Internationalist Perspective

On the Economic Crisis

Introduction

Internationalist Perspective

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On the economic crisis

L’ current crisis/economic recession is the fifth since that of 1974-75, known as the 1st oil crisis. Will this be another recession creating the conditions for a new period of expansion, as occurred after the four preceding recessions?

Crises/recessions permit:

• the “cleansing” of the financial sphere by the massive destruction of fictitious capital, particularly that generated by the speculative fever which develops at the beginning of all capitalist crises;

• the restoration of the rate of profit thanks to the fall of production costs: a drop in the cost of constant capital (factories repurchased for a symbolic dollar) and a fall in the costs of the labor force (caused by unemployment);

• an attenuation of the imbalance between productive capacity and solvent outlets by the destruction and the abandonment of productive forces, by the elimination of the least competitive companies;

• an impetus to the search for new solvent outlets and means of better exploiting old markets.

Graph 1, describes the movement of the “margin of profit” in the U.S. (a measure indicative of the “rate of profit” because it is based on a ratio of the profits to costs per unit,) highlights how recessions (indicated in the graph by gray zones) are always preceded by a prolonged decline in the rate of profit, and are followed by a new period of increase of this same rate. They are the result of the decline and a condition of the increase.

Margin of profit of the non-financial companies in the United States

Ratio of profit per unit to the cost and profits per unit
Before taxes and after taxes

graphique_1.pdf

Source: BEA, Survey off Current Business.
(http://www.bea.gov/scb/pdf/2008/12%20December/D-Pages/1208dpg_d.p

The recession that has just started should not be an exception as regards the outburst of cannibalism between fractions of capital. Many capitalists will lose their fortunes and even some their life (the number of suicides of “business men” reported by the press has already clearly increased). But the most powerful, or the most skilful, those who envisioned that they would survive the storm, salivate already at the sight of the many corpses on which they will be nourished. But, at the end of the ritual sacrifice, will there be a new period of expansion?

Marxist revolutionaries who generally think that a profound crisis of capitalism is necessary so that the proletariat is “constrained” to act in a revolutionary way, “in accordance with its being,” have also a subjective tendency to consider that each crisis of capital is “ the last,” the one that the system will not survive. The four last recessions all were analyzed as such by this or that Marxist group. What is it this time?

I do not pretend to bring a ready answer to this question. But, if one endeavors to engage the innovations of the current recession compared to the preceding ones, it appears rather quickly that the present one should be more serious in breadth and in depth, but also that it can be the first of a new epoch of capitalism. Three principal specificities seem to me particularly significant.

The first is the unprecedented size of the amount of accumulated fictitious capital and the disastrous state of the financial system which engendered it. The financial deregulation of the last decade accounts for much, even if it does not explain it all. The size of the accumulation of debts is exceptional, but the deterioration of the quality of these debts is so too. The inevitable “correction” should be more destructive and more prolonged than at the time of the preceding recessions.

The second innovation is the truly GLOBAL character of this crisis. In fact, it is the first great planetary crisis of capitalism. At the time of the recessions of 1990 and 2000, l’ extent of the debacle was strongly limited by the new outlets opened by China, India and East Asia. Today, these countries are well integrated into the worldwide economy. China became, in 2007, the third world power, behind the United States and Japan. Asia has become part of the problem and the effects of the world recession there are already being violently felt. (1)

One should not underestimate the significance of this new reality. The integration of China and India in the worldwide economy, even if one can see that it is not yet completed (we will return to this point), constitutes an important mark of achievement in the constitution of the capitalist worldwide market. (2) Anton Pannekoek, 60 years ago, saw there the limit of the true expansion of capital and he announced the beginning; of a slow and a progressive “decline”:

“Once it [capitalism] will have inserted in its domain the hundreds of millions of people who are crowded together in the fertile plains of China and India, the essential work of capitalism will be accomplished. (…) Also the expansion of the Capital will thereby meet its end” (3)

I share the broad outlines of this vision. The current recession will not be the last of capitalism but it seems the first of a capitalism at the end of its “historic mission”, a capitalism which has run up against the limits of the worldwide market which it has created.

The third innovation of this crisis is due to the enormous increase in labor productivity during the period that preceded it. The financial crisis which initiated the recession of 2000 had been assimilated to the deflation of the “ Internet” bubble; since then, internet and communications technologies just like those of information/automation of the production processes has spread to the four corners of the planet, entailing an exceptional growth in the “real” productivity “ of labor. (4)

However, the increase in real productivity, the reduction in labor time contained in each commodity, exacerbates two intrinsic contradictions of the system: it reinforces the downward trend of the rate of profit and increases the need for new outlets for production.

To cite the formula of Sander: “Too many goods can be produced too cheaply.”

The needs of capital to overcome the recession which has begun will be all the greater given the exceptional amplification of its most fundamental contradictions during its last cycle.

The social consequences of the recession.

From the ideological point of view, this recession has as a particular characteristic to be relatively more perceptible as a product of the nature of the system of production itself. Seldom before have we seen the media and the politicians speak as much about a “systemic” crisis,” of a problem of “capitalism” as a system. Obviously, they recommend a “reformed,” “regulated”, “rationalized” capitalism, etc. But they do speak of the “system.” At the time of the recessions of 1974-75, and 1979-82 it was all about the first then the second oil crisis. At the time of the recession of 2000-03 it was about the “Internet” bubble. Some tried indeed to speak about a “third oil crisis” early on in this recession, when once again oil prices beat all records, but the financial disaster became so massive that attention could not be diverted from the fundamental mechanisms of the system.

Raoul Victor

Jan 13, 09

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Notes

1. Recent Chinese official estimates speak of 10 million “migrant” workers who already had to return to the countryside because of the closing of thousands of factories, victims of the fall in demand in all the sectors, from textile to automobiles.

2. It is interesting to note that the United Nations describe the displacement, during the last three decades, in China, of almost 130 million people from the countryside to industrial cities as the greatest human migration in history. (International Herald Tribune, 31.12.2008). 130 million; is almost the number of the total active population of the United States.

