The Point Is

London Review of Books Dec 18th

2008-12-15T18:43:00.000Z

America Concedes
Patrick Cockburn writes about the significance of the new Status of Forces Agreement

On 27 November the Iraqi parliament voted by a large majority in favour of a security agreement with the US under which its 150,000 troops will withdraw from Iraqi cities, towns and villages by 30 June next year and from all of Iraq by 31 December 2011. The Iraqi government will take over military responsibility for the Green Zone in Baghdad, the heart of American power in Iraq, in a few weeks’ time. Private security companies will lose legal immunity. US military operations will only be carried out with Iraqi consent. No US military bases will remain after the last American troops leave in 2011 and in the interim the US military is banned from carrying out attacks on other countries from within Iraq.

The Status of Forces Agreement (SOFA), signed after eight months of rancorous negotiations, is categorical and unconditional. America’s bid to act as the world’s only super-power and to establish quasi-colonial control of Iraq, an attempt that began with the invasion of 2003, has ended in failure. There will be a national referendum on the new agreement next July, but the accord is to be implemented immediately, so the poll will be largely irrelevant. Even Iran, which had denounced the first drafts of the SOFA, fearing that any agreement would enshrine a permanent US presence in Iraq, now says that it will officially back the new security pact after the referendum: a sure sign that America’s main rival in the Middle East sees the accord as marking the end of the occupation and the end of any notion of Iraq being used as a launching-pad for military assaults on its neighbours.

Astonishingly, this momentous agreement was greeted with little surprise or interest outside Iraq. On the day that it was finally passed by the Iraqi parliament international attention was focused on the terrorist attacks in Mumbai. For some months polls in the US have shown that the economic crisis has replaced the Iraqi war in the minds of American voters. In any case, Bush has declared so many spurious milestones to have been passed in Iraq over the years that when a real turning point is reached people are naturally sceptical about its significance. The White House is anyway so keen to keep quiet about what it has agreed in Iraq that it hasn’t even published a copy of the SOFA in English. Some senior officials in the Pentagon privately criticise Bush for conceding so much, but the American media are fixated on the incoming Obama administration and no longer pay much attention to the doings of Bush and Co.

The last-minute delays to the accord were not really to do with the Americans. It was rather that the leaders of the Sunni Arab minority, seeing Nouri al-Maliki’s Shia-Kurdish government about to fill the vacuum created by the US departure, wanted to wring as many concessions as they could in return for their support. Around three-quarters of the 17,000 prisoners held by the Americans are Sunni and their leaders wanted them released or at least to have some guarantee that they wouldn’t be mistreated by the Iraqi security forces. They also asked for an end to de-Baathification, which is directed primarily at the Sunni community. Only the Shia cleric Muqtada al-Sadr held out against the accord, declaring it a betrayal of independent Iraq. The ultra-patriotic opposition of the Sadrists has been important because it has made it difficult for the other Shia parties to agree to anything less than a complete American withdrawal if they wanted to avoid being portrayed as US puppets in the provincial elections at the end of next month, or the parliamentary elections later in the year.

The SOFA finally agreed is in almost every way the opposite of the one the US started to negotiate in March, which was largely an attempt to continue the occupation under similar terms to the UN mandate that expires at the end of the year. Washington overplayed its hand. The Iraqi government was growing stronger as a result of the end of the Sunni Arab uprising. The Iranians had helped restrain the Mahdi Army, Muqtada’s powerful militia, allowing the government to regain control of Basra and Sadr City, which amounts to almost half of Baghdad, from the Shia militias. Maliki became more confident, realising that his military enemies were dispersing and that, in any case, the Americans had no real alternative but to support him. The US has been politically weak in Iraq since the fall of Saddam Hussein – not surprisingly, given that it has so few real friends in the country aside from the Kurds. The leaders of the Iraqi Shia, 60 per cent of the total population, might ally themselves to Washington to gain power, but they never intended to share power with the US in the long term.

The occupation has always been unpopular in Iraq. Foreign observers and some Iraqis are often misled by the hatred with which Iraqi communities regard each other into underestimating the strength of Iraqi nationalism. Once Maliki came to believe that he could survive without US military support he was able to spurn American proposals until an unconditional withdrawal was conceded. In any case, by the end of August it seemed quite likely that Obama, whose withdrawal timetable is not so different from his own, would be the next president. Come next year’s elections, Maliki can present himself as the man who ended the occupation. His critics, notably the Kurds, think that success has gone to his head, but there is no doubt that the new security agreement has strengthened him politically.

It may be that, living in the heart of the Green Zone, Maliki has an exaggerated idea of what his government has achieved. In the Zone there is access to clean water and electricity while in the rest of Baghdad people get no more than three or four hours’ electricity a day. Security is certainly better than it was during the civil war between Sunni and Shia of 2006-7, but the improvement is relative. The monthly death toll has dropped from 3000 a month at its worst to 360 Iraqi civilians and security personnel killed this November, though these figures may understate the casualty toll since not all bodies are found. Iraq is still the most dangerous place in the world. On 1 December, the day I started writing this article, two suicide bombers killed 33 people and wounded dozens more in Baghdad and Mosul. Iraqis are cynical about the government’s claim to have restored order. ‘We are used to the government always saying that things have become good and the security situation has improved,’ says Salman Mohammed Jumah, a primary school teacher in Baghdad. ‘It is true security is a little better, but the government leaders live behind concrete barriers and don’t know what is happening on the ground. They only go out in their armoured convoys. We no longer have sectarian killings by ID cards, but Sunni are still afraid to go to Shia areas and Shia to Sunni.’

Security has improved now that there are police and military checkpoints everywhere, but sectarian killers have also upgraded their tactics. There are fewer suicide bombings but many more small ‘sticky bombs’ placed underneath vehicles. Everybody checks their car before getting in. I try to keep away from notorious choke points, such as Tahrir Square or the entrances to the Green Zone, where a bomber can wait for a target to get stuck in traffic before making a move. The checkpoints and the walls dividing different communities bring Baghdad close to paralysis even when there aren’t any bombs. It can take two or three hours to travel a few miles. The bridges over the Tigris are often blocked, and this has got worse recently because the soldiers and the police have a new toy, a box which looks like a transistor radio with a short aerial sticking out horizontally. It’s supposed to detect vapour from explosives when pointed at a car and may well do so, but since it also responds to vapour from alcohol or perfume it’s worse than useless as a security aid.

Iraqi state television and government-backed newspapers never stop saying that life in the country is improving by the day, which would be convincing if in addition to improved security there were more electricity, clean water and jobs. ‘The economic situation is still very bad,’ says Salman Mohammed Jumah, the teacher. ‘Unemployment affects everybody and you can’t get a job unless you pay a bribe. There is no electricity and nowadays we have cholera again so people have to buy expensive bottled water and only use the water that comes out of the tap for washing.’ Not everybody is so downcast, but life in Iraq is still extraordinarily hard. The best way to gauge how much ‘better’ it is, is by the willingness of the 4.7 million refugees to go home – one in five Iraqis now lives elsewhere, inside or outside Iraq. By October only 150,000 had returned; some of those who come to assess the situation decide to remain in Damascus or Amman. One middle-aged Sunni businessman who came back from Syria for two or three weeks said: ‘I don’t like to be here. In Syria I can go out in the evening to meet friends in a coffee bar. It is safe. Here I am forced to stay in my home after 7 p.m.’

The degree of optimism or pessimism felt by Iraqis depends very much on whether they have a job, whether or not that job is with the government, which community they belong to, their social class and the area they live in. All these factors are interlinked. Most jobs are with the state, which reputedly employs some two million people. The private sector is very feeble. Despite talk of reconstruction there are almost no cranes visible on the Baghdad skyline. Since the Shia and Kurds control the government, it is difficult for a Sunni to get a job and probably impossible without a reference from someone connected to a political party in the government. Optimism is greater among the Shia. ‘There is progress in our life,’ says Jafar Sadiq, a Shia businessman married to a Sunni in the Shia-dominated Iskan area of Baghdad. ‘People are co-operating with the security forces. I am glad the army is fighting the Mahdi Army, though they aren’t finished yet. Four Sunni have reopened their shops in my area. It is safe for my wife’s Sunni relatives to come here. The only things we need badly are electricity, clean water and municipal services.’ But, when she was out of her husband’s hearing, his wife, Jana, admitted that she had secretly warned her Sunni relatives against coming to Iskan ‘because the security situation is unstable.’ She teaches at Mustansiriyah University in central Baghdad, which a year ago was controlled by the Mahdi Army, with the result that its Sunni students fled. ‘Now the Sunni students are coming back,’ she says, ‘though they are still afraid.’

They have good reasons to be afraid. Baghdad is divided into Shia and Sunni enclaves defended by high concrete blast walls, often with a single entrance and exit. The sectarian slaughter is much less than it was, but it’s still dangerous for returning refugees to try to reclaim their old house in an area in which they are a minority. In a Sunni district in west Baghdad a Shia husband and wife with their two daughters went back to their house to find it gutted, with the furniture gone and electric sockets and water pipes torn out. They decided to sleep on the roof. A Sunni gang reached them by way of a neighbouring building, cut off the husband’s head and threw it into the street. ‘The same will happen to any other Shia who comes back,’ they told the man’s wife. But even without such atrocities Baghdad would remain divided: the memory of the mass killings of 2006-7 is too fresh and there is an underlying fear that they could start all over again.
Iraqis have a low opinion of their elected representatives, frequently denouncing them as an incompetent kleptocracy. The administration is dysfunctional. ‘Despite the fact that the Department of Labour and Social Affairs is meant to help the millions of poor Iraqis, I discovered that they had spent only 10 per cent of their budget,’ an independent member of parliament, Qassim Daoud, reported. This isn’t entirely the government’s fault. Iraqi society, its administration and economy have been shattered by 28 years of war and sanctions. Few other countries have been put under such intense and prolonged pressure. In 1980 the eight-year Iran-Iraq War began, followed by the disastrous Gulf War of 1991, 13 years of sanctions and then the five and a half years of conflict since the US invasion. Ten years ago UN officials were already saying they couldn’t repair the country’s faltering power stations because they were so old that spare parts were no longer made for them.

Iraq is full of signs of the gap between the rulers and the ruled. When I talked to people on the street in Baghdad in October many of them mentioned their fear of cholera, which had just started to spread from Hilla province, south of Baghdad. Forty per cent of people in the capital don’t have access to clean drinking water. The origin of the epidemic was the purchase of out-of-date water purification chemicals from Iran by corrupt officials. Everybody talked about the cholera except in the Green Zone where people had scarcely heard of the epidemic.
The Iraqi government will become stronger as the Americans begin to depart. It will also be forced to take full responsibility for the failings of the Iraqi state. This comes at a bad moment for the government because the price of oil, the state’s only source of revenue, has fallen to $50 a barrel, when the budget assumed it would be $80. Many state salaries – those of teachers, for example – were doubled on the strength of this estimate. Communal differences are still largely unresolved. Although friction between Sunni and Shia, bad though it is, is less than it was two years ago, hostility between Arabs and Kurds is deepening. The departure of the US military frightens many Sunni, who will be at the mercy of the majority Shia. But it is also an incentive for the three main communities to come to an agreement about their relations with one another: there will soon be no Americans left to stand between them. America’s troops will depart, leaving behind a ruined country.

Patrick Cockburn is a foreign correspondent on the Independent and has been visiting Iraq since 1977. Muqtada: Muqtada al-Sadr and the Fall of Iraq was published in April 2008.

Wallerstein on Pakistan

2008-12-15T16:03:00.000Z

Commentary No. 247, December 15, 2008
"Pakistan: Obama's Nightmare"

On the evening of Nov. 26, 2008, a small group of 10 persons attacked two luxury hotels and other sites in central Mumbai (India) and, over several days, managed both to kill and hurt a very large number of persons and to create massive material destruction in the city. It took several days before the slaughter was brought to an end. It is widely believed that the attacks were the work of a Pakistani group called Lashkar-e-Taiba (LET), a group thought to be similar in motivation to al-Qaeda, perhaps directly linked to it. The world press immediately called the Mumbai massacres the 9/11 of India, a repetition of the attacks al-Qaeda launched against the United States in 2001.

The motivations and strategy of al-Qaeda in 2001 were largely misunderstood in 2001, both by the U.S. government and by analysts. The same thing risks happening now. Al-Qaeda in 2001 was of course seeking to humiliate the United States. But this was, from a strategic point of view, only a secondary motivation. Al-Qaeda has always made clear that its primary objective is the re-creation of the Islamic caliphate. And, as a matter of political strategy, it has considered that the necessary first step is the collapse of the governments of Saudi Arabia and Pakistan. Al-Qaeda considers that these two governments have been the essential political supports of Western (primarily U.S.) political dominance in the greater Middle East, and therefore the biggest obstacles to the re-creation of the caliphate, whose initial geographic base would of course be in this region.

The attack of September 11 can be seen as an attempt to get the U.S. government to engage in political activities that would put pressures on the Saudi and Pakistani governments of a kind that would undermine their political viability. The primary actions of the U.S. government in the region since 2001 - the invasion first of Afghanistan and then of Iraq - certainly met the expectations of al-Qaeda. What has been the result?

The Saudi government has reacted with great political astuteness, fending off U.S. pressures that would have weakened it internally, and has been able thus far to minimize al-Qaeda political success in Saudi Arabia. The Pakistani government has been far less successful. The regime in Islamabad is far weaker in 2008 than its predecessor regime was in 2001, while the political strength of al-Qaeda-type elements has been on a steady rise. The Mumbai attacks seem to have been an effort to weaken the Pakistani state still further. Of course, LET wished to hurt India and those seen as its allies - the United States, Great Britain, and Israel - but this was a secondary objective. The primary objective was to bring down the Pakistani government.

In Pakistan, as in every country of the world, the political elites are nationalist and seek to further the geopolitical interests of their country. This objective is fundamentally different from that of al-Qaeda-like groups, for whom the only legitimate function of a state is to further the re-creation of the caliphate. The persistent refusal of the Western world to understand this distinction has been a major source of al-Qaeda's continuing strength. It is what will turn Pakistan into Obama's nightmare.

What are Pakistan's geopolitical interests? Before anything else, it worries about its principal neighbors, India and Afghanistan. These concerns have fashioned its geopolitical strategy for the last sixty years. Pakistan sought powerful allies against India. It found two historically, the United States and China. Both the United States and China supported Pakistan for one simple reason, to keep India in check. India was seen by both as too close geopolitically to the Soviet Union, with whom both the United States and China were in conflict.

In the 1990s, with the end of the Cold War and the momentary geopolitical weakness of Russia, both the United States and China sought tentatively to obtain closer relations with India. India was geopolitically a more important prize than Pakistan, and Pakistan knew this. One of the ways Pakistan reacted was to expand its role in (and control over) Afghanistan, by supporting the eventually successful Taliban takeover of the country.

What happened after 2001? The United States invaded Afghanistan, ousted the Taliban, and installed a government which had elements friendly to the United States, to Russia, even to Iran, but not at all to Pakistan. At the same time, the United States and India got still cozier, with the new arrangements on nuclear energy. So, the Pakistani government turned a blind eye to the renewal of Taliban strength in the northwest tribal regions bordering Afghanistan. The Taliban elements there, supported by al-Qaeda elements, renewed military operations in Afghanistan - and with considerable success, it should be noted.

The United States became quite upset, pressed the Pakistani army to act militarily against these Taliban/al-Qaeda elements, and itself engaged in direct (albeit covert) military action in this region. The Pakistani government found itself between a rock and a hard place. It had never had much capacity to control matters in the tribal regions. And the attempts it made as a result of U.S. government pressure weakened it still further. But its inefficacy pushed the U.S. military to act even more directly, which led to severe anti-American sentiment even among the most historically pro-American elites.

What can Obama do? Send in troops? Against whom? The Pakistani government itself? It is said that the U.S. government is particularly concerned with the nuclear stockpile that Pakistan has. Would the United States try to seize this stockpile? Any action along these lines - and Obama recklessly hinted at such actions during the electoral campaign - would make the Iraqi fiasco seem like a minor event. It would certainly doom Obama's domestic objectives.

There will be no shortage of people who will counsel him that doing nothing is unacceptable weakness. Is that Obama's only alternative? It seems clear that pursuing his agenda, as he himself has defined it, requires getting out from under the unending and geopolitically fruitless U.S. activities in the Middle East. Iraq will be easy, since the Iraqis will insist on U.S. withdrawal. Afghanistan will be harder, but a political deal is not impossible. Iran can be negotiated. The Israel/Palestine conflict is for the moment unresolvable, and Obama may be able to do little else than let the situation fester still longer.

But Pakistan requires a decision. If a Pakistani government is to survive, it will have to be one that can show it holds its own geopolitically. This will not be at all easy, given the internal situation, and an angry Indian public opinion. If there is anywhere where Obama can act intelligently, this is the place.

New Statesman Dec 15th 2008

2008-12-15T12:26:00.000Z

New Statesman Dec 15th 2008

The cover feature is about the power of oratory illustrated by Barack Obama and an article by Dominic Sandbrook saying that time will tell. James Pilger continues to be one of the lead nay-sayers about Obama, putting him in a Groundhog Day framework as a 'continuity' president for the system described by Martin Luther King as the 'greatest purveyor of violence in the world today'. James Macintyre reports on what's going on inside the Labour Party, ruling out a general election for 2009, but speculating on the return to office of 'big beast' David Blunkett. Richard Reeves from Demos continues his argument for a grand political realignment. Soumya Bhattacharya reports on the sombre mood in Mubai after the bombings. Mehdi Hasan from Channel 4 provides a guide to Islamic finance as a model for better banking practice.

However it turns out that the most interesting and controversial thing in the mag is the review by Owen Hatherley of Richard Seymour's Liberal Defence of Murder. It's a good review. Seymour is identified as the Lenin of Lenin's Tomb. I think I'd replace the word 'gall' with 'chutzpah'. There is what seems to be (I haven't read it yet, so I'm just going on tacit knowledge and expectation here - forgive me) a solid account of the book. Pertinent criticisms are made, although I wasn't sure what it meant by saying it was more useful as history than 'polemic'. It certainly added to my desire to get the book and give it a look. For a short piece it is a good and useful account. However, the review doesn't mention the SWP. Should it have? Yes, I think so, to help place the work and for intellectual honesty, but not mentioning the SWP doesn't particularly damn the book or the review. First thing I did on seeing the author's name was to google it, to see if he was in the SWP and that produced the link to his own blog Sit Down Man You're a Bloody Tragedy. The magazine is at fault not mentioning this, but it's only a minor issue. Checking the blog showed that even if the author has written on cultural matters for the SWP he is clearly not a member. Does it matter. Well to a certain extent, yes. Books by the SWP are of interest and don't get that widely reviewed, except for those by Professor Callinicos, who is an important Marxist intellectual heavyweight. They get reviewed in SWP publications, usually with pertinent criticisms inside a context of support. If they get reviewed elsewhere and an SWP author is reviewed by another SWP member I think, 'what a shame they couldn't find anyone outside the SWP to review the book, says a lot about the SWP and the intellectual currents of the time'. However we all know there is a lot of back-scratching and mutuality in the reviewing inustry and usually decry it - somewhere in the massive and mostly fruitless debate referred to below somone lists the reviewers of Nick Cohen's book and it is a hoot. For the same reason that The Economist prides itself on not reviewing books by its own authors, there is a taint about all this.

Is it McCarthyite to point this out? Can be, but not necessarily. However this is where the fun and controversy starts. Harry's Place didn't like the review and carried an attack focussed on the accusation that Hatherley as a member of the SWP couldn't write an honest review of the book. They've had to back down on this, but are still happy to call him an 'SWP activist' and insult him for his associations with the party. This does seem pretty McCarthyite to me, but we are in a period when the SWP's spurious cries of McCarthyism against itself in the context of its late factional tussles inside Respect and the accusations of them as 'Russian dolls' from George Galloway are fresh in the mind. That Harry's Place can use Richard Seymour's disclaimerless but useful (and mildly critical) New Statesman review of Harman's People's History of the World is an indicator of the problems that the faux naif review leads to. Hatherley justifiably calls all this McCarthyism, although the point that a libel action would depend on him arguing that being associated with the SWP was detrimental to his reputation is funny. The discussion on Harry's Place is typically unpleasant and McCarthyite and goes on and on in an insane manner - actually you could go back further and say it's like the pre-slavery bullying of abolitionists and ex-slaves. Bullying is the key word. Not surprisingly Hatherley eventually comes back to give them a strong and deserved rebuke. So I've ended up thinking that although there is a problem with the SWP's economy of openess and honesty (which is not an accusation against Hatherley), this is hardly anything when set against the nasty bullying McCarthyism of Harry's Place, which far exceeds the annoying and depressing 'hunt in packs' mentality of contributors to blogs like Lenin's Tomb. Hatherley is a victim of some of the worst childish ragging I've seen, but I'm sure he can look after himself and if it gets more people to look at his excellent blog so much the better. And, on top of all this, Oliver Kamm has launched into the tussle (here as well) - which after the wading through the sticky mess that is the Harry's Place discussion - starts to turn the affair from a s torm in a teacup into a farce. My Aunt Minnie is lost in here somewhere.

New Left Review 54

2008-12-06T14:10:00.000Z

New Left Review 54
(their own summary of contents)

Susan Watkins: The Nuclear Non-Protestation Treaty
What are the geopolitical origins of the NPT, and what are its actual effects? Non-proliferation as nuclear privilege of the few, weapon of intimidation of the one, submission of the many—and its impact on the peace movement.

Dmitri Furman: Imitation Democracies
What are the differences, and the commonalities, between the states that broke away from the USSR in 1991? Russia’s leading expert on the CIS analyses the range of regimes in the Caucasus and Central Asia, on the Baltic and the Black Sea, with a sharp comparative gaze.

Nicholas Crafts: Profits of Doom?
Can the economic history of the past three to four decades be accurately depicted as a long downturn? Contesting Robert Brenner’s account of them in his Economics of Global Turbulence, Nicholas Crafts argues that the ‘Great Moderation’ is a better description of a period in which the United States came to enjoy a strong lead in productivity growth.

Michel Aglietta: Into a New Growth Regime
Should the story of contemporary capitalism be told as essentially an American tale? Counterposing a more Braudelian understanding of the global economy to Brenner’s approach, Michel Aglietta sees a new mode of regulation, and distribution of growth, emerging out of the Asian crisis of the nineties.

Kozo Yamamura: More System, Please!
Commending Brenner’s overall narrative of post-war economic development, Kozo Yamamura holds it to be nevertheless too narrow—needing more attention to modern capital markets, to historical cycles of technological change, and to institutional differences between the leading industrial states.

Alexander Beecroft: World Literature Without a Hyphen
Literary studies with global ambitions are on the rise. But do they truly embrace the literatures of the world? Alexander Beecroft offers a typology of historically distinct kinds of writing that reaches further into the past and wider across human languages than any hitherto.

Sven Lutticken: Attending to Abstract Things
From the philosophe De Brosses in the eighteenth century to the abstract expressionist Barnett Newman and the conceptualist Sol LeWitt in the twentieth—via Hegel, Creuzer and Marx—the fates of the fetish and the commodity, in critical thought and art.

Joel Andreas: Changing Colours in China
The nature of China’s present socio-economic system has for some time been hotly debated. Reflecting on Giovanni Arrighi’s Adam Smith in Beijing, Joel Andreas traces the path of property relations, social services and income distribution in the PRC since the late seventies, reaching unambiguous conclusions.

BOOK REVIEWS
Kheya Bag on Martin Puchner, Poetry of the Revolution. The rules of the manifesto as a form, in revolutionary politics and in avant-garde art, and the history of its fortunes.

Henry Zhao on Gloria Davies, Worrying about China. The range of contemporary disputes among Chinese intellectuals, and what they characteristically have in common.

WSWS talks to David King

2008-12-04T17:54:00.000Z

Uncovering the truth about Trotsky and the Russian Revolution “continues to run my life”
A conversation with the remarkable David King
By David Walsh 4 December 2008

As I have suggested elsewhere (see "San Francisco International Film Festival 2005—Part 3: There is no shortage of subjects"), David King—artist, designer, editor, photohistorian and archivist—is one of the most significant artistic-intellectual personalities of our time.
An indefatigable collector of images associated with the Russian Revolution, and Leon Trotsky in particular, King has accumulated more than 250,000 photographs, posters, drawings and other items over the past four decades.

Born in London in 1943 and art editor of the Sunday Times [of London] Magazine from 1965 to 1975, King designed Trotsky: A Documentary in 1972, with a text by Francis Wyndham, a large-format book that sold in the tens of thousands of copies. The work was part of, and helped encourage the revival of, the interest in Trotsky's life and ideas that grew out of the global political radicalization of the late 1960s and early 1970s.

Here already is the King style, described by one commentator as "an easily recognisable mix of explosive sans serif typography, solid planes of vivid colour and emphatic rules," a modern reworking of "the graphic language of the Russian Constructivists" (eyemagazine.com).
Other books followed, many of them on similar themes. King designed How the GPU Murdered Trotsky, published by the International Committee of the Fourth International in 1976, which detailed the Stalinist plot against Trotsky's life and the operations of the deadly network of GPU agents in and around the Fourth International.

King created a catalogue for a major retrospective exhibition devoted to the work of the great Soviet artist Alexander Rodchenko, edited by David Elliott, in 1979. He co-authored and designed Blood & Laughter: Caricatures from the 1905 Revolution in 1983. A year later, to a text by the late Isaac Deutscher, he designed The Great Purges. In 1986, King put together Trotsky: A Photographic Biography, demonstrating the exponential growth of his collection of images associated with the Russian revolutionary.

In The Commissar Vanishes (1997), King investigated and exposed the falsification of Soviet history practiced by the Stalinist regime, as inconvenient figures were excised from photographs and art works. King commented: "The physical eradication of Stalin's political opponents at the hands of the secret police was swiftly followed by their obliteration from all forms of pictorial existence."

In one notorious example (which appears on the cover of the book), a photograph of Stalin with three other Communist Party leaders (including Sergey Kirov) taken in the mid-1920s is worked over through the years, with all of the other figures eventually disappearing, finally leaving by 1940, in a painting based on the photo, only the gravedigger of the revolution.

In a tremendously powerful and chilling work, Ordinary Citizens (2003), King published in the West for the first time hundreds of mug shots taken by the Stalinist secret police and long stored in the Central Archives of the former KGB. All of those photographed were executed by the Stalinist regime, often shortly after the pictures were taken.

As King explained in his introduction: "In the following pages there are people from more than twenty countries, employed in over fifty different lines of work. There are engineers, artists, beekeepers, teachers and students, shopkeepers, factory workers, pilots, housewives, NKVD [one of the acronyms for Stalin's secret police] officials and heroes of the Soviet Union. Their trials, if they took place, were in absentia, and rarely lasted more than a few minutes; they were often sentenced and shot the same day."

The faces in this indispensable book are haunting. It's horrifying to read the brief accounts: "Born 1918 in Gorky. Transport worker.... Arrested on January 12, 1937. Sentenced to death by the Military Board of the Supreme Court of the USSR on July 21, 1937. The charge: participation in anti-Soviet terrorist groups. Shot the same day."

We read: "Born 1900 in Lodz, Poland. Communist Party member. Technician," "Born 1905 in Almora, India. Communist Party member. Assistant shop steward," "Born 1896 in Ulyanovsk. Non-party member. Housewife," "Born 1896 in Semyonovka, Zapadny region.... Head of the planning department, Tambov Factory No. 87.... Sentenced to death on October 5, 1936. The charge: Participation in a counter-revolutionary Trotskyist organization. Shot two days later."
Then there's the young woman on the book's cover: "Tamara Litsinskaya Born 1910 in Moscow. Non-Party member. Student. Address unknown. Arrested on February 8, 1937. Sentenced to death on August 25, 1937. The charge: Unknown. Shot the same day." You don't forget her face either.

The extermination of the most self-sacrificing and conscious elements of the population had devastating consequences for the Soviet Union and, indeed, far beyond its borders.
The mug shot of Grigory Zinoviev, Lenin's longtime comrade and defendant in the first Moscow show trial in 1936, included in the introduction, is especially memorable, and appalling. The photo reveals a man who has undergone unimaginable physical and mental torment, yet, while beaten and doomed, remains surprisingly defiant. Secret police photographs of poet Osip Mandelstam and writer Isaak Babel, both murdered by Stalinism, are also deeply disturbing.
King continues indefatigably to carry on with his work. A new book, Red Star Over Russia, is scheduled to appear early in 2009. It will be an artistic and intellectual event, as are all his major efforts.

Contacted by e-mail and telephone, David King was generous enough to agree to an interview. We met at the Tate Modern in London, the museum of contemporary art, which opened in May 2000. An entire room of the museum is devoted to King's Soviet posters, which range from evocative and lively celebrations of the revolution to hideous endorsements of Stalinist policy.
Also on display is a conté drawing (i.e., done with a hard drawing crayon made of clay and graphite) of Trotsky made in 1923 by Sergei Pichugin. The artist hid the drawing under a sheet of white cardboard for the rest of his life and his family only discovered it 75 years later.
Over lunch at the Tate Modern café, David King told me about his new book: "It's entitled Red Star Over Russia. It comes out in February. The book is a visual history of the Soviet Union from 1917 to the death of Stalin in 1953. It includes material, photos, posters, taken from my collection. I've been doing this for about 40 years.

"Red Star Over Russia is being published by the Tate in Britain. It's 352 pages. They're going to sell it for £25, in hard cover, which is very reasonable. In France, it's Gallimard, in the US, it's Abrams, the big art publisher."

He went on: "I've written a text, an introduction, explaining how I found the material. There are explanatory captions. The book works as a documentary, cinema verité, each spread treats a particular visual aspect of what happened in the USSR. The reader can contrast and compare with the official version of what took place. It's roughly chronological.

"One thing you might be interested in," King told me. "I obtained 50 of the mugshots of the defendants of the Moscow Trials. Zinoviev, Kamenev and some of the prominent victims, but also the lesser-known. [In the introduction to Ordinary Citizens, King had noted that the mugshots of the Moscow Trials defendants "are hidden to this day in secret archives, some of them in Siberia."]

"According to my sources in Russia, the defendants in the third Moscow Trial, Bukharin, Rykov and the others, were never mugshotted, they used their passport photos. This is what they told me, and I have no way of verifying or disputing it.

"So there are the mug shots of Zinoviev, Kamenev, Radek, Sokolnikov, but also minor characters. The lesser-known victims. Some of these individual shots have been viewed, but never the entire bunch. The mugshots were hidden in an archive in Omsk, in a former GPU archive.

"I have everybody from the first trial, and everybody from the second trial. And a substantial group from the Bukharin trial. As I said, I was told that the authorities used his passport photograph. Also, Yegoda, the former secret police chief. It was his GPU photograph they used."
How had King sustained himself intellectually after the collapse of the Soviet Union and "the end of socialism," indeed, "the end of history"?

"Oh, I never believed any of that. And look what's happening now, with the financial crisis!" I suggested that it might be a very good time to publish his new book, with a revived interest in alternatives to capitalism. Five years ago, the book might have received a different reception....
We discussed some of the problems in the development of the Fourth International and the crisis inside the Workers Revolutionary Party, the British Trotskyist movement, in the 1980s.

I asked King about the origins of his interest in Trotsky and the October Revolution. "How did I start? I worked for the Sunday Times, and I traveled widely. I was taking photos, collecting photos. I was always interested in left ideas, in socialism. I wanted to get the ideas of socialism across visually to a much wider audience, a much wider audience than there seemed to be at the time. And it's continued.
"I began 40 years ago collecting material out of an overwhelming interest in discovering the truth about what happened to the Russian Revolution and the Soviet Union. I wanted to uncover, through visual means, what happened, to collect visual evidence.
"Suddenly in the late 1960s here, everybody was interested in Trotsky and one or two other figures, as major alternatives to Stalinism. There was a crisis, and people were looking for alternatives. I determined to find out what really happened to Trotsky, who he was."
King speaks passionately about these matters. "When I was growing up, everything to do with the USSR was cloudy, mysterious. I was intrigued. By the time I started on the first book, in 1970, with Francis Wyndham, it was like opening up Pandora's box. In the USSR, I'd ask ‘What do you have on Trotsky?' Trotsky didn't exist. ‘Trotsky was a fascist,' etc. It was crazy.
"I hunted around the world, while working for the Sunday Times, searching every second-hand bookshop, library, tracking down friends, relatives of Trotsky. I was trying to piece together the real history.

"When I showed Francis Wyndham the material," King commented laughingly, "he said that far from there being no pictures of Trotsky, there were more pictures of him than Marilyn Monroe.
"After that, I started to work in a wider way, with a broader perspective. I became interested in examining the entire Soviet experience. The Stalinist stuff was also banned in the USSR at the time."

He concentrated his thoughts. "All of this work took on a life of its own. It became an all-consuming passion. It ran my life. Uncovering this history continues to run my life.
"When I began collecting the material, no one outside the Trotskyist movement was interested. ‘Why are you spending your money and your time on this stuff?' "

Obviously, King doesn't feel he wasted his time. We are all the more fortunate for that. Interest in his collection has been affected by the vicissitudes of recent history.

"At the time Gorbachev came to power in 1985," he explained, "and the general rehabilitation of various figures in the late 1980s, people began calling me up from all over the world. ‘Do you have a photo of Lenin?' and so forth.

"In the West, they used to crow that history books were constantly being rewritten in the Soviet Union. But they did it here too! People came to me for photographs, images.

"As I say, after 1991 [and the end of the USSR], I never believed any of that," he scoffed. "The end of history! Stupid stuff.

"The post-Soviet historians, like Richard Pipes, begin from the premise that there never was an alternative to Stalinism. That's false. My collection also proves that the claim is false. I can't imagine being Pipes, spending his life writing about the Bolsheviks, something he hates. It must be awful to be in his head."

King later invited me to his house in north London and allowed me to see a proof copy of Red Star Over Russia. I was able to leaf through the 350 or so pages of the new book. There are many extraordinary images, including the aforementioned mugshots of the victims of the Moscow Trials. There are also beautiful, vivid photographs of the early days of the revolution, among them a remarkable shot of a session of the council of People's Commissars from 1918, in which we see Trotsky, Zinoviev, Uritsky and others.

Visually, historically, politically, the new book is an important work. I was pleased to have seen the book and met David King. Along with everything else, he is a lovely person.

WSWS: David North on Trotsky and Historiography

2008-12-02T08:52:00.003Z

World Socialist Web Site
Published by the International Committee of the Fourth International (ICFI)
wsws.org
Leon Trotsky, Soviet Historiography, and the Fate of Classical Marxism
By David North
1st December 2008
The American Association for the Advancement of Slavic Studies (AAASS) held its 2008 National Convention in Philadelphia on November 20-23. Over 600 panels presented papers or roundtable discussions covering more than 1,700 topics in history, economics, political science, literature, language, and film. The convention’s exhibit hall displayed recently published material by about 50 publishers and organizations, including Mehring Books.

A highlight at the convention was the panel on Friday afternoon devoted to “The Intellectual and Political Legacy of Leon Trotsky.” Chaired by independent scholar Lars Lih, the panel presented papers by Baruch Knei-Paz of the Hebrew University of Jerusalem; David North, chairman of the International Editorial Board of the World Socialist Web Site; and Vladimir Volkov, independent scholar from St. Petersburg. Attendance was good as 40 people listened attentively to the three papers. Knei-Paz offered a 30-year retrospective of his book, The Social and Political Thought of Leon Trotsky. North delivered a contrasting perspective, “Leon Trotsky, Soviet Historiography, and the Fate of Classical Marxism,” which we present below in its entirety. Volkov gave an overview of “The Reception of Trotsky’s Legacy in Russia from Perestroika to the Present.”

Discussion was lively during the time remaining in the two-hour session. One questioner focused on the continuing legacy of the October Revolution of 1917. Another raised the issue of how the history of the 20th century would have been different had Trotsky’s policies predominated in the period after Lenin’s death in 1924. Differing views were defended on the task of historians as alternatives are considered when examining complex historical issues.

