenry are enriching themselves, they are prepared to defend it. But once what we call “economic growth” begins to wane, few are prepared to defend the society of capital. One of the enduring ideological myths of capitalism – a myth that becomes reality once its propagation of greed spreads to the entire “citizenry” – is that every social formation will eventually and “naturally” follow in the path of capitalist accumulation – the path of secularism and “rationalism”. That is why capitalist societies are naively and perversely incapable of dealing with social formations whose real fabric is composed of religious or military beliefs. We are referring, of course, to Islam and to Chinese and Russian nationalist militarism. For the sake of preserving our own “Western” civilization, it is high time that we looked beyond “economic interests” in the Middle East and in Eurasia and started to confront the true Evil that is threatening our very existence – and capitalism with it.