3. Anton Pannekoek, “Worker’s Councils”, 1941-1945, Chap. VI, ED. Bélibaste, 1974. Translated, commented on and presented by a work team within the ICO. Here are some other extracts of the piece from which the quotation is drawn:

“The alternation of depression and prosperity in industry is not a simple balancing movement. Each new cycle was always accompanied by an expansion. After each collapse, each crisis, capitalism was able to increase by extending its field of operation, its markets, the number of its products, and the scale of its production. As long as capitalism can always extend its domination over the world and increase its dimensions, it can offer employment to the mass of the population. And as long as it can fulfill the first requirement of any system of production, to procure the vital necessities for its members, it will be able to maintain itself, because there would be no inexorable necessity that will oblige the workers to overthrow it. If it could thrive by always expanding, the revolution would be then impossible and superfluous. (…)

The capitalists of Europe, then America, could increase their production with such regularity and such speed because they were surrounded by a vast non-capitalist world, having only a much reduced production, and being, at the same time, the source of raw materials and markets for their products. (…) Capitalism itself, industrial exploitation, introduces itself into these countries and, soon, the former customers become competitors. (…)

But the planet is only a sphere whose surface is limited. The discovery of the finite dimensions of the globe accompanied the rise of capitalism, four centuries ago; considering of the limits of these dimensions shows that capitalism has an end. The population to control is limited. Once capitalism will have incorporated in its domain the hundreds of millions of people who live in the fertile plains of China and of India, the essential work of capitalism will be accomplished. (…)

Also the expansion of Capital will be its failure. Not as if an obstacle were thrown up suddenly in front of it, but, little by little, by the difficulty in selling products and investing its capital. Then the rhythm of development will slow, production will decrease. Unemployment will become an insidious disease. Then the struggle between capitalists for the domination of the world will become keener, with a perspective of new world wars. (…)

Then they [the workers] will have to assume the task of creating a better world left with the chaos generated by capitalism in full decrepitude.

4.”Real” productivity indicates here productivity measured in physical goods or “use-values,” by units of working time; for example, how many computers are produced in one million hours of work. Measurements of this productivity are not really accessible. They exist only in a sectoral way. The usual statistics on productivity compute production as “value added”, measured in money based on the selling price. So they give a quite lower indication of growth. For example, if the price of the computers were divided by two, the same sales figure would not make it possible to give an account of the doubling of the number of computers produced with the same amount of labor.

Public Meeting in Toronto

Internationalist Perspective will be part of a forum with the International Bureau for the Revolutionary Party in Toronto on Saturday January 17, 2009. The meeting is titled The Global Economic Crisis: What are the perspectives for workers? It takes place at 7:00 PM at OISE, 252 Bloor Street West Room 2295.

Public Meeting on Economic Crisis

Internationalist Perspective will take part in a forum along with the International Bureau for the Revolutionary Party in Montreal on Saturday January 10, 2009. The meeting is titled The Global Economic Crisis: What are the perspectives for workers? It takes place at 2:30 PM at Centre Jean-Claude Malépart, salle 207 633, rue Ontario Est, Montréal. (Opposite Frontenac métro)

A meeting on the same topic is being held in Toronto on January 17. Location TBA.

Greece 2008

Since the beginning of December, a number of Greek cities have been the scene of violent demonstrations in which young people – largely students – have confronted the forces of state order. While the police killing of a young demonstrator is what unleashed the confrontations of the past month, they did not come out of a clear blue sky. They are rather part and parcel of a social conflict within the educational sector, as well as manifestations of discontent that have spread to other sectors of the work world.

This is directly linked to the economic transformations that Greece has experienced since the 1970’s, which have necessitated the development of a skilled and more diversified labor force, entailing the development of compulsory education and the opening of higher education to large numbers of youth. Access to such a diploma has become, for the young, the ticket to the possibility of a professional job, and thereby to a higher standard of living. The opening up of schools and universities brought with it ever higher costs to be borne by students and their families, as well as more and more rigid selection criteria for admission. The outcome has been typical for a mass education system, with the reduction of teachers to the condition of wage-workers and a constant degradation of working conditions, even as a growing number of students are excluded – all following a pattern characteristic of other industrialized countries. To that must be added the pressure of the internal contradictions of the capitalist system, in which education no longer provides the illusion of access to a better life, but rather reflects the social injustice and fears for the future shared by the whole of the exploited population of the industrialized countries.

In a real sense, this disillusion can be compared to the May ’68 movement, which marked a revolt of youth and sections of the working class against the very real effects of economic degradation and the grim situation that it produced. To come back to Greece, we can point to the student protest movements in 1991 and ’98, the occupation of the universities in 2006, and again in ’07, the six-week long teachers strike in ’06, of which this is merely a partial list.

A factor that has strengthened the determination of the students is that many of them are at the same time engaged in wage-labor in order to pay for their studies. They are, therefore, already directly confronted with the exploitation of their labor and the reality of unemployment and dismal economic perspectives, much like the youth engaged in the anti-CPE movement in France. This latter has already – in December — led the French minister of education to withdraw the education reforms that had been passed over the protests of both teachers and high-school students. That is only one more example showing the global nature of the capitalist system, of its crisis, and of the “remedies” that the ruling class has to offer – drastic cut-backs and their corollary of exclusion.

The Greek situation is not, therefore, what the mass media seeks to make of it: a situation particular to Greece, following an exceptional event, the killing of a youth, but rather constitutes an expression of the opposition of a proletarianized class, and especially of its youth, to the degradation of its very conditions of existence, against the perspectives of an uncertain future, against any resignation vis-à-vis the global relations of exploitation and coercion imposed by the ruling class. The popular support for these youth, as well as the social movements that have arisen of late, are just further expressions of that fundamental opposition.

INTERNATIONALIST PERSPECTIVE

Staring into Blackwater

Predicting the short- term economic future is like staring into pitch-black water and trying to see how deep it is. It’s very, very deep, that much seems certain. But nobody knows how much fictitious capital is out there, and how much of it must disappear before the rest of the economy is sufficiently unburdened to catch its breath. By now, the crisis has already devoured more than 15 trillion dollars in the USA alone and trillions elsewhere and the end is nowhere in sight. Like an avalanche, crushing everything on its path and growing ever bigger in its rush downward, the debt-deflation becomes more devastating with time, as its effects – falling prices, plummeting assets, constipated credit markets, spreading bankruptcies and growing unemployment– reinforce each other.

One option for the ruling class is to do more or less nothing. Let the avalanche rush on until it has hit the bottom. After all, a crisis is a moment of correction and if the correction is not allowed to proceed, the underlying problem will not go away. But the crisis is not a surgical instrument that eliminates the sick parts and leaves the healthy untouched. The shrinking market, falling profit-rate and tight credit are dragging everybody down. No capitalists are saying,” don’t help us, we’re willing to sacrifice ourselves for the greater good of capitalism.” And no state can feel confident that it has enough control over its population to allow such a ferocious process to unfurl without risking major social convulsions. So this option is out. The laissez faire-approach to the crisis, even in a moderated form, will not happen. The capitalist class will desperately try to contain it. The question is: does it have the means to do so?