While publishing North’s paper today, we will provide further analysis of the issues raised at the conference in the coming days. Here is the text of North’s paper as it was delivered on November 21.
***
More than 45 years have passed since the publication of the last volume of Isaac Deutscher’s extraordinary biographical triptych of Leon Trotsky, The Prophet Armed, Unarmed and Outcast. It would be difficult to think of another biography that had so profound and far-reaching intellectual and political influence. When Deutscher began his project in the early 1950s, Trotsky had been dead for more than a decade. But his murderer, Joseph Stalin, remained very much alive in the Kremlin—the object of a worldwide campaign of public veneration, as disgusting as it was absurd, in which virtually every Communist party participated. Deutscher compared his task as a biographer to that of Thomas Carlyle, who had complained that his study of Cromwell had required that he “drag the Lord Protector from out of a mountain of dead dogs, a huge load of calumny and oblivion.”[1]

By the time Deutscher completed his third volume in 1963, the political environment had changed dramatically. Stalin died in March 1953. In February 1956, at the 20th Congress of the CPSU, Khrushchev delivered his so-called “secret speech.” He all but denounced Stalin as a political criminal, responsible for the imprisonment, torture and murder of countless thousands of Old Bolsheviks and loyal communists during the purges of the 1930s. Of course, Khrushchev hardly acknowledged the full extent of Stalin’s crimes. The indictment was as evasive as it was incomplete. But the impact of Khrushchev’s speech was politically devastating. The unstated but inescapable conclusion that flowed from the exposure of Stalin’s crimes was that the Moscow Trials of 1936-38 were a frame-up and that the Old Bolshevik defendants had been murdered. The thought that “Trotsky was right” haunted countless leaders and members of the CPSU and associated Stalinist parties throughout the world. And if Trotsky was right about the trials, what else had he been right about?

Amidst the turmoil that erupted inside the Stalinist parties—initiating a process of internal decomposition that led, within 30 years, to their political disintegration—Deutscher’s trilogy assumed immense political significance. The discrediting of Stalin was, to a great extent, a vindication of Trotsky. In the climate of the time, the heroic image of Trotsky evoked by the metaphoric title of Deutscher’s biography did not seem at all hyperbolic. Notwithstanding its significant limitations—especially in the final volume, in which Deutscher pursued rather obtrusively his own past political disputes with Trotsky—the three volumes introduced the heroic personality of the great revolutionary to a new generation of politically-radicalized intellectuals and youth. And what a personality it was! What other figure in modern history exhibited such a vast repertoire of intellectual, political, literary, and martial skills? Deutscher succeeded in imparting to his narrative an immense dramatic tension. But the drama of Trotsky’s life did not have to be invented, nor did it require artistic exaggeration. His life was, after all, the concentrated expression of the vast historical drama and tragedy of the Russian Revolution.

By the 1960s, the Soviet Union had lost its claim on the imagination of intellectuals and students. Deutscher’s biography served as an introduction to the old disputes of the 1920s, in which the work of Trotsky had loomed so large. So many of Deutscher’s readers then made their way to a study of Trotsky’s writings, which gradually became more widely available.

Throughout the 1960s and into the 1970s, interest in the life and work of Trotsky was intense. In 1978, on the eve of his centenary, Professor Baruch Knei-Paz’s The Social and Political Thought of Leon Trotsky was published. Knei-Paz’s approach to his subject, however critical, reflected the predominant sentiment among Soviet scholars that Trotsky was an important political and intellectual presence. Knei-Paz noted that Trotsky “is, even now, and perhaps not unjustly, considered to be the quintessential revolutionary in an age which has not lacked in revolutionary figures.” He described Trotsky’s achievements “in the realm of theory and ideas” as “prodigious.” Trotsky, he wrote, “was among the first to analyze the emergence, in the twentieth century, of social change in backward societies, and among the first, as well, to attempt to explain the political consequences which would grow out of such change.”[2] As a Marxist and an adherent of Trotsky’s political conceptions, there are many elements of Professor Knei-Paz’s analysis and interpretation with which I respectfully disagree. But his meticulous scholarship certainly demonstrated that Trotsky’s life provides fertile ground for serious research. Though Trotsky was a man of action par excellence, he was also an outstanding thinker. Knei-Paz estimated that Trotsky’s writings, if brought together in a single edition, would “easily fill … sixty to seventy thick volumes—without including the vast material contained in the Trotsky archives at Harvard University.”[3]

Professor Knei-Paz set himself definite limits—a necessity for any scholar attempting to tackle a subject as vast and complex as Trotsky’s life and times. He explained that his work was “a study of Trotsky’s own thought, not that of his opponents or followers, nor of the ideological and political movement which came to be identified with his name.”[4] Even with this disciplined focus, Professor Knei-Paz required 598 pages of the Clarendon Press’s compact typography to complete his assignment. But he still left the scholarly community with not only a great deal to argue about, but also a great deal to do.

And yet, Knei-Paz’s book turned out to be almost the last really significant academic contribution to the field of Trotsky studies. That this would be the case would have been hard to foresee in 1978. Knei-Paz’s book was, after all, published on the very eve of an event that should have encouraged Trotsky scholarship—the opening on January 2, 1980 of the previously closed section of the Trotsky Archive at the Houghton Library at Harvard University. Until then, Isaac Deutscher, with the special permission of Trotsky’s widow, Natalia Sedova, had been the only writer to gain access to this vast collection of the revolutionary’s private papers. But as it turned out, the opening of this archive had only marginal impact on American and British researchers in the field of Soviet history. During the past 28 years, very little material from this vast archive has found its way into published academic work.

This drying up of Trotsky scholarship after 1978 is a curious phenomenon. After all, the deepening crisis of the Soviet Union and Eastern Europe throughout the 1980s certainly justified a more intensive review of the work of Trotsky, who, after all, had been the foremost critic of Stalin and Stalinism, and who had foreseen the demise of the USSR. As a matter of fact, Trotsky’s depiction, in The Revolution Betrayed (published in 1936), of the process of capitalist restoration anticipated, with astonishing accuracy, the economic transformation of the former USSR under the auspices of Yeltsin in the early 1990s. However, in most English-language works dealing with the history, economics, politics and social structure of the Soviet Union, Trotsky appears as a minor, and even marginal figure. The only notable and original contribution to Trotsky studies that appeared in the 1980s—such a tumultuous decade in Soviet history—was a small monograph, entitled Leon Trotsky and the Art of Insurrection, that focused on Trotsky’s achievements as a military strategist. Surprisingly, this highly favorable assessment of Trotsky’s contributions in the art and science of war, insurrection and military command was authored by an officer and professor at the US Army War College, Col. Harold Wilson.

If anything, the situation in Trotsky studies deteriorated in the 1990s. American and British scholarship produced nothing substantial in this field during the entire decade. The only published work that perhaps stands out as an exception, though a minor one, is a single volume of essays, produced by the Edinburgh University Press in 1992 under the title The Trotsky Reappraisal. During this decade, a disturbing trend emerged in Britain, which consisted of recycling and legitimizing old anti-Trotsky slanders. This trend was exemplified by the so-called Journal of Trotsky Studies, which was produced at the University of Glasgow. The favorite theme of this journal was that Trotsky’s writings were full of self-serving distortions. This claim was repeatedly made without any respect for the factual record. Among its more absurd contributions was an article that set out to prove that Trotsky, in his History of the Russian Revolution, had vastly exaggerated his own role in the October insurrection. It informed us that while serious revolutionaries like Stalin went out into the streets to do the heavy lifting, a somewhat befuddled Trotsky was left behind in the Smolny Institute to answer the phones. Mercifully, this journal expired after four issues.

The current decade has seen no improvement. Two new Trotsky biographies were published, the first in 2003 and the second in 2006, by Professors Ian Thatcher and Geoffrey Swain. These works contained no new research, and I have already provided a detailed analysis of their work in an extended review, entitled Leon Trotsky and the Post-Soviet School of Historical Falsification.[5]

It is worth contrasting the prevailing treatment of Trotsky to the massive volume of material on Stalin. He seems to exert a never-ending fascination on historians. Of course, Stalin, no less than Hitler, is a legitimate subject of scholarly research. There are no appropriate or inappropriate subjects for historical study. But, as Wilde might have suggested, the one unconditional requirement for the writing of history, like for the writing of novels, is that it should be done well. The problem is that much of the writing on Stalin is done badly. Many of the works are crassly journalistic, exploiting in a sensationalist manner material acquired from the Soviet archives. Works by Radzinsky and Sebag Montefiore provide examples of this genre. More troubling, however, are studies by scholars that seem genuinely anxious to rehabilitate Stalin and Stalinism. At times, the conclusions arrived at by such historians are truly bizarre. For example, Professor Stephen Kotkin, in his book Magnetic Mountain, argues that Stalinism was the culmination of the Enlightenment project. Stalinism, he writes:
… constituted a quintessential Enlightenment utopia, an attempt, via the instrumentality of the state, to impose a rational ordering of society, while at the same time overcoming the wrenching class divisions brought about by nineteenth century industrialization. That attempt, in turn, was rooted in a tradition of urban-modeled, socially-oriented utopias that helped make the Enlightenment possible. Magnitogorsk had very deep roots.[6]

At its worst, this tendency, in the guise of providing more “nuanced” appreciations of historical events, advances weird justifications of Stalin and his crimes. Along these lines, in Robert W. Thurston’s Life and Terror in Stalin’s Russia 1934-1941, published by the Yale University Press in 1996, we are offered this appraisal of Stalin’s prosecutor, Andrei Vyshinskii:
Thus, in 1935-36, despite his appalling role in the show trials that began in August 1936, Vyshinskii advocated major improvements in legal procedures. Simultaneously, he scorned key NKVD practices and urged much greater tolerance of ordinary citizens’ criticisms, so long as they did not touch fundamental policy.[7]

And, referring to Kamenev, Zinoviev and other defendants in the 1936 trial, Thurston offers this thinly-concealed legitimization of their condemnation by Stalin:
Probably guilty of nothing more than talking about political changes, these men, according to Western standards of justice, did not deserve punishment. But they had engaged in opposition, had had contacts with Trotsky and leaked secret documents to the West, and had wanted to remove Stalin, all of which they had lied about, while proclaiming their complete loyalty. These points provided material for Stalin’s suspicious mind. Why were such people lying? How many more like them existed, and what were their real intentions? Given the Trotsky bloc and the language of the Riutin Memorandum, it might have been easy for people less morbid than Stalin to visualize terrorism at work in some of the many industrial accidents of the period. He embellished matters considerably and told massive lies of his own—but the evidence just given suggests that at this point he took steps to eliminate people who had misled him and conspired with an archenemy, Trotsky. This decision, though unjust, was not part of a plan to create political terror.[8]

While the Stalin industry seems to be a going concern in the field of Soviet scholarship, the protracted depression in Trotsky studies continues. This finds expression not only in the very limited and generally poor quality of research into Trotsky’s life, but also in the absence of significant work on his political comrades in the Left Opposition. How many of the leaders of the Left Opposition, beginning with Christian Rakovsky and Adolph Joffe, have been the subject of full-length English-language biographies? What work has been done on Smirnov, Smilga, Bogoslavskii, Ter-Vaganian, and Voronskii? There has not been, as yet, any comprehensive study of the Left Opposition and its activities. A persistent theme of many contemporary works on the Great Terror is that it had little to do with Trotsky, who by the 1930s, it is claimed, was without any influence within the Soviet Union. But is this really true? What research has been conducted into the activities of Oppositionists? And even if Stalin’s repression made systematic agitation impossible, is it really the case that the Trotskyist Biulletin of the Left Opposition exercised no influence on the thinking of disaffected elements within the Soviet state and party apparatus? Moreover, had all recollection of Trotsky among Civil War veterans of the Red Army, within the officer corps and among rank-and-file soldiers, vanished by 1936? Was Victor Serge simply exercising his artistic license when he wrote of Trotsky, in 1937, that within the Soviet Union, “Everyone thinks of him, since it is forbidden to think of him … As long as the Old Man lives, there will be no security for the triumphant bureaucracy.”[9] These questions cannot be answered until the necessary research is carried out.

But why has this work not been done? This is a complex question which, I suspect, will, itself, at some point become a subject for students of intellectual history. I will not claim to have the definitive answer, but I would like to point to several factors that may have affected the perception and reception of Trotsky in the academic and scholarly community. Let me state from the outset that references to Trotsky’s political “irrelevance” are neither credible nor serious. Trotsky, quite clearly, played a decisive role in the Russian Revolution, one of the key events of the 20th century. He was also, as it so happens, one of this century’s most brilliant literary figures. Walter Benjamin noted in his diary that Bertolt Brecht in 1931 “maintained that there were good reasons for thinking that Trotsky was the greatest living European writer.”[10]

With these qualifications it should hardly be necessary to justify “another book” about Trotsky. One might also, for good measure, add that Trotsky’s political and intellectual legacy, however controversial and contested, continues to exert influence on contemporary politics. Trotsky is, quite obviously, not irrelevant for history. Why, then, has he become irrelevant for historians?
The conservative political and intellectual climate that has prevailed for nearly three decades has been a substantial factor in determining the reception of Trotsky in the scholarly community. Supreme Court justices take note of the election returns and historians read the newspapers. As Trotsky aptly observed in 1938, the force of political reaction not only conquers, it also convinces. The dissolution of the USSR in 1991 brought in its wake a flood of embittered denunciations of the entire Soviet experience. The works of right-wing opponents of the socialist project like Martin Malia, Robert Conquest, the indefatigable Richard Pipes and Francois Furet (a former Stalinist) promoted an intellectually-stultifying environment that discouraged a serious, let alone sympathetic, investigation of the political heritage of Russian and European Marxism. It is difficult to imagine the classics of Soviet studies that date from the 1950s and 1960s— works like Leopold Haimson’s Origins of Bolshevism, Samuel Baron’s Plekhanov, or, for that matter, E.H. Carr’s encyclopedic study of early Soviet history—being written in the 1990s. The prevailing intellectual climate was not congenial for those, like the Russian scholar Vadim Rogovin, who sought to explore, within the context of the Marxist and Bolshevik tradition, revolutionary socialist alternatives to Stalinism.

However, not all the problems relating to the academic reception of Trotsky flow directly from the political environment of the last 30 years. There are other long-term intellectual tendencies at work, which substantially predate the elections of Margaret Thatcher in Britain and Ronald Reagan in the United States. I am referring to a protracted process, spanning many decades, of a steadily deepening alienation of substantial sections of left intellectuals from the theoretical framework and political outlook associated with the “classical Marxism” of which Leon Trotsky was among the most outstanding and, certainly, the last great representative.

It is not possible at this time to offer an exposition of Trotsky’s philosophical worldview and his conception of politics and human culture. But it must be said, for the sake of the argument being presented here, that crucial elements of this world view included an irreconcilable commitment to philosophical materialism, belief in the law-governed character of the historical process, confidence in the power of human reason (to the extent that this faculty is understood materialistically) and its ability to discover objective truth, and, associated with this, belief in the progressive role of science. Trotsky was a determinist, an optimist, and an internationalist, convinced that the socialist revolution arose necessarily out of the insoluble contradictions of the world capitalist system. Above all, he insisted that there existed a revolutionary force within society, the working class, that would overthrow the capitalist system and lay the foundations for world socialism.

None of these elements of the outlook of classical Marxism—least of all, its optimism—has survived within any significant section of the left intelligentsia. Even by the 1920s, the shattering impact of World War I, the collapse of the Second International, and, somewhat later, in the aftermath of the October Revolution, the political defeats suffered by the working class in Central and Western Europe, undermined confidence in the Marxist outlook and perspective among substantial sections of the left petty-bourgeois intelligentsia. As early as 1926, Hendrick de Man’s frontal assault on Marxism, The Psychology of Socialism, gave voice to the growing skepticism among left intellectuals in the materialist explanation of the development of political consciousness and in the efficacy of Marxist political practice. Marxism’s confidence in the revolutionary effect of objective socioeconomic processes on mass working-class consciousness, de Man argued, was misplaced. The rationally-grounded appeals of Marxists to objective class interests were inadequate as a means of winning the working class to socialism. Many of the arguments advanced by de Man subsequently found their way into the writings of the theoreticians of the Frankfurt School.

The victory of Hitler in 1933, the Moscow Trials, the defeat of the Spanish Revolution and, finally, the Stalin-Hitler Pact completed the political demoralization of the left intelligentsia. The basic perspective of socialism, they believed, had been discredited. The working class had failed. There existed no revolutionary subject in contemporary society. Trotsky, in one of his last major essays, grasped the implications of such arguments: “If we grant as true that the cause of the defeats is rooted in the social qualities of the proletariat itself then the position of modern society will have to be acknowledged as hopeless.”[11] Just seven years later, in their Dialectic of the Enlightenment, Horkheimer and Adorno arrived at precisely this conclusion.

It does not seem an exaggeration to state that the intelligentsia was overwhelmed and exhausted by the tragedies of the 20th century: the two world wars, fascism, the Stalinist betrayal of socialism, and the protracted paralysis of the workers movement beneath the weight of bureaucracy. Pessimism gave way to cynicism and complacency. Paradoxically, overcoming the intellectual demoralization would have required systematic research into the causes of past defeats, and this demanded, in turn, engagement with the ideas of Trotsky and the great school of classical Marxism. But objective conditions, embedded in the long post-World War II economic expansion of capitalism, worked against such an engagement.

What, then, are the prospects now for a re-engagement with Trotsky’s ideas? In formulating an answer to this question, I think it best to employ the same approach taken by Trotsky himself. He insisted on understanding the vicissitudes of his own life within the context of the development of the socialist revolution, within Russia, Europe and the world as a whole. In assessing the shifts in his own fortunes, Trotsky stated that he did not see personal tragedy, but, rather, different stages in the contradictory unfolding of the world socialist revolution. The rise of the revolutionary wave carried Trotsky into power. Its ebb drove him into exile.

It has been many decades since Marxism, as Trotsky would have understood that term, has played any significant role in the life of the working class. But those were decades of capitalist economic stability and substantial growth. The class struggle, to the extent that it manifested itself at all, was kept within traditional channels, under the police supervision of the labor bureaucracies. Now, however, it appears that history has quite suddenly taken one of its surprising turns. The world in which we are meeting today already appears very different from that which existed when the AAASS met last year in New Orleans. Over the past few weeks, references to the Great Depression of the 1930s have become commonplace. It has been acknowledged, even by the president of the United States, that the unfolding crisis has brought American and world capitalism to the brink of collapse.

It is not difficult to imagine that this is a crisis that Leon Trotsky, who coined the phrase, “The Death Agony of Capitalism,” would have understood very well. The old “catastrophe” theory which so many anti-Marxists have had a good laugh over no longer seems so funny, let alone outlandish.

Social being does, in the final analysis, determine social consciousness. If, as seems very likely, the deepening crisis compels on the part of historians a reexamination of long-standing and discredited assumptions, and, with it, a more critical attitude toward the existing forms of society, then I suspect that we will soon be witnessing a renewal of intense scholarly interest in the life and work of Leon Trotsky.

Notes:
1. Isaac Deutscher, The Prophet Unarmed (London: Verso, 2003), p. vii.
2. Baruch Knei-Paz, The Social and Political Thought of Leon Trotsky (Oxford: Oxford University Press, 1978), p. viii.
3. Ibid, p. xi.
4. Ibid, p. xiii.
5. David North, Leon Trotsky and the Post-Soviet School of Historical Falsification
Mehring Books (Oak Park, 2007).
6. Stephen Kotkin, Magnetic Mountain (Berkeley: University of California Press, 1995), p. 364.
7. Robert W. Thurston, Life and Terror in Stalin’s Russia 1934-1941, p. 9.
8. Ibid, pp. 26-27.
9. Victor Serge, From Lenin to Stalin (New York: Pathfinder, 1973), p. 109.
10. Walter Benjamin, Selected Writings, Volume 2: 1927-1934 (Cambridge, MA: Belknap Press, 1999), p. 477.
11. Leon Trotsky, “The USSR in War,” from In Defence of Marxism (London: New Park, 1971), p. 15.

Wallerstein on ratification of SOF Agreement

2008-12-01T11:41:00.002Z

Commentary No. 246, December 1, 2008
"Iraq: The Thirteenth Hour"

The Iraq Parliament on November 27 voted 149-35 to ratify the Status-of-Forces Agreement (SOFA) with the United States. As the vote was being taken, the Deputy Prime Minister, Barham Salih, is quoted as saying: "I remind you that in Iraq things have not happened at the eleventh hour, but at the thirteenth hour." In other words, the key moment is yet to come.

What actually happened? The Iraqi Parliament has 275 members. Those present for the vote were only 198. Those who voted in favor of the text were 149, or a bare majority of the members. The 149 included the members from the two mainstream Shi'a parties (SCIRI and the Prime Minister's party, Dawa), the two Kurdish parties and, crucially, members of the Sunni-based Iraqi Accord Front (IAF).

The favorable vote of the IAF was crucial because Grand Ayatollah al-Sistani had said he would not endorse the agreement unless it had "wide" support, by which he meant substantial Sunni support. So the Sunni had great bargaining power with Prime Minister al-Maliki, whose political future hinged on getting the SOFA agreement adopted. The IAF got two things from al-Maliki. One was that there would be a national referendum on the agreement in July 2009. The second was the substantial support al-Maliki has been giving to the so-called "support councils" in Sunni tribes. That is, al-Maliki is offering both a bribe and a guarantee against future reprisals against the Sunni tribes who have been giving assistance to the American armed forces in the last year in return for material assistance.

Al-Maliki has emerged as the big political victor and shown himself to be a more able political maneuverer than most analysts had expected. Let us see what he has accomplished by passing the SOFA agreement, an agreement which the Iraqis are calling the "withdrawal agreement." His first accomplishment was to hold the Sadrists in check by co-opting the Sadrist strategy - getting the Americans out of Iraq by making a deal with the Sunnis. Both SCIRI (the other mainstream Shi'a party) and the Kurds are grumbling about a possible al-Maliki "dictatorship" in the making, but they had no choice but to ratify the agreement. The Sadrists have preserved their position-in-waiting by voting loudly against the pact.

What's in the pact? The key elements are a requirement that U.S. forces leave all cities and towns by June 2009, and leave Iraq entirely by December 2011. In addition, all U.S. military action must now be coordinated in advance with the Iraqis, and the United States may not use Iraq as a base to attack neighbors (that is, Syria and Iran).

Why did Bush agree? He had no choice. The alternative was for U.S. forces to be illegal after Dec. 31, 2008 and turn the whole issue over to Obama. The U.S. government was so frightened of U.S. congressional reaction to the details of the pact that they refused before the vote to release an English-language version of the pact. They did not want U.S. public discussion of the pact before the Iraqi parliament voted.

The terms of the pact contain some vague language and the U.S. military says it's counting on its ability to interpret the language in ways that it prefers. It is said that Bush has thereby gotten a better deal than Obama's 16-month withdrawal plan. But this is not true at all. It is in fact worse. Obama's proposal had been that U.S. combat forces leave in 16 months, but had set no date for "training" forces, leaving open the possibility of indefinite stationing of some U.S. forces. The SOFA agreement gets all forces out by December 2011. And Bush, not Obama, signed off on this.

In practice all U.S. forces will depart much sooner than December 2011. This is where the referendum comes in. It will be held in July 2009. U.S. forces must leave cities and towns by June 2009. If they don't, the referendum will surely not pass. If they do, al-Maliki will still have to win the referendum. In order to do that, he will have to take a very tough line with the Americans. Any thought that the U.S. military can "interpret" vague language in its favor is a total illusion. In any case, the referendum may be in trouble, since al-Sistani voiced reservations after the parliamentary vote. Al-Maliki knows that if he yields an inch now to the United States, Moqtada al-Sadr is waiting in the wings.

So al-Maliki has all the chips, and Obama will have none. Obama will have to accede gracefully to the Iraqi demands. These demands will escalate, not become less, as the months go by.

And, by the way, the Ethiopians (U.S. surrogates in Somalia) have just announced that they will pull out their troops by the end of 2008. And President Karzai of Afghanistan has just announced that he wants a formal pull-out date for U.S. and NATO forces there. The general feeling in the region seems to be that talking tough to the United States is not only possible. It pays off. The thirteenth hour is approaching.

WSWS on Pashukanis

2008-11-26T09:37:00.003Z

World Socialist Web Site on A Marxist perspective on jurisprudence
By Kevin Kearney 26 November 2008

Evgeny Pashukanis, A Critical Reappraisal, Michael Head, Routledge-Cavendish, 2008, 271 pp., $55.95.

Bourgeois jurisprudence's state of decay, manifesting itself most sharply in the perversion of constitutional law and the systematic destruction of democratic rights, can be understood only through an analysis of law in its historical development on an ever-shifting socio-economic foundation.

Such an approach is almost non-existent in legal academia. Instead, academia is dominated by a militantly empirical, practice-based orientation characterized by the meticulous study of individual cases, largely disconnected from history, politics, current social reality and even international law treating the same topics. In most university law libraries today one would be hard pressed to find any serious consideration of the origins and development of what has been virtually deified as the "rule of law."

In this cloistered atmosphere, Michael Head's book, Evgeny Pashukanis, A Critical Reappraisal, shines the light of day on one of the most important legal theories to come out of "the boldest and most sweeping experiment of the 20th century"—the October 1917 Russian Revolution. Head is a law professor at the University of Western Sydney in Australia and a regular contributor to the World Socialist Web Site.

Prior to the revolution, as now, the "rule of law" routinely put its seal of approval on economic exploitation, political repression and state murder. Upon seizing power, the Soviet government disposed of the previous courts, legal system and legal profession in its effort to radically refashion society and facilitate the ultimate "withering away" of the state.

Head notes, at the outset, that the Soviet legal experiment spearheaded a great expansion of basic rights worldwide, particularly in the areas of labor protection, social welfare, domestic relations and gender equality. This period in Soviet law is characterized by groundbreaking achievements such as the eight-hour work day, the establishment of social insurance, rent control and rent-free public housing. Moreover, Soviet women were the first in the world to enjoy full voting rights and—at a time when Great Britain allowed divorce only for women where adultery was proven—the Soviet legal system afforded divorce on demand to all.

In the same vein, the first Soviet criminal code replaced the archaic notions of crime and punishment with the concepts of "social danger" and measures of "social defense," because the former concepts, rooted in religious concepts of evil and individual guilt, served only to obscure the social roots of crime, thereby forestalling any real solutions to anti-social behavior.
Head aptly summarizes the Soviet legal project: "Overall, the Soviet government sought to make a fundamental shift from private property and individual rights to social ownership and collective rights and responsibilities... accompanied by far-reaching efforts to develop more humane and civilized approaches to social problems."

Revolutionary legal debates
Although the goals of the revolution were clearly defined, the tactics for realizing these goals—given the material limitations of the unfolding Russian revolution—could not be rigidly predetermined.

Following the seizure of power in 1917 by the soviets, or workers' councils, the Bolsheviks inherited a society burdened by backward feudal relations, exhausted by years of imperialist war, increasingly isolated from the developed capitalist economies of Western Europe and surrounded on all sides by imperialist predators. A period of civil war ensued in which the displaced Russian ruling elite, backed by imperialist powers, sought to retake the country by force.

From mid-1918 until 1921, the survival of the revolution was the most pressing issue, consuming nearly all the time, energy and, ultimately, the lives of masses of people. This was a harsh period, and, as Head points out, "hardly conducive to theoretical contemplation." Nonetheless, many of the legal concepts and conflicts that would emerge in a more developed form in the following period made their first appearance in the brief window of time preceding the civil war.

The post-civil war period from 1921 to 1924 saw the flowering of legal debates involving a host of soviet jurists and a variety of schools—including what have been described as the sociological, psychological, social function and normative schools. Head cites one scholar's description of the legal discourse in the 1920s as "a dynamic and prolific period in the history of soviet legal thought ... characterized by intellectual ferment, optimism and impatience."

All those involved in the debates were ostensibly seeking the transitional form of law best suited to carry out the revolutionary social transformation, while ensuring sufficient stability for the revolution's day-to-day survival. At the same time, the participants attempted to elaborate a comprehensive Marxist theory of law. Head manages to parse these debates into three core questions: "1) What was the class character and function of the Soviet state and Soviet laws? 2) Whether and how quickly the state would wither away into communism? and 3) What is the underlying role of law in socialist and communist society?"

Within this milieu, the work of Evgeny Pashukanis has evoked more interest than that of any other figure. As Head points out, this is in large part due to an enduring and growing interest in Marxism, the Russian Revolution and the contemporary relevance of Pashukanis's analysis of the law.

In 1924, Pashukanis published his most important work, The General Theory of Marxism and the Law. With this, he sought to probe deeper than other Soviet jurists of the period into the very essence of law itself.

Pashukanis's argument in a nutshell was that law is a historically limited form of regulation peculiar to class societies, peaking under capitalism and destined to fade away with the elimination of socio-economic classes and class conflict—in other words, in a truly socialist society. The most important implication of the theory was that the use of the traditional legal form in post-revolutionary Russia was a continuation of bourgeois law, although in the hands of the proletariat.

The General Theory is best known for its elaboration of the "commodity exchange theory of law," which traced the modern legal form not directly to class interests, but rather to the elemental logic operative in capitalism itself—a process occurring "behind the backs" of both the ruling class and the working masses. Head describes the theory as "the kernel of an historical materialist approach to the rise and evolution of the legal form."

The commodity exchange theory emerged from Pashukanis' debates with the then-dominant legal "instrumentalists"—represented by Piotr Stuchka—who viewed the law as nothing more than a "blunt instrument" of class domination, whose social function was considered as either purely ideological or, at most, just another form of coercion in the arsenal of the ruling elite.
Although Pashukanis did not deny the class instrumentalism and coercive functions of the law, he viewed them as secondary to the nature of the legal form itself. He wrote: "Having established the ideological nature of particular concepts in no way exempts us from the obligation of seeking their objective reality... external and not merely subjective reality." His analysis was unique, in that it was not limited to the role of law under capitalism, but extended to the very concept of law itself as an intrinsic and longstanding instrument of social regulation.

The commodity exchange theory of law
In order to present the basics of Pashukanis' commodity exchange theory, it is necessary to briefly review some points from the first chapter of Marx's Capital.

Capital identifies a duality—an immanent contradiction—within the commodity, as an immediate unity of both a use value and an exchange value. The former embodies what is particular to the commodity, its unique utility and the unique type of labor required for its production. If a useful object, for example a broom, were produced by an individual for his own use, it would be merely a product and not a commodity. However, when such a product is produced for the purpose of exchange on the market and is actually exchanged for another commodity, its value, its social nature, is revealed.

Exchange value is a quantitative ratio of exchange between commodities rooted in the amount of socially necessary labor time that went into the production of the commodities. Although initially this abstract labor time is reflected in a ratio of exchange between two given commodities—i.e., two gallons of milk for one broom—it is eventually represented by a third commodity—the universal equivalent of money.

In this process, the inherent differences between the commodities—the different types of labor required to produce them and their distinct uses—are masked. Quality is transformed into quantity and substance into form, and money is worshiped as the universal equivalent.
Pashukanis argues that this same process—the exchange of commodities in the market place—produces not only the value form, but also the legal form. In the legal form, individual human beings are abstracted into a juridical subject or something akin to the "reasonable man in law," and—ignoring the inherent class differences between these individuals—they are all considered formally equal before the law as juridical subjects.

He finds the origin of this development in the necessities of efficient commodity exchange in the market place. All enter the market place as inherently different from each other, akin to use values. However, all must enter into a definite relationship for purposes of exchange.

At the moment of exchange, Pashukanis identifies three forms which appear in the process: 1) Each merchant must recognize the other as an equal for purposes of the exchange, despite any inherent differences; 2) Each merchant must recognize the free will of the other to exchange the commodity; and 3) Each merchant recognizes the other as the rightful owner of the commodity.
Therefore, the constant exchange of commodities on the market gives rise to three phenomenal forms: equality, free will and a private ownership interest, which find ideal legal expression in the notion of the juridical subject as an abstract bearer of these rights before the law. The individual has thus been transformed into a juridical subject.

Pashukanis argues that this is the essence of the legal form which came into being wherever there was commodity exchange—initially on the periphery of ancient and feudal societies and finally predominating in capitalist society.

Although the legal form finds its fullest expression in contract law, as it is rooted in the concrete requirements of commodity exchange, the victorious bourgeois revolutionaries of Western Europe managed to raise this legal form "to the heavens," enshrining it as a set of "god-given" constitutional principles: liberty, property and equality before the law, as distinguished from the enforced inequality of the outgoing feudal regime, which divided individuals into separate castes from birth, each with distinct rights and responsibilities.

Pashukanis argues that, in its application to the spheres of constitutional law and criminal law, the legal form is effectively disembodied and devoid of any concrete content. Therefore, he asserts, "Outside Contract... the very concepts of subject and will exist only as lifeless abstractions in the legal sense."

The commodity exchange theory, by extension, impacts the concepts of morality and of crime and punishment under capitalism. Ideas of morality, Pashukanis argues, were based on the abstract notions of the rational individual and abstract equality before the law. He asserts that "if moral personality is nothing other than the subject of commodity production, then moral law must reveal itself as the rule of exchange between commodity owners."

By this token, he argues that the capitalist idea of "justice" is also derived from the process of commodity exchange, referring to the concepts of crime, punishment and guilt as examples of the "radical individualism of the bourgeois." As opposed to the concept of collective responsibility which dominated the ancient world, Pashukanis demonstrates that the requirements of equivalent exchange manifest themselves in the notion of equivalent punishment and finally become dominant under capitalism.

On this basis, bourgeois law injects an extreme notion of individual responsibility into criminal law. This is most easily recognized in the notion of "pay-back," or the idea that the legal subject must lose a certain amount of personal freedom as payment for a crime, without regard to the social causes of the anti-social behavior or to any real solution to such recurring, systemic social problems.

As opposed to a system of retribution, Pashukanis advanced the idea of social defense as a response to crime. This approach would abandon the market-based abstract equivalence principle, focusing not on the proportionality of the punishment to the crime, but rather on the correspondence between the measures taken and the ultimate goal of social defense.
With such a non-juridical approach, attention would shift from proving individual guilt to a more all-encompassing focus on the social and psychological symptoms. Examination of the social, cultural and economic environment associated with anti-social forms of behavior would replace the isolated focus on "the facts" of a single incident as the decisive factor in the process.

The commodity exchange theory is firmly rooted in the proposition that the legal superstructure grows necessarily out of the individualization and opposition of interests inherent in the capitalist mode of production. In this socio-economic context, the law suit (or controversy) is the basic mode of resolution of legal matters, whereas a social unity of purpose is the premise for a purely technical regulation—for example, the administration of a system of mass transit or standardized medical procedures. In this manner, Pashukanis draws a fundamental distinction between bourgeois law and what would emerge as socialist regulation.

The theory holds that the legal form would wither away as commodity exchange and market relations gave way to social production and distribution. Pashukanis put it best, saying, "Only when the individualistic economic system has been superseded by planned social production and distribution will this unproductive expenditure of man's intellectual energies (the law and law suits) cease."

In other words, as private interests are replaced by collective interests, society's governance will no longer require the compulsion of formal legal instruments to manage myriad individual disputes, and social regulation will increasingly take the form of simple technical coordination and management.

Although Head notes that this conclusion has been routinely assailed by bourgeois academics as utopian, he points out that "if masses of people actually controlled their own lives as well as the economic, political, social and cultural direction of society" the "unity of purpose"—made possible by socialist revolution—could be a reality.

The demise of Pashukanis and his enduring relevance
Like the revolution itself, the Soviet legal experiment which produced Pashukanis was cut short by the consolidation of the Stalinist bureaucracy and its attack on Marxism in the form of the nationalist theory of "socialism in one country." The legal complement to "socialism in one country" was the concept of "socialist legality"—a complete abandonment of the classical Marxist perspective of the "withering away" of the state and law. Ultimately, the bureaucratic caste isolated itself from and dominated the masses, necessitating not only the permanency of the state and "the rule of law," but an unprecedented strengthening of their invasive and repressive powers.

