Friday, 1 June 2012

Lowest costs of borrowing ever - and we need budget cuts and austerity?

The Australian 10-year government bond yield rallied to an all-time low today of 2.902%. The previous low point for yields was 2.99%, which was reached in December 1941 shortly after the bombing of Pearl Harbour.

At the same time German bonds apparently reached zero (speculators are giving their money to Germany for free). They trust the neoliberal government in Germany more than they do the big banks!

All this is because Italian and Spanish governments are being held to ransom by these same capitalists at extraordinary interest rates because of likely defaults - that is to say they are pulling out of those countries and moving it all to 'safer' countries (see second figure, source: alankohler.com.au).







There is no viable capitalist argument for austerity whatsoever. Even on a capitalist basis we should now massively expand government spending on essential projects to create sustainable jobs and decent living standards.

Wednesday, 25 April 2012

China's rapid 'development' - how, why & what problems?

From David Harvey's ‘A Brief History of Neoliberalism’ (2005), pgs 141-142:

“China has massive labour surpluses, and if it is to achieve social and political stability it must either absorb or violently repress that surplus. It can do the former only by debt-financing infrastructural and fixed-capital formation projects on a massive scale… The danger lurks of a severe crisis of over-accumulation of fixed capital… The Chinese banking system, which is at the heart of the current deficit financing, cannot currently withstand integration into the global financial system because as much as half its loan portfolio is non-performing. Fortunately, the Chinese have a balance of payments surplus that can be applied, as we have already seen, to wiping the banks’ slates clean. But it is at this point that the other shoe is liable to drop, because the only way the Chinese can afford this is by piling up balance of payments surpluses against the US. A peculiar symbiosis emerges, in which China, along with Japan, Taiwan, and other Asian central banks, fund the US debt so that the US can conveniently consume their surplus output… Chinese economic dynamism is held hostage to US fiscal and monetary policy. The US is also currently behaving in a Keynesian fashion – running up enormous federal deficits and consumer debt while insisting that everyone else must obey neoliberal rules. This is not a sustainable position, and there are now many influential voices in the US suggesting that it is steering right into the hurricane of a major financial crisis. For China, this would entail switching from a politics of labour absorption to a politics of overt repression. Whether or not such a tactic can succeed, as it did in Tiananmen Square in 1989, will depend crucially upon the balance of class forces and how the Communist Party positions itself in relation to those forces.”


On current situation see radio interview: http://chinaworker.info/en/content/news/1771/

And see heading "China facing crisis" here: http://www.socialistworld.net/doc/5562

Monday, 9 April 2012

What is Wrong with Conspiracy Theories?

By Wjard van Leeuwen

Aren’t bankers really running the world? Didn't the US administration exploit 9/11 for their own purposes? Didn’t they have an interest in letting 9/11 happen, or even in setting it up?

‘Conspiracy theories’ (CTs) answer ‘yes’ to these types of questions, claiming that important political, social or economic events are the products of plots by secret groups that are largely unknown to the general public. CTs explain history as a series of secret plots. They can ring true because bankers, for example, really do have an inordinate amount of social, political and economic power. And they can seem quite radical because they question the status quo.

However CTs obscure a realistic understanding of important events. CTs do not, for example, explain why bankers behave as they do – why does ‘greed’ or a ‘lust for power’ revolve around money in the particular ways that it does? Because CTs obscure a real understanding, they can offer no solutions. They therefore have the effect of serving the system by deflecting blame and attention from where it belongs – with the system, and the people who propagate that system. CTs sum effect is demobilisation.

Why are conspiracy theories prominent?
The global capitalist crisis – the most serious systemic (rather than cyclical) crisis since the 1930s – has dramatically worsened the problems working people face under capitalism. Jobs are disappearing at an alarming rate, accelerating the already-quick decline in wages (as share of total GDP). For many young people a secure job is not even on the cards. The state is increasingly militarised and dissent is crushed in evermore ruthless ways. The capitalist political system is beginning to lose legitimacy in the eyes of ordinary people.

These are frightening facts. People feel like hidden forces beyond their control dominate their world. This increasing sense of alienation is leading them to search for explanations and solutions.