The limited reach of monetary tools is already painfully clear. Even a zero interest rate is not low enough to get credit flowing again if there is no confidence in tomorrow. Even if Ben Bernanke would throw money at people from a helicopter, as he once joked that he would do at a time like this, most people would still spend as little of it as possible, given their insecurity and the likelihood that they will pay less if they postpone buying. For the same reason, tax cuts, which can at best only compensate for a small fraction of the losses, will not restore confidence and not significantly alter economic behavior. That leaves direct government spending on public works, social programs, subsidies to industry, etc. It would have to be really massive to make a dent. Obama says he’s ready to lead the way. “We can’t worry about the deficit. We’ve got to make sure that the economic stimulus-plan is large enough to get the economy moving again”, he stated at a recent press conference. The fact that next year’s budget deficit is thought to reach one trillion dollars made some people gasp, but this figure is quite puny compared to the devalorization, and thus destruction of purchasing power, in process. My educated guess is that it will be much larger. It will have to be to slow, not to mention stop, the deflationary avalanche. It will be politically imperative, for capitalism to keep its grip on society.

The circumstances create some room for a massive reflation led by the US. The deflationary environment eliminates the danger that it will immediately lead to rising prices. The deflationary wave has other beneficial side effects for the strongest capitals. The fact that it affects the weakest competitors first and hardest lowers the import bill for the most developed countries (and will probably further stimulate globalization, with peripheral countries engaging in competitive devaluation to stem their market losses). Production costs (wages, energy, etc) are falling dramatically, despite Opec’s cutbacks. Stronger capitals fatten themselves on the corpses of the weaker ones, and seize the opportunities to grab their market-shares. These are counter-acting trends that could help reflation to take hold. Only the US could launch it, given its control over the world’s currency. It can launch it because it can bet that the Asians and European and Arabs and of course the Americans too will not stop buying the treasury notes that back its spending, regardless of how wild it becomes, because their vital need for the American market and their fear to see the value of their vast dollar reserves plunge, leaves them no choice. Furthermore, the tendency of capital, in this climate of insecurity, to seek refuge in a “safe haven,” to stay away from production, and to park in treasury-bonds at yields of near zero, removes, for the near future, any danger of capital flight from the US which would have to be stemmed by raising interest rates.

All this makes it seem likely that the US will embark on a reflation policy that will push its deficits far beyond currents projections. The best possible outcome of this would be that a modest level of growth would be restored, while the growth of dollars in circulation, compared to the anemic growth of value in the real economy, would lead to a further decline of the dollar and inflationary pressure in the US and the countries that followed the US on the reflationary path: stagflation. This is by no means certain. It may be that the loss of purchasing power as a result of the deflation of real estate and others assets is just too great to be compensated for, and that the deflationary wave, after slowing for a while, will accelerate again. Keeping alive weak companies will only postpone their demise and in the meantime lower the profit-rate of their stronger competitors. And the capacity of Asian and other foreign capital to absorb US debt depends on their profits in the American market and dwindles with it.

So the great stimulus plans may all be in vain, but there is no other option. Capitalism will make this move like a chess player getting his king out of a checkmate position, without worrying about the next moves. But the next moves will be troublesome. The crisis of confidence will move from confidence in the banks to confidence in the state. The latter could bail out the banks but there will be no higher instance that can come to the rescue when there is no safe haven left for value.

Sander

Crisis

The following article will appear in the next issue of IP.

The global financial crisis of 2008 is truly a milestone event. No other since the crash of 1929, and subsequent great depression, has shown so clearly that the capitalist economy, despite its solid façade, can unravel very quickly and collapse. No other has illustrated so clearly the absurdity, the obsolescence, of letting the needs of capital accumulation determine humankind’s fate. The sudden panic of capital owners, the sudden disappearance of trillions of dollars, the great difficulties with which the governments of the world have wrestled to get a grip on the situation, cannot but have a great impact on the consciousness of the working population, which now will see its living conditions substantially deteriorate for no other reason than that human needs are subservient to the needs of capital.

Too much can be produced too cheaply so that massive layoffs, wage and benefit cuts, attacks on the environment in order to further reduce costs, etc., must be imposed so that capital, abstract value, can grow again; because that is the real, determinant, purpose of the capitalist economy.

Although a total collapse is unlikely in the short term, this event marks the beginning of a period of protracted crisis, from which there will be no escape. There will be temporary recoveries but not a new boom period. Either the crisis will run its course, which means allowing depression and war to destroy so much value that the conditions for profitable expansion can be purportedly restored, or a global revolution, and the abolition of value production will occur.

By the time you read this, you will have read or heard countless explanations of this crisis, most of which blame it on capitalist greed, bad management and Anglo-American “neo-liberalism.” Such “analyses” come mostly from the left of the capitalist spectrum. The right struggled to say anything coherent at all about the mess, and at times even parroted the left (as when John McCain railed against “Wall Street greed”). It’s clear that at times like this, the left becomes very important for capital. A critique of unfettered free market-capitalism and of the stupidity of giving tax cuts to billionaires, is the only narrative left open, if blaming the capitalist system itself is to be avoided. It’s not capitalism but bad capitalists that have caused the problem, the left is essentially saying. The system can be saved through more regulation.

But while capitalist greed is permanent, capitalist crisis is not. While the bourgeois consensus has now nimbly shifted from “neo-liberalism” to “neo-keynesianism” (in truth, Keynesianism, as it is commonly understood – state-intervention in the economy and deficit-spending — have never gone away) and yesterday’s guru Greenspan was heaped with scorn and left making mea culpas on TV for having kept interest rates kept too low for too long, thereby allowing the US housing bubble, and its extension to Europe and other parts of the world, to swell, it is conveniently forgotten that this housing bubble, and the consumption it fueled, played an essential role in keeping the global economy humming over the past two decades.

IP predicted this crisis, but we were far from the only ones. Even some bourgeois economists saw it coming from afar. You don’t have to be a Marxist to understand that, when financial assets appreciate at a breakneck pace while there is no corresponding growth of the underlying value created in production, the exchange value of these assets will fall. Its fictitious character will at some point be revealed. The current recession is not caused by the financial panic, rather, it was the other way around: the economic downturn burst the financial bubble. The question is why, despite today’s tremendous productivity, the growth of value fell so short of what the credit expansion required. Or, to turn this around, why this financial expansion occurred in seeming indifference to the much slower pace of real economic growth. To these questions, the best answer bourgeois commentators can come up with is “human failure”: greed, sloppiness, stupidity, shortsightedness…which with better leaders, and with more oversight and regulation, will be cured…It’s not the system that’s at fault… The system pays them well to say just that.

And they may well believe it. Only Marx’s analysis of the value form and its immanent tendencies, allows us to answer the above questions.

Globalization, made possible by information-technology and the restructuring of the world economy following the end of the cold war, did give capitalism a new lease on life after the post-World War II boom ended in the 1970’s. Some say that the impressive expansion of the world economy since then was only caused by an expansion of credit, by an accumulation of debt. If that were true, the crash would have come much sooner. The credit expansion was indeed disproportionate, but the fact that it could go on for so long needs to be explained. This would not have been possible without a real expansion of value creation; “of productivity,” some would say, “resulting from technological innovation.” But if that is all there was to it, why are we in such a deep crisis? They do not see that a general rise of productivity not only means that more goods are being created, but also that these goods are made with ever less labor and that, the more surplus labor is already taken from that labor, the more difficult it becomes to squeeze more out of it. An acceleration of the general rate of productivity growth resulting from technological innovation tends to make the value of what is produced fall below the value of the capital advanced for its production. That threatens the very purpose of the economy: capital accumulation.