With the publication of his General Theory—the same year Stalin unveiled his theory of "socialism in one country"—Pashukanis became the preeminent Soviet jurist, and his book was required reading at universities around the country. Within a period of 12 years, however, Pashukanis found himself under increasing pressure to adapt his ideas more openly to the needs of the Stalinist bureaucracy. Pashukanis was eventually labeled a "Trostskyite saboteur" and executed by Stalin in 1937. His writings were subsequently expunged from the universities.
Pashukanis was by no means a recanting anti-Stalinist, nor was he a Trotskyist. Head successfully tackles this myth by clarifying the political record, which demonstrates that Pashukanis lined up against the Left Opposition, which was led by Trotsky, from at least 1925. Moroever, by putting Pashukanis' theoretical work in the correct economic and political context, Head shows how it was used as Marxist window-dressing for the bureaucracy's counter-revolutionary policies.

He highlights the fact that Pashukanis' General Theory debuted in 1924, after the institution of the New Economic Policy—enacted in 1921 as a temporary policy necessitated by the defeats of the European revolution and enforced isolation of the backward Soviet economy. The NEP made key concessions to capitalist market relations, thus promoting a return to traditional legal forms to protect private ownership in some of the means of production.

Head notes that although the General Theory was shaped by the requirements of the NEP, Pashukanis' theoretical work makes little reference to the NEP. When Pashukanis did refer to the NEP, he merely asserted that it represented an insufficient level of development for the building of socialism. Inherent in this was a bowing to mounting fears that a long period would have to ensue before socialism could be realized in the Soviet Union.

The period of the NEP was laden with political pressures exerted by the growing bureaucratic caste, anxious to consolidate its power on the national arena by abandoning the struggle for international revolution. Head finds the theoretical reflection of these pressures in aspects of the General Theory which naturally appealed to the bureaucratic caste—in particular, its assumption that the struggle for revolutionary social change would have to be shelved for an indefinite period and its general lack of emphasis and clarity on the repressive role of law and the state.

Head illustrates the political logic behind these theoretical failures by tracking Pashukanis' growing and ultimately futile capitulation to the Stalinist bureaucracy, to which he had wedded himself—from his denunciation of "Trotskyism" in 1925, his acceptance of "socialist legality" in 1927, to his repeated revisions of Lenin's State and Revolution in 1936. In that year, Pashukanis repudiated the theoretical core of the General Theory but was nevertheless executed the following year.

Pashukanis made a genuine contribution to understanding the nature of the legal form. But, as Head notes, "by lining up against the Left Opposition, he helped deprive the debates of the analysis and programme that could have combated the political and theoretical degeneration." Ultimately, Pashukanis became a casualty, not because of any principled political stance against the Stalinists, but rather because he still represented a link to the Marxist heritage of the revolution and thus a threat to the bureaucracy.

Head's book also corrects a tendency in other works to isolate the General Theory from its foundations in the Russian revolution and decades of Marxist cultural development in 19th century Europe. In particular, Head is careful to attribute the foundational concepts of Pashukanis' theory—the "withering away" of repressive instruments of government, law as an outgrowth of society's economic development, and the materialist analysis of the state and law—to the works of Marx and Engels.

Beyond this, Head traces key elements of Pashukanis' General Theory—the distinction between law and regulation, the rejection of law as an eternal form of social regulation, and the dual character of Soviet law—to the earlier works of lesser known, but important, Marxist legal scholars such as Lunacharsky, Reisner, Magerovsky, Podvolotsky, Krylenko and Goikhbarg.
Head ends the book by discussing Pashukanis' contemporary relevance. He examines the current assault on civil liberties as a component part of the "war on terror," the crisis in criminal justice and the prison explosion (citing statistics showing that, as of 2005, one in every 136 Americans was under the control of the penal system), from the standpoint of Pashukanis' theoretical perspective.

In the final chapter, Head demonstrates how the General Theory provides a framework for a materialist analysis of the American criminal justice system, which has severed nearly all connection with its stated purpose of protecting society and maintaining the peace, and is rapidly becoming an instrument of intimidation and political repression and a means for systematically stripping away the basic rights of masses of people.

In the context of the "global war on terror," Head's examination is particularly timely. The General Theory demonstrates that the traditional forms of bourgeois democracy and constitutional law are increasingly at odds with the class interests and social policies of the bourgeoisie in times of crisis. Thus they are increasingly abandoned, allowing politically-vetted judges an almost unlimited discretion in constitutional interpretation, and ultimately the freedom to abandon age-old democratic norms altogether, or to place a judicial seal of approval on the executive's efforts to do so.

On this topic, he quotes Pashukanis: "For the bourgeois has never, in favour of purity of theory, lost sight of the fact that class society is not only a market where autonomous owners of commodities meet, but it is at the same time the battlefield of a bitter class war, where the machinery of state repression represents a very powerful weapon... The state as a power factor in internal and foreign policy—that is the correction which the bourgeois was forced to make to the theory and practice of its ‘constitutional state.' The more the hegemony of the bourgeois was shattered, the more compromising these corrections became, the more quickly the constitutional state was transformed into a disembodied shadow, until finally the extraordinary sharpening of the class struggle forced the bourgeois to discard the mask of the constitutional state altogether, revealing the nature of state power as the organized power of one class over the other."

These words have renewed currency at the close of 2008. The economic crisis of world capitalism and the explosion of imperialist militarism across the globe, politically manifested in the "global war on terror" or the "long war," have led US imperialism and all national ruling elites to lay the legal groundwork for just such an "unmasking." Bourgeois democracy and the "rule of law" are giving way to authoritarian capitalism.

Labour Notes: End of Auto Industry?

2008-11-25T17:02:00.003Z

End of the Road: Is the Auto Industry Dead?
By Mark Brenner and Jane Slaughter, Labor Notes
Posted on November 19, 2008
http://www.alternet.org/story/107489/

In the 1980s Chevrolet proclaimed itself the "Heartbeat of America." Today many would say that the American auto industry qualifies for life support. Last November, General Motors (owner of the Chevy brand) announced that it was cutting 25,000 jobs and closing up to 12 factories by 2008.

The news came one month after auto parts giant Delphi declared bankruptcy, promising to shutter at least a dozen plants and cut as many as 24,000 jobs in three years time. Ford completed the grim hat trick in January, revealing a plan to cut 30,000 jobs by 2012.

Just months before, GM and Ford had convinced Solidarity House, headquarters of the once-mighty United Auto Workers, to make $1 billion in concessions to help pay for retired auto workers' health benefits. Detroit is abuzz over the additional give-backs the Big Three auto
makers (GM, Ford, and DaimlerChrysler) are likely to wrest from the union in next year's contract talks, and the rank-and-file hear no tough talk -- let alone action -- from their leaders.

On the face of it, the industry's problems seem almost insurmountable. Collectively, U.S. car makers are billions of dollars in the red and foreign competitors continue to gobble up the Big Three's market share. America's auto giants boost their bottom line only by selling
gas-guzzling trucks and SUVs, and cars would be moving off the lots even slower were it not for thousands of dollars in incentives used to sweeten each sale.

In the face of these pressures, it's no surprise that analysts from the Motor City to Wall Street are convinced that this is the end of an era in the auto industry. There is no alternative, these experts lament. Today's auto workers will have to make do with less or kiss their jobs goodbye.

For over a century the auto industry has been an anchor for the U.S. economy and a trendsetter for corporate America. What does the current upheaval mean for workers? Announcing the company's bankruptcy, Delphi's CEO Steve Miller signaled what was at stake: "I want you to view what is happening at Delphi as a flash point, a test case, for all the economic and social trends that are on a collision course in our country and around the globe."

The auto industry paid out a living wage for millions of working-class people. Is Detroit about to call an end to that life? What's Good for GM ...

Times weren't always so tough in the Motor City. On the heels of World War II America's auto manufacturers were the undisputed titans of industry. Although UAW President Walter Reuther began his tenure with visions of government-provided pensions and health care for all
Americans, that drive was blunted when the union achieved, at the bargaining table, a private welfare state for its members at the Big Three. In addition to private insurance and 30-years-and-out retirement benefits, they also received "supplemental unemployment benefits" to
cushion the blow when the cyclical nature of the industry brought about layoffs -- a step toward Reuther's social democratic dream of a guaranteed annual wage. Besides their 3 percent annual raises to compensate for productivity improvements, auto workers also received cost-of-living increases, and, as the decades rolled on, tuition and legal services were added as well.

Unions in steel and rubber followed suit with similar contracts and, to a lesser extent, other blue-collar workers such as miners, telephone workers, truckers, and electrical workers all attempted to follow the UAW's lead. The pattern of steady wage increases together with health and retirement benefits stretched well beyond heavily unionized industries, setting a higher standard for all the nation's employers, union and non-union alike.

Gold-Plated Sweatshops
The ratcheting productivity that allowed for these benefits was good for the bottom line but it meant that the factories continued to be, in Reuther's words, "gold-plated sweatshops." The foundry and the assembly line remained an inhuman way to make a living. The common pattern was for workers to sign on, thinking to stay just a few years, but to be seduced by the benefits -- and then say to themselves "it's only 30 years." The mind-numbing drudgery, the high injury rates, the heat and smoke and oil in the air led many workers to hit the bottle -- and, in one famous case, led black Detroit Chrysler worker James Johnson to pick up a gun and shoot two supervisors and a co-worker. A jury, after a plant tour, found that brutal working conditions and Chrysler's shop-floor racism had literally driven Johnson insane.

Removed from the daily grind of factory life, however, UAW officials became far more attuned to the gold-plating in the shops than to the sweat. They sought gains they could measure in dollars, and Reuther's belief in the benefits of technology and productivity kept him from protesting either automation or speedup. Officials came to see themselves as partners with management, truly convinced that "what's good for GM is good for America," and for UAW members.

This outlook ensured that a host of management initiatives -- and stupidities -- went unchallenged. Early on, the UAW abandoned Reuther's fight for low car prices; later, it joined auto manufacturers in lobbying against higher fuel economy standards. The UAW also embraced its role as guarantor of orderly industrial relations, repudiating the tactics that gave birth to the union in the 1930s.

The Path Downwards
These years of collaboration and quiescence left the union ill prepared for the crisis that shook the auto industry in 1979. The UAW once again blazed a trail the rest of the labor movement would soon follow-only this time it was the path of concessions and explicit labor-management
cooperation.

Through postwar recessions and expansions, it had not occurred to American employers that signed contracts could be breached. But when Lee Iacocca's Chrysler Corp. threatened bankruptcy in the fall of 1979, the UAW stepped up to the plate. Chrysler workers and retirees broke the once-sacrosanct pattern contract, taking concessions estimated at $203 million, $2,000 per worker, nonrecoverable. More cuts soon followed; by January 1981 Chrysler workers were collectively a billion dollars behind. The next year, with the economy and the industry in full-blown recession, the union opened pacts at Ford and GM to make cuts there.

Describing the new bargaining climate, a steel industry official told the Wall Street Journal, "The whole posture of negotiating is changed. Basically we're asking for something that we're not entitled to." A staffer for the United Food and Commercial Workers noted, "After
Chrysler, everything changed."Employers from meatpacking to airlines to education demanded and got wage cuts. In Michigan, the hospital workers union reported that every hospital it bargained with in 1982 used the argument "GM took a wage freeze." Companies used economic hard times to force a redistribution of power in their own favor.

Accepting Competition
As important as the monetary concessions was an explicit change in union philosophy: acceptance of the notion that it is the union's job to make the employer more "competitive."
Workers were to contribute their ideas for boosting productivity, including speedup and job cuts. This "team concept" quickly spread from auto throughout manufacturing and beyond. The flagship team concept plant jointly run by GM and Toyota in Fremont, California, became the
most famous factory in America and the site of manager-pilgrims from every walk of life, seeking the secrets of productivity. In essence, the UAW's deal with the auto makers was this: do whatever you need to do to boost profits, as long as you maintain the wages and benefits of (a steadily shrinking number of) workers at the Big Three. That "whatever" included lean production, outsourcing to nonunion parts plants at home and abroad, the sale of GM's and Ford's parts divisions in 1999 and 2000 (lopping off 52,000 workers) and, today, buyouts. Therewere 466,000 GM hourly workers in 1978 and in 2006, 112,000.

Buoyed by the Bubble
After a decade-long downturn, the 1990s was like winning the lottery for Detroit's auto makers. Mini-vans, one of the Big Three's only bright spots in the 1980s, continued to register solid sales, hovering at about 8 percent of the total domestic car and truck market. And because their Japanese rivals were slow to introduce their own models, Detroit maintained its dominance, with market share never dipping below 75 percent.

But the Big Three's real gold mine was the phenomenal growth of sports utility vehicles (SUVs) during the 1990s, rising from 7 percent of the total car and truck market at the beginning of the decade to roughly 20 percent by the end. And sales really took off in the latter half of the 1990s, when most Americans saw their real wages inch up for the first time in 15 years. Concerns over fuel efficiency also seemed to melt away, with gas prices averaging a little over a dollar a gallon for most of the decade. As with mini-vans, Detroit's foreign rivals lagged behind, leaving the Big
Three to dominate the SUV market. Bolstered by strong sales in these new niches, together with
skyrocketing stock prices, Detroit's auto giants hoped to reclaim the global dominance that had seemed to slip through their fingers a decade earlier.

In addition to expanding their existing global operations, the Big Three also engineered some very high- profile mergers and strategic investments, acquiring the Saab, Fiat, Suzuki, Daewoo, Jaguar, Volvo, and Land Rover brands. Investments, of course, can flow in both directions, and in 1998 Chrysler was acquired by Daimler-Benz.

Spin-offs and Restructuring
Detroit auto makers were also busy reshaping their domestic operations. They spun off their parts divisions into stand-alone companies and then negotiated steep wage cuts for new-hires there. GM hived off American Axle and Delphi, while Ford created Visteon. Chrysler took outsourcing to a new level by pioneering "modular production" in the U.S. At its Jeep plant in Toledo, body work, chassis and paint -- considered the core of auto assembly--will soon be
performed on-site by non-Chrysler workers at lower pay. GM and Ford also paid less and less attention to producing cars, focusing instead on their financial services arms, with General Motors Acceptance Corporation (GMAC) and Ford Credit adding more and more heft to each company's bottom line. Indeed, by 2000 both GMAC and Ford Credit accounted for a third of net revenue for their respective companies.

Mixed Bag for Workers
For America's auto workers, the 1990s were decidedly more mixed. On the one hand, after a decade of bruising concessions and plant closings, everyone was relieved to see the return of both jobs and steady wage increases.

On the other hand, much of the new investment coming into the industry was from foreign companies -- Toyota, Mazda, BMW, Nissan, Honda, Mercedes -- who sprinkled factories first on the outer edges of the Midwest auto corridor and then across the right-to-work South. These
"transplants" kept their factories non-union, as did the auto parts industry that mushroomed in the 1990s, as the Big Three replaced vertical integration with outsourcing.

Union density in auto, which in the dog days of the 1980s declined from 62 percent to 50, fell even faster in the prosperous 1990s, dropping to 37 percent by the year 2000. The UAW proved unwilling or unable to organize these newcomers, and one can only wonder whether things might
be different today had the union summoned up some of the spirit, energy, and vision that drew hundreds of thousands of unorganized auto workers into the union in the 1930s.

Instead the UAW concentrated on the state of its existing members, securing promises of new investment and job security from the Big Three both in contract talks and through job actions. For example, a 54- day strike at two strategic GM parts plants in 1998 idled most of General
Motors' North American operations, and resulted in $200 million in new investment in the two plants.

Unfortunately for the UAW, its fight to protect its shrinking store of good jobs was swimming against a much stronger national tide. The 1990s witnessed an explosion in income inequality, in no small part due to skyrocketing CEO pay (71 times workers' average wages in 1989, rising to
300 times by 2000) and a stock market run-up of historic proportions. The longest economic expansion since World War II did surprisingly little for those in the lower rungs of the income distribution, in part because of the declining share of the workforce represented by unions.
Adding to the insecurity were large-scale retrenchments by the bulwarks of corporate America, including Xerox, IBM, and ATT.

Underappreciated at the time, perhaps the biggest development of the 1990s was the move from defined-benefit pension plans to 401(k)-style defined-contribution plans. This seemed of little consequence when the stock market was posting double-digit gains year-in and year-out, but
when the turn of the century recession hit, baby-boomers across the nation saw their retirements vaporize. UAW members at the Big Three were some of the few to retain their original pensions.

Downturn
These trends collided with a deflating stock market in 2000 to create a squeeze play for the auto industry and its hourly workforce. The recession hit Detroit particularly hard, as rising gas prices turned consumers off the low-mileage SUVs and minivans that had saved Detroit's bacon a decade earlier. In the last five years the Big Three's market share has fallen from 66 percent to 58 percent, and sales would have been even worse without the deep discounts auto makers felt forced to offer.

At the same time that the domestic picture soured, many of the Big Three's global acquisitions also unraveled. General Motors, for example, paid a cool $2.4 billion to acquire a 20 percent stake in Fiat in 2000, then ponied up another $2 billion to get itself out of the deal five years later.

Ford has injected more than $5 billion into Jaguar and to this day the luxury brand remains stubbornly in the red. Meanwhile the marriage of DaimlerChrysler has hardly been a match made in heaven--the merged company is worth less today in stock market terms than Daimler was on its own before they united.

Hemorrhaging money and with no end in sight, last year Detroit's automakers took desperate measures to become smaller but more profitable companies, with Delphi declaring bankruptcy and GM and Ford putting 55,000 jobs on the chopping block. Since that time, they have all been
singing the same tune, blaming their troubles on the generous wages, pensions, and healthcare of their unionized workforce. In a move whose irony cannot be lost on executives, Detroit has
redirected decades of consumer frustration with American automakers for their lackluster designs and poor quality into widespread resentment of rank-and-file auto workers for their company-paid health care and pensions. The auto makers have tapped into middle America's deep-seated anxiety and insecurity with a not-so-subtle message: "If you don't have a pension or any hint of job security, why should they?"The scale and speed of these changes has left the UAW flat-footed, struggling to get a hearing-much less formulate a strategy-in its fight to save some of the last good manufacturing jobs in America.

So Who Cares?
Cynics might argue, who cares? The UAW represents fewer than 400,000 auto workers in an industry of more than a million, and the concessions the companies are clamoring for will simply bring their wages and benefits closer to what the market will bear for less-skilled workers
anyway. Besides, manufacturing is so 20th century. Aren't we a post-industrial economy with a future in services and high-tech jobs? America can design and engineer stuff and let the rest of the world build it (think X-Boxes and Ipods).

This mindset misses most of what's important about the crisis in auto. Downsizing isn't accountants shuffling numbers around on a spreadsheet; the lost jobs are concentrated in specific communities, such as the already devastated Flint, Michigan made famous by Michael Moore in his first film, Roger and Me.

Cuts of this magnitude will reverberate throughout the Midwest, leaving a lasting economic and social hangover. And they will not be confined to auto, as other companies follow the Big Three's lead.High tech companies can't fill the void. Google, for example, has just announced plans to open up shop in Michigan. But Google employs less than 6,000 people worldwide, a drop in the bucket compared to the 70,000 jobs this round of auto restructuring will destroy.

How could the auto industry right itself without devastating workers and communities? Execs have shown themselves curiously unwilling to campaign for one measure that would save them billions of dollars per year: single-payer health insurance.

GM is the largest private purchaser of healthcare in the country, providing coverage to 1.1 million people. Last year the price tag was $5.3 billion, which, as CEO Rick Wagoner is fond of pointing out, is more than GM pays for steel. Half of those covered are retirees, and the
company claims to provide healthcare to 1 percent of America's seniors.

Legacy Myths
The Big Three say that such "legacy costs," which also include pension benefits, are choking their business, obscuring the fact that all three auto makers have pension and retiree health funds flush with cash--healthy for the foreseeable future. If health care is such a heavy burden, why not join the movement for a far cheaper national health care plan? Canada's single-payer system makes it much less expensive to do business there and has spared most Ford and GM plants north of the border from the ax.

But despite promises to the UAW to pursue "universal coverage" in exchange for the union's $1 billion in concessions on retiree health care last fall, GM's CEO didn't even mention national health care in testimony before a June Congressional special hearing on the nation's healthcare crisis. Either free-market ideology is trumping good business sense, or paying for benefits is not such a burden after all -- or the employers don't mind having a propaganda hammer to use against the union.When Henry Ford introduced the five-dollar day in 1914 he famously quipped that he wanted to pay his workers enough so that they could afford to buy his cars. Today, a new-hire at Delphi or Visteon now makes $14.50 an hour, a bit more than half his or her counterparts at the Big Three. In 2007, when new agreements are negotiated, the Big Three's
new-hires are sure to take a hit.

What will America look like if most workers earn Wal-Mart, instead of General Motors, wages? For those without a four year college degree - i.e., about 70 percent of the labor force - average wages (adjusted for inflation) have stagnated or fallen for the last 30 years, hovering under $15 today. Manufacturing jobs paid wages no better than the economy-wide average when Henry Ford was perfecting the assembly line, but by the end of the 20th century they were about 25 percent above average, in no small part due to unions like the UAW.

A New Playbook
To solve the industry's problems, many analysts have urged Detroit executives to go back to the drawing board and start fresh. This advice applies with even more force to the UAW.

Forged in the 1930s' social upheaval, the UAW's pioneers originally saw the union as just one piece of a large-scale social movement to solve the problems of the Great Depression.

Today the stakes are higher than they have been in 60 years, but the UAW is still fumbling through its golden-age playbook. The rank-and-file revolt after the Delphi bankruptcy demonstrates that members are willing to fight, but they can't do it alone.Now, more than ever, the UAW needs the audacity and the guts of its founders, who set their sights on more than the survival of their union headquarters. Their fight to build a better world inspired millions.
With health care becoming less and less attainable for more and more working people, the fight for national single-payer health care has the potential to galvanize a new workers' movement. Rekindling such a movement may be the only way to ensure that the UAW founders' legacy
doesn't evaporate before our eyes.

Mark Brenner is the Director of Labor Notes.
Jane Slaughter is a Detroit freelance writer and frequent contributor to
the Metro Times.

Bad result for Respect in Mile End

2008-11-21T11:56:00.002Z

Mile End East Novemeber 20th by-election result:
Labour 1208
Conservatives 630
Respect 604
Liberal Democrats 110

Go to Socialist Unity or Liam McQuaid for discussion, much of it on tried and true (or tired and terrible) sectarian discussion.

Convention of the Left invite

2008-11-21T11:48:00.001Z

Dear Comrades
The organisers of the Convention of The Left would like to invite you to the free one day conference - "Capitalism Isnt Working - What Is The Alternative?" - to be held at the Friends Meeting House, Manchester, from 10-5 on Saturday 24th January 2009.

More details (plus downloadable leaflet, advance registration and discussion contributions) can be found on our website www.conventionoftheleft.org and we encourage you to circulate widely and to join in the debates taking place.

As was agreed at the Convention's week of debate in September, we know that the wealth exists in the world to pay for our essential needs, conspicuous consumption only leads to escalating warfare and environmental destruction, and we cannot let the recession be used as an excuse to scapegoat refugees and migrants - the poor must not be punished for the crisis of capitalism and we must directly challenge any legitimisation by Labour of the racism and fascism that threatens to emerge as a result. The recent comments of the appalling Immigration Minister Woolas are only too clear.

So we must provide the alternative - in the interests of the planet, peace and people, not profiteers - and we look forward to seeing everyone who supports the Statement of Intent that was agreed in September, at the Recall Convention meeting on 24th January in Manchester.

The provisional agenda is for a general political discussion (particularly about the development of a socialist economic alternative) followed by three parallel workshops (loosely along the lines of planet, peace, people) and a final plenary for agreeing demands, actions, campaigns, and ways of working that we can all carry out together across the left.

All sessions will follow the style developed by the Convention in September - participation rather than top-down platforms, consensus rather than polarisation - and we encourage background contributions or suggestions for action that will fit with the themes outlined. We would also welcome progress reports from local Convention groups or forums that may have started to develop. (We do request that all contributions are short and, in line with the Statement of Intent agreed in September, we request that contributions are not about the creation of a new left party now.) Please can you email these or submit to the website discussion - no later than January 10th, so that we can collate and circulate for the day itself.

The Organising Group has now drafted a Statement of Action which we hope may be useful for setting the context (please see below) - and there are a number of other proposals that have been developed recently on the left, particularly about the economy, and also from organisations supporting future Convention activity - please do let us have these so that we can publicise them on the website and at the Recall Convention itself on January 24th.

Thank you for your support and good luck with developing left unity in practice in your own campaigns and activities.

John Nicholson (on behalf of the Convention of The Left Organising Group)

Convention of The Left – moving forward – Statement of Action
The September launch of the Convention of The Left exceeded expectations and was a significant event on the left. We must now work out how to build on this positive beginning.
We re-affirm our intention “to join together with all those seeking a better society, as an anti-capitalist left fighting for an alternative socialist society” (September 21st 2008 Statement of Intent).

Local Campaigning
To do this effectively we must “go local” – building local Conventions, experimenting with organisational and political models, learning from each other and from experience, building on “what works”, with an emphasis on bottom up campaigning, participation and decision making.
Local Convention of The Left groups or forums should develop a combination of campaigning and political discussion – not duplicating other campaigns or seeking to replace them but drawing the left together in co-operation and struggle. We should go out of our way to overcome the division that exists between the organised left and the direct actionist and libertarian groups.

Campaigns should be developed and supported locally. Already some local groups have taken a lead in actions coming out of the financial crisis, on house repossessions, on fuel poverty and energy costs. Other areas of activity might include anti-academy campaigns, defence of local GP surgeries against poly-clinics, campaigns against privatisations, in support of migrants and opposing deportations, fighting the fascist threat.

Local Convention of The Lefts should be encouraged to:
1. produce reports for a local convention section of the website
2. discuss demands and programs of action around their struggles
3. submit these demands and charters to the Convention website and future events for further discussion.

National Campaigning
We re-affirm that this is not the construction of another political party. Rather, the strength of the Convention lies in attempting to bring local groupings together and to provide a wider forum for discussion and united action – so that we can strengthen the anti capitalist left by uniting ourselves around action and policies where we can.The Recall Event on January 24th 2009 should elect a steering committee to build on the work of the group that organised Manchester 2008’s Convention. This steering committee should be charged with organising or co-ordinating future activity – such as a further day or weekend Convention in summer 2009 – and with exploring the possibilities of a similar event at TUC and/or Labour Party Conference in Brighton 2009 as was organised in Manchester 2008.

World Socialist Website on NPA

2008-11-21T11:36:00.003Z

Always interesting to read about the LCR and the creation of the new anti-capitalist party in France. Here's the ex-Healyites sectarian and ultra-left take. Shame they didn't take the opportunity to translate the Krivine interview.

France: Alain Krivine explains the role of the "New Anti-Capitalist Party"
By Peter Schwarz 21 November 2008

Last week, the Internet publication Médiapart published an interview with Alain Krivine, the long-time leader of the French Revolutionary Communist League (LCR). The interview throws light on the programme and political role of the New Anti-Capitalist Party (NPA), which the LCR plans to found at the end of January.

Krivine makes three things clear: First of all, the new party will be reformist rather than revolutionary; its aim is not to build a socialist society, but rather to refurbish the existing capitalist system. Second, the new party does not represent a political break with the old, bankrupt workers’ organisations, but will operate instead as a vessel for assembling disappointed reformists, Stalinists, trade unionists and petty-bourgeois “lefts.” Third, the party cultivates a cynical and dismissive attitude to the traditions of the revolutionary Marxist movement.
In his first answer, Krivine reveals himself to be within the political spectrum of bourgeois politics. When asked, "How does the LCR analyse the current ‘crisis’ of the capitalist system?" he replies, "It is one of the big crises that periodically rock a system that is dominated by the drive for profit."

This is false and leads to completely wrong political conclusions.

The present crisis is not merely one of the cyclical downturns that grip capitalism at regular intervals—and give way to a new upsurge. It has already spread from the financial sector to the sphere of production and has led to the first worldwide recession since the Second World War. It marks a new stage in the decline of world capitalism and invokes all the historical contradictions that, between 1914 and 1945, plunged the world into revolutionary class struggles, fascist barbarism and two world wars.

At the heart of the crisis is the decline of American imperialism, whose economic superiority provided the basis for the temporary stabilisation of world capitalism after the Second World War. Now, the US is compensating for its economic decline by the aggressive deployment of its military forces. The reaction of the European ruling class has been to undertake its own military rearmament and its own initiatives to redivide the world and its resources. The growth of militarism and social reaction are two sides of the same coin.

This confronts the working class with revolutionary tasks. It can no longer defend itself on the basis of reformist or trade union methods, which seek to achieve class compromise within the context of the national state. The globalisation of production has superseded and rendered obsolete and reactionary the borders of the national state. The decay of all reformist organisations is an expression of this fact. The crisis cannot be solved within the context of capitalist society. It confronts the working class with the task of breaking with the old reformist organisations, taking the political initiative and struggling for political power—or facing a descent into dictatorship and war. The working class is posed with the alternative: socialism or barbarism.

That is not Krivine's perspective. His estimation of the crisis does not substantially differ from that of bourgeois politicians, who—like French President Nicolas Sarkozy or German Chancellor Angela Merkel—declare that the "real economy" is basically healthy, attribute the financial crisis to the misdeeds of a few speculators and promise to resolve the problem with stricter regulations. Echoing them, Krivine declares that the crisis has taken place at a time when "financial wealth no longer corresponds to real wealth."

He proposes a series of "immediate measures"—the setting up of a public banking system subject to democratic control, a prohibition on dismissals at profitable companies, the opening of corporate books, the abolition of bank secrets, a rise in purchasing power by increasing wages and pensions, etc.

While these measures sound radical, Krivine does not link them to a programme of working class power. They are raised from the standpoint of exerting pressure on other parties. The task of the NPA is not the preparation of the working class for inevitable class confrontations by breaking it from the paralysing influence of the reformist, Stalinist and trade union apparatuses. Instead, it encourages the illusion that precisely these apparatuses can be pressured to adopt policies favourable to the interests of workers.

How closely the LCR/NPA is linked to the old bureaucratic organisations is made clear in the next paragraph of the interview.

Krivine boasts that the NPA is already exerting a positive effect on the old parties: "Even prior to its birth, it is already forcing all of the time-worn left-wing parties to define themselves in accordance with the NPA or statements made by Olivier Besancenot [the leading light of the LCR/NPA]. It is already proving useful."

In particular, Krivine appeals to all those who have been left politically stranded by the lurch to the right of their old organisations: "The NPA project consists of creating a political opening for all currents, for all persons who wish to oppose the unparalleled offensive of the entrepreneurs and the Sarkozy government with a unified ‘all together’ approach."

He is pleased that so many have already taken up this appeal: "This party, which still does not even exist, has already absorbed a small group of experienced members from the Socialist Party (more than expected...) and the Communist Party, as well as a strong contingent from the trade union movement and from citizens' initiatives."

Krivine is open to any sort of political manoeuvre or combination—including participation in government. The NPA, he says, "is a tool useful for struggles, useful to develop a political alternative, and, why not, under certain, but not yet existing, conditions, useful tomorrow for the exercise of power. Nothing is impossible, a new chapter is opening up."

Krivine also declares his willingness to cooperate and draw up joint lists of candidates with other political currents. His only condition: no participation "in government coalitions with the Socialist Party, similar to the coalitions entered into by the PRC [Refounded Communism] in Italy and the Left Party in Germany."

Such declarations mean little. The timeline for such promises is usually short. In addition, there are different forms of cooperation. In 1936, the French Communist Party did not directly take part in the Popular Front government led by Léon Blum, which consisted of a coalition of the Socialist Party and bourgeois radicals. Nevertheless, the CP was Blum's most important prop, voting for his government in parliament and strangling the powerful general strike movement of that time in order to secure the survival of French capitalism.

Time will tell whether the NPA takes part in a future French government. At present, its most important task consists of cutting off a new generation of workers and young people from the inheritance of the revolutionary workers' movement. In this respect, it has a similar function to that of the Spanish POUM, whose role Trotsky described as follows: "By their general ‘left’ formulae the leaders of the POUM created the illusion that a revolutionary party existed in Spain and prevented the appearance of the truly proletarian, intransigent tendencies.” In so doing, as Trotsky explained, the POUM bore "an enormous responsibility for the Spanish tragedy." (1)

Krivine is completely dismissive of the inheritance of the Marxist movement. He contemptuously derides the great theoretical and political debates that decided the fate of millions as a controversy over antiquated "isms."
"Up to now we have had difficulty recruiting several hundred people into the LCR who differentiated between Stalinism, Maoism, anarchism, Trotskyism and all manner of ‘isms,’ ” Krivine declares. "Today, the revolutionaries are been heard by millions and are striving, while not denying their struggles, to develop a popular party forcing us to jointly change our vocabulary, methods and our ways of operating."

Krivine categorically dismisses the tradition of Trotskyism, which the LCR had invoked (falsely) up to now: "As a party which seeks to ‘revolutionise society,’ the NPA will not be ‘Trotskyist.’ Instead, it will strive to synthesise what is positive in the different traditions of the workers' movement, enriched by the contribution of the critics of globalisation, environmentalists, feminists, and not least the experience of those who come from traditional parties or the anarchist movement."

This opportunist mixing of irreconcilable political currents into a political mishmash is reactionary. One cannot "synthesise" Stalinism and Trotskyism. What separates them is not just differences of opinion but, in Trotsky’s words, a river of blood. The Stalinist regime murdered far more communists than the fascists, as the Italian fascist leader Mussolini once declared. The conflict between Trotskyism and Stalinism was the highest theoretical and political expression of the international class struggle itself. Stalinism was responsible for defeats of the working class whose impact has lasted for generations. The same can be said with regard to the Marxist movement's disputes with reformists and anarchists.

A revolutionary socialist strategy can be developed only on the basis of an assimilation of the lessons of past struggles. Only when the working class learns from history and draws lessons from earlier victories and defeats can it be prepared for a new period of revolutionary conflict. At the heart of these lessons is the struggle waged by the Fourth International against Stalinism, reformism, Pabloite revisionism and all other forms of political opportunism. The most important lessons of the twentieth century are summarised in this tradition.

The LCR/NPA deliberately strives to sever workers and young people from this history and from the political knowledge that must be extracted from history. It turns toward a new generation that grew up in a period marked by the collapse of the Soviet Union and amidst a propaganda campaign proclaiming the alleged "failure of socialism," and which knows little of the revolutionary traditions of the workers' movement. But it does so not to politically educate this generation, but rather to imbue it with contempt for theory and history. Such a movement can only serve as an impediment to the revolutionary development of the working class and a prop for bourgeois rule.
--------------------------------------

Race and Class Vol 50, 2 Oct-Dec 2008

2008-11-19T13:34:00.006Z

Race and Class is justly celebrating its 50th anniversary. This issue (Vol 50, 2 Oct-Dec 2008) carries a re-print from Sivanandan's Race and Resisitance: The IRR Story, his pamphlet from 1974 that gives the history of the Insitute of Race Relations and explains the insurgency that led to a transition from a kind of Commonwealth liberalism to the current radicalism. And Jenny Bourne contributes a piece on 'The IRR: the story continues'.

As well as these two pieces are there are another two articles of great interest. Arun Kundnani writes about 'Islamism and the Roots of Liberal Rage' and Richard Phillips on the Muslim Association of Britain and the anti-war movement, especially the Stop the War Coalition, in 'Standing Together'. Kundnani (who's 2007 book The End of Tolerance is an important contribution to debates about racism) gives a detailed account of British Islamicist politics and the Islamophobic response coming from the likes of Paul Berman and Nick Cohen and how this shapes Ed Husein's account of The Islamist. Phillips provides a very useful and interview based account of one of the crucial and most controversial features of anti-war politics, the participation of the MAB in the Stop the War Coalition, and of special interest an account of how the MAB moved away from STW.

There's more, but that's enough to be going on with.

Mike Davis on Obama

2008-11-19T09:23:00.003Z

Can Obama See the Grand Canyon?
On Presidential Blindness and Economic Catastrophe
By Mike Davis

Let me begin, very obliquely, with the Grand Canyon and the paradox of trying to see beyond cultural or historical precedent.