In the past, people could turn to the labour movement, which embodied a critique of capitalism. The Marxist tradition was the most highly developed form of this critique. It laid bare the class basis of capitalism: society is essentially divided into workers, forced to sell their labour-power in order to live, and capitalists, who pay labourers less in wages than the value that those labourers produce (called ‘exploitation’), in order to make a profit and accumulate capital. The Marxist analysis of both the economic foundation, and the legal and political superstructure of capitalism, provided a framework which guided the strategy and tactics of the working class in its political and economic struggles.

In the last thirty years of neoliberalism however, the labour movement in the form of unions and working-class political parties has been under sustained assault. The ideological form of this assault was summed up Margaret Thatcher’s phrase ‘There Is No Alternative’ to capitalism. A measure of the success of this attack – which reflects the historical balance of class forces rather than any actual ‘truth’ – is in the relative disintegration of all alternative ideologies, even of Keynesian capitalist ideas. This disintegration was bolstered by the collapse of Soviet Union, which provided a living, if degenerated, alternative to capitalism.

This relative throwback in class-consciousness and a lack of alternatives meant that newly radicalised people are sometimes starting their search for explanations and solutions from scratch. They find these explanations in the many ‘new’ ideas, principles or theories that have been invented or discovered by this or that would-be universal reformer, including CTs.

Real conspiracies versus conspiracy theories
Socialists do not say there are no conspiracies per se, that the ruling class does not lie to public. There is plenty of evidence that they do – one only needs to look at Murdoch’s phone hacking, the lies about Iraqi weapons of mass destruction, or the Watergate scandal. There is no doubt that members or sections of the ruling class ‘conspire’ and manipulate.

However, it not so much the point that individuals and specific groups conspire to achieve their ends, but rather that behind those individuals are objective reasons which cause them behave in very specific ways. Simply put, these reasons are the necessity for capitalists to maximise profits and accumulate capital, as well as ensuring that the necessary social, political and economic conditions for this accumulation exist.

If one group of capitalists were replaced by another, they would behave in a similar ways, with similar outcomes – the maximisation of profits and accumulation. This is true for the Rothschilds, Henry Ford, and for Gina Rinehart and Clive Palmer. They might even subscribe to differing social strategies on how to achieve this. Keynesianism and neoliberalism, for example, both aim to ensure capitalism’s needs in differing ways. In this sense, the problem is a systemic problem, not one of individuals – the behaviour of capitalists is constrained by confines of capital accumulation. In this sense Marxism is actually the best framework for analysing those conspiracies that really do take place, because it places them within the fundamental objective drives and contradictions of the capitalist system, rather than seeing them as constituting the central drive of the system themselves.

Obscuring reality
The most obvious problem with CTs is the low standards of evidence. Having placed a great of effort in showing inconsistencies in media and government accounts of events, CTs often then simply make up their own interpretations, often relying on ‘hidden’ factual information. However, if criticism of the existing system is to reach and influence a mass audience it must connect with working people’s experiences, rather than relying hours of special research to uncover buried evidence. The class nature of events can be exposed on the basis of publicly available information, and will speak to the experience of the working class. It is this generalisation of the class experience, and interpretation and interconnections of facts that distinguish a Marxist analysis, not ‘amazing’ factual revelations.

CTs are also inherent implausibility – not only do they control more or less everything important that happens, but the members of the ruling groups are usually countable on one’s fingers. How are they possibly able to make all the decisions necessary to run a complex modern society? Even if they could, such a system would extremely unstable and easily overthrown. Capitalist societies like the USA have in reality been relatively stable since the Second World War.

Further, even if the ruling class is only a tiny percentage of the population, they are still quite sizable even in a small country like Australia. This minority rules through a state machine which keeps the majority in check, using institutions like the army, police, courts, government departments and so on. These hierarchies are headed by members of the ruling class, but run on a day-to-day basis by the middle classes and professional workers.

The conspiratorial groups are usually presented as all ‘being in on it’. But in reality it is common interests that hold the ruling class together, in particular their interest in exploiting the working class. This is why businesses and governments behave as they do, being both driven and constrained by the objective logic of capitalism – the accumulation of capital and its social requirements. In CTs the system has no objective logic, which makes any understanding of the system’s development dependent on uncovering the latest plot.