The expansion of real value creation took place because the rate of exploitation of labor power increased. Globalization not only made the capitalist world market more unified and thus wider and more efficient, but it also restructured production on a global assembly line, shifting an ever growing part of industrial production to what used to be backward areas that had barely participated in the global market. In this way, capital not only could expand the exploitation of cheap labor power but also, because of its very mobility, discourage working class resistance to exploitation everywhere, despite the falling value (labor time) of wages.

Moreover, globalization accelerated a redistribution of value in the market place. In the global economy, the most developed capitals, with the fastest rate of technological innovation and productivity growth, have a competitive advantage that allows them to sell their goods at a price above their value. In other words, much of the value they realize, is not really in their products, they get it on the global market.

Globalization therefore created huge profits in the most developed parts of the world, which encouraged capitalization under the assumption that their growth would continue unabated. But, as technological innovation spreads and generalizes, the quantity of labor, and thus of surplus value, in commodities also falls. Globalization was eating away at the roots of the expansion of profits. What became decisive to obtain then, more than ever, was access to, and dominance of, markets. Many companies, from shoes to semi-conductors, began to spend more on marketing than on production.

It was the hope of capitalism’s apologists that globalization would generate its own expanding market. And indeed, to some extent it did just that, the multiplier effect enriched and expanded the size of middle-income strata in many parts of the world. That too, encouraged a credit-expansion on the assumption of its continuation. However, the limit to the expansion of the market, generated by globalization, was revealed in the Asian crisis ten years ago. It showed that much of the profit resulting from exploitation in low wage countries could not profitably be reinvested in those countries.

The same issue arises today. Some are saying that countries such as India and China have made a lot of money through globalization. At the same time, the needs are great there. Why don’t they invest their surpluses in the expansion of their domestic market, which could stimulate the whole world economy? Yes, there are huge amounts of capital in places like India and China, and there are hundreds of millions of small peasants and land workers, and unemployed there, who possess nothing. But they have nothing that Chinese and Indian capital owners want, not even their labor power, unless it can be used to make goods for another, foreign, market.

The Asian financial crisis, which spread to Latin America and Russia, showed that the expansion of the domestic market in the countries recently embraced by globalization is strictly dependent on the expansion of their foreign markets. It also showed that deflation increasingly becomes the hallmark of the economic picture. The implosion of financial bubbles, the sharp devaluations and falling prices during and after the Asian chain event announced the return to center stage of capitalism’s insurmountable economic contradictions. In a context in which just about everywhere both the labor force and the means can be available to make almost anything very cheaply, overaccumulation, and thus prices falling below their value, becomes inevitable. This touches the weakest competitors with the least access to the global market first. The twin, contradictions, each reinforcing the other, of capitalism’s incapacity to generate a market that keeps pace with the expansion of its productive capacity, and the tendency of the value of what it produces to fall, first attack their profits and wages. So owners of capital in the weaker countries, confronted by the limitations of reinvesting their profits at home and by the danger of devaluations, increasingly moved their savings to where they would be safer in a deflation wave. In 2004, according to the figures of the Morgan Stanley bank, 80 % of the net-savings of the world were flowing to the US.

And there, it was more than welcome. The US, through its foreign policy, the projection of its military power, but also through its stable political system, now adorned with the friendly face of Barack Obama, is cultivating its status as the safe haven for capital. Even the implosion of the dot-com bubble in 2000, with its trillions of evaporated fortunes, hardly interrupted the stream of capital. A pattern had developed: the US economy lived, every year a bit more, beyond its means, buying more than selling, paying by printing more dollars, backed by public debt notes bought by the countries who sell more to it than they buy from it. Neither side can withdraw from this relationship. A swing to protectionism would plunge the US in depression, but the loss of the American market would be equally devastating for China and Japan.

At the same time, the profits made in the developed countries sought a safe haven where they could maintain and expand their value. After the dot-com-implosion revealed that the value of high tech companies was wildly overrated and with many traditional sectors such as automakers suffering from overcapacity, where could they go? The combined demand of international capital for safety pushed up the price of all assets in the US, and to a lesser extent elsewhere, that are part of “the hoard”: the part of capital that is not directly engaged in creating new value, but that is kept in reserve to move in or out of the productive process, depending on the profits, and the promise of profits. The rising demand for them in turn pushed up their prices. Their fast rate of appreciation attracted more capital, which again raised their prices and so on. The fundamental reason why financial assets expanded so much faster than the real economy is that the demand for them is unlimited while the demand for all other commodities is not. In a context of global overcapacity and a growing deflationary tendency, the effective demand for cars, computers or any other commodity is severely limited, but the demand for financial capital is not, because while “ … all commodities are perishable money; losing their value if they are not sold, money is the imperishable commodity. ”

The financial sector in the US and beyond was all too happy to accommodate this thirst for assets in which value could be “safely” parked, through the creation of all sorts of new financial commodities. The appreciation resulting from the rising demand for them seemingly confirmed that they lived up to their safe haven promise. As in all pyramid schemes, it was essential to keep that demand rising. The policies of the US, under Democratic as well as Republican administrations, were aimed at just that. The feeding of the housing bubble played an essential role in this. The increased “equity” in property values was used to underpin the exponential rise in both consumer and business debt that kept up global demand and kept deflation at bay in the most developed parts of the world economy. But to keep the demand for property values rising, the financial sector had to take increasingly desperate measures, such as sub-prime loans to buyers without means. Although it was clear from the onset that such loans would never be paid back and would be subject to default in the first downturn, there was no alternative to feeding the bubble.

Globalization expanded value creation but value can only remain value if it continues to valorize. Capital that does not mobilize, directly or indirectly, productive forces for the creation of new value, is bound to devalorize. This crisis shows that there is too much value requiring valorization, that the value of assets in which profits sought refuge is fictitious. But if the illusion had not been there, where would these profits have found refuge? The housing bubble postponed the crisis, if only for a few years.

Tens of trillions of dollars, euros, and other currencies, have disappeared since this credit crisis began and it’s far from over. This is terrible for those who lost them, but for the conditions of accumulation of capital this is, in itself, beneficial: less capitals crowd each other out, some big ones enrich themselves by swallowing the smaller ones at a bargain price, costs (oil, wages) are falling. But this isn’t enough to stop the unraveling. It can only be stopped (temporarily) when a massive creation of new debt backed by the lender of the last resort — the state – props up the debt-saddled financial system and interest rates are lowered. So the crisis of fictitious capital is “solved”… by the creation of new fictitious capital.