The first European to look into the depths of the great gorge was the conquistador Garcia Lopez de Cardenas in 1540. He was horrified by the sight and quickly retreated from the South Rim. More than three centuries passed before Lieutenant Joseph Christmas Ives of the U.S. Army Corps of Topographical Engineers led the second major expedition to the rim. Like Garcia Lopez, he recorded an "awe that was almost painful to behold." Ives's expedition included a well-known German artist, but his sketch of the Canyon was wildly distorted, almost hysterical.

Neither the conquistadors nor the Army engineers, in other words, could make sense of what they saw; they were simply overwhelmed by unexpected revelation. In a fundamental sense, they were blind because they lacked the concepts necessary to organize a coherent vision of an utterly new landscape.

Accurate portrayal of the Canyon only arrived a generation later when the Colorado River became the obsession of the one-armed Civil War hero John Wesley Powell and his celebrated teams of geologists and artists. They were like Victorian astronauts reconnoitering another planet. It took years of brilliant fieldwork to construct a conceptual framework for taking in the canyon. With "deep time" added as the critical dimension, it was finally possible for raw perception to be transformed into consistent vision.

The result of their work, The Tertiary History of the Grand Canyon District, published in 1882, is illustrated by masterpieces of draftsmanship that, as Powell's biographer Wallace Stegner once pointed out, "are more accurate than any photograph." That is because they reproduce details of stratigraphy usually obscured in camera images. When we visit one of the famous viewpoints today, most of us are oblivious to how profoundly our eyes have been trained by these iconic images or how much we have been influenced by the idea, popularized by Powell, of the Canyon as a museum of geological time.

But why am I talking about geology? Because, like the Grand Canyon's first explorers, we are looking into an unprecedented abyss of economic and social turmoil that confounds our previous perceptions of historical risk. Our vertigo is intensified by our ignorance of the depth of the crisis or any sense of how far we might ultimately fall.

Weimar Returns in Limbaughland

Let me confess that, as an aging socialist, I suddenly find myself like the Jehovah's Witness who opens his window to see the stars actually falling out of the sky. Although I've been studying Marxist crisis theory for decades, I never believed I'd actually live to see financial capitalism commit suicide. Or hear the International Monetary Fund warn of imminent "systemic meltdown."

Thus, my initial reaction to Wall Street's infamous 777.7 point plunge a few weeks ago was a very sixties retro elation. "Right on, Karl!" I shouted. "Eat your derivatives and die, Wall Street swine!" Like the Grand Canyon, the fall of the banks can be a terrifying but sublime spectacle.

But the real culprits, of course, are not being trundled off to the guillotine; they're gently floating to earth in golden parachutes. The rest of us may be trapped on the burning plane without a pilot, but the despicable Richard Fuld, who used Lehman Brothers to loot pension funds and retirement accounts, merely sulks on his yacht.

Out in the stucco deserts of Limbaughland, moreover, fear is already being distilled into a good ol' boy version of the "stab in the back" myth that rallied the ruined German petite bourgeoisie to the swastika. If you listen to the rage on commute AM, you'll know that ‘socialism' has already taken a lien on America, Barack Hussein Obama is terrorism's Manchurian candidate, the collapse of Wall Street was caused by elderly black people with Fannie Mae loans, and ACORN in its voter registration drives has long been padding the voting rolls with illegal brown hordes.

In other times, Sarah Palin's imitation of Father Charles Coughlin -- the priest who preached an American Reich in the 1930s -- in drag might be hilarious camp, but with the American way of life in sudden freefall, the specter of star-spangled fascism doesn't seem quite so far-fetched. The Right may lose the election, but it already possesses a sinister, historically-proven blueprint for rapid recovery.

Progressives have no time to waste. In the face of a new depression that promises folks from Wasilla to Timbuktu an unknown world of pain, how do we reconstruct our understanding of the globalized economy? To what extent can we look to either Obama or any of the Democrats to help us analyze the crisis and then act effectively to resolve it?

Is Obama FDR?

If the Nashville "town hall" debate is any guide, we will soon have another blind president. Neither candidate had the guts or information to answer the simple questions posed by the anxious audience: What will happen to our jobs? How bad will it get? What urgent steps should be taken?

Instead, the candidates stuck like flypaper to their obsolete talking points. McCain's only surprise was yet another innovation in deceit: a mortgage relief plan that would reward banks and investors without necessarily saving homeowners.

Obama recited his four-point program, infinitely better in principle than his opponent's preferential option for the rich, but abstract and lacking in detail. It remains more a rhetorical promise than the blueprint for the actual machinery of reform. He made only passing reference to the next phase of the crisis: the slump of the real economy and likely mass unemployment on a scale not seen for 70 years.

With baffling courtesy to the Bush administration, he failed to highlight any of the other weak links in the economic system: the dangerous overhang of credit-default swap obligations left over from the fall of Lehman Brothers; the trillion-dollar black hole of consumer credit-card debt that may threaten the solvency of JPMorgan Chase and Bank of America; the implacable decline of General Motors and the American auto industry; the crumbling foundations of municipal and state finance; the massacre of tech equity and venture capital in Silicon Valley; and, most unexpectedly, sudden fissures in the financial solidity of even General Electric.

In addition, both Obama and his vice presidential partner Joe Biden, in their support for Secretary of the Treasury Paulson's plan, avoid any discussion of the inevitable result of cataclysmic restructuring and government bailouts: not "socialism," but ultra-capitalism -- one that is likely to concentrate control of credit in a few leviathan banks, controlled in large part by sovereign wealth funds but subsidized by generations of public debt and domestic austerity.

Never have so many ordinary Americans been nailed to a cross of gold (or derivatives), yet Obama is the most mild-mannered William Jennings Bryan imaginable. Unlike Sarah Palin who masticates the phrase "the working class" with defiant glee, he hews to a party line that acknowledges only the needs of an amorphous "middle class" living on a largely mythical "Main Street."

If we are especially concerned about the fate of the poor or unemployed, we are left to read between the lines, with no help from his talking points that espouse clean coal technology, nuclear power, and a bigger military, but elide the urgency of a renewed war on poverty as championed by John Edwards in his tragically self-destructed primary campaign. But perhaps inside the cautious candidate is a man whose humane passions transcend his own nearsighted centrist campaign. As a close friend, exasperated by my chronic pessimism, chided me the other day, "don't be so unfair. FDR didn't have a nuts and bolts program either in 1933. Nobody did."

What Franklin D. Roosevelt did possess in that year of breadlines and bank failures, according to my friend, was enormous empathy for the common people and a willingness to experiment with government intervention, even in the face of the monolithic hostility of the wealthy classes. In this view, Obama is MoveOn.org's re-imagining of our 32nd president: calm, strong, deeply in touch with ordinary needs, and willing to accept the advice of the country's best and brightest.

The Death of Keynesianism

But even if we concede to the Illinois senator a truly Rooseveltian or, even better, Lincolnian strength of character, this hopeful analogy is flawed in at least three principal ways:

First, we can't rely on the Great Depression as analog to the current crisis, nor upon the New Deal as the template for its solution. Certainly, there is a great deal of déjà vu in the frantic attempts to quiet panic and reassure the public that the worst has passed. Many of Paulson's statements, indeed, could have been directly plagiarized from Herbert Hoover's Secretary of the Treasury Andrew Mellon, and both presidential campaigns are frantically cribbing heroic rhetoric from the early New Deal. But just as the business press has been insisting for years, this is not the Old American Economy, but an entirely new-fangled contraption built from outsourced parts and supercharged by instantaneous world markets in everything from dollars and defaults to hog bellies and disaster futures.

We are seeing the consequences of a perverse restructuring that began with the presidency of Ronald Reagan and which has inverted the national income shares of manufacturing (21% in 1980; 12% in 2005) and those of financial services (15% in 1980; 21% in 2005). In 1930, the factories may have been shuttered but the machinery was still intact; it hadn't been auctioned off at five cents on the dollar to China.

On the other hand, we shouldn't disparage the miracles of contemporary market technology. Casino capitalism has proven its mettle by transmitting the deadly virus of Wall Street at unprecedented velocity to every financial center on the planet. What took three years at the beginning of the 1930s -- that is, the full globalization of the crisis -- has taken only three weeks this time around. God help us, if, as seems to be happening, unemployment tops the levees at anything like the same speed.

Second, Obama won't inherit Roosevelt's ultimate situational advantage -- having emergent tools of state intervention and demand management (later to be called "Keynesianism") empowered by an epochal uprising of industrial workers in the world's most productive factories.

If you've been watching the sad parade of economic gurus on McNeil-Lehrer, you know that the intellectual shelves in Washington are now almost bare. Neither major party retains more than a few enigmatic shards of policy traditions different from the neo-liberal consensus on trade and privatization. Indeed, posturing pseudo-populists aside, it is unclear whether anyone inside the Beltway, including Obama's economic advisors, can think clearly beyond the indoctrinated mindset of Goldman Sachs, the source of the two most prominent secretaries of the treasury over the last decade.

Keynes, now suddenly mourned, is actually quite dead. More importantly, the New Deal did not arise spontaneously from the goodwill or imagination of the White House. On the contrary, the social contract for the post-1935 Second New Deal was a complex, adaptive response to the greatest working-class movement in our history, in a period when powerful third parties still roamed the political landscape and Marxism exercised extraordinary influence on American intellectual life.

Even with the greatest optimism of the will, it is difficult to imagine the American labor movement recovering from defeat as dramatically as it did in 1934-1937. The decisive difference is structural rather than ideological. (Indeed, today's union movement is much more progressive than the decrepit, nativist American Federation of Labor in 1930.) The power of labor within a Walmart-ized service economy is simply more dispersed and difficult to mobilize than in the era of giant urban-industrial concentrations and ubiquitous factory neighborhoods.

Is War the Answer?

The third problem with the New Deal analogy is perhaps the most important. Military Keynesianism is no longer an available deus ex machina. Let me explain.

In 1933, when FDR was inaugurated, the United States was in full retreat from foreign entanglements, and there was little controversy about bringing a few hundred Marines home from the occupations of Haiti and Nicaragua. It took two years of world war, the defeat of France, and the near collapse of England to finally win a majority in Congress for rearmament, but when war production finally started up in late 1940 it became a huge engine for the reemployment of the American work force, the real cure for the depressed job markets of the 1930s. Subsequently, American world power and full employment would align in a way that won the loyalty of several generations of working-class voters.

Today, of course, the situation is radically different. A bigger Pentagon budget no longer creates hundreds of thousands of stable factory jobs, since significant parts of its weapons production is now actually outsourced, and the ideological link between high-wage employment and intervention -- good jobs and Old Glory on a foreign shore -- while hardly extinct is structurally weaker than at any time since the early 1940s. Even in the new military (largely a hereditary caste of poor whites, blacks, and Latinos) demoralization is reaching the stage of active discontent and opening up new spaces for alternative ideas.

Although both candidates have endorsed programs, including expansion of Army and Marine combat strength, missile defense (aka "Star Wars"), and an intensified war in Afghanistan, that will enlarge the military-industrial complex, none of this will replenish the supply of decent jobs nor prime a broken national pump. However, in the midst of a deep slump, what a huge military budget can do is obliterate the modest but essential reforms that make up Obama's plans for healthcare, alternative energy, and education.

In other words, Rooseveltian guns and butter have become a contradiction in terms, which means that the Obama campaign is engineering a catastrophic collision between its national security priorities and its domestic policy goals.

The Fate of Obama-ism

Why don't such smart people see the Grand Canyon?

Maybe they do, in which case deception is truly the mother's milk of American politics; or perhaps Obama has become the reluctant prisoner, intellectually as well as politically, of Clintonism: that is say, of a culturally permissive neo-liberalism whose New Deal rhetoric masks the policy spirit of Richard Nixon.

It's worth asking, for instance, what in the actual substance of his foreign policy agenda differentiates the Democratic candidate from the radioactive legacy of the Bush Doctrine? Yes, he would close Guantanamo, talk to the Iranians, and thrill hearts in Europe. He also promises to renew the Global War on Terror (in much the same way that Bush senior and Clinton sustained the core policies of Reaganism, albeit with a "more human face").

In case anyone has missed the debates, let me remind you that the Democratic candidate has chained himself, come hell or high water, to a global strategy in which "victory" in the Middle East (and Central Asia) remains the chief premise of foreign policy, with the Iraqi-style nation-building hubris of Dick Cheney and Paul Wolfowitz repackaged as a "realist" faith in global "stabilization."

True, the enormity of the economic crisis may compel President Obama to renege on some of candidate Obama's ringing promises to support an idiotic missile defense system or provocative NATO memberships for Georgia and Ukraine. Nonetheless, as he emphasizes in almost every speech and in each debate, defeating the Taliban and Al-Qaeda, together with a robust defense of Israel, constitute the keystone of his national security agenda.

Under huge pressure from Republicans and Blue Dog Democrats alike to cut the budget and reduce the exponential increase in the national debt, what choices would President Obama be forced to make early in his administration? More than likely comprehensive health-care will be whittled down to a barebones plan, "alternative energy" will simply mean the fraud of "clean coal," and anything that remains in the Treasury, after Wall Street's finished its looting spree, will buy bombs to pulverize more Pashtun villages, ensuring yet more generations of embittered mujahideen and jihadis.

Am I unduly cynical? Perhaps, but I lived through the Lyndon Johnson years and watched the War on Poverty, the last true New Deal program, destroyed to pay for slaughter in Vietnam.

It is bitterly ironic, but, I suppose, historically predictable that a presidential campaign millions of voters have supported for its promise to end the war in Iraq has now mortgaged itself to a "tougher than McCain" escalation of a hopeless conflict in Afghanistan and the Pakistani tribal frontier. In the best of outcomes, the Democrats will merely trade one brutal, losing war for another. In the worst case, their failed policies may set the stage for the return of Cheney and Rove, or their even more sinister avatars.

Mike Davis is the author of In Praise of Barbarians: Essays Against Empire (Haymarket Books, 2008) and Buda's Wagon: A Brief History of the Car Bomb (Verso, 2007). He is currently working on a book about cities, poverty, and global change. You can listen to a podcast of Davis discussing why the New Deal isn't relevant as a solution today by clicking here.

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Why Obama's Futurama Can Wait
Schools and Hospitals Should Come First in Any Stimulus Package
By Mike Davis

America's "Futurama" is defunct. The famous walk-through diorama of a car-and-suburb world, imagineered by Norman Bel Geddes for General Motors at the 1939 New York World's Fair, has weathered into a dreary emblem of our national backwardness. While GM bleeds to death on a Detroit street corner, the steel-and-concrete Interstate landscape built in the 1950s and 1960s is rapidly decaying into this century's equivalent of Victorian rubble.

As we wait in potholed gridlock for the next highway bridge to collapse, the French, the Japanese, and now the Spanish blissfully speed by us on their sci-fi trains. Within the next year or two, Spain's high-speed rail network will become the world's largest, with plans to cap construction in 2020 at an incredible 6,000 miles of fast track. Meanwhile China has launched its first 200 mile-per-hour prototype, and Saudi Arabia and Argentina are proceeding with the construction of their own state-of-the-art systems. Of the larger rich, industrial countries, only the United States has yet to build a single mile of what constitutes the new global standard of transportation.

From day one, Barack Obama campaigned to redress this infrastructure deficit through an ambitious program of public investment: "For our economy, our safety, and our workers, we have to rebuild America." Originally he proposed to finance this spending by ending the war in Iraq. Although his present commitments to a larger military and an expanded war in Afghanistan seem to foreclose any reconversion of the Pentagon budget, he continues to emphasize the urgency of an Apollo-style program to modernize highways, ports, rail transit, and power grids.

Public works, he also promises, can put the public back to work. His "Economic Rescue Plan for the Middle Class" vows to "create 5 million new, high-wage jobs by investing in the renewable sources of energy that will eliminate the oil we currently import from the Middle East in 10 years, and we'll create 2 million jobs by rebuilding our crumbling roads, schools, and bridges."

Of course, Bill Clinton entered the White House with a similarly ambitious plan to rebuild the derelict national infrastructure, but it was abandoned after Treasury Secretary Robert Rubin convinced the new president that deficit reduction was the true national priority. This time around, a much more powerful and desperate coalition of interests is aligned to support the Keynesian shock-and-awe of major public works.

Rolling Out the Dozers

Since the Paulson bailout plan has become so much expensive spit in the wind, and with bond spreads now premised on the possibility of double-digit unemployment over the next 18 months, massive new federal spending has become a matter of sheer economic survival. As innumerable influentials -- from New York Times columnist David Brooks to House Majority Leader Nancy Pelosi -- have argued, a crash program of infrastructure repair and construction, likely to include some investment in the new power grids required to bring more solar and wind energy online, is the "win-win" approach that will garner the quickest bipartisan support.

It has also been portrayed as the only lifeboat in the water for the ordinary steerage passengers in our sinking economy. The emergent Washington consensus seems to be that those five million green jobs can actually come later (after we save GM's shareholders), but that infrastructure spending -- if resolutely pushed through the lame-duck Congress or adopted in Obama's first 100 days -- can begin to pump money into the crucial construction and manufacturing sectors of the economy before the end of next winter.

Unlike Comrade Bush's "socialist" efforts to save Wall Street, a public-works strategy for national recovery has had broad ideological respectability from the days of Alexander Hamilton and Abraham Lincoln to those of Franklin D. Roosevelt and John F. Kennedy. If Democrats can brag about the proud heritage of the Works Progress Administration and the Public Works Administration from the era of the Great Depression (ah, those magnificent post offices and parkways), there are still a few Republicans who remember the Golden Age of interstate highway construction that commenced in the 1950s with President Dwight D. Eisenhower. Indeed since the national shame of Hurricane Katrina, Americans have become outspokenly nostalgic about competent federal governments and magnificent public achievements.

If one accepts the reasonable principle of supporting the new president whenever he makes policy from the left or addresses basic social needs, shouldn't progressives be cheering the White House as it rolls out the dozers, Cats, and big cranes? Aren't high-speed mass transit and clean energy the kind of noble priorities that best reconcile big-bang stimulus with long-term public value?

The answer is: no, not at this stage of our national emergency. I'm not an infrastructure-crisis denialist, but first things first. We are now at a crash site, and our priority should be to save the victims, not change the tires or repair the fender, much less build a new car. In the triage situation that now confronts the president-elect, keeping local schools and hospitals open should be the first concern, rebuilding bridges and expanding ports would come next, and rescuing bank shareholders at the very end of the line.

Inexorably, the budgets of schools, cities, and states are sinking into insolvency on a scale comparable to the early 1930s. The public-sector fiscal crisis -- a vicious chain reaction of falling property values, incomes, and sales -- has been magnified by the unexpectedly large exposure of local governments and transit agencies to the Wall Street meltdown via complex capital lease-back arrangements. Meanwhile on the demand side, the need for public services explodes as even prudent burghers face foreclosure, not to speak of the loss of pensions and medical coverage. Although the public mega-deficits of California and New York may dominate headlines, the essence of the crisis -- from the suburbs of Anchorage to the neighborhoods of West Philly -- is its potential universality.

Certainly, in such a rich country, wind farms and schools should never become a Sophie's choice, but the criminal negligence of Congress over the past months should alert us to the likelihood that such a choice will be made -- with disastrous results for both human services and economic recovery.

Saving Schools and Hospitals

Congress naturally loves infrastructure because it rewards manufacturers, shippers, and contractors who give large campaign contributions, and because construction sites can be handsomely bill-boarded with the names of proud sponsors. Powerful business lobbies like the National Industrial Transportation League and the Coalition for America's Gateways and Trade Corridors stand ready to grease the wheels of their political allies. In addition, if the past century of congressional pork-barrel methods is any precedent, infrastructural spending typically resists coherent national planning or larger cost-benefit analyses.

Yet saving (and expanding) core public employment is, hands-down, the best Keynesian stimulus around. Federal investment in education and healthcare gets incomparably more bang for the buck, if jobs are the principal criterion, than expenditures on transportation equipment or road repair.

For example, $50 million in federal aid during the Clinton administration allowed Michigan schools to hire nearly 1,300 new teachers. It is also the current operating budget of a Tennessee school district made up of eight elementary schools, three middle schools, and two high schools.

On the other hand, $50 million on the order book of a niche public transit manufacturer generates only 200 jobs (plus, of course, capital costs and profits). Road construction and bridge repair, also very capital intensive, produce about the same modest, direct employment effect.

One of the most likely targets for a Congressional stimulus plan is light-rail construction. Street-car systems are enormously popular with local governments, redevelopment agencies, and middle-class commuters, but generally they operate less efficiently (per dollar per passenger) than bus systems, and at least 40% of the capital investment leaks overseas to German streetcar builders and Korean steel companies.

Personally, I would love to commute via a sleek Euro-style bullet train from my home in San Diego to my job in Riverside, 100 grueling freeway miles away, but I'll take gridlock if the cost of rationing federal expenditure is tolerating the closure of my kids' school or increasing the wait in the local emergency room from two to ten hours.

Obama, unlike his predecessor, has a bold vision, shared with his powerful supporters in high-tech industries, of catching up with the Spanish and Japanese, while redeeming America as the synonym for modernity. Lots of new infrastructure will, however, become so many bridges to nowhere (especially for our children) unless he and Congress first save human-needs budgets and public-sector jobs.

A good start for progressive agitation on Obama's left flank would be to demand that his health-care reform and aid-to-education proposals be brought front and center as preferential vehicles for immediate macro-economic stimulus. Democrats should not forget that the most brilliant and enduring accomplishment of the Kennedy-Johnson era was Head Start, not the Apollo Program.

If, after saving kindergartens and county hospitals, we someday hope to ride the fast train, then we need to rebuild the antiwar movement on broader foundations. The president-elect's original proposal for funding domestic social investment through downsizing the empire offers a brilliant starting point for basing economic growth on an economic bill of rights (as advocated by Franklin Roosevelt in 1944) instead of imperial over-reach and Pharaonic levels of military waste.

Mike Davis is the author of In Praise of Barbarians: Essays Against Empire (Haymarket Books, 2008) and Buda's Wagon: A Brief History of the Car Bomb (Verso, 2007). He is currently working on a book about cities, poverty, and global change.

Tomgram presents Tariq Ali on Afghanistan

2008-11-17T14:38:00.003Z

November 16, 2008
Tomgram: Tariq Ali, Flight Path to Disaster in Afghanistan

One of the eerier reports on the deteriorating situation in Afghanistan appeared recently in the New York Times. Journalist John Burns visited the Russian ambassador in Kabul, Zamir N. Kabulov, who, back in the 1980s, when the Russians were the Americans in Afghanistan, and the Americans were launching the jihad that would eventually wend its way to the 9/11 attacks… well, you get the idea…

In any case, Kabulov was, in the years of the Soviet occupation, a KGB agent in the same city and, in the 1990s, an adviser to a U.N. peacekeeping envoy during the Afghan civil war that followed. "They've already repeated all of our mistakes," he told Burns, speaking of the American/NATO effort in the country. "Now," he added, "they're making mistakes of their own, ones for which we do not own the copyright." His list of Soviet-style American mistakes included: underestimating "the resistance," an over-reliance on air power, a failure to understand the Afghan "irritative allergy" to foreign occupation, "and thinking that because they swept into Kabul easily, the occupation would be untroubled." Of present occupiers who have stopped by to catch his sorry tale, Kabulov concludes world-wearily, "They listen, but they do not hear."

The question is: Does this experience really have to be repeated to the bitter end -- in the case of the Soviets, a calamitous defeat and retreat from Afghanistan, followed by years of civil war in that wrecked country, and finally the rise of the Pakistani-backed Taliban? The answer is: perhaps. There is no question that the advisers President Obama will be listening to are already exploring more complex strategies in Afghanistan, including possible negotiations with "reconcilable elements" of the Taliban. But these all remain military-plus strategies at whose heart lies the kind of troop surge that candidate Obama called for so vehemently -- and, given the fate of the previous 2007 U.S./NATO "surge" in Afghanistan, this, too, has failure written all over it.

If you want a glimmer of hope when it comes to the spreading Afghan War -- American missile-armed drones have been attacking across the Pakistani border regularly in recent months -- consider that Barack Obama has made ex-CIA official Bruce Reidel a key advisor on the deteriorating Pakistani situation. And Reidel recently reviewed startlingly favorably Tariq Ali's must-read, hard-hitting new book on Pakistan (and so Afghanistan and so American policy), The Duel: Pakistan on the Flight Path of American Power for the Washington Post. ("My employers of the past three decades, the CIA and the Brookings Institution, get their share of blame," Reidel wrote. "So do both of the current presidential candidates…")

Ali believes that there could be a grand, brokered regional solution to the Afghan War, essentially a military-minus strategy. Let's hope Reidel and others are willing to listen to that, too; otherwise it will certainly be "Obama's war," and -- for anyone old enough to remember -- haven't we been through that before? Tom

Operation Enduring Disaster
Breaking with Afghan PolicyBy Tariq Ali
Afghanistan has been almost continuously at war for 30 years, longer than both World Wars and the American war in Vietnam combined. Each occupation of the country has mimicked its predecessor. A tiny interval between wars saw the imposition of a malignant social order, the Taliban, with the help of the Pakistani military and the late Benazir Bhutto, the prime minister who approved the Taliban takeover in Kabul.

Over the last two years, the U.S./NATO occupation of that country has run into serious military problems. Given a severe global economic crisis and the election of a new American president -- a man separated in style, intellect, and temperament from his predecessor -- the possibility of a serious discussion about an exit strategy from the Afghan disaster hovers on the horizon. The predicament the U.S. and its allies find themselves in is not an inescapable one, but a change in policy, if it is to matter, cannot be of the cosmetic variety.

Washington's hawks will argue that, while bad, the military situation is, in fact, still salvageable. This may be technically accurate, but it would require the carpet-bombing of southern Afghanistan and parts of Pakistan, the destruction of scores of villages and small towns, the killing of untold numbers of Pashtuns and the dispatch to the region of at least 200,000 more troops with all their attendant equipment, air, and logistical support. The political consequences of such a course are so dire that even Dick Cheney, the closest thing to Dr. Strangelove that Washington has yet produced, has been uncharacteristically cautious when it comes to suggesting a military solution to the conflict.

It has, by now, become obvious to the Pentagon that Afghan President Hamid Karzai and his family cannot deliver what is required and yet it is probably far too late to replace him with UN ambassador Zalmay Khalilzad. On his part, fighting for his political (and probably physical) existence, Karzai continues to protect his brother Ahmad Wali Karzai, accused of being involved in the country's staggering drug trade, but has belatedly sacked Hamidullah Qadri, his transport minister, for corruption.

Qadri was taking massive kickbacks from a company flying pilgrims to Mecca. Is nothing sacred?
A Deteriorating Situation
Of course, axing one minister is like whistling in the wind, given the levels of corruption reported in Karzai's government, which, in any case, controls little of the country. The Afghan president parries Washington's thrusts by blaming the U.S. military for killing too many civilians from the air. The bombing of the village of Azizabad in Herat province last August, which led to 91 civilian deaths (of which 60 were children), was only the most extreme of such recent acts. Karzai's men, hurriedly dispatched to distribute sweets and supplies to the survivors, were stoned by angry villagers.

Given the thousands of Afghans killed in recent years, small wonder that support for the neo-Taliban is increasing, even in non-Pashtun areas of the country. Many Afghans hostile to the old Taliban still support the resistance simply to make it clear that they are against the helicopters and missile-armed unmanned aerial drones that destroy homes, and to "Big Daddy" who wipes out villages, and to the flames that devour children.

Last February, Director of National Intelligence Michael McConnell presented a bleak survey of the situation on the ground to the House Permanent Select Committee on Intelligence:
"Afghan leaders must deal with the endemic corruption and pervasive poppy cultivation and drug trafficking. Ultimately, defeating the insurgency will depend heavily on the government's ability to improve security, deliver services, and expand development for economic opportunity.
"Although the international forces and the Afghan National Army continue to score tactical victories over the Taliban, the security situation has deteriorated in some areas in the south and Taliban forces have expanded their operations into previously peaceful areas of the west and around Kabul. The Taliban insurgency has expanded in scope despite operational disruption caused by the ISAF [NATO forces] and Operation Enduring Freedom operations. The death or capture of three top Taliban leaders last year -- their first high level losses -- does not yet appear to have significantly disrupted insurgent operations."

Since then the situation has only deteriorated further, leading to calls for sending in yet more American and NATO troops -- and creating ever deeper divisions inside NATO itself. In recent months, Sir Sherard Cowper-Coles, the British Ambassador to Kabul, wrote a French colleague (in a leaked memo) that the war was lost and more troops were not a solution, a view reiterated recently by Air Marshal Sir Jock Stirrup, the British Defense Chief, who came out in public against a one-for-one transfer of troops withdrawn from Iraq to Kabul. He put it this way:
"I think we would all take some persuading that there would have to be a much larger British contingent there… So we also have to get ourselves back into balance; it's crucial that we reduce the operational tempo for our armed forces, so it cannot be, even if the situation demanded it, just a one for one transfer from Iraq to Afghanistan, we have to reduce that tempo."

The Spanish government is considering an Afghan withdrawal and there is serious dissent within the German and Norwegian foreign policy elites. The Canadian foreign minister has already announced that his country will not extend its Afghan commitment beyond 2011. And even if the debates in the Pentagon have not been aired in public, it's becoming obvious that, in Washington, too, some see the war as unwinnable.

Enter former Iraq commander General David Petraeus, center stage as the new CentCom commander. Ever since the "success" of "the surge" he oversaw in Iraq (a process designed to create temporary stability in that ravaged land by buying off the opposition and, among other things, the selective use of death squads), Petraeus sounds, and behaves, more and more like Lazarus on returning from the dead -- and before his body could be closely inspected.
The situation in Iraq was so dire that even a modest reduction in casualties was seen as a massive leap forward. With increasing outbreaks of violence in Baghdad and elsewhere in Iraq, however, the talk of success sounds ever hollower. To launch a new "surge" in Afghanistan now by sending more troops there will simply not work, not even as a public relations triumph. Perhaps some of the 100 advisers that General Petraeus has just appointed will point this out to him in forceful terms.

Flight Path to Disaster
Obama would be foolish to imagine that Petraeus can work a miracle cure in Afghanistan. The cancer has spread too far and is affecting U.S. troops as well. If the American media chose to interview active-duty soldiers in Afghanistan (on promise of anonymity), they might get a more accurate picture of what is happening inside the U.S. Army there.

I learned a great deal from Jules, a 20-year old American soldier I met recently in Canada. He became so disenchanted with the war that he decided to go AWOL, proving -- at least to himself -- that the Afghan situation was not an inescapable predicament. Many of his fellow soldiers, he claims, felt similarly, hating a war that dehumanized both them and the Afghans. "We just couldn't bring ourselves to accept that bombing Afghans was no different from bombing the landscape" was the way he summed up the situation.

Morale inside the Army there is low, he told me. The aggression unleashed against Afghan civilians often hides a deep depression. He does not, however, encourage others to follow in his footsteps. As he sees it, each soldier must make that choice for himself, accepting with it the responsibility that going AWOL permanently entails. Jules was convinced, however, that the war could not be won and did not want to see any more of his friends die. That's why he was wearing an "Obama out of Afghanistan" t-shirt.

Before he revealed his identity, I mistook this young soldier -- a Filipino-American born in southern California -- for an Afghan. His features reminded me of the Hazara tribesmen he must have encountered in Kabul. Trained as a mortar gunner and paratrooper from Fort Benning, Georgia, he was later assigned to the 82nd Airborne at Fort Bragg. Here is part of the account he offered me:

"I deployed to Southeastern Afghanistan in January 2007. We controlled everything from Jalalabad down to the northernmost areas of Kandahar province in Regional Command East. My unit had the job of pacifying the insurgency in Paktika, Paktia, and Khost provinces -- areas that had received no aid, but had been devastated during the initial invasion. Operation Anaconda [in 2002] was supposed to have wiped out the Taliban. That was the boast of the military leaders, but ridiculed by everyone else with a brain."

He spoke also of how impossible he found it to treat the Afghans as subhumans:
"I swear I could not for a second view these people as anything but human. The best way to fashion a young hard dick like myself -- dick being an acronym for 'dedicated infantry combat killer' -- is simple and the effect of racist indoctrination. Take an empty shell off the streets of L.A. or Brooklyn, or maybe from some Podunk town in Tennessee… and these days America isn't in short supply… I was one of those no-child-left-behind products…
"Anyway, you take this empty vessel and you scare the living shit out of him, break him down to nothing, cultivate a brotherhood and camaraderie with those he suffers with, and fill his head with racist nonsense like all Arabs, Iraqis, Afghans are Hajj. Hajj hates you. Hajj wants to hurt your family. Hajj children are the worst because they beg all the time. Just some of the most hurtful and ridiculous propaganda, but you'd be amazed at how effective it's been in fostering my generation of soldiers."

As this young man spoke to me, I felt he should be testifying before the Senate Foreign Relations Committee. The effect of the war on those carrying out the orders is leaving scars just as deep as the imprints of previous imperial wars. Change we can believe in must include the end of this, which means, among other things, a withdrawal from Afghanistan.

In my latest book, The Duel: Pakistan on the Flight Path of American Power, I have written of the necessity of involving Afghanistan's neighbors in a political solution that ends the war, preserves the peace, and reconstructs the country. Iran, Russia, India, and China, as well as Pakistan, need to be engaged in the search for a political solution that would sustain a genuine national government for a decade after the withdrawal of the Americans, NATO, and their quisling regime. However, such a solution is not possible within the context of the plans proposed by both present Secretary of Defense Robert Gates and President-elect Barack Obama, which focus on a new surge of American troops in Afghanistan.

The main task at hand should be to create a social infrastructure and thus preserve the peace, something that the West and its horde of attendant non-governmental organizations have failed to do. School buildings constructed, often for outrageous sums, by foreign companies that lack furniture, teachers, and kids are part of the surreal presence of the West, which cannot last.
Whether you are a policymaker in the next administration or an AWOL veteran of the Afghan War in Canada, Operation Enduring Freedom of 2001 has visibly become Operation Enduring Disaster. Less clear is whether an Obama administration can truly break from past policy or will just create a military-plus add-on to it. Only a total break from the catastrophe that George W. Bush, Dick Cheney, and Donald Rumsfeld created in Afghanistan will offer pathways to a viable future.

For this to happen, both external and domestic pressures will probably be needed. China is known to be completely opposed to a NATO presence on, or near, its borders, but while Beijing has proved willing to exert economic pressure to force policy changes in Washington -- as it did when the Bank of China "cut its exposure to agency debt last summer," leaving U.S. Treasury Secretary Paulson with little option but to functionally nationalize the mortgage giants -- it has yet to use its diplomatic muscle in the region.

But don't think that will last forever. Why wait until then? Another external pressure will certainly prove to be the already evident destabilizing effects of the Afghan war on neighboring Pakistan, a country in a precarious economic state, with a military facing growing internal tensions.

Domestic pressure in the U.S. to pull out of Afghanistan remains weak, but could grow rapidly as the extent of the debacle becomes clearer and NATO allies refuse to supply the shock-troops for the future surge.

In the meantime, they're predicting a famine in Afghanistan this winter.

Tariq Ali, writer, journalist, filmmaker, contributes regularly to a range of publications including the Guardian, the Nation, and the London Review of Books. His most recent book, just published, is The Duel: Pakistan on the Flight Path of American Power (Scribner, 2008). In a two-part video, released by TomDispatch.com, he offers critical commentary on Barack Obama's plans for Afghanistan and Pakistan, as well as on the tangled U.S.-Pakistani relationship.

Copyright 2008 Tariq Ali

Wallerstein on Obama

2008-11-15T11:43:00.001Z

Commentary No. 245, Nov. 15, 2008
"Obama's Victory - Fear and Hope"

The whole of the United States and indeed the whole world was watching, and almost all of it was cheering, the election of Barack Obama as the next president of the United States. Although, during the electoral campaign, everyone tried to play down the centrality of the racial issue, on Nov. 4 it seemed that no one could talk of anything else. There are three central questions about what most commentators are calling this "historic event": How important is it? What explains the victory? What is likely to happen now?