Through this understanding of the logic of capital accumulation we can see what unites the ruling class – CTs consistently overestimate the unity of ruling class– but also what divides them: one capitalist against another, one group against another and one capitalist state against another. This is vital to understanding the causes of the major wars and inter-imperialist conflicts that have shaped the last century. CTs, including some presented in ‘Zeitgeist’, often claim that a secret group deliberately caused crises. This of course begs the question of how it could possibly be in the interest of the system to enter deep recessions, which wipe trillions off share values, send production into decline and so on. Economic crises are the result of the internal contradictions of capitalism, such as monopolisation, falling wages leading to demand crises, and so on.

There are many more problems with CTs. One is their use to attempt to cut across working class unity, by creating divisions along national, ethnic or other social lines, for example anti-Semitism in banking conspiracies, or the claim that leaders of the Russian revolution were really aiming for Jewish world domination, for example in the hoaxed Protocols of the Elders of Zion. Another use of CTs by the ruling class is to divert attention away from their destructive social and economic policies, witnessed in the recent US primaries, or to protect their own sectional capitalist interests, such as mining magnate Clive Palmer’s recent claims against the environmental movement.

Solutions
Apart from being a confusing and inconsistent way of understand the world, CTs also do not generate any strategy for practical action to change the world, apart from trying to inform people of the hidden conspiracy. In this sense CTs are disempowering and demobilising. Given their enormous power, how could a small and secret group possibly be taken down, while at the same time avoiding the formation of new secret groups? Other common ‘solutions’, such as those prominent in Zeitgeist, amount to withdrawing from the world to try and build a new society, which is impossible given the unceasing (and militarised) search by capitalism for markets and resources. This rejection of the possibility of changing the world is, however, contradicted by the history of the workers’ movement, which not only fought and won reforms from capitalism, but also made revolutions that fundamentally changed societies. It is no accident that both reforms and revolutions were often guided or influenced by a thoroughgoing Marxist analysis of capitalism, which had over 160 years developed and tested a strategy for achieving the overthrow of capitalism. Marx’s understanding of class struggle, Rosa Luxemburg’s conception of general strike, Trotsky’s theory of the permanent revolution, and Lenin’s contributions on the role of the revolutionary party concretely suggested what should be done to advance the interests of working people – something CTs are incapable of doing.

Conspiracy theories can seem quite radical, because they are hostile to bankers or other exploiting groups, and the status quo generally. CTs however actually obscure an understanding of the concrete political and economic processes that shape the world, especially the processes of capital accumulation and the creation of the necessary social conditions for that accumulation. Consequently these ‘theories’ do not offer any solutions to the problems faced by working people. And precisely because they do so, they have the effect of serving the system by deflecting blame and attention from where it actually belongs – with the system and the people who propagate that system. Instead what is needed is a rigorous scientific approach, one which is capable of laying bare the class nature of the processes that shape capitalist society. This understanding can then inform the socialist practice of class struggle to actually fundamentally change the world.




Sunday, 11 March 2012

Resources on the Chinese Revolution

Good resources for pre-1978 period:

Short, but relatively fleshed out background: http://www.socialismtoday.org/132/china60.html


Andy Blunden, extracts on explanation of Stalinism in the workers movement:
Trotsky:


Good resources for post-1978 period:

Contemporarry debate about nature of state:

about this blog

I am a student of political economy (unfortunately through a neoliberal economics degree), dissatisfied with the explanations and theories offered at universities, which apparently serve a particular set of minority interests. This blog was originally created to serve as a collection of resources and commentary for a more critical view of this kind of economics. The revuelta de M-15 switched the focus from theory to its application. It was inspiring to hear the Spanish and Greeks saying ‘enough is enough,’ and demanding ‘real democracy now!’ Now the resistance continues partly through the Occupy movement. And there will be many more movements in the ebb and flow of ordinary people's resistance - we will have to emancipate ourselves - that's why we need you in the movement too! I am committed to mass democratic, collective action of the majority - the working class - as the way to achieve social change; that is why I am a member of the Committee for a Workers’ International. I am responsible for all views, and errors. Apologies for the lack time put into editing; this blog serves as much for my own clarification, development as anything else.

previous radecon blog entries