To the trillions spent to save the financial system will be added trillions in spending to contain the recession and prevent deflation from spreading to the strongest countries. The approval of Fed-Chairman Bernanke to an Obama-type stimulus program shortly before the elections already indicated where we’re heading. The left will clamor for a new “New Deal,” but “stagflation” – the combination of stagnation and dangerously rising inflation that brought the world economy to the brink of collapse in the 1970’s — would be its best possible outcome. However, there will be increasing public spending to fight deflation. There will be a more direct intervention of the state, more state capitalism. But in the end, nothing will have changed: more debt will be created to counter-act the devalorization of old debt.

This will move the problem from confidence in banks and other financial enterprises to confidence in the lender of last resort, the state. In many countries that are in the grip of deflation, this confidence is already shredded. But in stronger countries, with big financial reserves, such as Japan and the US, the anchor and guardian of the global system, it is strengthened, at least in the short term, as capital seeks refuge from the uncertainty of the financial storms in state-backed securities. Thus, the demand for US treasury notes rose, despite its low yield, and so did the dollar. But in the somewhat longer term, as state debts swell to ever more enormous proportions, this confidence will become increasingly fragile. The capacity of the concerted action of governments to stop a collective run for the exit and thus prevent a collapse will become more doubtful, as the quantity of debt-notes and other money sloshing around will increasingly dwarf their combined financial reserves. The crisis will return and will likely make the present one look like child’s play.

Sander
November 6, 2008

…AND ITS CONSEQUENCES

The present financial crisis, with its threats to the existing international banking and credit system, and the underlying economic crisis, the global crisis of overaccumulation, which is its basis, is the greatest challenge to the functioning of world capital since the early 1930’s. Given the gravity of this crisis, the current recession will most likely be a very deep and protracted one, striking all sectors of the global economy.

It’s impact on the working class will be devastating, leading to a vast increase in unemployment as the economy contracts, both in the advanced capitalist countries and in the emerging economies, lower wages as well as significant cuts in the “social wage” and pensions, together with the loss of homes due to foreclosures, which hits the working class especially hard. Yet this is no “death crisis” of capitalism; it will bring no automatic collapse, the expectation of which is a significant barrier to revolutionary struggle and to the development of the consciousness of the collective worker. Capital possesses enormous resources, economic, political, and ideological, upon which it can draw. One such resource is to blame the crisis on the greed of the bankers and capitalists, to focus anger on “Wall Street,” and its agents whose avarice has supposedly brought this crisis upon us. From the US and Germany, to Russia and China, that ideological campaign has already begun. It is important, then, to recognize – as Marx insisted — that the capitalist is simply the functionary or executor of capital, and not the responsible agent of the economic processes to which he or she responds: For Marx, “… individuals are dealt with only insofar as they are the personifications of economic categories, the bearers [Träger] of particular class relations and interests.” The executor or functionary of capital, the capitalist class, acts consciously, but without an understanding of the complex of networks and interests that it personifies, without a full understanding of the exchange mechanism, and the objective or real abstraction in which value is incarnated. As Marx pithily said, “they do not know it, but they do it.” It is capital and the logic of the value form that has produced this crisis, and not the capitalists, and their cupidity or stupidity. And any “solution” short of the abolition of value production will only prepare the way for new and even more devastating crises. Within the confines of capitalism and the value form, we can expect a provisional end to the policies of neo-liberalism and deregulation that were ushered in by Thatcher and Reagan in the 1980’s. As the steps already taken by capital to respond to the credit freeze and the need to re-capitalize the banking system indicate, regulation will now become the mantra of the most powerful elements of the capitalist class. It is not just left-liberalism and Social Democracy which now rejects neo-liberalism, and which seeks to save capitalism through regulation and Keynesianism. In its lead article this October, the New Left Review sees promise in “financial regime change,” and holds out the prospect that more scope for government regulation of the financial system “may give the new regime that emerges from the current upheavals greater stability than its predecessor.” That is surely the aim of capital, though it ignores the fact that this is not just a financial crisis; it is rather a global crisis of the value form and its insurmountable contradictions. Moreover, an end to policies of deregulation does not mean an end to globalization, which is separable from neo-liberalism, though it was the latter that historically made possible the former. For the moment, the time to dismantle the policies and institutions of globalization – the WTO, the IMF, the World Bank, the OECD, — and with it a robust populism of the left or right, has not yet come. Indeed, capital, for the moment, needs to reinforce the bonds of globalization: the advanced capitals, the EU, Japan, the US, need the markets of the emerging economies (China, India, South East Asia, Brazil) if the slackening of domestic demand, even with lower interest rates, is to be offset, and the emerging economies need the open markets of the advanced capitals to prevent a collapse of their own newly industrializing economies. Moreover, deflationary tendencies in the periphery of world capital, and ever cheaper wages there, will lower the wage bill in the advanced capitals, by keeping the flow of cheap consumer goods coming in the midst of unemployment and declining wages in those sectors of world capital. The most intelligent functionaries of capital, from the US to China understand this. Just as they understand the need of capital to further degrade the natural environment in its unceasing quest for surplus-value, in its determination to reduce the costs of variable capital as it seeks to raise its rate of profit, a process that the present economic crisis will exacerbate, as the conversion of left liberals and even some of the left to an expansion of offshore drilling for oil and the building of nuclear reactors makes abundantly clear.

Those very “needs” of capital, mired in a deepening economic crisis, are a significant reason why, even before the credit crunch this past September, leading sectors of the capitalist class in the US had already made it clear that it preferred a Democrat to a Republican as president; that it preferred Obama to McCain. The future of American imperialism was one reason: Bush’s unilateral foreign policy had proven an obstacle to the support of allies in policing the world and its global economy. Bogged down in Iraq, incapable of making progress in bringing about an end to the Israeli-Palestinian conflict, the debacle in Lebanon, where Syrian influence was growing, the danger of unilateral American moves against Iran, the need to increase troops in Afghanistan, and the task of restoring some kind of order in Pakistan and preventing its descent into civil war, all made some kind of “intelligent” imperialism, to replace the discredited Bush doctrine, an imperative need. It was precisely Obama who was made to order to be the functionary of such an intelligent imperialism, of the sort represented by Zbigniew Brezinski or Colin Powell, though the replacement of Donald Rumsfeld by Robert Gates as American Secretary of Defense had already signaled the beginnings of such a shift by the Bush administration. The financial and economic crises, and the moves already undertaken by Secretary of the Treasury Henry Paulson, and the Fed Chairman, Ben Bernanke, signaled the need for capital to reverse the course towards deregulation of financial markets, and engage in robust Keynesian economic policies to reflate the economy, without sacrificing the “gains” for capitalism made possible by globalization. The ideological commitment of much of the Republican Party to lower taxes, Reaganomics, and opposition to the Paulson plans for re-capitalizing the banks, all made it clear that in the present situation, Obama, and a Democratic Congress, was a better choice to implement the economic policies that capital required than McCain. While the exact course of the economic crisis cannot be predicted, it would seem that Obama and the Democrats are best suited to wear the mask of capital at the present time; indeed, Obama’s capacity to mobilize popular support for “change” is one reason why that is the case. Should the policies of an Obama administration fail, should popular discontent significantly rise, populist movements of the left or right will probably grow. In such a case, the right-wing of the Republican Party, with an anti-Washington, anti-Wall Street, ideology, and calls for anti-immigrant legislation and protectionist economic policies, may well resonate with both the middle class and elements of the working class too (as will similar calls in the EU countries too). But for the moment, capital has the functionaries it needs in charge of both the executive and legislative branches of the American republic; functionaries who can best assure the kind of international cooperation that the continuation of American hegemony requires.