On the evening of November 4, an immense crowd assembled in Grant Park, Chicago, to hear Obama's acceptance speech. All those who were watching U.S. television saw the camera zoom in on Jesse Jackson, who was in tears. Those tears reflect the virtually unanimous view of all African-Americans, who regard Obama's election as the moment of their definitive integration into the U.S. electoral process. They do not believe that racism has disappeared. But a symbolic barrier has been crossed, first of all for them, and then for all the rest of us.

Their sentiment is quite parallel to the feelings of Africans in South Africa on April 27, 1994 when they voted to elect Nelson Mandela president of their country. It has not mattered that Mandela, as president, did not fulfill the whole promise of his party. It will not matter if Obama does not fulfill the whole promise of his campaign. In the United States, as in South Africa, a new day has dawned. Even if it is an imperfect day, it is a better day than before. The African-Americans, but also the Hispanics and the young people in general, voted for Obama out of hope - a diffuse hope, but a real one.

How did Obama win? He won the way anyone wins in a large, complex political situation. He put together a large coalition of many different political forces. In this case, the gamut ran from fairly far left to right of center. He would not have won without that enormous range of support. And, of course, now that he has won, all the different groups want him to govern as each prefers, which is of course not possible.

Who are these different elements, and why did they support him? On the left, even the far left, they voted for Obama because of deep anger about the damage the Bush regime inflicted on the United States and the world, and the genuine fear that McCain would have been no better, perhaps worse. On the center-right, independents and many Republicans voted for him most of all because they had become aghast at the ever-increasing dominance of the Christian right in Republican party politics, a sentiment that was underlined by the choice of Sarah Palin as the vice-presidential candidate. These people voted for Obama because they were afraid of McCain/Palin and because Obama convinced them that he was a solid and sensible pragmatist.
And in-between these two groups were the so-called Reagan Democrats, largely industrial workers, often Catholics, often racist, who had tended to desert their Democratic party roots in recent elections because they viewed the party as having moved too far left and disapproved of its positions on social questions. These voters moved back to the Democratic party not because their outlook had changed, but because of fear. They were deeply afraid of the economic depression into which the United States has moved, and thought that their only hope was in a new New Deal. They voted for the Democrats despite the fact that Obama was an African-American.

Fear conquered racism.
And what will Obama do now? What can Obama do now? It is still too early to be sure. It seems clear that he will move quickly to take advantage of a crisis situation, as his new Chief of Staff, Rahm Emanuel, put it. I suspect we shall see a dramatic set of initiatives in the traditional first 100 days. And some of what Obama does may be surprising.

Still, there are two situations, the two biggest, that are largely beyond his control - the transformed geopolitics of the world-system, and the catastrophic world economic situation. Yes, the world received Obama's victory with joy, but also with prudence. It is notable that two major centers of power issued statements on the geopolitical scene that were quite forthright. Both the European Union in a unanimous statement and President Lula of Brazil said they looked forward to renewing collaboration with the United States, but this time as equals, not as junior partners.

Obama will pull out of Iraq more or less as promised, if for no other reason than the fact that the Iraqi government will insist upon it. He will try to find a graceful exit from Afghanistan, which will not be too easy. But whether he will do something significant in relation to the Israel/Palestine deadlock and whether he can look forward to a more stable Pakistan is very unsure. And he will have less to say about it than he may think. Can Obama accept the fact that the United States is no longer the world's leader, merely a partner with other power centers? And, even if he can, can he somehow get the American people to accept this new reality?

As for the depression, it will no doubt have to play out its course. Obama, like all the other major leaders in the world, is a captain on a very stormy sea, and can do relatively little more than try to keep his ship from sinking altogether.

Where Obama has some leeway is in the internal U.S. situation. There are three things where he is expected to act and can act, if he is ready to be bold. One is job creation. This can only be done effectively in the short run through government action. And it would be best done by investing in reconstructing the degraded infrastructure of the United States, and in measures to reverse environmental decline.

The second is the establishment, at last, of a decent health care structure in the United States, in which everyone, without exception, will be covered, and in which there will be considerable emphasis on preventive medicine.

And the third area is in undoing all the damage that has been done to basic civil liberties in the United States by the Bush administration, but also by prior administrations. This requires an overhauling both of the Department of Justice and the legal and paralegal apparatus that has been constructed in the last eight, but also the last thirty, years.

If Obama acts decisively in these three arenas, then we might say that this was a truly historic election, one in which the change that occurred was more than symbolic. But if he fails here, the letdown will be momentous.

Many are trying to divert his attention into the arenas in which he cannot do much, and in which his best position would be that of a lower profile, the acceptance of new world reality. There is much about Obama's future actions to fear, and much that offers hope.

Naomi Klein calls for a 'rocky transition'

2008-11-14T09:48:00.003Z

In Praise of a Rocky Transition
Lookout
By Naomi Klein
This article appeared in the December 1, 2008 edition of The Nation.
November 13, 2008

The more details emerge, the clearer it becomes that Washington's handling of the Wall Street bailout is not merely incompetent. It is borderline criminal.

Brace yourself for a final, frantic stripping of public wealth as the Bush regime goes out the door.

Hurricane Gustav should have been political rat poison for the GOP; instead, it became an argument for drilling. In a moment of high panic in late September, the US Treasury unilaterally pushed through a radical change in how bank mergers are taxed--a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140 billion in tax revenue, lawmakers found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "Treasury had no authority to issue the [tax change] notice."

Of equally dubious legality are the equity deals Treasury has negotiated with many of the country's banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals, "Any use of these funds for any purpose other than lending--for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc.--is a violation of the act." Yet this is exactly how the funds are being used.

Then there is the nearly $2 trillion the Federal Reserve has handed out in emergency loans. Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg News believes that this secrecy violates the law and has filed a federal suit demanding full disclosure.

Despite all of this potential lawlessness, the Democrats are either openly defending the administration or refusing to intervene. "There is only one president at a time," we hear from Barack Obama. That's true. But every sweetheart deal the lame-duck Bush administration makes threatens to hobble Obama's ability to make good on his promise of change. To cite just one example, that $140 billion in missing tax revenue is almost the same sum as Obama's renewable energy program. Obama owes it to the people who elected him to call this what it is: an attempt to undermine the electoral process by stealth.

Yes, there is only one president at a time, but that president needed the support of powerful Democrats, including Obama, to get the bailout passed. Now that it is clear that the Bush administration is violating the terms to which both parties agreed, the Democrats have not just the right but a grave responsibility to intervene forcefully.

I suspect that the real reason the Democrats are so far failing to act has less to do with presidential protocol than with fear: fear that the stock market, which has the temperament of an overindulged 2-year-old, will throw one of its world-shaking tantrums. Disclosing the truth about who is receiving federal loans, we are told, could cause the cranky market to bet against those banks. Question the legality of equity deals and the same thing will happen. Challenge the $140 billion tax giveaway and mergers could fall through. "None of us wants to be blamed for ruining these mergers and creating a new Great Depression," explained one unnamed Congressional aide.

More than that, the Democrats, including Obama, appear to believe that the need to soothe the market should govern all key economic decisions in the transition period. Which is why, just days after a euphoric victory for "change," the mantra abruptly shifted to "smooth transition" and "continuity."

Take Obama's pick for chief of staff. Despite the Republican braying about his partisanship, Rahm Emanuel, the House Democrat who received the most donations from the financial sector, sends an unmistakably reassuring message to Wall Street. When asked on This Week With George Stephanopoulos whether Obama would be moving quickly to increase taxes on the wealthy, as promised, Emanuel pointedly did not answer the question.

This same market-coddling logic should, we are told, guide Obama's selection of treasury secretary. Fox News's Stuart Varney explained that Larry Summers, who held the post under Clinton, and former Fed chair Paul Volcker would both "give great confidence to the market." We learned from MSNBC's Joe Scarborough that Summers is the man "the Street would like the most."

Let's be clear about why. "The Street" would cheer a Summers appointment for exactly the same reason the rest of us should fear it: because traders will assume that Summers, champion of financial deregulation under Clinton, will offer a transition from Henry Paulson so smooth we will barely know it happened. Someone like FDIC chair Sheila Bair, on the other hand, would spark fear on the Street--for all the right reasons.

One thing we know for certain is that the market will react violently to any signal that there is a new sheriff in town who will impose serious regulation, invest in people and cut off the free money for corporations. In short, the markets can be relied on to vote in precisely the opposite way that Americans have just voted. (A recent USA Today/Gallup poll found that 60 percent of Americans strongly favor "stricter regulations on financial institutions," while just 21 percent support aid to financial companies.)

There is no way to reconcile the public's vote for change with the market's foot-stomping for more of the same. Any and all moves to change course will be met with short-term market shocks. The good news is that once it is clear that the new rules will be applied across the board and with fairness, the market will stabilize and adjust. Furthermore, the timing for this turbulence has never been better. Over the past three months, we've been shocked so frequently that market stability would come as more of a surprise. That gives Obama a window to disregard the calls for a seamless transition and do the hard stuff first. Few will be able to blame him for a crisis that clearly predates him, or fault him for honoring the clearly expressed wishes of the electorate. The longer he waits, however, the more memories fade.

When transferring power from a functional, trustworthy regime, everyone favors a smooth transition. When exiting an era marked by criminality and bankrupt ideology, a little rockiness at the start would be a very good sign.

About Naomi KleinNaomi Klein is an award-winning journalist and syndicated columnist and the author of the international and New York Times bestseller The Shock Doctrine: The Rise of Disaster Capitalism (September 2007); an earlier international best-seller, No Logo: Taking Aim at the Brand Bullies; and the collection Fences and Windows: Dispatches from the Front Lines of the Globalization Debate (2002). more...

Wallerstein on Iraq

2008-11-03T12:09:00.002Z

Commentary No. 244, Nov. 1, 2008
"Dramatic Consequences in Iraq?"

"Dramatic consequences" are what U.S. Secretary of Defense, Robert Gates, predicts if, on Jan. 1, 2009, there is no agreement concerning the rights of U.S. troops to operate in Iraq, either via a so-called Status-of-Forces Agreement (SOFA) between Iraq and the United States or, second best, an extension of the United Nations mandate that is at the moment the juridical basis of the presence and rights of U.S. military activity there, but which expires on Dec. 31, 2008.

The negotiations between the United States and Iraq have reached an impasse, as almost everyone now acknowledges. There could be a last-minute breakthrough, but it seems unlikely. It seems more probable that the U.N. Security Council will meet at the very end of December to authorize a time-limited extension of the present mandate. This would throw the question into the hands of the next U.S. president to negotiate. This is not at all what the Bush administration had wanted or ever expected to happen.

A year ago or so, the Bush administration was confident that it could negotiate a SOFA agreement with a presumed-to-be friendly al-Maliki government in Iraq. It wanted an agreement that would more or less renew the current rules governing U.S. military operations in Iraq and one that would also thereby tie the hands of the next U.S. administration for at least several years. The U.S. negotiators proposed an agreement at the level of the two governments, one that would not have to be ratified by the legislatures of either country.

Everything went wrong with this plan. First of all, the legislatures insisted that they wanted to be part of the arrangements, especially the Iraqi legislature. Secondly, there were important political voices within Iraq who were against any arrangement that would keep U.S. forces in Iraq. These included, of course, the group led by Moktada al-Sadr, who has consistently raised the banner of Iraqi nationalism against a continued U.S. presence.

But al-Sadr was not alone. It turned out that there were serious reservations among all three groups on whom the United States had counted to be sympathetic to an extension - the two main Shi'a parties other than the Sadrists (SCIRI and al-Maliki's party, Dawa), the so-called moderate Sunnis, and of course the Kurds. The rumblings on all sides led Prime Minister Nouri al-Maliki to take a far tougher line in the negotiations than the United States had anticipated. He started to act as though his greatest worry was that he might be outflanked as an Iraqi nationalist leader by others, and in particular by Moktada al-Sadr.

Al-Maliki therefore made two primary demands in the negotiations. He wanted a firm date for the withdrawal of U.S. troops. And he wanted to submit U.S. troops and civilian contractors to Iraqi jurisdiction, whenever they were accused of serious crimes committed outside of legitimate military activity. Both demands were totally anathema to the United States.

But al-Maliki held firm. And after many months he got concessions. There was agreement on a terminal date of 2011 for U.S. combat troops, and there was agreement on Iraqi jurisdiction on behavior in the non-military arena. But the wording of each concession also included escape clauses. The withdrawal in 2011 was to be subject to "conditions on the ground." And Iraqi jurisdiction was to be subject to someone (presumably the United States) deciding that the alleged behavior was indeed outside of legitimate military activity.

The escape hatches turned out to be too much for Iraqi politicians to accept. As one of them recently put it, "they have given with the right hand what they have taken away with the left hand." So, one after the other, they said they would not vote to approve the present "compromise" draft. The most important voice along these lines was Grand Ayatollah al-Sistani who indicated that the present proposal was unacceptable. The largest Shi'a party, SCIRI, refused the draft. The moderate Sunnis and the Kurds indicated that they wanted changes. The entire Iraqi cabinet then voted to insist on amendments. It then indicated that one of the amendments would be to give the Iraqi (and not the U.S.) government the power to decide on whether behavior of Americans was outside legitimate military activity. It doesn't seem that such amendments are at all acceptable to the United States.

In this situation, Secretary of Defense Gates and Secretary of State Condoleezza Rice have tried to issue careful diplomatic comments. Other Americans were not as restrained. The commander of U.S. troops in Iraq, Gen. Raymond T. Odierno, said that Iraqi reluctance was due to Iranian bribes. Al-Maliki immediately said that Odierno had "risked his position."

Then the Chairman of the U.S. Joint Chiefs of Staff, Adm. Michael Mullen, opined that, without U.S. troop support, Iraqi forces would not "be ready to provide for their own security." The Iraqi government's spokesman, Ali al-Dabbagh, immediately responded angrily that "it is not correct to force Iraqis into making a choice and it is not appropriate to talk with the Iraqis in this way." Other Iraqis were more blunt. They called Mullen's comments about ending all U.S. assistance if a SOFA agreement was not signed a form of "blackmail."

When the United States launched its recent raid against presumed al-Qaeda elements located on Syrian soil, and did this from a base in Iraq, it threw further cold water on the proposed agreement. A prominent Kurdish politician said that the raid was made without the knowledge of the Iraqi government and would give Iraqi's neighbors "a good reason to be concerned about the continued U.S. presence in Iraq." Another amendment the Iraqi cabinet now wants is one forbidding attacks on neighbors by U.S. forces located in Iraq.

Russia's Foreign Minister, Sergei Lavrov, has made it clear that Russia would not oppose an extension of U.N. authorization, provided it is the government of Iraq that requests it. Lavrov added that Russia supports "the government of Iraq as far as the need to ensure the sovereignty of Iraq on its own territory is concerned." Why should Russia not do this? Russia is quite happy to see U.S. troops tied down in Iraq for the time being. It constricts U.S. ability to use them anywhere else. In any case, there is a question whether the Iraqi government, if and when it requests an extension of the U.N. mandate, would ask that the new provisions the United States is opposing in the SOFA agreement be included in the extension, in which case the United States might veto the extension.

The person who is quietly relishing what is going on is Moktada al-Sadr. His mere existence as a voice on the Iraqi scene has forced all other Iraqi political forces to express Iraqi nationalist demands more openly and more aggressively. The tide is moving in his direction. It is now quite probable that the Iraqi government will ask the United States to withdraw entirely even before the hypothetical date of 2011 in the present proposal, and very long before the 100 years of which John McCain once spoke.

Will there be "dramatic consequences"? The world will judge. So of course will the Iraqis. And so will U.S. public opinion. But dramatic or not, it is probably going to happen.

Immanuel Wallerstein

Socialist Party: Capitalism in Crisis

2008-10-30T16:24:00.010Z

Press Release for immediate use 30/10/08
Capitalism in crisis – come and hear the case for socialism

Activists, left trade union leaders, workers in struggle and young people to discuss the fight-back against the bosses’ crisis. Speakers from across the globe to attend rally in central London. We are living in historic times. The utter unplanned chaos of those 'in control' of the levers of finance has been revealed to working-class people. The self styled 'masters of the universe' have been exposed for the parasites - who have gambled away trillions - that they are. People are outraged, firstly at these creatures' wanton recklessness, but even more so at the fact that they have been bailed out with our money. The situation urgently cries out for a socialist explanation of the crisis-ridden capitalist system and what to do about it. And that is what you will get Socialism 2008 on 8 & 9 November. Left trade union leaders, activists and workers in struggle from across the globe will gather together to discuss how working people can best respond to the crisis.

Speakers include: Mark Serwotka, PCS general secretary
Janice Godrich, PCS president
Mark Steel, stand up & activist
Cllr Dave Nellist, Socialist Party councilor and ex-Labour MP
Peter Taaffe, Socialist Party general secretary
Hannah Sell, Socialist Party Deputy General Secretary
Kevin Ovenden, RESPECT
Robbie Segal, candidate for the presidency of the USDAW shop-workers' union (she won 40% of the vote in the general secretary election)
Fang Guoli, a Chinese socialist and activist
David Redelberger, a German school student strike leader
Nikos Anastasiadis, a leading activist from the new Greek coalition of the radical left, Syriza
Onay Kasab, Greenwich Unison branch secretary, currently being witch hunted by Unisons national leadership
Tony Mulhearn, one of the leaders of the Liverpool council struggle in the 1980s
Lynn Walsh, editor of Socialism Today magazine

Registration opens at 12 noon on Saturday 8 November at the University of London Union building (ULU), Malet Street, London WC1.
The Rally for Socialism will take place from 5:30pm - 8:30pm on Saturday 8 November at Euston Friends Meeting House, Euston Road, London. Tickets are available on the door.
The closing session of Socialism 2008 will be a discussion forum hosted by the Campaign for a New Workers' Party. This will take place from 3:00pm - 4:30pm on Sunday 9 November at Logan Hall, Institute of Education. Tickets for this closing forum will be available on the door.

More details here.
=========
There are some reports of the event. A Very Public Sociologist is carrying typically interesting and engaging reports, including some immediate impressions here (but please don't follow up references to the subject of the comrades' discussions on the way home) and one on the debate between Martin Smith for the SWP and Hannah Sell for the SP. Left-Wing Criminologist reports on the Fourth International and After session here. Devon Socialist Party has a report here. Nation of Duncan here and The Revolution Decides here. Socialist Party videos here. And the lengthy report in The Socialist is here. Sounds big (900, but remember Marxism gets 1000s, going to be interesting how many people go to the special Marxism event on Dec 6th) and certainly enthused the comrades.
Campaign for a New Workers Party has a report on the closing rally by Dave Carr.

WSWS on Baader Meinhof Complex

2008-10-30T09:33:00.003Z

The Baader Meinhof Complex
A superficial treatment of the history of the Red Army Faction
By Peter Schwarz 30 October 2008
Directed by Uli Edel, screenplay by Edel and Bernd Eichinger, based on the book by Stefan Aust

Three decades after the "German autumn"—the climax of a wave of bomb attacks and kidnappings by the Red Army Faction (RAF)—producer and writer Bernd Eichinger (Downfall, Perfume: The Story of a Murderer) has brought the history of this terrorist group to the screen.

The film begins in 1967. Klaus Rainer Röhl, publisher of the radical magazine Konkret, his wife Ulrike Meinhof (Martina Gedeck) and his two small daughters spend their summer vacation in blissful nakedness on a nudist beach on the North Sea island of Sylt. On the front page of an illustrated magazine can be seen the picture of the Shah of Iran and his wife Farah Diba. Röhl explains to his daughters—against the protests of Meinhof—that the Shah tortures his opponents and cuts off their heads.

The next scene shows the anti-Shah demonstration of June 2. The Shah and his wife are arriving at the German Opera in Berlin. On the other side of the street—behind a dense police cordon—demonstrators wave banners and chant slogans. Between the police and the visiting Iranian monarch are his supporters—a group of well-trained brawny men in black suits—waving pro-Shah posters.

Suddenly, the Shah supporters cross the police line and begin to viciously beat up the peaceful demonstrators. A woman is bleeding. The police stand by, doing nothing. Finally, they pull out their truncheons and brutally drive apart the demonstrators. One sees the disbelieving, frightened and indignant faces. A shot rings out in a courtyard. The police officer Karl-Heinz Kurras has shot the student Benno Ohnesorg.

Now the events fast forward. In a Berlin apartment, the first bombs are being made. Rudi Dutschke addresses the Berlin congress against the Vietnam War and is shot down on the street. Andreas Baader (Moritz Bleibtreu) and Gudrun Ensslin (Johanna Wokalek) set fire to a Frankfurt department store. They are arrested. Ulrike Meinhof takes part in their liberation. A person is seriously injured (accidentally) and the group submerges into the underground.
Trained by Fatah forces in Jordan in bank robberies and bombings, the arrested RAF members are kept in solitary confinement as a group in the high security wing of Stammheim prison. On television, radio and in secret messages, they follow how the second generation takes over the command and the terror escalates: cold-blooded attacks on prominent representatives of the state and big business, hostage-taking in the German embassy in Stockholm, and finally—in the "German autumn" of 1977—the abduction of Hans Martin Schleyer (Bernd Stegemann), president of the German Employers Association, as well as the hijacking of a Lufthansa plane by a Palestinian commando unit. The object of both actions is to secure the release of the prisoners in Stammheim.

Ulrike Meinhof is already dead by this time, found hanged in her prison cell. Andreas Baader, Gudrun Ensslin and Jan-Carl Raspe are likewise found dead in their cells on the morning of October 18. Previously, a "special forces" operation had overwhelmed the hijackers in Somalia. The film ends with the execution of Schleyer, who is shot in the head.

The Baader Meinhof Complex certainly has some positive aspects.
This is largely due to the outstanding cast. Eichinger has engaged some of the best representatives of the current generation of actors, who strive to create a nuanced portrayal of their characters. Above all, the scenes in Stammheim are played outstandingly. The main participants have walled themselves into a political dead end. They suffer the consequences of solitary confinement, argue bitterly with each other, their personalities disintegrate; they rebel desperately against their situation, and are monitored and watched round the clock.

A further plus is the care and attention to detail with which the historical events are reconstructed. The production invested much effort and money to this end. The film was largely filmed at the original locations and received subsidies of €6.5 million.

Nevertheless, the film remains essentially superficial and flat. There has been an obvious endeavour not to cause offence in any quarter. It provides an uncritical, conventional view of the events and avoids any awkward questions.

Eichinger and Stefan Aust, the long-standing editor-in-chief of newsweekly Der Spiegel, on whose eponymous book the film is based, clearly did not want to come into conflict with the leading circles in politics and the media. While they have resisted the temptation to portray the Baader Meinhof group as a non-political, purely criminal gang, as those in leading Christian Democrat and Social Democrat circles still do, what is offered to illuminate the social and political context does not go beyond hollow clichés.

Some critics have attributed this to the fact that the film attempts to condense the events of 10 years into two-and-a-half hours of screen time, succumbing to the temptation to give action scenes more emphasis. According to such views, the film depends on action and visual effects and is little suited for critical reflection. But this is too simple an account. Der Baader Meinhof Komplex is not only an action film. The script provides considerable space for background material and dialogue, but this material is carefully filtered. Some aspects are downplayed, and others are consciously excluded.

What should the audience make of this film? Why did women such as Ulrike Meinhof and Gudrun Ensslin, who both originally aspired to high moral values in their politics, end up in the reactionary dead-end of individual terrorism?

The film offers little basis to clarify these questions. A filmgoer—born in the 1970s or 1980s—would find it simply incomprehensible that while the 1968 protest movement attracted hundreds of thousands, why then did a small group slide into terrorism? A little free love and a little anarchy (Baader races along the streets in stolen cars), combined with abstract, hollow clichés about imperialism and freedom are all the film has to offer as explanation.

Is one to conclude from Der Baader Meinhof Komplex that all protest against the ruling order leads to an orgy of violence and that it is better to avoid it altogether? The film does not go quite this far, but it certainly does not exclude such a conclusion.

Amongst the best scenes is certainly the one initially described—the demonstration against the Shah's visit—as well as brutal original film material documenting the Vietnam War. They serve to explain the anger and rage felt by many young people at that time. But the film does not go any further. The disproportionate way in which the state and media react to the student protests and the initial actions by Baader and Ensslin, find hardly any expression in the film.

This was even noticeable to Gerhart Baum (Free Democratic Party), who from 1972 to 1978 was an undersecretary in the interior ministry and from 1978 to 1982, interior minister with overall responsibility for the state's apparatus of suppression. In a recent edition of Die Zeit, he writes of The Baader Meinhof Complex: "Unfortunately, important circumstances are omitted—such as the public panic and hysteria fomented by the media and politics... also omitted is the exploitation of the terror for political ends, by which the constitutional state placed itself in danger. Occasionally, the state showed the ugly face that its opponents wanted to depict. It would have been good, if the film had dealt with the theme of the constitutional state, which became unhinged in a state of emergency and fear."

This, according to Baum, is still an important topic today: "Our fundamental rights are being damaged in the fight against terror—then as now."

The film also completely omits any reference to Germany's Nazi past—the fact that in the post-war period, state personnel, judges and professors, were able to move smoothly from the Third Reich into new posts; that hardly anyone was brought to account for the crimes of the Nazis. Nor does it address the Emergency Laws enacted under the Christian Democrat-Social Democrat grand coalition in 1968. Both contributed just as much to the emergence of the mass student protest movement as the Vietnam War and the anti-Shah demonstrations.

What weighs far more heavily, however, is the complete exclusion of the role of Stalinism and social democracy. There really can be no innocent explanation for this; the film clearly comes to the defence of both.

Without a historical knowledge of the period, most cinema-goers would simply not know that Konkret, for which Ulrike Meinhof wrote, was originally backed by the illegal German Communist Party and the Stalinist regime in East Germany. The film also gives no indication of the fact that in 1967 the Social Democratic Party (SPD) was responsible for the activities of the police in Berlin, nor that since 1966 the SPD had participated in a federal coalition government led by Kurt Georg Kiesinger (Christian Democratic Union), a former member of Hitler's Nazi party.

The reactionary role of Stalinism and social democracy contributed significantly to the mixture of indignation and impotence that drove Meinhof, Ensslin and others into the dead end of terrorism. The crimes of Stalinism, which culminated in the summer of 1968 in the suppression of the Prague spring in Czechoslovakia, cut off the students' justified indignation from a socialist perspective. And the SPD unreservedly supported the Emergency Laws and the stepping up of state powers against the student protests.

A section of the student left ascribed responsibility for the policies of the SPD to the workers, who had voted for the SPD by a large majority. Basing themselves on the theories of the Frankfurt School, and in particular Herbert Marcuse, they regarded the working class as a reactionary mass, which consumerism had completely integrated into the capitalist system. From this they concluded that only individual "revolutionary action" could electrify social consciousness—a theory that found its ultimate murderous consequences in the terrorism of the RAF.

These connections are not made clear in the film. The appeals written by Ulrike Meinhof, which are repeatedly cited in the film, and the speech given by student leader Rudi Dutschke, are reduced to just a few sound bites, which make hardly any sense to a contemporary audience. The great struggles of the working class, which began with the French general strike in May 1968 and then rolled across Europe until 1975, are ignored—although they refuted the theories of Marcuse and undermined the theoretical stance of the RAF, which confused individual acts of terrorism with revolutionary politics.

The film's authors obviously felt that they needed some social explanation for the phenomenon of the RAF. Therefore they invented an artificial character. While all the other roles are played by actors who are as similar in age and appearance as possible to the real person they portray, Horst Herold, who in 1971 at the age of 48 took over the Federal Criminal Investigation Office, is played by the 67-year old Bruno Ganz (Hitler in Downfall). Ganz plays the part as the wise old police commissioner, who sits reflecting at his desk and expounds to his fellow workers how terrorism has social causes and can only be eliminated through the eradication of poverty in the Third World. But this artifice cannot hide the film's fundamental weaknesses.

Worldwide Socialist Website on SWP and Respect

2008-10-30T09:21:00.003Z

Britain: the SWP and Galloway’s Respect Renewal on the economic crisis
By Chris Marsden 29 October 2008
Last Saturday the Socialist Workers Party and George Galloway's Respect Renewal held separate meetings where they discussed the economic crisis gripping world capitalism. Galloway's event was his organization's annual conference, but took less than a full day. The SWP's event was a debate entitled "Marxism and the Economic Crisis."

It is just over a year since the SWP and Galloway, then united in Respect, split acrimoniously. Galloway did so amidst accusations that the SWP was ultra-left and that its undemocratic efforts to dominate Respect were an obstacle to building a broad alliance of generally left and democratic forces. The SWP somewhat belatedly discovered that Galloway was orienting towards Muslim businessmen and that he is moving to the right.

The two conferences served to demonstrate how both organizations are continuing their rightward lurch. Their response to what Bank of England Deputy Governor Charlie Bean admitted two days earlier was "a once in a lifetime crisis, and possibly the largest financial crisis of its kind in human history" was identical in all major respects. They sought to downplay the scale of the financial disaster, to reject any possibility of mobilizing the working class to fight for a socialist alternative to capitalism, and to advance instead Keynesian-style government intervention to stabilize the world capitalist economy while securing a number of minimal social reforms.

Even before Respect Renewal met, Galloway had made clear his opposition to any socialist response to the crisis of the profit system. On October 17 he appeared on "The One Show," hosted by Andrew Neil, who asked him, "Will capitalism die?" Galloway replied in the negative. "There is a fire raging in the forest," he said, but we had to hope "that the forest doesn't perish before the flames go out." Capitalism is "not dead because there is not an alternative system ready and waiting to take over. Socialism is not dead either, but it pretty nearly died and it will be a long time before it is in a position to compete as an alternative."

Efforts to "save the forest" supports by Galloway include the Labour government's £500 billion subvention to the banks, which will be paid for by working people. His statement on Prime Minister Gordon Brown's bailout declared that "at last the government is taking action which may begin to shore up the banking system."

"It was essential the government propped up the banks' capital base," he added, warning only that "many in the City" believe that more is needed. There would be further demands on taxpayers "unless more is done to pump prime our collapsing economy now."

Respect Renewal's conference policy documents said very little on the economic crisis other than to call for a defence of "working people, the poor and vulnerable in the current economic climate" by freezing council rents and service charges for a year and implementing wage increases in line with inflation.

The primary role of left apologist for Galloway since his split with the SWP has been played by Alan Thornett's International Socialism Group, the British section of the Pabloite United Secretariat. Thornett's own resolution to the conference was basically identical to Galloway's position, insisting that "Democratic control over the economy through Parliament is essential if a further plunge into crisis is to be avoided" and pledging to "campaign for the public ownership of the financial institutions."

At the conference Thornett's group took second place to Galloway's preferred political partner, the Stalinist Communist Party of Britain. Galloway writes a semi-regular column for the CPB's Morning Star and is anxious to use the party's continued influence within the upper echelons of the trade union bureaucracy as a source of financial and organizational clout in order to advance his own political career. To this end, pride of place alongside Galloway on the platform was given to CPB General Secretary Rob Griffiths.

Galloway has long combined an admiration of Stalin's Soviet Union and Castro's Cuba with Catholicism and an opportunist glorification of various despotic regimes, including Saddam Hussein's Iraq. His claim that socialism "nearly died" refers to the collapse of Stalinism.
Galloway's performance at the Respect Renewal conference made clear that his alliance with the Stalinists is rooted in his deep and abiding hostility to Marxism, Trotskyism and opposition to social revolution.

Galloway addressed the 200 or so delegates in overtly anticommunist terms. We need to stop talking about "dead Russians," he declared (to which someone in the audience added, "And dead Germans"). The break from the SWP was necessary because it was a "Marxist-Leninist far-left party," out of touch with the masses. What was required instead was a new "realistic" left movement with ideas that people understand—to be formed by making "unity" the watchword.
All the problems of the "left" were rooted in the actions of "splitters" and "Marxist sects" who spoke of a "catastrophe" facing world capitalism.

Galloway's statements were so right-wing that even Griffiths was somewhat embarrassed. He agreed with Galloway that Marxism had been supposedly "discredited" by talk of the "crisis of capitalism." But he cautioned a real crisis was now unfolding.

SWP rejects possibility of socialism
Having worked in Respect with Galloway for three-and-a-half years, only for this unprincipled electoral alliance to end in a debacle, the Socialist Workers Party has recently been trying to rescue its credibility by projecting itself as an orthodox Marxist Party. However, the SWP continues to advocate a left regroupment based on a rejection of any possibility of building a revolutionary socialist party.

Saturday's conference was held under the auspices of the SWP's theoretical journal, International Socialism. Its latest issue contained the International Socialist Tendency's October 1 statement on the global economic crisis. Littered with references to "a major economic crisis" that "originated in the very heart of the capitalist system, in the United States," the statement advocates "the nationalisation without compensation of the banks" and little else.
As to the prospects for class struggle and socialism, its verdict is extremely negative. "The relationship between economic crisis and the class struggle is complex and mediated by the political context in which they interact," the IST/SWP states, meaning that "the precise combination of job losses and higher prices in a given country is likely to have a major impact on whether workers are likely to respond with aggressive resistance or demoralised acquiescence" (emphasis added).

The task is not to build a revolutionary leadership, but to develop "a broader radical left that can begin to present a credible and principled alternative to capitalism."

Building this "broader radical left" last Saturday took the form of a debate between leading SWP members, including Chris Harman and Alex Callinicos; the academic Robin Blackburn, a former member of the United Secretariat and contributor to the New Left Review; Peter Gowan, the editor of the New Left Review; and the Keynesian economist Alan Freeman.

Harman kicked off proceedings by stating that though there was talk we were facing another crash like 1929, "To be honest, nobody knows."
His statements are far more sanguine than those of leading financiers, who have acknowledged that the crash is at least as bad as 1929 or, in the case of Bank of England governor Mervyn King, is the "worst since the First World War." Even now share prices in Europe have dropped by more than a quarter and, excluding a bounce, Wall Street will have fallen further in October than at any time since Black Monday 1932.
Despite this, Harman declared, "I don't expect a crisis as bad as the 1930s, as the state will intervene.... I think it will be more on the basis of the Japan crisis"—a reference to the bursting of the speculative property bubble in the early 1990s. James McCurry wrote of such comparisons in the October 28 edition of the Guardian that "the notion that financial crises are a throwback to an era that ended with the death throes of the ‘lost decade' is being exposed as so much folly.... In truth, though, the immediate future promises to be one of unremitting pain for the world's second biggest economy."

When contrasted with Harman, the Keynesian economist Alan Freeman sounded left. While insisting that "you'd have to be really dumb and seeking early retirement not to be a Keynesian now," and that Keynes was better than Marx for understanding the "sort term" development of capitalism, he did warn that the efforts of the capitalists to "reorganise the world politically" may involve "violence and war.... The real cause of the crisis is the decline of the US as the world hegemon.... It is now using its military clout to prevent the day of reckoning and will have to take on its own working class."

Freeman then declared that we were only seeing the beginning of the end for US hegemony and that this could take a hundred years, as it had for the British Empire. To prevent war and fascism meant exerting maximum pressure for the capitalists to employ the "visible hand of the state" to regulate "the invisible hand of the market."

"Neither 1929 nor 1873 (the last crises on this scale) led to any socialist revolution," he said. "Does Keynesianism provide a way out of the crisis of capitalism?" It must do because, "We are not yet on the edge of a socialist revolution."

Harman did not disagree with this appraisal other than to insist, "I don't think the US will crash. Several states will crash but not the US."

For his part, Blackburn had little of substance to add, other than to warn, "We shouldn't make the mistake of saying that all finance capital is bad."
Finance capitalism should merely be brought under control, he said, while the left should call for a set of reforms to be implemented by the capitalists.

These demands were not socialist, he acknowledged, but of a "state capitalist nature." That is all that is possible, Blackburn insisted. The situation is not like 1917 "when no one knew what to do and Lenin put his hand up at the back of the room and said I will take responsibility for this mess," he said to laughter from the hundred or so present.