While capital needs the best functionaries to assure its continuation, it also requires something else: the ability to control the population, to guarantee its hegemony over the collective worker, which entails an ability to mold the human population as subjects. One facet of the shift from the formal to the real domination of capital, is a concomitant shift from a reliance on force or coercion to control the working class to a reliance on its capacity to ideologically shape the human “material” that it needs to control; to shape humankind as a certain kind of subject. We are not speaking of simple mystifications, tricks, by which the working class is induced to accept the rule of capital. Rather it is a matter of profoundly shaping and re-shaping the very culture, needs, psychology and anthropology, of the human being; its subjectification. The value form is not some kind of coat that humankind can simply take off when the weather changes, certainly not in the epoch of the real domination of capital, where its rule, cultural, economic, and political, becomes totalitarian. Theodor Adorno added to Marx’s concept of the rising organic composition of capital, the concept that the “organic composition of man” is growing: “Only when the process that begins with the metamorphosis of labour-power into a commodity has permeated men through and through and objectified each of their impulses as formally commensurable variations of the exchange relationship, is it possible for life to reproduce itself under the prevailing relations of production.” Adorno’s rising organic composition of man grasps the immanent tendency of capital in its phase of real domination to extend the changes in the technical composition of capital, the relation of dead to living labor, into the very constitution of the worker: his needs, her affects, his vision of the world, her perceptual universe. While Adorno may have captured one of the immanent tendencies of capitalism in its phase of real domination, we believe that his vision of the rising organic composition of man is too pessimistic; that it virtually forecloses any possibility of revolutionary struggle or the development of class consciousness on the part of the collective worker. We do not want to underestimate the capacity of capital to subjectify the population that it rules; its successes have been historically compelling. Indeed, the power of nationalism, in both left and right forms, and the recrudescence of religious ideologies, which have quite literally re-shaped a considerable portion of humankind, are a warning to those who might underestimate this power of capital, and the extent to which the exchange relationship has penetrated most aspects of human existence. However, it also seems to us, that there are counter-tendencies to capital’s power to bring about the subjectification that it needs and wants; counter-tendencies inherent in the value form itself and its laws of motion. Capital has not succeeded in expunging the collective memories of humankind’s struggles against exploitation, embedded in the history of every culture and social order, and especially the struggles of the working class, memories that the very globalization of capitalism spreads universally; memories that can be re-actualized, particularly in an era of crisis. Moreover, one of the means that capital must wield in order to escape its downward economic spiral is to accelerate the development of the productive forces, including especially the productive force of humankind, of the collective worker. That requires the creativity and innovation on the part of workers, without which scientific and technological stagnation will prevail. On the one hand, capitalism needs the creativity and innovation provided by the collective worker in order assure its own economic bases, the competitiveness of capital entities; on the other hand, that creativity and innovation has the potential to escape the control of capital, to extricate itself from the prevailing modes of science and technology integrally linked to the law of value, to re-animate the very tendencies to resistance and rebellion that capital seeks to expunge from creativity and innovation, but that may be inherent in it.

There is no inevitability of communism attendant on a devastating economic crisis — the 1930’s should have demonstrated that – and the real domination of capital has proceeded over the course of the past eight decades. Yet, revolutionaries will not shout “here’s to the crisis,” aware as they are that crisis does not necessarily result in revolution, that it causes enormous suffering for the working class, and can lead to ever-greater “barbarism,” to xenophobia, war, and genocide. The crisis itself is inevitable; its outcome is not. One effect of the present crisis will be to shatter the “normalcy” of economic growth, of faith in the benefits of the prevailing science and technology. To the questions that arise as the processes of normalization breakdown, capital will try to provide its own answers. Yet none of those “answers” can resolve the necessity that lies at the heart of the value form, that “ … its production moves in contradictions which are constantly overcome but just as constantly posited. The universality towards which it irresistibly strives encounters barriers in its own nature, which will, at a certain stage in its development, allow it to be recognized as being itself the greatest barrier to this tendency, and hence will drive towards its own suspension. … Ricardo and his entire school never understood the really modern crises, in which this contradiction of capital discharges itself in great thunderstorms which increasingly threaten it as the foundation of society and of production itself.” The task of revolutionaries is to show where the horrific logic of the value form leads, in this epoch of social retrogression, to provide different answers to the questions that are beginning to be asked, to intervene in all the cracks that open up in the edifice of capitalist normalcy; to devote themselves to the work of that old mole of revolution, and to the possibility of creating a human community.

Mac Intosh
November 7, 2008

Marxism and the Holocaust

The following exchange took place after a reader of IP wrote with some comments on the article “Marxism and the Holocaust” which appears in the latest issue of IP.

Letter to IP

I’ve been working through the ‘Marxism and the Holocaust’ article and found it surprising that Postone was never mentioned in it. His essay ‘Anti-Semitism and National Socialism’ seems pretty fundamental to mapping out a Marxist response to the Shoah.

The article in IP does not answer two major questions: 1) Why Germany? and 2) Why the Jews?

“In that sense, the Nazi vision of a `racially pure community,’ a Volksgemeinschaft, was directly linked to the effects of capitalism’s destruction of all genuine communal bonds, and to the void that it left in its wake.”

Capitalism has destroyed genuine communal bonds everywhere. Why was there no holocaust in other countries? Why did other states not attempt to create a “racially pure community”?

I strongly disagree with the Aly and Heim argument about extermination of Jews in Eastern Europe being done out of economic interest in destroying surplus population. How was it in the interest of the German state to divert huge amounts of resources to the holocaust in the midst of a two-front war? What was utilitarian about the holocaust? The fact that it was not utilitarian (in fact, it was against the immediate economic and military interests of the German state) is what is so terrifying and also unique. As Postone wrote – “No functionalist explanation of the Holocaust and no scapegoat theory of anti-Semitism can even begin to explain why, in the last years of the war, when the German forces were being crushed by the Red Army, a significant proportion of vehicles was deflected from logistical support and used to transport Jews to the gas chambers.”