Posing the question, "But aren't we trying to get rid of capitalism?" he replied, "What we are getting towards are publicly responsible democratic forms of financial governance."

In the closing debate, Alex Callinicos focused on what he claimed were the political consequences of the crash. In a rambling survey, he largely confined himself to insisting that the United States, though weakened, would remain the world's hegemonic power, as neither Europe nor China was in a position to challenge it.

The financial crisis would get worse, he added.
The problem was that political radicalisation in the anti-war movement has developed "well in advance of working class economic resistance.... We need to close the gap between political and economic resistance."

Peter Gowan did little other than to explicitly back Keynesian-style regulation of the capitalist market. "I remember the old International Socialism Journal and us Trotskyists [the IMG] used to oppose the idea of structural reforms. Now the left needs to advance them," he declared.
In the brief debate that followed, a member of the Socialist Equality Party asked, "Speakers have spoken of the depth of the crisis. I have heard solutions like structural reforms and transitional demands. What do the speakers think is the prospect for revolution and do they think the working class will lead it?"

The question was greeted with laughter and ignored by the platform, other than Callinicos stating, "Of course I am for a socialist planned economy. It is important to start talking about that stuff again."

Variant #33 Winter 2008

2008-10-29T12:42:00.007Z

Variant #33

The latest edition of the crammed-full Scottish e-jine of cultural politics arrives. The highlight is Terry Brotherstone on Paul Mason's very interesting Live Working or Die Fighting. Brotherstone includes an account of Mason on Laurie Taylor's Thinking Allowed and a discussion that he thinks shows the decline of notions of the 'end of class' and 'there is no alternative'. Brotherstone connects Mason's global account of class struggles to Engels' Condition of the Working Class in 1842 and, particularly, his 1892 Preface. This review is well-worth reading and a clear steer towards the importance of Mason's work.

There's also a review of a recent work by Robert Porter on Habermas and the public sphere. Tom Jennings writes about literary reflections on crime and the poor. Gerry Mooney reviews books about modern public housing - the nightmare and dystopia of the council estate. Much more as well.

Nir Rosen in Afghanistan

2008-10-20T13:12:00.002+01:00

URL: http://www.rollingstone.com/news/story/23612315/how_we_lost_the_war_we_won
Rollingstone.com

How We Lost the War We Won
A journey into Taliban-controlled Afghanistan
NIR ROSEN
Oct 30, 2008

The highway that leads south out of Kabul, the capital of Afghanistan, passes through a craggy range of arid, sand-colored mountains with sharp, stony peaks. Poplar trees and green fields line the road. Nomadic Kuchi women draped in colorful scarves tend to camels as small boys herd sheep. The hillsides are dotted with cemeteries: rough-hewn tombstones tilting at haphazard angles, multicolored flags flying above them. There is nothing to indicate that the terrain we are about to enter is one of the world's deadliest war zones. On the outskirts of the capital we are stopped at a routine checkpoint manned by the Afghan National Army. The wary soldiers single me out, suspicious of my foreign accent. My companions, two Afghan men named Shafiq and Ibrahim, convince the soldiers that I am only a journalist. Ibrahim, a thin man with a wispy beard tapered beneath his chin, comes across like an Afghan version of Bob Marley, easygoing and quick to smile. He jokes with the soldiers in Dari, the Farsi dialect spoken throughout Afghanistan, assuring them that everything is OK.

As we drive away, Ibrahim laughs. The soldiers, he explains, thought I was a suicide bomber. Ibrahim did not bother to tell them that he and Shafiq are midlevel Taliban commanders, escorting me deep into Ghazni, a province largely controlled by the spreading insurgency that now dominates much of the country.

Until recently, Ghazni, like much of central Afghanistan, was considered reasonably safe. But now the province, located 100 miles south of the capital, has fallen to the Taliban. Foreigners who venture to Ghazni often wind up kidnapped or killed. In defiance of the central government, the Taliban governor in the province issues separate ID cards and passports for the Taliban regime, the Islamic Emirate of Afghanistan. Farmers increasingly turn to the Taliban, not the American-backed authorities, for adjudication of land disputes.

By the time we reach the town of Salar, only 50 miles south of Kabul, we have already passed five tractor-trailers from military convoys that have been destroyed by the Taliban. The highway, newly rebuilt courtesy of $250 million, most of it from U.S. taxpayers, is pocked by immense craters, most of them caused by roadside bombs planted by Taliban fighters. As in Iraq, these improvised explosive devices are a key to the battle against the American invaders and their allies in the Afghan security forces, part of a haphazard but lethal campaign against coalition troops and the long, snaking convoys that provide logistical support.

We drive by a tractor-trailer still smoldering from an attack the day before, and the charred, skeletal remains of a truck from an attack a month earlier. At a gas station, a crowd of Afghans has gathered. Smoke rises from the road several hundred yards ahead.
"Jang," says Ibrahim, who is sitting in the front passenger seat next to Shafiq. "War. The Americans are fighting the Taliban."

Shafiq and Ibrahim use their cellphones to call their friends in the Taliban, hoping to find out what is going on. Suddenly, the chatter of machine-gun fire erupts, followed by the thud of mortar fire and several loud explosions that shake the car. I flinch and duck in the back seat, cursing as Shafiq and Ibrahim laugh at me.
"Tawakkal al Allah," Shafiq lectures me. "Depend on God."

This highway — the only one in all Afghanistan — was touted as a showpiece by the Bush administration after it was rebuilt. It provides the only viable route between the two main American bases, Bagram to the north and Kandahar to the south. Now coalition forces travel along it at their own risk. In June, the Taliban attacked a supply convoy of 54 trucks passing through Salar, destroying 51 of them and seizing three escort vehicles. In early September, not far from here, another convoy was attacked and 29 trucks were destroyed. On August 13th, a few days before I pass through Salar, the Taliban staged an unsuccessful assassination attempt on the U.S.-backed governor of Ghazni, wounding two of his guards.

As we wait at the gas station, Shafiq and Ibrahim display none of the noisy indignation that Americans would exhibit over a comparable traffic jam. To them, a military battle is a routine inconvenience, part of life on the road. Taking advantage of the break, they buy a syrupy, Taiwanese version of Red Bull called Energy at a small shop next door. At one point, two green armored personnel carriers from NATO zip by, racing toward Kabul. Shafiq and Ibrahim laugh: It looks like the coalition forces are fleeing the battle.
"Bulgarians," Shafiq says, shaking his head in amusement.

After an hour, the fighting ends, and we get back in the car. A few minutes later, we pass the broken remains of a British supply convoy. Dozens of trucks — some smoldering, others still ablaze — line the side of the road, which is strewn with huge chunks of blasted asphalt. The trucks carried drinks for the Americans, Ibrahim tells me as we drive past. Hundreds of plastic water bottles with white labels spill out of the trucks, littering the highway.

Farther down the road, American armored vehicles block our path. Smoke pours from the road behind them. Warned by other drivers that the Americans are shooting at approaching cars, Shafiq slowly maneuvers to the front of the line and stops. When the Americans finally move, we all follow cautiously, like a nervous herd. We drive by yet more burning trucks. Ibrahim points to three destroyed vehicles, the remains of an attack four days earlier.

A few miles later, at a lonely desert checkpoint manned by the Afghan army, several soldiers with AK-47s make small talk with Shafiq and Ibrahim, asking them about the battle before waving us through. As night falls, we pass a police station. We have reached Ghazni province.
"From now on, it's all Taliban territory," Ibrahim tells me. "The Americans and police don't come here at night."

Shafiq laughs. "The Russians were stronger than the Americans," he says. "More fierce. We will put the Americans in their graves."

It has been seven years since the United States invaded Afghanistan in the wake of September 11th. The military victory over the Taliban was swift, and the Bush administration soon turned its attention to rebuilding schools and roads and setting up a new government under President Hamid Karzai. By May 2003, only 18 months after the beginning of the war, Defense Secretary Donald Rumsfeld all but declared victory in Afghanistan. "We are at a point where we clearly have moved from major combat activity to a period of stability and stabilization and reconstruction," Rumsfeld announced during a visit to Kabul. The security situation in Afghanistan, in his view, was better than it had been for 25 years.

But even as Rumsfeld spoke, the Taliban were beginning their reconquest of Afghanistan. The Pentagon, already focused on invading Iraq, assumed that the Afghan militias it had bought with American money would be enough to secure the country. Instead, the militias proved far more interested in extorting bribes and seizing land than pursuing the hardened Taliban veterans who had taken refuge across the border in Pakistan. The parliamentary elections in 2005 returned power to the warlords who had terrorized the countryside before the Taliban imposed order. "The American intervention issued a blank check to these guys," says a senior aid official in Kabul. "They threw money, weapons, vehicles at them. But the warlords never abandoned their bad habits — they're abusing people and filling their pockets.

By contrast, aid for rebuilding schools and clinics has been paltry. In the critical first two years after the invasion, international assistance amounted to only $57 per citizen — compared with $679 in Bosnia. As U.S. contractors botched reconstruction jobs and fed corruption, little of the money intended to rebuild Afghanistan reached those in need. Even worse, the sudden infusion of international aid drove up real estate and food prices, increasing poverty and fueling widespread resentment.

The government of Pakistan, seeking to retain influence over what it views as its back yard, began helping the Taliban regroup. With the Bush administration focused on the war in Iraq, money poured into Afghanistan from Al Qaeda and other Islamic extremists, who were eager to maintain a second front against the American invaders. The Taliban — once an isolated and impoverished group of religious students who knew little about the rest of the world and cared only about liberating their country from oppressive warlords — are now among the best-armed and most experienced insurgents in the world, linked to a global movement of jihadists that stretches from Pakistan and Iraq to Chechnya and the Philippines.

The numbers tell the story. Attacks on coalition and Afghan forces are up 44 percent since last year, the highest level since the war began. By October, 135 American troops had been killed in Afghanistan this year — already surpassing the total of 117 fatalities for all of 2007. The Taliban are also intensifying their attacks on aid workers: In a particularly brazen assault in August, a group of Taliban fighters opened fire on the car of a U.S. aid group, the International Rescue Committee, killing three Western women and their Afghan driver on the main road to Kabul.
The Bush administration, belatedly aware that it was losing Afghanistan, responded to the violence as it did in Iraq: by calling for more troops. Speaking at the National Defense University on September 9th, the president announced a "quiet surge" of U.S. troops in Afghanistan, saying additional forces are necessary to stabilize "Afghanistan's young democracy." But the very next day, testifying before the House Armed Services Committee, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, offered a sharply different assessment. His prepared testimony, approved by the secretary of defense and the White House, read, "I am convinced we can win the war in Afghanistan." But when Mullen sat down before Congress, he deviated from his prepared statement. "I am not convinced we are winning it in Afghanistan," he testified bluntly.

In early October, the president's plan for a surge was once again contradicted by his top advisers. American intelligence agencies drafting a classified report on the war warned that Afghanistan is in a "downward spiral" fueled by worsening violence and rampant corruption. Defense Secretary Robert Gates also admitted to Congress that the Pentagon is stretched so thin in Iraq, it will be unable to meet even a modest request for 10,000 more troops in Afghanistan until next spring at the earliest.

But those closest to the chaos in Afghanistan say that throwing more soldiers into combat won't help. "More troops are not the answer," a senior United Nations official in Kabul tells me. "You will not make more babies by having many guys screw the same woman."

It is a point echoed in dozens of off-the-record interviews I conducted in Kabul with leading Western diplomats, security experts, former mujahedeen and Taliban commanders, and senior officials with the U.N. and prominent aid organizations. All agree that the situation is, in the words of one official, "incredibly bleak." Using suicide bombers and other tactics imported from Iraq, the Taliban have cut Kabul off from the rest of the country and established themselves as the only law in many rural villages. "People don't want the Taliban back, but they're afraid to back the government," says one top diplomat. "They know the Taliban will ride into the village and behead anybody who has made a deal with the coalition."

According to the diplomat, military solutions are simply no longer viable. "The analysis of our intelligence people is that things are getting worse," he says. "CIA analysts are extremely gloomy and worried. You have an extremely weak president in Afghanistan, a corrupt and ineffective ministry of the interior, an army with no command or control, and a dysfunctional international alliance."

As one top official with a Western aid organization put it, "We're simply not up to the task of success in Afghanistan. I'm increasingly unsure about a way forward — except that we should start preparing our exit strategy."

To travel with the Taliban and see firsthand how they operate, I contacted a well-connected Afghan friend in Kabul and asked him to make the introductions. He knew many groups of fighters in Afghanistan, but said he would only trust my security if those I accompanied knew that they and their families would be killed if anything happened to me. Through a respected dignitary, I was connected with Mullah Ibrahim, who commands 500 men in the Dih Yak district of Ghazni. We met at my friend's office in Kabul on a hot, sunny afternoon. Midlevel Taliban leaders like Ibrahim move freely about the capital, like any other Afghan: U.S. forces lack the intelligence and manpower to identify enemy commanders, let alone apprehend them. (To protect Ibrahim's identity, I agreed to change his name.)

Now in his 40s, Ibrahim has been fighting with the Taliban since the 1990s. He walks with a pronounced limp: He lost his right leg below the knee in the country's civil war, and he had undergone surgery only the week before to repair nerve damage he suffered in a recent firefight. At first he told me his wounds were from an American bullet, but I later learned he had been injured in a clash with a rival Taliban commander.

After our meeting, Ibrahim promised to contact the Taliban minister of defense and request approval for my trip. As I waited for word, I went to a market in Kabul and bought several sets of salwar kameez, the traditional tunic and baggy pants worn by Afghan men. I had grown my beard longer to pass as an Afghan, and before leaving New York I had supplemented my Arabic and basic Farsi with a week of Berlitz classes in Pashtu, the language spoken by the ethnic group that dominates the Taliban. Pashtu is not exactly in high demand, and the book Berlitz gave me was clearly designed for military purposes. It contained a list of military ranks, including "General of the Air Force," and offered a helpful list of weapons, including "land mines" and "bullets." It also provided the Pashtu translation for a host of important phrases: Show me your ID card. Let the vehicle pass. You are a prisoner. Hands up. Surrender. If I wanted to arrest an Afghan, I was now prepared. The book did not include the phrase I needed most: Ze talibano milmayam. "I am a guest of the Taliban."

On a Saturday afternoon, Ibrahim picks me up in a white Toyota Corolla, its dashboard covered in fake gray fur. His friend Shafiq is behind the wheel, wearing a cap embroidered with rhinestones. Afghan culture places a premium on courtesy, and Shafiq comes across as unfailingly polite. At one point, almost casually, he mentions that he has personally executed some 200 spies, usually by beheading them. "First I warn people to stop," he says, emphasizing his fair-mindedness. "If they continue, I kill them."

Shafiq, who fought the Soviets with the mujahedeen, now commands Taliban fighters in the Andar district of Ghazni. "Andar is a very bad place," an intelligence officer in Kabul tells me. "The Taliban show a lot of confidence and freedom of movement there." While coalition forces have focused on driving the insurgents from the south, they failed to maintain a buffer in central regions like Ghazni, where the Taliban now routinely pull people off buses and execute them. "They have that level of control right on Kabul's front door," the officer adds. "Environments regarded as extreme two years ago are much worse now. There has been a staggering intensification."

As we head south, Shafiq tells me that fighters from Saudi Arabia, Pakistan and Uzbekistan have come through the Andar district. Most are suicide bombers, but some fight alongside the Taliban. He is impressed with their skill, but like many Taliban, he doesn't care for their politics. "Pakistan and Iran are not friends of Afghanistan," Shafiq says dismissively. "They don't want peace in Afghanistan — they want to take Afghanistan." Despite their extremely conservative views on religion, most Taliban are fundamentally nationalist and Afghan-centric. They accept the support of Al Qaeda, but that doesn't mean they approve of its tactics. "Suicide attacks are not good because they kill Muslims," Shafiq says.

In the darkness, we roll into the village of Nughi. We no longer have cellphone reception; the Taliban shut down the phone towers after sunset, when they stop for the night, to prevent U.S. surveillance from pinpointing their position. It is the holiday of Shaab eh Barat, when Muslims believe God determines a person's destiny for the coming year. Young boys from the village gather to swing balls of fire attached to wires. Like orange stars, hundreds of fiery circles glow far into the distance. The practice is haram — one of many traditions banned by the Taliban, who consider it forbidden under Islam. The fact that it is being tolerated is the first indication I have that the Taliban are not as doctrinaire as they were during their seven years of rule.
Shafiq maneuvers the car on the bumpy dirt road between mud houses. After a few stops in the village we are led to a house where a group of young Taliban fighters emerges. Several of them are carrying weapons. We greet the traditional way, each man placing his right hand on the other's heart, leaning in but not fully embracing, inquiring about the other's health and family. Ibrahim, who had promised to protect me on the trip, decides to go home, leaving Shafiq to guide me the rest of the way.

With the moon lighting our path, Shafiq and I follow the Taliban on foot to another house, entering through a low door into a guest room with a red carpet on the floor and wooden beams on the ceiling.

A dim bulb barely illuminates the room. A PKM belt-fed machine gun and a rocket-propelled grenade launcher lean against a wall, next to several rockets. We are joined by Mullah Yusuf, Ibrahim's nephew, who serves as a senior commander in Andar.

Yusuf has dark reddish skin and a handsome face. He wears a black turban with thin gold stripes and carries an AK-47. A boy brings a pitcher and basin and we rinse our hands. We drink green tea and eat a soup of mushy bread called shurwa with our hands, followed by meat and grapes.
Yusuf became a commander last year, when the Americans killed his superior officer. He sleeps in a different house every night to avoid detection. Only 30 years old, he has big ears and an almost elfin air; the ringtone on his cellphone is a bells-and-cymbals version of The Sorcerer's Apprentice theme. A year and a half ago, Yusuf was injured in his thigh by a U.S. helicopter strike, and now walks with a limp. He joined the Taliban in 2003 after studying at a religious school in North Waziristan, the border region of Pakistan where many Afghan refugees live. He seems less motivated by religious ideals than by defending his homeland: He took up jihad, he tells me, because foreigners have come to Afghanistan and are fighting Afghans and poor people.
"The Americans are not good," he says. "They go into houses and put people in jail. Fifteen days ago the Americans bombed here and killed a civilian."

The U.S. campaign in Afghanistan has not been helped by its rash of misguided bombings. This year, according to the United Nations, 1,445 Afghan civilians were killed by coalition forces through August — two-thirds of them in airstrikes. On July 6th, a bombing raid killed 47 members of a wedding party — including 39 women and children — near the village of Kacu. On August 22nd, more than 90 civilians — again mostly women and children — were killed in an airstrike in Azizabad.

Yusuf makes it clear that it is only the Americans he has a problem with. Once the foreigners leave, he insists, the Taliban will negotiate peace with the Afghan army and police: "They are brothers, Muslims." What's more, he says, girls will be allowed to go to school, and women will be allowed to work. It is a stance I will hear echoed by many Taliban leaders. In recent years, recognizing that their harsher strictures had alienated the population, the Taliban have grown more tolerant. To improve their operations, they have even been forced to adopt technologies they once banned: computers, television, films, the Internet.

After we finish eating, we walk to a mud shed. Shafiq opens its wooden doors to reveal another white Toyota Corolla. The men load the RPG launcher and four rockets into the car, along with the PKM machine gun. We drive through the moonlit desert on dirt paths to the village of Kharkhasha, where Shafiq lives. On the way, Shafiq pops in a cassette of Taliban chants. They are in Pashtu and without instrumentation, which is forbidden by the Taliban.

Arriving at Shafiq's house, we enter the guest room in darkness and sit on thin mattresses. A small gas lamp is brought out, as well as grapes and green tea. Shafiq says he fought the Soviets in the 1980s and spent five years in jail. But following the Soviet withdrawal, as the mujahedeen turned on one another, Shafiq felt they had become robbers. He joined the Taliban in 1994, he says, because they wanted peace and Islam.

Shafiq has met Osama bin Laden twice — once before the Taliban took over, and once during the Taliban reign. He was impressed by bin Laden's knowledge of Pashtu. He has also met Mullah Muhammed Omar, the one-eyed cleric who calls himself the "commander of the faithful." Omar, who served as leader of the Taliban government, is now in hiding across the border in Pakistan, where he rebuilt the Taliban with the help and protection of Pakistani intelligence. Shafiq hopes that Omar will return to lead the country, but other Taliban leaders no longer view him as the only option. The shift is significant — a sign that the Taliban are not fighting merely to restore the hard-line government they had before but are prepared to move forward with a greater degree of flexibility and pragmatism than they have shown in the past.

The next morning, we get back into the Corolla, loading the PKM, the RPG launcher and four rockets into the trunk. Shafiq and the machine gun are in the front passenger seat. Yusuf drives, his AK-47 beside him. Another Taliban fighter rides a Honda motorcycle alongside us, an AK-47 strapped to his shoulder. They have promised to take me to see the Taliban in action: going out on patrols, conducting attacks, adjudicating disputes and providing security against bandits and police. As we head deeper into the province, the land becomes increasingly flat and arid. Everything is the color of sand. Even the dilapidated mud homes, bleached almost white by the sun, look like sand castles after the first wave has hit them.

Yusuf points to a police checkpoint. The police know him, he says, but do nothing to stop him. "Every night I go on patrol, and they don't fight me," he says. "They don't have guns, and they are afraid."

The police, in fact, often defect to the Taliban. Shafiq recently bought two jeeps from the police, who later told the Interior Ministry that the vehicles were destroyed in an attack. "The police are highly corrupt," a senior U.N. official in Kabul tells me. "They are at the center of the collapse of the Karzai government — their corruption makes people support the Taliban." The cops have even taken to robbing U.S. contractors. "The police will raid foreign companies and just steal everything — iPods, money, weapons, radios," says an intelligence officer. "People might hate the Taliban, but they hate the government just as much. At least the Taliban have rules. This government, they're just parasites fucking with you."

In the village of Khodzai, we visit a commander at a mosque where eight men and two boys sit on the floor, drinking tea. When they aren't attacking checkpoints or ambushing convoys, the Taliban spend most of their time praying or listening to religious lectures. The men ambushed the Afghan army two days earlier in a nearby village, killing 20 Afghan soldiers. "The Americans do not come here," their commander says proudly. "We control this area. The Taliban is the government here."

Outside, in a sunny courtyard, the men get ready to go on patrol, checking their ammunition and slinging their AK-47s over their shoulders. Suddenly, a coalition military helicopter swoops low overhead, nearly coming to a hover above us. Throughout the war, the U.S. has compensated for its lack of troops by relying on aerial shows of force: It's possible to go for days in Ghazni without seeing a single coalition soldier. I clench my fists in terror, waiting for the helicopter to fire at us, but the men ignore it and laugh at me. One tells me he fired an RPG at a helicopter yesterday, and will fire a rocket at this one if it attacks us. My fear may be comic, but it's not misplaced: A month after I leave, an airstrike in Andar will kill seven suspected Taliban fighters.

To my relief, the helicopter flies off. The men leave on their motorcycles to patrol the countryside. As the Taliban have attempted to counter the Americans by adopting the tactics of Iraqi insurgents, they have become far more brutal than they were when they ruled Afghanistan. To sow insecurity, they routinely enter villages and bypass traditional tribal mechanisms, waging a harsh campaign of social terror.

"They're killing more and more tribal elders," one intelligence officer tells me. "We can't expect communities to show solidarity with the government when we can't provide for their security — it's ridiculous."

As we leave the mosque, Shafiq tells me of the trials that the Taliban frequently hold to prosecute collaborators. The suspects are given a hearing by a qazi, or judge, who orders those convicted to be beheaded. As he drives, Shafiq plays more Taliban songs about brave boys going to fight.

As the Taliban insurgency spreads, it has fallen victim to the tribal rivalries and violent infighting that are endemic to Afghanistan, which is home to hundreds of distinct tribal groups. "The leadership is totally fragmented," a senior U.N. official says. "There is a lot of criminality within the Taliban." With the targeting of civilians now sanctioned by the Taliban, top commanders compete for prize catches, stopping cars in broad daylight and checking the cellphones of foreigners to determine if they are worthwhile captives. As we drive deeper into Ghazni, we are entering territory where such factionalization is now as lethal as the rocket launcher stuffed in the Corolla's trunk.

In the middle of a sandstorm, we head to a local shop, pulling up with the PKM in plain view and the Taliban chants blaring from the car's speakers. The people in the shop greet Yusuf warmly. He buys shoulder straps for AK-47s. Then, as we're passing through a nearby village, we are stopped by a bearded man on a motorcycle. An AK-47 is slung over his shoulder, his face partially concealed by a scarf.

He demands to know who I am. Shafiq tells him I am a guest. The man asks me if I am Pashtun. "Pukhtu Nayam," I say, drawing on my Berlitz lessons. "I am not Pashtun." He glares at me and rides off.

Arriving at another mosque, we find a dozen men inside. A large shoulder-fired missile is on the floor, an anti-armor weapon. Shafiq tells me we are waiting to meet the commander who will approve my trip.

This is news to me. I thought my trip had already been approved by the Taliban defense minister. Suddenly, as I am talking to one of the fighters, the angry man on the motorcycle bursts in holding a walkie-talkie. He barks at the fighter to stop talking to me until the men's commander shows up. A judge, he says, will decide what will happen to me. Upon hearing the Pashtu word qazi, I start to panic. As Shafiq made clear earlier, a meeting with a judge could end with decapitation.

I am ordered to get into a car with the angry man and the other strangers, who will take me to the judge. To my alarm, Shafiq says he will join Yusuf, who is praying in the mosque, and catch up with us later. He seems to be washing his hands of me.

I have been held by militias in both Iraq and Lebanon, but in those situations I could speak the language and talk my way out of trouble. Now I am in one of the most desolate places I have ever seen, far from any help and unable to speak more than a few garbled words of Pashtu. Trying to contain my mounting sense of helplessness, I tell Shafiq that I am not leaving him — I am his guest. Once I am out of his control, I will be at the mercy of men who kill almost as routinely as they pray. Brandishing their rifles, the men shout at me to get into their car.
Yusuf comes out and tells me to get into our Corolla. He won't leave me, he says. He puts another man with an AK-47 in the car to guard me. As I wait, a standoff ensues. Frantic, I send text messages to my contacts back in Kabul to tell them I'm in trouble. In the tense silence, my guard's cellphone abruptly goes off: The ringtone is machine-gun fire, accompanied by a song about the Taliban being born for martyrdom.

My mouth goes dry from fear; I feel as though I have lost my voice. My friend in Kabul who helped arrange the trip manages to get through to Shafiq. He tells him he should not leave me, that I am Shafiq's responsibility and he will hold him personally responsible if anything happens to me.

We sit in the car for more than an hour, windows up. The sandstorm is still raging, and it's impossible to see more than a few yards. Outside, men with guns flicker into view, only to vanish in the blinding haze. Finally, Shafiq tells me I can get out. The angry man and his companions depart, taking the rocket launcher with them. Thinking it is over, I put my hand on my heart as they leave, to indicate no ill will. Then Shafiq tells me there has been a change of plan. He has been ordered to escort me to visit a rival commander — a man called Dr. Khalil — who will determine what will happen to me.

I later learn that I have been caught in the midst of the bitter and often violent infighting that divides the Taliban. Ibrahim's recent injury, it turns out, was the result of a clash between his forces and a group of foreign fighters under the command of Dr. Khalil. The foreigners wanted to close down a girls' school, sparking a battle. Two Arabs and 11 Pakistanis commanded by Dr. Khalil had been killed by Ibrahim's men.

As we leave to meet Dr. Khalil, the car jolts forward in the sandstorm, rocking back and forth on the stony path. I feel as though I am in a boat being tossed about by waves. Yusuf tells me not to worry — if Dr. Khalil tries to take me, he will fight them. It is the only reassurance I have. Throughout all our time in Ghazni, we have seen no authority other than the Taliban. Even if American helicopters were to appear suddenly, that would hardly be a relief — it would only be to target us in an airstrike.

I struggle to find a signal for my phone, cursing as the bars appear and disappear. I reach another of my contacts. "I spoke to Dr. Khalil," he says. "If they behave bad with you, don't worry — they just want to punish you." Shafiq also tells me not to worry — that he will die defending me if necessary. My only hope, I realize, is the Pashtun code of hospitality known as Pashtunwali — the same tradition that forbade the Taliban from handing over Osama bin Laden to the Bush administration after September 11th. Unfortunately, as young Taliban fighters have substituted their own authority for tribal customs, more and more insurgents now ignore the code. "All the old rules have broken down," an aid official who has spent two decades in Afghanistan tells me. The guarantees of safety that once protected civilians have been replaced by a new generation removed from traditional society — one for whom jihad is the only law.
Our car crawls through the empty desert. I can see nothing on the horizon. I ask Shafiq if Dr. Khalil is a good guy. "He's like you," Shafiq answers. "No Muslim is a bad man." His faith in the brotherhood of Islam does little to reassure me. "Don't worry," Shafiq says. "The Doctor has a gun, and I have a gun."

Ibrahim calls to say that he has reached a Taliban leader in Pakistan, as well as someone in the United Arab Emirates, and they have promised to call the Doctor and tell him not to harm me. "The Doctor will fight with me, not with you," says Shafiq, who seems to be warming to the idea of bloodshed. My contact in Kabul calls again. "They might slap you, but they won't kill you," he tells me. "It's just to punish you for coming without permission. They might keep you overnight as a guest. You are lucky you called me." Later, he tells me that the Doctor had assured him that he would not "do anything that isn't Sharia," or Islamic law. This was little consolation, even after the fact, since the Taliban's interpretation of Sharia includes beheading.

"I'm a martyr, I'm a star," the Taliban on the car's tape deck chants. "I will testify on behalf of my mother on Judgment Day. When I was small, my mother put me on her lap and spoke sweetly to me...."

We finally arrive at a mosque somewhere between the villages of Gabari and Sher Kala. The Doctor, I am told, is waiting for us inside. As I enter, I inadvertently step on a pair of Prada sunglasses — just as the Doctor walks into the room.

A burly man with light skin and a dark brown beard, the Doctor picks up the bent glasses and examines them somberly. His hands are thick, enormous. He wears a white cap, with palm trees and suns embroidered in white thread. He straightens the glasses and puts them on — it turns out they're his. My heart sinks. Not the best beginning, perhaps.

After everyone prays, the Doctor orders the others to leave the room, except for Yusuf. His voice is low and gruff. We sit on the floor. "Deir Obekhi," I say, apologizing for entering his territory without permission. He accuses me of being a spy for the Afghan army. He asks how I got a visa to Afghanistan. I tell him I am here to write about the mujahedeen and tell their story. If I like them so much, he sneers, why don't I join them?

The Doctor asks about my contact. I say he fought with the mujahedeen from Jamiat-i Islami. The Doctor scoffs, saying the man never fought the Soviets. Then he gets to his feet and announces that he is going to make phone calls to Pakistan to investigate me. We will have to spend the night in the mosque, and he will come back for us in the morning. As I try to protest, he stalks out.

I sit glumly on the floor in the guest room. A few minutes later, Shafiq sticks his head in and says, "Yallah" — Arabic for "come on." I jump up, relieved to get out of there. The Talib fighters sitting with us insist that we drink the tea they have made. I hurriedly gulp it down and step out into the darkness, eager to get away from the mosque. But Shafiq has more bad news: We will have to return in the morning. My mind flashes to the videos I have seen on the Internet of victims being decapitated by jihadists in Iraq and Afghanistan.

We get in the car and Shafiq drives slowly, winding through nearly invisible paths, the moonlight obscured by dust. When we reach Shafiq's house, he carries a television into the guest room and turns on the generator. Reading the English titles on the program guide, he finds Al-Jazeera, the Arabic news channel. We watch coverage of the attacks we drove by the day before. Shafiq switches to an Afghan channel, and we watch an Indian soap opera dubbed in Dari. The women are dressed in revealing Western attire. I am amazed that Shafiq would watch something so anathema to the Taliban. It's OK, he tells me — "it's a drama about a family." Later he puts on a satellite channel devoted to Iranian-American pop music. We watch as a portly singer with stubble and long hair imitates bad Eighties rock, but in Farsi. The next video features an Iranian pop singer dressed in leather fringe and a tank top, like a cross between Davy Crockett and Richard Simmons. The Taliban commander watches, mesmerized.

In the morning, I awake to the drone of military planes overhead. Stepping outside, I see a convoy of American armored vehicles a mile away. I fight the urge to walk to them and beg for rescue. Even if they don't mistake me for Taliban and shoot me themselves, approaching them would doom everybody who had helped me.

I wait impatiently for the phone network to go back up. When it does, one of my contacts in Kabul tells me that he had spoken to senior Taliban officials who told the Doctor not to harm me, but the Doctor continued to insist that I am a spy. He thinks the Doctor is just trying to assert his independence and exchange me for a ransom. He tells me that Mullah Nasir, a one-armed Kandahari who serves as Taliban governor for Ghazni, is also trying to secure my release. I try to convince Shafiq to drive me to Ghazni's capital, but he says that if he doesn't return me to Dr. Khalil, the Doctor will arrest him.

In the end, I am saved by the same official who authorized my trip. According to my contact, the Taliban minister of defense called Dr. Khalil and ordered him to release me, warning the Doctor that "he would be fucked" if anything happens to me. My contact tells me I will be let go this afternoon but that once we are on the road we should take the batteries out of our phones, to prevent anyone from tracking us. "This Doctor, he is a very nasty guy," he says. "He might send somebody to kidnap you on the way, and then I can do nothing for you."

As we wait for the Doctor to arrive, Shafiq has other problems to deal with. His nephew has been arrested by a Taliban patrol after being spotted walking with a girl. After Shafiq secures his release, other Talib fighters call to complain that they heard music coming from his house the night before. Exasperated, Shafiq protests that it was only Al-Jazeera. He doesn't mention the Iranian pop singer.

A few hours later, Dr. Khalil finally shows up. He examines my passport and leafs through my notebooks, asking me to show him the photos I took. "Zaibullah Mujahed said I should hit you," he says, referring to the chief Taliban spokesman. "But I will not." Rifling through my bags, he seems particularly fascinated by my toothbrush. Puzzled, he riffles the bristles with his finger, trying to deduce their purpose.

For a man who has spent much of the past 24 hours contemplating whether I was worth more to him dead or alive, the Doctor is now surprisingly friendly. "What can I do for you?" he asks, a model of courtesy. I cautiously ask him a few questions. The Doctor tells me he studied at an Islamic school in Pakistan before entering medical school in Afghanistan. He joined the Taliban early, eventually serving as a commander in a northern district. He says he is fighting to restore a government of Islamic law, but that Mullah Omar does not have to be the leader again. God willing, he adds, it will take no more than 30 years to rid Afghanistan of foreigners. Like the other Taliban leaders I've spoken with, he says he is prepared to allow women to attend school and to work.

We pile into the Corolla and drive off to meet Ibrahim, loading an RPG into the trunk just in case. Dr. Khalil gets behind the wheel, with Shafiq beside him holding the PKM. After an hour of driving, the car gets stuck, and we all collect rocks to put beneath the tires. As we drive through the Doctor's village, he points to its outer limits. "This is the border between the Taliban and the government," he says, stressing his control. He is now jocular and relaxed.

At the edge of town, close to the main road, the Doctor gets out of the car, followed by Shafiq, holding his PKM. The locals appear stunned. Everyone stops and stares, immobilized, their daily routine interrupted by the sudden appearance of two heavily armed Taliban commanders escorting a large foreign man in ill-fitting salwar kameez. The Doctor stops a pickup truck and orders the driver to take us to the bazaar. We part warmly.

Arriving at the bazaar in the back of the pickup truck, we find a tense and apologetic Ibrahim waiting for us. Like my contact, he was worried that the Doctor had set up an ambush for me on the road. "I should not have left you," Ibrahim says. "I was lazy. That was my mistake."
On the way back to Kabul, we dodge more craters in the highway. The military trucks I saw burning two days earlier are still smoldering by the road. Children play on the blackened vehicles, removing pieces for salvage. I tease Ibrahim that the Taliban have made our drive more difficult by destroying the highway. To my surprise, he agrees.