Because the attempted extermination of the Jews was not utilitarian – and because of the specificity of anti-semitism, I do not think the Shoah can be compared to the other genocides mentioned at the end of the article. (That is not to say, of course, that these other genocides are not horrible). I think y’all are correct in saying that the Shoah requires us to reexamine Marxism (I would add: and raise serious questions about the optimistic conception about the struggle for communism), but I don’t think y’all went far enough.

How could a working class that not too many years before was engage in the most intense wave of class struggle in history, perhaps even a ‘revolutionary wave’, between 1917 and 1923, so actively participate in the extermination of European Jewry – oftentimes with brutality that surprised even Nazi leaders who encouraged it? Why were there pogroms even within anti-Nazi partisan forces?

It’s also confusing to me why Callinicos is referenced. Isn’t he the main “theorist” (ideological party hack) for the British SWP? I think that Callinicos has a particularly uninteresting formulation of Marxism in keeping with his Trotskyite politics. It’s also ironic that he’s quoted in an article about the holocaust, since the SWP openly supports and has ties to the Muslim Brotherhood in Egypt, a militantly anti-semitic organization that worked hand-in-hand with the Nazis during the holocaust (one of the MB leaders actually organized SS divisions during the war).

Reply by IP

Thanks for your thoughtful comments on my essay, “Marxism and the Holocaust.” I will try to respond to your specific comments and criticisms, and to situate them within the overall perspective that animated the essay.

Let me start with your objections to including references to Callinicos (or I might add, Mandel too). The thinkers to whom I refer in the essay, with the exception of Goldhagen, use Marxist categories to grapple with the phenomenon of the Holocaust. None of them share my “politics;” none of them — not Marcuse, Adorno, Anders, Aly, Geras, etc. – draw the “class line.” And the same is true for those thinkers to whom I refer in terms of theoretical constructions of Marxism – Bloch or Althusser, for example. I would not turn to any of them for an understanding of the nature of Stalinism, nationalism, or inter-imperialist war, for example, where it is precisely the class line that must be clearly drawn. But, I have no hesitation, when discussing the Paris Commune or Marx’s Grundrisse, for example in utilizing thinkers, Henri Lefebvre, for the Commune or Roman Rosdolsky for the Grundrisse, to take two examples, whose politics I reject, but for whom I have a high regard when it comes to wielding Marxist theory in specific domains. I cannot imagine, for example, grappling with Marx’s understanding of the value form without seriously reading I. I. Rubin’s Essays on Marx’s Theory of Value. Yet Rubin was an old Menshevik! In the specific case of Callinicos, however, the point was simply that here was a self-professed Marxist for whom the Holocaust constituted a challenge to orthodox Marxist theory.

Now to Postone. I have a very high regard for Postone’ work on the value form, as well as for some of his insights about modern anti-Semitism and its links to the trajectory of capitalism. With more time and space I would certainly have included a discussion of Postone, and of several other thinkers, such as Mosse and Mayer. But my primary goal in this essay was to do two things: first to link the Holocaust to the trajectory of capitalism, and second to show that genocide, of which the Holocaust is emblematic, but not the exclusive “case,” has become a hallmark of decadent capitalism. Postone’s focus is on the Nazi genocide of the Jews, and he clearly shows that it was not utilitarian (a point that I also make), and that the ideology of modern anti-Semitism was both central to it, and linked to the trajectory of value production. However, I believe that the specific link that Postone forges between modern anti-Semitism and the dual character of the commodity form; with anti-Semitism focusing on the abstract value linked to finance capital, and connected to the Jews, while ignoring industrial capital, is too limited to account for the Nazi genocide. I have no doubt that distinctions between the two types of capital characterized many anti-Semitic thinkers, and provided an “explanation” for the need to rid Germany of its Jews, but I also think that that factor is not sufficient to account for the power of the ideology of Jew-hatred that propelled the Holocaust. In that regard, I stand by my effort to expand the factors that made modern anti-Semitism so potent an ideology in Germany, and indeed in Europe during the 1930’s and ‘40’s.

However, it is in attempting to show that the Holocaust was but one link, especially horrible, in a chain of mass murder, ethnic cleansing, and genocide, that constitutes an immanent tendency of decadent capitalism, that I seek to go beyond Postone’s analysis. You ask, “Why did other states not attempt to create a ‘racially pure community’?” My point is that other states have: Cambodia, Vietnam, Rwanda, Serbia, Sudan, Burma, for example, where ethnic cleansing and genocide are clearly linked to ideologies of a racially pure community. And as economic crisis deepens, we can expect to see this tendency expand, both in its violence and its geographical scope – from which I fear even the most advanced capitalist states will not be immune. The point is not to claim that Sudan or Serbia is the same as the Holocaust, but rather that it exemplifies similar tendencies inherent in capitalism at this historical stage. Too exclusive a focus on Nazism and modern anti-Semitism, while necessary in examining the Shoah as a determinate event, can obscure the very tendency to which I seek to call attention in my essay, what I have termed “the futural dimension of the Holocaust.”

Comradely greetings,

Mac Intosh

Suicide Note

Recently, there was an uproar in Germany about the death of Bettina Schardt. It was not the fact that she died which provoked strong feelings, but the way in which she died. The 79 year old woman, a retired X-ray technician from the Bavarian city of Würzburg, chose to end her life through assisted suicide. She was neither sick nor dying, but she was old and worn out; she needed help. She had no alternative but to sell her home and move to a nursing home. No alternative but death. Death seemed far preferable to Bettina than to be institutionalized in a warehouse for the dying.

How many millions of people in the world are in exactly the same situation as Bettina? How fast are their numbers growing? All around the world, governments are cutting budgets for social programs. Everywhere, the wages of the nursing home personnel are being squeezed. Everywhere, they are forced to take care of more patients with fewer people. There are surely many dedicated people amongst those caregivers, but they are powerless to resist the squeeze, the urge of capital to get rid of unproductive costs to protect the nation’s profitability, which translates in the life of nursing home patients to more misery.

Meanwhile, the world has close to 2 billion unemployed people. Could it be that amongst them, there are many who would gladly spend their days making the lives of old people happier? When I visited a nursing home in Belgium a couple of years ago, I met several refugees who worked there and were much beloved by the patients. While waiting for their cases to be handled, they were not allowed to work for money. Rather than watching daytime TV, they worked for free in the nursing home. Doing nothing is not what most unemployed prefer to do. Most of them would like to do something useful and creative, and it just so happens that there is so much useful and creative work to do: So many needs which could be met; so much pain which could be avoided or erased. If only we stop letting value and profit dictate what we do and what we don’t. If only we understand the obvious: that we should employ our resources directly to meet human needs. We may think that we do so already but the means – production for profit, the market, the accumulation of capital- has become its own end which employs humans as its means. If you are of no use for the accumulation of capital, you have no job, you are nothing.

What unites all forms of bourgeois thought is the idea that capitalism is a given. That it is part of the unmovable forces that condition our lives, like the forces of nature which we must accept and make the best of it. That is the essence of their message. Capitalism must be accepted. Whether they are from the left or the right, their disagreements are minor compared to this common point of departure.

The reactions of the right and the left to Bettina’s suicide illustrate this point. Predictably, Germany’s conservative chancellor Angela Merkel condemned all forms of assisted suicide as “inhumane,” and the rest of the right agreed, all in the name of “the sanctity of life”, which in no way prevents them from imposing austerity measures which make life unbearable for so many, nor from waging war in Afghanistan or selling weapons around the world. Roger Kusch, the promoter of assisted suicide who helped Bettina to kill herself, received praise from the left side of the political spectrum. They defended his practice in the name of “the right to die in dignity”.

What about the right to live in dignity? The implicit assumption of Kusch’s defenders is that people like Bettina don’t have such a right; that the loneliness, alienation and poverty that is increasingly the fate of people who are unproductive for capital is unavoidable, so that the best that can be done for them is to assist them in making themselves disappear.
‘Assisted suicide’ is an apt metaphor for the role of the left as a whole at a moment in which global capitalism, compelled by its contradictions becomes increasingly destructive. There is too much capital that cannot be profitably invested and that includes ‘variable capital’, people. From the point of view of the needs of the accumulation process, it needs to be discarded. Capital needs the superfluous to commit suicide and the left stands ready to assist them so that they can destroy themselves “with dignity”. Capitalism’s crisis provokes massive unemployment which the bourgeois left accepts as unavoidable, but it wants the layoffs to occur “with dignity”. It accepts wars as unavoidable, but it wants them to be waged “with dignity”. And so on. The left is the proletariat’s suicide assistant.

Sander

Post-script: Two days after the article that inspired the lines above, The New York Times had more ‘suicide news’ on its front page: “Despair Drives Suicide Attacks By Iraq Women” (July 5). To say that in this case too the suicides are assisted, is an understatement. Here the role is carried out by Islamists, who promise Heaven to an exhausted depressed woman who means nothing to them. She is just one more cheap commodity to be consumed in the struggle for Islamic power. That is a struggle of a capital to make room for itself in a world already crowded with capitals and whose inner dynamic leads to an ever greater concentration of capital. The more the system’s tendency to breakdown becomes pronounced, the more cracks appear in the global order and the more sensible an investment violence becomes. While chasing only their narrow capitalistic power dream, the Islamic suicide assistants are loyal agents of capital as a whole which is bent on destruction to make room for itself.

Theses on State Capitalism vs. Real Socialism

The following article was sent to us by the Chicago Revolutionary Network for discussion

THESIS ON STATE CAPITALISM VS. REAL SOCIALISM (Expanded Version)

Dave, Diana and Perry of Chirvenet, December 23, 2007

The CENTRAL question for every “Revolution” is WHICH CLASS runs the major means of production and government. If the major means of production is run by a state bureaucracy, that’s STATE CAPITALISM. Of course, there are other forms of STATE CAPITALISM such as in Sweden (social welfare state), and the U.$.A. (social welfare and regulation of the class struggle – NLRB and Taft-Hartley Law). However, if the major means of production is run by the working class, then that’s REAL SOCIALISM! If the economy is based on money, wages, prices, profits and commodities, then that’s CAPITALISM. But if the economy is based on ‘FROM EACH ACCORDING TO THEIR ABILITY [and desire], TO EACH ACCORDING TO THEIR NEED [and wants]’ (Marx & Engels, ‘The Communist Manifesto’), that’s REAL SOCIALISM or communism! If there is a state, standing army, police, prisons, etc. then it is a CAPITALIST STATE. But if the voluntary government is of the workers, by the workers, and for the workers, then the government is REAL SOCIALIST! REAL SOCIALISM can only work if it is a GLOBAL ON-GOING REVOLUTION! As Gil Scott Heron said in ‘The Revolution will not be Televised,’ “the revolution WILL put you in the driver’s seat.”

Obviously, there are no contemporary examples of heroic working class attempts at real socialist revolution. But what about historically? Below we list several, including the key reason for their demise:

THE PARIS COMMUNE OF 1871 French workers seize control of Paris, abolish the State and institute communism economically, but don’t disarm the French ruling class, who, with the aid of the German army, create a bloodbath of Parisian workers. Marx adds to his theoretical arsenal the famous, or infamous, depending on your viewpoint, “the dictatorship of the proletariat.”

THE RUSSIAN PROLETARIAN, OCTOBER REVLOUTION Under the false banner of “the dictatorship of the proletariat,” Lenin et al shut down the revolutionary factory committee movement in favour of the trade unions, which they controlled , and the Bolshevik Party hijacked the revolutionary Soviets, leading to “the dictatorship of the party.” The last attempt at revolution by the Russian working class was the Kronstadt rebellion in the early 1920’s, which was drowned in blood by the so-called Red Army led by Trotsky and approved by Lenin. Stalin’s murderous State Capitalism followed and the rest, they say, is history.

THE HUNGARIAN REVOLUTION OF 1956. The Hungarian working class creates revolutionary worker councils that run production throughout the country, and essentially govern. The Russians invade Hungary with tanks etc., and put down the revolution militarily.

THE FRENCH WORKING CLASS GENERAL STRIKE AND MASS STUDENT REVOLT OF 1968. The “masses were in motion” so to speak, revolutionary motion, how empowering and exhilarating that must have been! But lacking the goal of Real Socialism to march forward, this revolutionary upsurge was co-opted through clever reforms by the French ruling class.

THE CHILEAN AGRICULTURAL WORTKERS EXPROPRIATION F OLANDOWNDERS IN 1973. Unfortunately, these revolutionary take-overs did not find a timely echo among the industrial workers, which resulted in the CIA-led fascist coup of General Pinochet against reformist President Allende, murdering Allende and thousands of revolutionary workers.

All we can do now is take revolutionary inspiration from the spontaneous revolutionary actions of these heroic revolutionary workers of our international class, and convey what REAL SOCIALISM means to our working class engaging in a revolutionary dialogue with other REVOLUTIONARIES and REVOLUTIONARY-MINDED WORKERS.

New issue of Internationalist Perspective

Internationalist Perspective 49 is now available.

The new issue contains the following articles:

May 68 to May 08

Elements for an understanding of the Class Struggle Today

Marxism and the Holocaust

Value Creation and the Crisis Today

Review: Communicating Vessels