Back in Kabul, we all have lunch together at the office of my friend where I first met Ibrahim. My friend teases me for sending him so many text messages — more than a dozen — and reads some of them aloud. Everyone laughs, relieved that the ordeal is over. I look at Ibrahim, wondering if he would have taken me hostage himself under different circumstances. He again surprises me by expressing disapproval of the Taliban for harming civilians in what he views as a war for national liberation. There used to be rules. Now, for many Taliban, there is only killing. "They are not acting like Afghans," he says.

To return to Kabul from a feudal province like Ghazni is to experience a form of time travel. The city is thoroughly modern, for those who can afford it: five-star hotels, shiny new shopping malls and well-guarded restaurants where foreigners eat meals that cost as much as most Afghans make in a month, cooked with ingredients imported from abroad. If you can avoid falling into the sewage canals at every crosswalk, and evade the suicide bombers who occasionally rock the city, you can enjoy the safety of Afghanistan's version of the Green Zone.

But the barbarians are at the gate, and major attacks are getting closer and closer to the city each day. Upon my return to Kabul, I discover that the Taliban have fired rockets at the airport and at the NATO base; the United Nations has been on a four-day curfew; and President Karzai has canceled his public appearances. The city is being slowly but systematically severed from the rest of the country.

"The road from Kabul to Ghazni is gone," an intelligence officer tells me, "and most of the rest of the roads are going. The ambushes are routine now, which tells you that the Taliban have a routine capability." The Parwan province, which borders Kabul to the north, has also become dangerous. "All of a sudden we see IEDs on the main road in Parwan and attacks on police checkpoints," the intelligence officer says. "It's the last remaining key arterial route connecting Kabul to the rest of the country."

The Bush administration is placing its hopes on presidential elections in Afghanistan next year, but everyone I speak with in Kabul agrees that the elections will be a joke. "The Americans are gung-ho about elections," a longtime nongovernmental official tells me. "But it will only exacerbate ethnic tensions." In Pashtun areas controlled by the Taliban, registration would be virtually impossible, and voting would invoke a death sentence — effectively disenfranchising the country's dominant ethnic group. "You can't fix the insurgency with an election," a senior U.N. official tells me. "It's a socioeconomic phenomenon that goes well beyond the border of Afghanistan." Real elections would require the cooperation of the Taliban — and that, in turn, would require negotiations with the Taliban. The war, in effect, is already lost.

"This can't be solved other than by talking to the Taliban," says a top diplomat in Kabul. A leading aid official adds that it is important to understand the ideological goal of the Taliban: "They don't have an international-terrorist agenda — they have an Afghanistan agenda. We might not agree with their agenda for the country, but that's not our war." Former Taliban leaders agree that only talks will end the war. "If the U.S. deals with Pakistan and negotiates with higher-level Taliban," says one, "then it could reach a deal."

Negotiating with the Taliban would also enable the Americans to take advantage of the sharp divisions within the insurgency. Mullah Omar, the Taliban leader, has been openly criticized by a rival named Siirajudin Haqqani, who has called for Omar to be replaced. In provinces like Ghazni, the Taliban leadership is now divided between commanders loyal to Omar and men who follow Haqqani. A recent meeting between supporters of the two men in the Pakistani city of Peshawar reportedly descended into fighting when an Omar official threw his tea glass at a Haqqani man. The internal split provides an opening — if U.S. intelligence is smart enough to exploit it.
"The U.S. should try to weaken the Taliban," a former Taliban commander tells me. "They should make groups, divide and conquer. If someone wants to use the division between Haqqani and Omar, they can."

The Bush administration believes it can stop the Taliban by throwing money into clinics and schools. But even humanitarian officials scoff at the idea. "If you gave jobs to the Viet Cong, would they stop fighting?" asks one. "Two years ago you could build a road or a bridge in a village and say, 'Please don't let the Taliban come in.' But now you've reached the stage where the hearts-and-minds business doesn't work."

Officials on the ground in Afghanistan say it is foolhardy to believe that the Americans can prevail where the Russians failed. At the height of the occupation, the Soviets had 120,000 of their own troops in Afghanistan, buttressed by roughly 300,000 Afghan troops. The Americans and their allies, by contrast, have 65,000 troops on the ground, backed up by only 137,000 Afghan security forces — and they face a Taliban who enjoy the support of a well-funded and highly organized network of Islamic extremists. "The end for the Americans will be just like for the Russians," says a former commander who served in the Taliban government. "The Americans will never succeed in containing the conflict. There will be more bleeding. It's coming to the same situation as it did for the communist forces, who found themselves confined to the provincial capitals."

Simply put, it is too late for Bush's "quiet surge" — or even for Barack Obama's plan for a more robust reinforcement — to work in Afghanistan. More soldiers on the ground will only lead to more contact with the enemy, and more air support for troops will only lead to more civilian casualties that will alienate even more Afghans. Sooner or later, the American government will be forced to the negotiating table, just as the Soviets were before them.

"The rise of the Taliban insurgency is not likely to be reversed," says Abdulkader Sinno, a Middle East scholar and the author of Organizations at War in Afghanistan and Beyond. "It will only get stronger. Many local leaders who are sitting on the fence right now — or are even nominally allied with the government — are likely to shift their support to the Taliban in the coming years. What's more, the direct U.S. military involvement in Afghanistan is now likely to spill over into Pakistan. It may be tempting to attack the safe havens of the Taliban and Al Qaeda across the border, but that will only produce a worst-case scenario for the United States. Attacks by the U.S. would attract the support of hundreds of millions of Muslims in South Asia. It would also break up Pakistan, leading to a civil war, the collapse of its military and the possible unleashing of its nuclear arsenal."
In the same speech in which he promised a surge, Bush vowed that he would never allow the Taliban to return to power in Afghanistan. But they have already returned, and only negotiation with them can bring any hope of stability. Iraq, Afghanistan and Pakistan "are all theaters in the same overall struggle," the president declared, linking his administration's three greatest foreign-policy disasters in one broad vision. In the end, Bush said, we must have "faith in the power of freedom."

But the Taliban have their own faith, and so far, they are winning. On my last day in Kabul, a Western aid official reminds me of the words of a high-ranking Taliban leader, who recently explained why the United States will never prevail in Afghanistan.
"You Westerners have your watches," the leader observed. "But we Taliban have time."

Marxism and the Credit Crunch event

2008-10-20T12:47:00.002+01:00

Marx and the Credit Crunch
Tuesday 21 October, 7pm
Conway Hall, Red Lion Square, London

Speakers:
Istvan Meszaros, author of Beyond Capital
Chris Harman, editor, International Socialism journal
Richard Brenner, author of The Credit Crunch - a Marxist Analysis

A global credit crunch. Banks collapsing. Prices soaring. Recession looming. Conventional economic theory appears to have no coherent explanation. Government stumps up hundreds of billions to rescue the bankers - and demands that working people's pay be held down and spending cut on public services. At this meeting, three Marxist writers examine the roots of this great crisis in the nature of capital itself. Tracing the current crisis to its origins, they show how workers can resist paying the price for a crisis they never made, and set out the case for systemic change.

Political Affairs takes up Debusmann on Marx and crisis

2008-10-20T12:28:00.002+01:00

Marxists love it when journalists take up our ideas. Here the e-journal of the Communist Party of the USA responds to Bernd Debussmann.

Karl Marx and the Economic Crisis Today
By Norman Markowitz

In a recent article for Reuters, titled “Karl Marx and the World Financial Crisis,” Bernd Debussmann discusses the present global crisis. The reporter, far brighter than most we are used to in “mainstream” US media, quoted the Communist Manifesto’s statements on the centralization of credit as a major step on the road toward socialism and suggested that Marx and Marxism may be relevant to understanding what is happening in the world today.

These views shouldn’t surprise anyone. They are views that smart people in the capitalist world, especially those who had no desire to see a working-class revolution take place, noted when they began to take Marx and Marxism seriously in the late 1870s. These were the last years of Marx’s life, but the beginning of the establishment of mass socialist parties strongly influenced by and/or committed to the general theories propagated by Marx and Engels. Debussmann, to support his analysis, also quotes warnings from IMF historians and US analysts who saw disaster, the equivalent to an international economic “train wreck,” in the offing.

The article is an excellent one for general readers and should be circulated widely. Debussmann mentions that since 1980 (the beginning of the “free market” reign), the top one percent of US income earners has seen their share of the national income grow from around eight percent to about 20 percent. Meanwhile the percentage of workers in private sector unions has dropped to about 7.5 percent, “the lowest in the industrialized world,” which should be a source of both anger and concern for American working people. Debussmann also mentions positively the campaign labor is waging for the Employee Free Choice Act.

But there are some points of Debussmann's interpretation that need to be challenged, along with important omissions in the article. Let me begin with the omissions, which I see as wholly constructive and friendly.

Marx stressed the battle for democracy as essential for the Communists to support as a necessary condition to the eventual establishment of socialism.

He also saw the attempts by capitalists to save the capitalist system from its chronic crisis, the crisis of overproduction, leading to depressions, as not only hopeless but self-defeating. In their centralization of credit, their creation of bigger and bigger monopolies, their search for foreign markets to dump surplus goods and gain access to greater and cheaper quantities of raw materials and pools of labor, the capitalists were digging their own grave. Marx believed that they were literally setting the stage for bigger crises in the future, breaking down the distinctions between workers in various countries and regions of the world by putting more and more of them, from Beijing to Brooklyn, from Calcutta to Cleveland, in the same boat so to speak.

The capitalists' development of manufacturing, centralization of credit, expansion of both capital and productive capacity, would create the conditions that make socialism possible. By themselves, these things are not socialism. Capitalism also created a working class whose material interest would be to establish socialism, not only, or even primarily, to create a “better society,” to achieve “social justice,” but to survive beyond a hand to mouth existence, losing jobs, skills, homes, and fighting endlessly to keep up with a “labor market” whose rules are fixed for bigger and bigger, richer and richer employers seeking to the cheapest labor costs possible.

Marxism has little meaning (except as an understanding of what modern capitalists are trying to do and why they are trying to do it) without this understanding of the class struggle as the foundation for understanding social development in class divided society. The future of the capitalist class and working class are as Marx and Engels understood as closely intertwined as that between slaveholder and slave, feudal landlord and serf.

A strong possibility of a “global depression” – rather than the euphemism “recession" – is what the world today is facing. It is rooted in enormous over-production and income inequalities among and within the “producing nations" (China and India for example as against Britain and the US). there are also many possible outcomes. The worst would be new imperialist alliance systems and a global and probably nuclearized world war (the “ruin of the contending parties” to quote the Communist Manifesto). The best would be either the establishment or re-establishment of working-class power and socialist policies of economic development based on cooperative planning and public ownership in both industrialized and industrializing countries. Many other outcomes, such as global systems of resource and labor management through corporations, trade unions and governments operating through international organizations are also possible, depending on the developing social struggles as they are enacted in political-economic contexts.

What we can be sure about, though is, that "free market capitalism," "self-regulating markets," "supply side economics," and all of the reactionary romanticism which was dusted off from its 19th century archives after 1979 in Britain and 1980 in the US and paraded as “cutting edge” economic theory and practice have lost their luster.

Marxism is what Marx and Engels meant it to be: a guide for action for the working class. The author’s contention that there are “few Marxists” in the industrialized world after the “dismal failure” of the Soviet Union is a significant slight to Marxists and a spectacular one to the former USSR. Marxism, stated or unstated, is a force in all of the struggles of labor movements to keep the capitalists of their countries from foisting the economic crisis on them, in the attempts, limited as they have been for workers movements to achieve international labor cooperation.

Still, Debussmann article is thoughtful and captures where the capitalists of the world are going, while Americans are forced to watch the Republican Party leadership debate among themselves about what set of names to call Barack Obama in the last weeks of the campaign. While the economic crisis deepens, the stalwarts of the Republican “base” engage in racist hate speech.

Debussmann expresses strong pessimism, however, about the possibilities for major changes in the US, which I think are unfounded. The US does have, as he writes, “an Everest size debt” along with its crumbling infrastructure and backward health care. Today, the US, to use the term that Lenin used about Czarist Russia at the time of the revolution, may be the “weak link” among the major capitalist states, not the “anchor” that he quotes another writer as saying. No one really expected the Czarist Russian Empire at the beginning of the 20th century to become the citadel for a world socialist movement and no one really expects the US at the beginning of the 21st century to play such a role in the future.

But, as Marx and Engels always understood, beneath the surface of events, the struggles of factions and parties, there are class and social forces at work, seeking to fit theory to practice to make an understanding of the world a force to change it. And the US, with its popular democratic culture, its skilled and educated working class, and its central, albeit declining role in the global capitalist economy, may have surprises in store for its own ruling class and the rest of the capitalist world in the future.

--Norman Markowitz is a contributing editor of Political Affairs.

Bernd Debusmann on Karl Marx and the world financial crisis

2008-10-20T12:18:00.004+01:00

Journalistic re-assessment of Marx continues.

Karl Marx and the world financial crisis: Bernd Debusmann
Wed Oct 15, 2008
Reuters
Bernd Debusmann is a Reuters columnist. The opinions expressed are his own

WASHINGTON (Reuters) - Capitalism as we used to know it is on its deathbed. And those who predicted that the old brand, the unfettered, American-promoted system, was a danger to the world, are being vindicated. They include Karl Marx, whose thinking on banks seems oddly contemporary these days.

The credit crisis that began in August last year and turned into near-catastrophe this month is not over, despite the hundreds of billions of dollars that governments are spending to save banks in the United States and Europe from collapse and thereby prevent a global depression. But there is an emerging consensus that capitalism needs a 21st century overhaul, not just emergency rescues, to save it from itself.

When that will happen is not clear. "What we are seeing right now looks like a very slow train wreck," says James Boughton, the historian of the International Monetary Fund, or IMF.
British Prime Minister Gordon Brown has suggested an international meeting on the pattern of the 1944 Bretton Woods conference that resulted in the post-World War II financial order and created the IMF and the World Bank. That system was dominated by Washington.

The United States, from where the credit crisis spread like a virulent epidemic, is not likely to play as large a role in whatever new "financial architecture" world leaders construct. As Peer Steinbrueck, the German finance minister, put it: "One thing seems probable ... The U.S. will lose its status as the superpower of the global financial system."

"The world is at risk of losing its anchor ... the United States," U.S. financial strategist David Smick writes in his just-published book on financial globalization, The World is Curved: Hidden Dangers to the World Economy.

The opening chapter is darkly entitled The End of the World. Smick said in an interview he thought a global depression was still possible despite the steps taken by the United States and Europe to restore confidence.

Those measures included buying stakes in major banks - in effect partial nationalization - and would make Marx smile if he could rise from his grave. In the Communist Manifesto he and his collaborator Friedrich Engels published in 1848, Marx listed government control of capital as one of the ten essential steps on the road to communism. Step five: "Centralization of credit in the hands of the state ..."

There are not many Marxists left in the industrialized world and not even the most fervent expect the revival of an ideology that failed so dismally in the Soviet Union.

MOMENTOUS BREAK
But as far as the United States is concerned, the events of the past few weeks represent a momentous break with decades of a free market philosophy that abhorred government intervention in (and regulation of) financial markets.

"There is little question that making the government a major investor in American banks raises thorny questions ... about the role of the public sector in private markets," Sen. Charles Schumer, a member of the Senate finance and banking committees, wrote in the Wall Street Journal the day the government announced it was planning to take equity stakes worth up to $250 billion in American banks.

It will take time for questions about the public sector in private markets to be answered. But it looks likely that some things will never be quite the same, no matter who wins the presidential election on November 4. For one, the control center of the financial market has already begun shifting from New York to Washington.

The "big government" that free marketeers identified as something evil is almost certain to make a comeback, although spending on America's crumbling infrastructure, its inefficient health care system, and environmental programs will be limited by the Everest-sized public debt. The U.S. national debt has increased by an average of $3.34 billion a day over the past year and now stands at more than $10 trillion.

Both in the United States and in Europe, officials have stressed that government intervention in the banks will be temporary but whether they will be able to stuff that genie back into the bottle remains to be seen. And "temporary" has not been defined.

"We will not stand down until we have achieved our goal of repairing and reforming our financial system and thereby restoring prosperity to our economy," said Ben Bernanke, the chairman of the Federal Reserve.

Amid the gloom and anxiety of the worst financial crisis since the Great Depression, which started in the United States in 1929 and then spread to the rest of the world, there are hopes that Capitalism 2.0 (if it ever comes about) will result in a more equal society. "There is a tremendous opportunity now to narrow the income gap," says Sam Pizzigati of the Institute for Policy Studies, a Washington think tank.

That gap resembles the top-to-bottom income distribution just before the Great Depression, according to the Washington Center on Budget and Policy Priorities. Then as now, the top 1 percent of households accounted for around one fifth of the national income. In 1980, their share was 8 percent.

History shows that deep financial crises have helped spur public policy reforms and those pending include legislation that would make it easier for American workers to join labor unions. At present, 7.5 percent of private sector workers are union members, the lowest percentage in the industrialized world.

U.S. unions say they are close to reaching a goal of collecting, by election day, one million signatures supporting the legislation. If passed, it would be part of what some have already started calling the new world financial order.

Many Marxisms

2008-10-20T12:15:00.001+01:00

MANY MARXISMS: HISTORICAL MATERIALISM ANNUAL CONFERENCE 2008
7-9 November 2008

Online registration now available: http://mercury.soas.ac.uk/hm/conference2008.htm

School of Oriental and African Studies, Central London
Organised in collaboration with the Isaac and Tamara DeutscherMemorial Prize Committee and with Socialist Register.

There is also a link to a vast number of abstracts - looks excellent as ever.

Marxism and the Economic Crisis

2008-10-20T12:07:00.005+01:00

A one-day conference hosted by International Socialism
Saturday 25 October 2008 12 noon – 6pm Uuniversity College London, Central London

Faced with the unprecedented economic upheavals of recent months, International Socialism has invited some of Britain’s leading Marxist economics to present their views on the crisis.

Sessions on:
· The depth of the crisis
· Finance and the system
· Political implications of the crisis

Speakers will include:Peter Gowan, professor of international relations at London Metropolitan University and author of The Global Gamble, Alex Callinicos, chair of European studies at King’s College London, and author of An Anticapitalist Manifesto and Resources of Critique. Robin Blackburn, professor of sociology at Essex University and author of Age Shock: How Finance is Failing us. Chris Harman, editor of International Socialism and author of Explaining the Crisis

To book a place, email isj@swp.org.uk or phone 020 7819 1177. Those attending will be asked for a donation (£10/£5) to cover our costs.

To download a poster, go to our website: http://www.isj.org.uk/

Sounds great, but short notice.

ADDENDUM
There's a lengthy account of the event by Infinite Thought (October 26th)

PSA Marxism Group

2008-10-16T18:44:00.005+01:00

The PSA Marxism Group has links to a number of interesting articles on Marxism, well worth exploring. In particular the addition of a piece by Alex Callinicos on the contours of Anglo-Saxon Marxism is a good starting point for the whole tradition. This is taken from the Critical Companion to Contemporary Marxism edited by Jacques Bidet and Stathis Kouvelakis (published by Brill and at the moment a typically expensive hardback - but Brill have been very good at allowing very good paperback editions of works in the Historical Materialism book series to be published by Haymarket Books. Lih on What is to be Done? and Broue on The German Revolution are both pretty indispensable now).

The PSA Marxism group version is open to additions. Hey, Callinicos goes Wiki, that's a thought!

Wallerstein on the return of depression

2008-10-16T17:51:00.001+01:00

Commentary No. 243, Oct. 15, 2008
"The Depression: A Long-Term View"

The depression has started. Journalists are still coyly enquiring of economists whether or not we may be entering a mere recession. Don't believe it for a minute. We are already at the beginning of a full-blown worldwide depression with extensive unemployment almost everywhere. It may take the form of a classic nominal deflation, with all its negative consequences for ordinary people. Or it might take the form, a bit less likely, of a runaway inflation, which is simply another way in which values deflate, and which is even worse for ordinary people.

Of course everyone is asking what has triggered this depression. Is it the derivatives, which Warren Buffett called "financial weapons of mass destruction"? Or is it the subprime mortgages? Or is it oil speculators? This is a blame game, and of no real importance. This is to concentrate on the dust, as Fernand Braudel called it, of short-term events. If we want to understand what is going on, we need to look at two other temporalities, which are far more revealing. One is that of medium-term cyclical swings. And one is that of the long-term structural trends.

The capitalist world-economy has had, for several hundred years at least, two major forms of cyclical swings. One is the so-called Kondratieff cycles that historically were 50-60 years in length. And the other is the hegemonic cycles which are much longer.

In terms of the hegemonic cycles, the United States was a rising contender for hegemony as of 1873, achieved full hegemonic dominance in 1945, and has been slowly declining since the 1970s. George W. Bush's follies have transformed a slow decline into a precipitate one. And as of now, we are past any semblance of U.S. hegemony. We have entered, as normally happens, a multipolar world. The United States remains a strong power, perhaps still the strongest, but it will continue to decline relative to other powers in the decades to come. There is not much that anyone can do to change this.

The Kondratieff cycles have a different timing. The world came out of the last Kondratieff B-phase in 1945, and then had the strongest A-phase upturn in the history of the modern world-system. It reached its height circa 1967-73, and started on its downturn. This B-phase has gone on much longer than previous B-phases and we are still in it.

The characteristics of a Kondratieff B-phase are well-known and match what the world-economy has been experiencing since the 1970s. Profit rates from productive activities go down, especially in those types of production that have been most profitable. Consequently, capitalists who wish to make really high levels of profit turn to the financial arena, engaging in what is basically speculation. Productive activities, in order not to become too unprofitable, tend to move from core zones to other parts of the world-system, trading lower transactions costs for lower personnel costs. This is why jobs have been disappearing from Detroit, Essen, and Nagoya and factories have been expanding in China, India, and Brazil.

As for the speculative bubbles, some people always make a lot of money in them. But speculative bubbles always burst, sooner or later. If one asks why this Kondratieff B-phase has lasted so long, it is because the powers that be - the U.S. Treasury and Federal Reserve Bank, the International Monetary Fund, and their collaborators in western Europe and Japan - have intervened in the market regularly and importantly - 1987 (stock market plunge), 1989 (savings-and-loan collapse), 1997 (East Asian financial fall), 1998 (Long Term Capital Management mismanagement), 2001-2002 (Enron) - to shore up the world-economy. They learned the lessons of previous Kondratieff B-phases, and the powers that be thought they could beat the system. But there are intrinsic limits to doing this. And we have now reached them, as Henry Paulson and Ben Bernanke are learning to their chagrin and probably amazement. This time, it will not be so easy, probably impossible, to avert the worst.

In the past, once a depression wreaked its havoc, the world-economy picked up again, on the basis of innovations that could be quasi-monopolized for a while. So, when people say that the stock market will rise again, this is what they are thinking will happen, this time as in the past, after all the damage has been done to the world's populations. And maybe it will, in a few years or so.

There is however something new that may interfere with this nice cyclical pattern that has sustained the capitalist system for some 500 years. The structural trends may interfere with the cyclical patterns. The basic structural features of capitalism as a world-system operate by certain rules that can be drawn on a chart as a moving upward equilibrium. The problem, as with all structural equilibria of all systems, is that over time the curves tend to move far from equilibrium and it becomes impossible to bring them back to equilibrium.

What has made the system move so far from equilibrium? In very brief, it is because over 500 years the three basic costs of capitalist production - personnel, inputs, and taxation - have steadily risen as a percentage of possible sales price, such that today they make it impossible to obtain the large profits from quasi-monopolized production that have always been the basis of significant capital accumulation. It is not because capitalism is failing at what it does best. It is precisely because it has been doing it so well that it has finally undermined the basis of future accumulation.

What happens when we reach such a point is that the system bifurcates (in the language of complexity studies). The immediate consequence is high chaotic turbulence, which our world-system is experiencing at the moment and will continue to experience for perhaps another 20-50 years. As everyone pushes in whatever direction they think immediately best for each of them, a new order will emerge out of the chaos along one of two alternate and very different paths.

We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it, because it will be the result of an infinity of individual pressures. But sooner or later, a new system will be installed. This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.

As for our immediate short-run ad interim prospects, it is clear what is happening everywhere. We have been moving into a protectionist world (forget about so-called globalization). We have been moving into a much larger direct role of government in production. Even the United States and Great Britain are partially nationalizing the banks and the dying big industries. We are moving into populist government-led redistribution, which can take left-of-center social-democratic forms or far right authoritarian forms. And we are moving into acute social conflict within states, as everyone competes over the smaller pie. In the short-run, it is not, by and large, a pretty picture.

Booklovers turn to Marx

2008-10-16T17:39:00.003+01:00

The Guardian carries a story about the return to Marx in German bookshops, especially Das Kapital.

Later:
BBC Radio 4 carried a feature on this on the 6 o'clock news on Monday, Oct 20th

Revolutionary left on TV

2008-10-13T17:20:00.005+01:00

http://www.channel4.com/news/articles/politics/international_politics/come+back+communism/2494912
Channel Four carried a brief but delicious feature on the 'hard left' on Friday, including an interview with Mark Fisher of the CPGB in Highgate Cemetary and Martin Smith of the SWP at the SWP's smallish demo against capitalism at the Bank of England (complete with what Channel Four apologised for as 'offensive language': 'they say bankers, we say wankers'. The thrust of the report was to agree with Professor Tony Travers outside the LSE that the revolutionary left is hopelessly divided and impotent. Mark and Martin came over well though.

Hat-tip for this: Oliver Kamm I'm afraid to say. Come on left bloggers, you can't all have been out building the movement on Friday evening!

Rick Kuhn on economic crisis

2008-10-13T12:25:00.003+01:00

Canberra Times 13 October 2008 p. 17

Finance chiefs sound alarm bells

Global credit problems are not simply financial, RICK KUHN writes

Don't panic! That's the panicked cry of governments and central bankers around the world. Meanwhile, their behaviour shows that they expect a very, very deep recession.

After repetition over more than a quarter of a century by mainstream economists, ministers, the World Bank and International Monetary Fund, neo-liberal platitudes have been forgotten. Today, we just aren't hearing about the efficiency of markets, the importance of balanced budgets or, better, budget surpluses.

Less than a year ago, Kevin Rudd reassured Australian business that he was a fiscal conservative. But last week the Labor Government decided that valour was the better part of discretion by speeding up expenditure on public infrastructure from the Future Fund. Again, this was designed to reassure corporate Australia: Labor will do whatever it takes to secure growth and, especially, their profits.

In the face of the global financial crisis, a prolonged and careful assessment of how to spend the billions of dollars in the fund on competing projects was set aside. It was necessary to get the money flowing to make up for the rapid anticipated slow-downs in Australian investment, consumption and income from the export of minerals to China.

The Reserve Bank board, on which the head of Treasury sits alongside several corporate heavyweights, has the same fears as the Government. So it slashed the official interest rate by a whole 1 per cent on Tuesday, for the first time since 1992.

Australia is following a pattern set in the United States, Britain and other countries in Europe. This looks like Keynesian economics, where the government steps in to sustain growth and make up for the deficiencies of markets. Already Republicans in the United States and conservatives elsewhere are expressing concerns about creeping socialism, as governments take over some failing banks and promise to regulate the rest much more closely. There is bound to be even more overt state involvement in economic activity as the crisis deepens.

It must be noted, however, that neo-liberal policies of liberating markets, privatising, corporatising and contracting out state activities, were mainly designed to put the pressure on workers who actually produce the wealth on which profits are based.

In Australia, the Howard government's market-freeing activities went hand-in-hand with a bigger role for government in policing the population in general and unionists in particular.

Even heavy-duty state intervention is unlikely to solve the world's current economic problems for two reasons.

Firstly, the problems are not simply financial. More transparency and better regulation of banking won't deal with the underlying issue which is the rate of profit across the entire economy.

During the long boom, capital intensive investment meant that outlays on employing workers declined compared to business spending on machinery, equipment, buildings, raw materials and other goods used in production. Yet it is only the labour of workers that creates new value. The rate of profit fell and the period between the mid 1970s and the early 1990s saw the deepest global recessions since the 1930s. Profit rates have recovered somewhat, largely thanks to neo- liberal policies that squeezed more work out of employees and, especially in the United States, led to declining real wages. Even so, the rate of profit did not recover to the levels of the long boom. So those who own and manage corporations often prefer to invest in speculative financial assets rather than activity that produces real goods that people need. Most of the transactions on financial markets are a zero sum game: players only gain at each other's expense. While the US finance sector only realised 10 per cent of total corporate profits in 1980, the figure was 40 per cent in 2007.

So developments in the real economy explain the speculative frenzy that led to the credit crunch. The financial crisis is bringing that underlying problem to the surface. Capitalism has a tendency to break down that which is expressed in deep crises like the current one. As Henryk Grossman put it in 1929, before the stock market crash,''Capitalist production is characterised by insoluble conflicts. Irremediable systemic convulsions necessarily arise from the immanent contradiction between value and use value, between profitability and productivity, between limited possibilities for valorisation and the unlimited development of the productive forces.''Financial regulation and even an expansion of state ownership, which conservatives label socialism, can't overcome this tendency. Governments will soon demand that everyone tighten their belts. Unemployment will rise, while employers and governments try to drive wages down.

In Australia, this will be easier because Rudd and Julia Gillard have promised not to touch key elements of John Howard's industrial relations laws. These include secret ballots for strikes, restrictions on union officials' ability to talk to their members at work, and the ban on pattern bargaining, that is, industry- wide campaigns.

The alternative is a real socialism in which workers replace production for profit with production to fulfil human needs and the despotic structures of all corporations with democratic control over workplaces and society as a whole. Now that neo-liberalism has ceased to be common sense, it is worth considering.

This article is based on the Deutscher Lecture which Rick Kuhn, Reader in Political Science at the Australian National University, will deliver in London on November 7. His book, Henryk Grossman and the recovery of Marxism, won the 2007 Deutscher prize.

John Bellamy Foster on economic crisis

2008-10-11T11:14:00.001+01:00

Can the Financial Crisis Be Reversed?
Interview of John Bellamy Foster for Página/12

Página/12: What is your opinion about the decision of the Treasury Department to consider taking ownership stakes in many United States banks? Do you think this is the right political-economic strategy? I mean, will it lead to the recovery of the system?

JBF: The Treasury Department proposal to purchase majority shares in major U.S. banks (the extent of this is still not clear) is, in a U.S. context, an act of sheer desperation, following a whole series of increasingly desperate actions. It signals that the crisis is out of control. The standard operating procedure whenever there is a major credit crisis is to activate the lender of last resort function and for the central bank to flood the economy with liquidity, while bailing out large financial and economic institutions that threaten to bring down the whole ship. Since the publication in 1963 of Milton Friedman and Anna Schwarz's A Monetary History of the United States, most U.S. economists have come to believe that the Great Depression was a result of the failure to open up the monetary floodgates when necessary; that it had little to do with the real economy. All of the prevailing notions of how to deal with a financial/economic crisis grew out of this. This is the tradition that Ben Bernanke, the current Federal Reserve Board chairman, comes out of. It meant dealing with the problem primarily in monetary/interest rate/price terms.

But in the face of this massive financial crisis, now 14 months old, and rapidly morphing into what looks like a full-scale debt deflation on the order of the Japanese meltdown/stagnation in the early 1990s -- even threatening to turn into a new Great Depression on the scale of the 1930s -- the U.S. government is bailing like mad with bigger and bigger buckets, and trying absolutely everything it can think of. It has poured hundred of billions of dollars, and is prepared to pour trillions of dollars more, into bailing out the financial sector (witness the Treasury Department's $700 billion bailout plan, and the Federal Reserve Board's declaration that it will be the buyer of last resort for the commercial paper market, to the full amount of $1.3 trillion). The lender of last resort has changed into the buyer of last resort on a huge scale. An array of tools has been unleashed to combat the crisis of a kind and of a magnitude scarcely even imagined before. Just the other day central banks across the world cut interest rates basically in tandem. Nothing has worked. The meltdown has continued. The financial contagion is spreading globally, with all of Europe and now Japan caught in the downswing.

It is only in these dire circumstances that the United States, where private property is more sacrosanct probably than anywhere else in the world, is talking about some kind of nationalization of banks, if only limited. In financial circles they are now calling this "regime change," borrowing the term of course from a different context. But it is clear what it means: the end of neoliberalism, and the rise of aggressive government interventions into the economy. It represents a clear recognition that this is not a liquidity crisis that can be solved by pouring more money into financial markets or by lowering interest rates. What difference does a reduction in rates make for a borrower who could not obtain a loan at a higher rate and now cannot obtain a loan at a lower rate? There's a lot of dollars out in the financial world, the problem is that those who own the dollars are not willing to lend them to those who cannot be certain to pay them back -- and that's just about everyone who needs the dollars. This is a solvency crisis, where the balance sheet capital of the U.S. and U.K. financial institutions -- and many others in their sphere of influence -- has been wiped out by the declining value of the loans (and securitized loans) they own, their assets. As an accounting matter they are insolvent.

Will it work? Can they avoid a massive devaluation of capital across the board? I doubt it. It is likely too late to stabilize things in this way. Things have gone too far. The crux of the matter is that the whole "Atlantic" economy is in trouble, not just the financial sector. Consumption is collapsing in the United States, where it represents more than two thirds of total demand, and a good part of world demand. Fifteen percent of the population is under water with their mortgages. Real wages in the United States have not risen since the 1970s and people are deeply in debt and their circumstances are eroding. Unemployment is way up and jobs are vanishing. Where the productive base of the economy is weakening drastically, a falling financial superstructure, finding the ground shifting under it, is unlikely to be able to right itself.
As for the politics of nationalization of banks in the U.S. and U.K., one should not confuse this, as is all too common, with socialism or even radicalism, unless one is talking about socialism for the rich. This is just another desperate stop-gap measure aimed at preventing a full-scale debt deflation. But as a sign of the total collapse of the "U.S. model" of "free market" finance capitalism, the moral and political consequences are vast.

Página/12: Which sort of policies should the government implement to sort out this crisis, extending beyond the financial market?

JBF: I don't think anyone knows how to "sort out" or stop this crisis. What we are seeing is a lot of improvising while the house is falling down around us. There is no possibility of avoiding a very severe world economic crisis at this point; the object has shifted to avoiding a deep debt deflation as in the 1930s. We are facing one of the great crises in the history of capitalism; nothing this bad has been seen in advanced capitalist world in eighty years, since the Great Depression itself.

My own view is that the sole object at this point -- though it is hard to imagine this in the United States at present due to the weakness of labor and of working-class organizations in general -- should be to reorganize social and economic priorities to meet the needs of those at the bottom. It is a fact that the U.S. economy over decades has drastically weakened the conditions of the wider population, which is at the root of the whole problem. So addressing those conditions is the real key. But even if that were not the case, the goal of those who identify with the great majority of the population, with the working class, the propertyless, the poor, should be clear: to put the employment, food, nutrition, housing, health, education, environmental conditions of those at base of society first. This is simple humanity and justice. Why flood the financial world (which means first and foremost the rich, the near-rich, and corporations) with trillions of dollars ultimately at taxpayer expense, probably to no avail, when something might be done for the greater population? Marx said, in one of his ironic moments, that the only part of the national wealth that was held in common amongst all the people was the national debt. If the wealth is not shared, why should the public take on more debt, supporting the opulence at the top while the great majority of the people are seeing their basic conditions deteriorate? Let the system take care of itself; let us devote our public resources to the people. More good would be accomplished that way. Of course what this means is a reactivation of class struggle from below; something we haven't really seen in the United States in a long time. I ended a lecture recently by saying that the working class in the United States could learn a lot from how class struggles have been waged in the streets in Argentina. You may think your working class has not accomplished all that much, but from our perspective things look different.

Página/12: Do you think it is necessary to change the regulation of the financial system or sector to solve the crisis?

JBF: If you mean by regulations, placing more limits on the financial system, it certainly will happen in the future after the economy settles down to whatever level it will end up at. But no real regulations will be imposed now during the height of a financial meltdown. The Federal Reserve and Treasury Department in the United States and the other branches of the government, and of course other governments as well, are doing everything they can to combat a more catastrophic financial meltdown, including getting the printing presses going (this is a metaphor of course these days since now it is done electronically) in order to pour liquidity and capital into the system. Beyond that they want to "restore confidence," which is code for increased risk-taking. The goal is to get the "animal spirits," as Keynes called them, going again. To inflate the financial system they are reducing, not increasing, regulations at the present moment; and that is how the state authorities always respond to a financial crisis. They have no choice as long as they represent the interests of capital. Imposing tough regulations would make things worse for financial interests that find everything closing in on them at present. The goal is to get money flowing again. So the answer is that for the moment at least any real reregulation is not in the cards.

The truth is the advanced capitalist system has been dependent on a process of financialization (the increase in the financial superstructure relative to the "real economy") as the main means of combating the stagnation of production and investment for decades now -- beginning in the 1960s, but accelerating in the 1980s, and accelerating still more in the 1990s. It is the underlying tendency to stagnation rooted in exploitation and inequality that is the root problem. (This was brilliantly and relentlessly explained in a long series of articles by Monthly Review editors Harry Magdoff and Paul Sweezy from the 1960s to the 1990s.) Financialization, the blowing of one bubble after another (ideologically justified by neoliberalism), was offered as the solution to stagnation in the real economy. It was this that mainly spurred economic growth in the United States and elsewhere at the center of the system given the stagnation of investment in new productive capacity (held down by existing overcapacity). Ultimately, however, there was no "solution" other than the wiping out of capital: "the real barrier to capitalist production," Marx wrote, "is capital itself."

We are once again up against that real barrier. Hence the issue of regulation/deregulation/
reregulation is, at this point, immaterial -- at least if one is talking about new restraints on capital as a solution to the immediate problem. Restabilization of capitalism requires what has always been the saving function of crises: a vast amount of existing capital must be extinguished to enable a smaller surviving amount to begin again the process of blind, crazed accumulation. But the real-world suffering that would accompany such a massive "devaluation of capital" -- the lost jobs, housing, self-respect, and the misery, even starvation, which would follow on a global scale today -- would mean the end of the U.S. model of capitalism, since the rest of the world would never accept such a result. What we need and must fight for is real regime change: that is a socialism for the 21st century.

John Bellamy Foster is editor of Monthly Review. This is the full text of the interview with Foster conducted by Página/12 (Argentina). A shorter version of this interview will appear in Página/12.
URL: mrzine.monthlyreview.org/foster101008.html

William Tabb on Financial Crisis

2008-10-11T11:10:00.003+01:00

The Financial Crisis of U.S. Capitalism
William K. Tabb
The Will Miller Lecture, University of Vermont, October 28, 2008

Like many people who do not live around here, and maybe some who do, I had not heard of Will Miller, so, on being invited to be part of the Will Miller Social Justice Lecture series, I went to the organization's Web site and learned that "Events sponsored by the Lecture Series: will be connected to social, ecological and political concerns; will assist the community in understanding the origins, workings and implications of capitalism and imperialism; will encourage active participation in the creation of a more just society; and will be accessible to all." Now, one's ears perk up at words like capitalism and imperialism.

Economists don't use the word capitalism very much although we talk about capitalism all the time. We just don't name the system as often as we should. When I was given the title of tonight's talk, "The Financial Crisis of U.S. Capitalism," it of necessity changed what I was going to say in interesting ways. For while it is important to talk about the state of the economy, the weaknesses of the bailout plans proposed and debated, still a certain clarity emerges when their class character is discussed and it becomes clearer why meaningful reform is so hard. These most important questions have a lot to do with how capitalism works, how the economy cannot be separated from politics, and how politics cannot be separated from the distribution of wealth and class power.

This topic, the current financial crisis described as a crisis of capitalism, is the way a lot of the most conservative people in America view our situation, including a goodly number of members of the House of Representatives. Representative Jeb Hensarling, a conservative Texas Republican, tells his fellow representatives that this is no time to abandon free-market principles and start along that "slippery slope to socialism." "How can we have capitalism on the way up, and socialism on the way down?" he asks. How indeed. Representative Thaddeus McCotter, a Michigan Republican, recalls that "peace, land, and bread" was the 1917 slogan of the Bolshevik Revolution. "Today," he told his colleagues, "I suggest that the people on Main Street have said they prefer their freedom, and I am with them." Actually they seem to be saying that they don't want to bail out the banks so they can afford bread, health care, and gasoline. Such conservatives voting to prevent socialism in America do not acknowledge that it is a socialism for the rich at the expense of the rest of us. The ideological right wants to save capitalism from the likes of such dangerous radicals as George W. Bush, Ben Bernanke, and Henry Paulson. This is a comic turn of events. They do not understand that business cycles are integral to the workings of capitalism and have been since its beginnings and that the more extreme form of laissez faire, the more violent the economic crisis.

Let me explain how the system itself created this crisis by starting with how the last crisis was solved. In the late 1990s, as you may remember, the economy expanded thanks to the Internet and the high tech boom as investors made money on this new technology, which led others to float the stock of new companies that promised to do the same. Many had no business plan, no chance of ever making money, but the animal spirits of investor/speculators, greed, and the herd mentality bid up prices of such stock until they reached such unrealistic levels that in 2000-2001 the stock market came crashing down. To address the crisis, the Federal Reserve lowered interest rates and kept lowering them. This made it cheaper for companies and individuals to borrow and helped people pay off debt and borrow more. One area that was particularly impacted was real estate: because it is not so much the cost of a home as how much must be paid each month to stay in it that matters, low-interest mortgages made ownership cheaper. As housing prices rose and kept rising, mortgage originators grew lax in their standards. Ninja (no income, no job) loans and little or no down payment became common. To keep the bubble going, low teaser-rate loans which would reset in the future were offered, and interest-only mortgages were popularized; by 2005, adjustable-rate mortgages allowing borrowers to make very low initial payments for the first years were the norm in more than half of new home loans. By 2006, the most popular mortgage option included paying less than the amount due each month, the difference being added to the principal and subject to dramatically higher monthly payments in the future.

Even if you were a banker who saw where all this was heading, you could not refuse to play. If you did, your bank would earn less than its competitors, your stockholders would wonder why they shouldn't get someone else who could increase the profits, and you would be out of a job. If you were the person handing out the loans and interviewing people, your income depended on how many loans you originated. What happened to them after that was not your problem. You will have earned your bonus. The banks learned to securitize these loans -- that is, to gather a bunch of them, some millions of dollars worth, and sell these collateralized debt obligations to someone else who would receive the income. You would get paid up-front with money you could lend to still more borrowers. Since the values kept rising and defaults for years were very low, the rating agencies thought these were safe instruments. Government regulators saw nothing wrong. They mostly came from the banking industry, at least the political appointees at the top did, and they laid down policy. Between mid-2000 and 2004, American households took on three trillion dollars in mortgages. Interestingly, during these same years, the U.S. private sector borrowed what BusinessWeek calls "an astonishing $3 trillion" from the rest of the world -- astonishing because that is a lot of money. Between a third and half of the mortgages were financed with foreign money. Banks, especially in Europe, hold a lot of the toxic securitized debt. Some of their banks are in more trouble than ours thanks to these unwise purchases of presumably "safe" assets.

As the bubble inflated, the Securities and Exchange Commission changed the rules to allow investment banks to take on a great deal more risk, a disastrous decision that led to the collapse of Wall Street as we have known it. The big investment banks asked for and got from the SEC exemption from regulation limiting the amount of debt they could take on. After the change, they no longer had to keep the billions of dollars in safety-cushion reserves against possible bad investments. From then on, with very little of their own money, they could leverage themselves to greater extremes, that is, borrow and invest more in relation to the actual capital the bank possessed. On the up side, this meant they could make great profits with exotic and non-transparent financial instruments and simpler ones which were as it turned out far more risky than they thought. Without the protective buffer of greater reserves, however, they quickly ran out of money when things began to go bad and they could not sustain the extent of leverage which for Bear Stearns was short-term debt 33 times the value of capital they held. The SEC examiners pointed out the growing problem before the banks publicly were seen to be in grave danger, but these warnings were ignored by political appointees at the top of the SEC itself.
By allowing the banks to self-regulate and making it more difficult for the staff to investigate and go after companies the staff believes to have broken the law, the SEC, as in the case of many other executive branch agencies, moved the country away from social responsibility to laissez faire at serious cost to the American people. The pendulum will now shift. How far and for how long depends on how deep the crisis becomes and how the American public learns to think about why they are suffering and what can be done. This is a question to which we shall return.
When the inevitable crash happened and the air went out of the bubble, the nature of what banks do became central. Banks have liabilities to their depositors and others which are short-term. People can demand their money back when they want or, in the case of money borrowed at low rates for short-term loans, very soon. The banks' assets are their long-term loans including twenty- and thirty-year mortgages. If these mortgages and other loans begin to look risky and it seems the banks may not get their money back, those who have lent money to the banks panic and want their money now. The banks don't have it. This is a liquidity problem. The purpose of FDIC insurance is to calm those who have lent to the bank. But today much bank borrowing is in large money market deposits, commercial paper in large denominations, and interbank borrowing -- none of which is insured, so it's hard to come by these days. Thus a liquidity problem. But if the banks hold assets which are worth less than their liabilities this is a solvency crisis. What we are watching is a spreading solvency crisis in which the value of assets is falling, from the value of homes, to the value of the mortgages and the collateralized debt obligations based on these assets, to other collateralized debt obligations based on car loans and credit card payments as the broader economy weakens.

Before the House voted down the Paulson plan, a European minister asked what happens if the Treasury's $700 billion program to buy toxic debt does not work. Mr. Paulson told the minister, "We have nothing else." Remarkable. Just as in Iraq. No real planning. Just a faith-based initiative and throwing money at private companies. The taxpayer money extended in purchases, guarantees, grants, and loans is well north of a trillion and a half dollars. By comparison the wars in Iraq and Afghanistan from 2001 to 2008 have so far cost us "only" $790 billion, maybe by tonight $900 billion. Getting us out of the financial crisis we are in, economists think, will cost from one to two trillion dollars. It depends on how it is done and who pays how much of the total. Mr. Paulson had sought authority to act alone with his acts nonreviewable by any court or administrative agency. Congress refused to cede such power and the lamest of lame duck presidents had no mandate to force much at all from the people's elected representatives feeling heat from the grassroots. The key question is what price the Treasury will pay for bad assets. If it pays the current market price, it forces banks to write down such assets to perhaps 20 to 25 percent of the value they would have if things were as they had been before the bubble burst. If it pays more (with taxpayer money), it subsidizes ("rewards") the banks for their bad judgment. Mr. Paulson says he will not overpay, but what does that mean? If he doesn't "overpay" in the sense of paying more than the market now believes these toxic assets are worth, he is not helping solve the crisis.

If the loans the banks made are bad loans, even toxic loans as the term of art has it, the value of assets is less than the value of bank liabilities. In this case, the banks are insolvent, not as Paulson claims merely holding illiquid assets. Not able to meet their debts, they either go out of business or sell themselves at a bargain price to a stronger institution. Sometimes no one will buy them unless the government takes a big share of the toxic loans. Hence the inevitable socialism for the rich which we are told must take place or else it is the end of the world for the rest of us as well. Paulson demanded money to save the banking system his way. It has not washed for reasons mainstream economists have explained. It now turns out that the Treasury is making unsecured loans and buying commercial paper from companies which need short-term loans they can't get from banks even after the bailout passed. This is to say the real economy is being helped and the plan to buy toxic waste was not needed to bring liquidity to credit markets -- which it did not do in any case. There has begun to be widespread criticism of how Paulson saw the crisis and who he thought needed to get taxpayer money.

There have now been lots of lectures, panel discussions, and teach-ins in which economists have weighed in on the financial crisis. In September at Harvard, a standing-room-only crowd of MBA students worried about their job prospects were told that indeed the job market for them looked bleak this year. The phrase used by Jay Light was a "slow-motion train wreck." But, for Robert Merton, the main point was that innovation is inherently risky. Some ideas will fail, he reminded his audience, and innovators inherently outrun existing regulatory structures. That is just how it is. We don't want to clamp down on innovation because "innovation is the engine of growth." Not only must Wall Street be bailed out but any attempt to regulate may produce overregulation and that is worse than the crash itself for it puts the future of capitalism's foundational energy in danger.

This is a line taken by many defenders of the system. The Financial Times editorial writers with a repetitious insistence tell readers that government may well only mess it up. In early October, they pointed out that it was the regulated banks that had problems, not the unregulated hedge funds. The same day this editorial appeared on page 12, on page 17 the paper ran a story headed "Hedge Funds Prey on Rivals." It was essentially about how the rest of the pack turns on its weak members by, as the writer said, embracing "increasingly cannibalistic" trading strategies. This is what happened after Bear Stearns collapsed. The pack went after the next weakest investment bank, Lehman Brothers. At this point the commercial banks won't lend to each other because they don't know who is holding how much toxic waste and will be unable to pay back loans even a day later. Now it turns out many hedge funds are collapsing.

This effort to blame government needs to be seen as an effort by ideologues and other defenders of the current system to prevent social regulation in the public interest. The analysis typically opposes something called government with something called the market. In actuality, capitalists who own the companies which want the rules that help them get richer pay politicians to get what they want. Government is not an above-the-fray entity but a terrain of contestation among capitalist interests which are at odds with one another and between the general interests of capital and the interests of the working class. To blame government is to assume an independence government does not have. Its decisions reflect class power and the interests of particularly powerful fractions of capital, limited only by public outrage and the courage of those representatives who have been elected for their real independence from these interests and commitment to the working class. Residents of this state might know of such a senator, for example.

Among speculators there is outrage that the government has limited short selling which fed the downward cycle and encouraged more financial institution bankruptcies. The Financial Times warned against too much government interference in the market and cited the Smoot-Hawley Act which raised tariffs and presumably prolonged the Great Depression as the prime example of how "government" makes things worse. However, if one is looking at capitalism, it is clear that Smoot-Hawley was passed because America's most powerful capitalists were national capitalists who wanted protection from foreign competition. Smoot-Hawley would not be passed today because the most powerful capital is now transnational capital. The "government" which passed Smoot-Hawley then is not the same government as today's which would not pass such a law because the dominant fraction of capital has changed in this era of globalization. Similarly the reason the Paulson plan favors Wall Street and ignores the needs of domestic manufacturers and Main Street is that Paulson represents Wall Street in Washington in much the same way that the "government" once represented large industrialists. What fractions of capital are dominant goes a long way to explaining what "government" proposes to do. Now, the extreme free-marketeers are being displaced by fractions of capital which understand the dangers of their shortsightedness. Working people have become angry and have made their anger felt in Washington. This has led once enthusiastic free-marketeers to move rhetorically to the left.
On the same Harvard panel this past September, N. Gregory Mankiw, chairman on Mr. Bush's Council of Economic Advisers from 2003-2005, told the audience that Wall Street likes Mr. Bush's interpretation that current prices on Wall Street are too low and government should pay more for these assets to get prices, and thus profits of the financial firms, back up. He points out that economists are skeptical of "throwing money at the problem" because, first, it won't do all that much and, second, many of them think government should take equity positions in these companies, that is, take preferred stock, which can be sold at a profit after recovery, and run them in the public interest. That is from a mainstream Republican academic. Also on the panel, Kenneth Rogoff, the former chief economist at the International Monetary Fund, enforcer of neoliberalism throughout the world, echoed the sentiment: "The problem is not merely bad debts held by institutions but bad banks themselves." The $700 billion bailout, he said, would have the effect of maintaining management salaries and bidding up the price of bank stock when the financial sector instead needs to shrink. He actually said a large financial sector as we now have is "unproductive" for the economy as a whole. He actually thought we should focus on the needs of homeowners facing default. After decades during which these men as public officials pursued policies based on the idea that uncontrolled free markets always knew best, in a crisis they knew that, to save the system in their own country, strong government action was needed.
There has been a cacophony of punditry to the effect that it will be a long time before anyone listens to Washington policy makers give economic lectures. At the UN the new General Assembly session opened with the Secretary General making this clear in his disparaging remarks about "the magic of the market," a reference to the term made famous a quarter of a century ago when Ronald Reagan explained that the poor countries needed not more aid and government programs but trade and the magic of the market. Michael Mandel, BusinessWeek's senior columnist, calls what has happened "the Great Repudiation" (October 13, 2008, p. 32). It is assumed it will also be a long time before business and political leaders can call for unregulated markets again. Within modern American capitalism, though, regulation and deregulation has been a pendular phenomenon. After recovery, self-interest and the re-establishment of ideological hegemony brings a shift back to the magic of the market and deregulation, until the next crisis hits. As if to presage just such an ideological swing back, Mankiw, too, warned against excessive regulation which would choke off innovation.

On the West Coast at the University of California-Berkeley, eminent economists who tended Democratic were more critical though nevertheless supportive of the bailout because not doing it would be worse -- not that the bailout would solve the problem, of course. Barry Eichengreen said that, after a year of holding action which had not solved the problem, the TARP (Troubled Asset Relief Program) would give the Treasury Department wiggle room. His colleague Brad DeLong, a former Clinton official, told the audience, "Don't call it a bailout or TARP." He recommended calling it "seizure" and renaming the program "the troubled asset seizure and forced bank nationalization plan." This is exactly what Paulson had been trying to avoid. He did not want to seize the banks and nationalize them. Taking over AIG for $65 billion of your dollars and asking for a little under 80 percent ownership so he could call it conservatorship -- 80 percent or more would have been nationalization -- the idea was not to take control but leave the same people in charge. The Bush people and especially Paulson, strong advocates of deregulation as they are, just could not do what most economists understood needed doing: nationalizing the banks, sorting them out, and directing them to make loans to the real economy and letting the stockholders, top managers, and speculators take their losses. It is not surprising that Mr. Paulson, former head of Goldman Sachs, thinks this way. But it is also a question of the correlation of class forces within the political system and the pressures on the state.

At the time DeLong spoke, eight million Americans were out of work. The figure is higher today. They need jobs. The recession will deepen. The credit squeeze means that businesses cannot get the credit they need. They are cutting back on investment, on payroll, on employees. They are shutting down divisions rather than fixing them. Salaries and wages are being held down in an effort to ride out the crisis. But this means less purchasing power and more pressure on the economy. Why should the big money be spent to prop up Wall Street and not help working people? The government needs to allow courts to lower the mortgage rates and principal on homes, so that those who can afford to pay realistic mortgages can stay in their homes. These are not normal times and ordinary people are becoming restive and increasingly active in making their feelings heard.

There are two relevant models for addressing the financial crisis. The first is closer to the Paulson approach; it is how Japan handled its banking crisis in the 1990s which resulted from a speculative bubble, its government initially refusing to recognize the scale of the problem and financially supporting financial institutions. The result was a decade of slow or no growth and the spending of a vast amount of public monies to recapitalize what is now a far more concentrated banking system. Their broader economy has still not really recovered. The second is the Swedish case where the government took over and reorganized the banks under state ownership. In 1985, Sweden deregulated its credit markets, leading to the kind of property speculation and bubble we have repeated. Between 1990 and 1994 this bubble burst, leaving 90 percent of the banking sector with massive losses, including all of the country's largest banks. The government divided banks into those that could be saved and those that it judged could not or should not, letting many fail, and taking on the bad assets of banks but leaving the shareholders of these banks with nothing. Over time they sold off the assets and then as the banks returned to health sold them to private owners. Taxpayers got their money back and economic growth resumed. Of the two models, the latter is clearly better than the former in crisis.

It is not surprising that government always bails capital out. The difference between the two approaches considered above is a willingness to nationalize and reorganize the banks versus just throwing money at the banks and waiting for the market to recover by itself. The distinction here is between the two major perspectives within the capitalist class. As the British have recently shown by nationalizing a big part of their banking system, taking preferred stock in exchange for a cash infusion, for the more sensible, less ideologically driven fraction of capital, pragmatic survival comes first. The pragmatic faction accepts that, if throwing money at failing enterprises and extending more loans and loan guarantees proves ineffective, the government is forced to nationalize the insolvent enterprises and run them at a loss (when the enterprises become once again profitable, capital leans on the government to sell them back to private investors).

The best the renegade Republicans (who it turns out are a majority of the party in the House of Representatives) can come up with is a private insurance scheme to solve the crisis. Private insurance has failed. That is why the largest private insurance company AIG had to be nationalized -- excuse me, placed under "concervatorship." The other major Republican rebels' solution was to do away with the capital gains tax and lower the corporate income tax since, they said, the U.S. "has the highest corporate income tax in the world." The statutory rate is high in the U.S. However, this is not the rate corporations actually pay. Most US companies doing business in the U.S. (57 percent of them) paid no federal income tax in at least one year between 1998 and 2005. More than half of foreign corporations and over 40 percent of US corporations paid no income tax for two or more of those years according to the General Accounting Office. Companies minimize or eliminate their tax burden, leaving the rest of us to pay more. In 2005, the last year for which we have data, 25 percent of the largest US companies paid no federal income taxes despite gross sales that year of well over a trillion dollars. They hardly need a tax cut. What is more, the logic is wrong. Companies don't invest because they will pay lower taxes but because they see they will make money by expanding production, investing in new plants and equipment and hiring more workers. They will not do this in an economy where the consumers have borrowed more than they can repay and workers are losing jobs. As stagnation deepens the giveaway programs to the corporate rich have less impact on the rest of the economy, which is why the New Deal had to move to direct job creation.

At the level of what more is to be done, the question arises: what will be done for working people? This is a secondary question for the elites. The primary one for them is saving capital (especially US capital) and the system itself. But what of the lives of ordinary people? Their needs and desires do not ordinarily rank very high beyond symbolic rhetorical sympathy unless large numbers of people are angry and focused on the crimes of the elites who run their country and who encourage and enforce the rules that allow capitalist excesses (which are seen as just part of how the system operates and so of no real concern to governments serving capital). Until the issue of class power and the structural nature of capitalism as a system of class domination is brought in, reform will always be limited and never enough to either prevent crises or put the working class victims of the system first when it comes to societal priorities.

Having laid out my broad take on things, let me go back to the elements which have driven the U.S. economy over the last decade or so and especially fueled the two great bubbles, the high tech-Internet optimism of the late 1990s and the housing boom of roughly the first half of the present decade. I would also stress other key elements lurking beneath the surface. The first is the expansion of military spending which feeds a right-wing politics because it depends on promoting fear of the enemy and misdirecting anger outward as well as funding companies that are major campaign contributors for the right. The second is a secular stagnation which is disguised by the pattern of redistributive growth in which the upper ten percent of households (especially the upper one-tenth of one percent among them) get more and more of the wealth of the country while the majority are denied basic infrastructure, education, health care, and of course secure decently paying jobs and retirement. The third is the remarkable rise in debt which funded consumption through these years. Consumer debt allowed working families to maintain their standard of living to some extent. But there are limits to how much debt people can carry. US households now spend more of their disposable income to pay off debts (14 percent) than to buy food (13 percent). This has never happened before.

Because real wages have stagnated for decades, Americans have had to borrow more. They have pulled hundreds of billions out of their homes by refinancing, increased their credit card debt, and raided their 401(k)s to pay for living expenses. Household indebtedness rose from 50 percent of GDP in 1980 to 71 percent in 2000 to 100 percent in 2007. Student loans were two billion dollars in 1996-7 but $17 billion in 2006-7 according to the College Board. The job market is making it hard to pay off these loans which amount to well over $20,000 on average. The financial sector's indebtedness was 21 percent of GDP in 1980 but rose to 83 percent by 2000 and was 116 percent of GDP in 2007. Government debt paid for tax cuts to the rich and wars in the Middle East. The impact of the huge federal debt, which grows with each new bailout, will make it harder to properly address the recession in ways that will serve the majority of the American people. The total American debt (the debt of households, business, and government) has doubled as a proportion of GDP since 1980 and was 350 percent of GDP even before the recent dramatic taking on of new debt by the government. It was not simply bankers' "mistakes" and/or greed which produced the crisis but efforts to use debt to overcome the stagnationist tendency of the economy. It is this structural issue, an economy which cannot grow without resorting to a large buildup of debt and speculative financial asset investment, that is not being faced. The irrationality of a system which does not meet people's needs but requires such artificial and finally dangerous methods of growth is not a very good system.

There is a specter haunting Wall Street. At this point it appears in odd cartoonish tributes to Marx and socialism. In a recent issue of The Economist, which is a libertarian business publication, there is a drawing of French President Sarkozy reading Das Capital in gleeful approval in front of a crumbling New York Stock Exchange (October 4, 2008, p. 55). The suggestion was that Sarkozy, who had said American laissez faire ideology as practiced during the subprime business "was as simplistic as it was dangerous," is looking forward to the demise of the system. But of course Sarko is a big fan of America and capitalism. He, as The Economist full well understands, is just responding to French public opinion which rejects free-market capitalism. The story itself points out other statements by Sarkozy, such as "capitalism is the system that has enabled the extraordinary development of western civilization" (a sentiment, by the way, that Marx would have endorsed). Moreover, Sarkozy also says that "anti-capitalism offers no solution to the current crisis." On that, Marx could not disagree more with the President of France. His riposte might be something like, "Yes, the system may recover -- but only at great cost to working people, who will eventually understand that they do not have to put up with all this." He would also add that we now have the potential to meet human needs, accept that the development of each of us should be the goal of all of us, reject wars for oil, save the planet, and have ordinary people learn that they can govern themselves.

The same issue of The Economist had another one of Obama and McCain coming to the finish line behind which there are crumbling bank buildings and one worried person on the sidelines saying to another, "The end is just the beginning." And so it is. Things will get a lot worse before they get better. The question will be to what extent public pressure and popular mobilization insist that working people are helped first and foremost; that the patterns of taxation and pro-corporate policy making are reversed; and, as in the Great Depression, that greater social control over capital is put in place.

David Harvey in an introduction to a new printing of The Communist Manifesto called attention to one of its modest proposals for reform, the centralization of credit in the hands of the state. This is happening already on a temporary basis as it did in Sweden and now in the UK and other places. So wrote Harvey earlier this year, why not consider some of the other equally modest but wholly sensible proposals -- such as free (and good) education for all children, serious progressive taxation, and significant inheritance taxation? The proposals made in the Manifesto for the most part now strike us as tame stuff. Yet even those which were to some extent achieved have been significantly repealed in the last decades in America. It would be useful to think about what we need and want and demand it, if not in some grand manifesto then in public discussion, demonstrations, and electoral struggles. I expect Will Miller might have thought something along these lines of economic democracy the right sort of answer to bailouts for banks and bankers. And, if these are good ideas for a time of crisis, why not as a route to a more just economic system? We may be moving closer to a point similar to the one when the New Deal began: an entire economic system is understood to be broken and the usual policies of bailing out corporations can't reverse the decline, fear permeates all and hundreds of millions of Americans are desperate. At such times, people begin to say if this is how capitalism works it is time to figure out something better. At least that is what Will Miller would be asking us to think about. If things keep going the way they have been, many Americans will be up for the conversation.

William K. Tabb is Professor Emeritus, Queens College, City University of New York. He is the author of The Amoral Elephant: Globalization and the Struggle for Social Justice in the Twenty-First Century (Monthly Review Press, 2001) among other publications.
URL: mrzine.monthlyreview.org/tabb101008.html

Wallersein on Bolivia

2008-10-01T13:38:00.001+01:00

"Commentary No. 242, Oct. 1, 2008
"Bolivia: Defeat of the Right"

In the amazing series of elections in South America in the last five years, the most radical results were in Bolivia, with the election of Evo Morales as President. It is not because Morales stood on the most radical platform. It was rather that, in this country in which the majority of the population are indigenous peoples, this was the very first time that an indigenous person was elected president of the republic. This in itself was a profound social revolution, and was not at all appreciated by the descendants of European immigrants who had always controlled the country.

The big question when Morales was elected was whether he could stay long in office, or whether the Bolivian right, perhaps in collusion with the armed forces, could oust him. He has now demonstrated that he can.

There were three major elements in his program. Bolivia's national income today is primarily drawn from its gas exports, essentially to Brazil and Argentina. The gas is located in the eastern provinces, the so-called Half Moon. And these areas are the ones in which there are the lowest percentages of indigenous peoples. The majority are Euro-descendants. Until Morales came to power, the prices at which the gas was sold were ridiculously low. And the income remained largely with the eastern provincial governments.

So, Morales sought to renegotiate the prices of the gas being exported. And he instituted a hydrocarbon tax so that much more of the income would come to the national government. Morales intended to use the money for social redistribution throughout the country, which would of course significantly benefit the indigenous populations.

In addition, the land in the eastern provinces is exceptionally mal-distributed. Two-thirds of the land are owned by one-sixth of 1% of the population. Morales wished to place a cap on the acreage any one person could own - a form of major agrarian reform.

In foreign policy, Morales attempted to maintain reasonable relations with the United States. He continued to accept the money the U.S. had been giving for anti-narcotic operations, especially since this money went to the armed forces. He did, however, in addition, welcome Venezuelan aid and Cuban doctors. The U.S. government was clearly not happy with Morales and would have preferred to see20the Bolivian right return to power.

The strategy of the Bolivian right was to demand more autonomy for the regional governments, ultimately hinting at secession - a project they had never advocated as long as they controlled the central government. They demanded a recall election of Morales. The tactic badly backfired.

Morales accepted the challenge, adding to the recall election the question of whether the nine provincial prefects should also be recalled. In the elections Morales got a whopping 68% support, far greater than the votes he had originally received when he was elected. Seven prefects were returned but two anti-Morales governors were ousted, which has allowed Morales to name successors.

The right in the eastern provinces then sought to block exports of gas. They hoped thereby to induce the Brazilian and Argentine governments to put pressure on Morales. Supporters of Morales then began to demonstrate. The governor of Pando province, Leopoldo Fernández responded with repression. Over 30 demonstrators were killed in the capital city, El Porvenir. Morales arrested the governor and named a navy admiral as the new prefect.

At this point, President Michelle Bachelet of Chile convened an emergency meeting of the organization of the 12 South American states, UNASUR, to consider the situation. All twelve presidents came to Santiago for the meeting, and unanimously adopted a resolution of "full and complete support for the constitutional government of Evo Morales," denouncing any possible coup d'etat. The significance of this resolution was that it was unanimous, being signed even by the deeply pro-American president of Colombia, Marcelo Uribe. The resolution was then endorsed by the Grupo Río, composed of 22 countries from all of Latin America and the Caribbean, including Mexico.

UNASUR called for dialogue. Morales called for dialogue himself, even before the UNASUR resolution. The right is stymied. Its last hope was some U.S. intervention. But Bolivia has now expelled the U.S. ambassador, Philip Goldberg, for "conspiring against democracy," that is, with the Bolivian right. The United States is now withdrawing its small aid projects in Bolivia. Russia has offered to enter the breach. The United States is becoming more and more irrelevant in Latin America.

If one asks why even Uribe supported the resolution, it is because no president wants to see the new tactic of secession receiving support. The United States is trying this also in Ecuador, where it has backfired equally, with the great victory of President Rafael Correa's referendum on the constitution.

Besancenot in New York Times

2008-10-01T13:25:00.002+01:00

New York Times
HE looks like a sprite: boyish, handsome in his black Hugo Boss T-shirt and blue jeans. He reminds some of Tintin, the eternally young comic-book hero of so many childhood adventures.
But Olivier Besancenot, 34, is the extremely adept leader of the hard French left, a beacon for disaffected young members of the Socialist Party and the remnants of the once-powerful Communists. Having already run twice for the French presidency, and as an articulate presence on news and talk shows, Mr. Besancenot has higher favorability ratings in some polls than established politicians like Ségolène Royal, the Socialist Party presidential candidate who lost last year to the conservative Nicolas Sarkozy.

In the 2007 presidential election, Mr. Besancenot won 4.1 percent of the vote with the slogan, “Our lives are worth more than their profits.” But in the year since, as the Socialist Party has squabbled over its leadership and Mr. Sarkozy has picked off a few Socialist figures for his own cabinet, the young radical has become almost mainstream — serious surveys show that more than 60 percent of the French regard him favorably.

In a poll last month by the firm CSA, 49 percent of respondents said Mr. Besancenot was currently Mr. Sarkozy’s leading opponent, behind the Socialist mayor of Paris, Bertrand Delanoë (54 percent), but ahead of other Socialists like Martine Aubry (36 percent) and Ms. Royal (32 percent).

Mr. Besancenot is a postman, a member of the working class, who delivers the mail part time in the wealthy Parisian suburb of Neuilly-sur-Seine. But he is also the leader of the Communist Revolutionary League, and in a long interview here, in party offices above a printing factory in this racially mixed city just east of Paris — where cheap clothing stores abut shops selling North African and Middle Eastern spices and take-out food — he describes himself without blushing as a revolutionary.

But given the travesties of the past, from the bureaucratic savagery of Soviet Communism to the chaos of Mao, he said, “revolution needs to be reinvented, for no revolutionary experiment has ever succeeded.” They have only been betrayed, either crushed by an armed elite or destroyed by “bureaucratic counter-revolution,” he said, adding, “We are trying to strike that balance of taking power without being taken by power.”

CAPITALISM is in a deep crisis, he said, “losing the leeway to buy social peace” in the massive credit crunch that began with subprime mortgages and has not finished. “This time it’s not on the periphery,” he said, but it “touches the heart of the system” and so has a domino effect, he believes. “This is a major turn in the evolution of the world economy.”

The credit crisis is pointing up further contradictions, Mr. Besancenot said. “We are heading straight for catastrophe from a social standpoint, the human standpoint, from war and the environment. For us, today, to be environmentalists means to understand that this model of socio-economic development is out of breath, and if we don’t change we will destroy our own planet.”

He is media savvy and understands that the name of his party, affiliated with the Trotskyist Fourth International, is wrong for the modern world, having a stink of dead ideology and the last bloody century. “We asked ourselves about finding a name based on what unifies everyone,” he said.

So he is trying to gather other small, left-wing parties into a new grouping: the New Anti-Capitalist Party, which is intended to provide an umbrella voting list for those unhappy with the impact of capitalism and globalization on the poor, the environment, the third and fourth worlds, and on the rights of women and homosexuals. The new party intends to run in the elections for the European Parliament next June.

“We aren’t soldier-monks,” he said. “We are the exploited, oppressed, the young and the salaried, who don’t whine but want to be respected — and for that, at some point, we lift our heads through engagement.”

Mr. Besancenot speaks quickly and fluently, dotting his answers with references to the philosophical canon of Marxism and post-Marxism, but he has a sense of humor, too, especially about revolutionary purity. Asked about the way human fallibility has ruined previous utopias, he said that serious change must come from below, not from a dictatorship of the proletariat, and that he believed in the protective guarantees of legal rights, decentralization of authority, local responsibilities and multiparty democracy.

The goal, he said, is “to find a political process that permits a revolutionary process to be controlled by its base — especially to not trust each other’s promises.”
“If we arrived tomorrow, saying that this time we have the guarantee that it won’t be messed up, we should definitely not be believed, even if we were sincere — which we would be, by the way.”

Mr. Besancenot was born in Levallois-Perret, near Neuilly. His father was a teacher and his mother a school psychologist. But he is sensitive about his upbringing. Teased about being a son of the academic bourgeoisie, he bristled, making it clear that his father taught in a primary school in a Communist neighborhood, and that his parents were salaried employees with “a working-class background.” Then he softened. “It would be no problem, by the way,” if they had been bourgeois, he said, then added: “My parents exploited no one.”

He was politicized by youthful violence and racism. “We had a friend, a buddy in the neighborhood who was attacked by someone who shot at him,” he said. The neighborhood mobilized, and “we young people went to be militant for SOS Racisme,” a group fighting prejudice. He joined the Revolutionary Communist Youth at 14.

He studied history at the University of Paris X-Nanterre, where the 1968 student uprising began, and then earned a master’s degree in contemporary history.

His goal, he said, is to try to define a new model for society that somehow avoids a permanent ruling elite. “Until now we’ve had two types of societies, we’ve had the bureaucratic societies in the East and we’ve had capitalist societies, and in both cases it’s a minority of individuals that decide for the majority,” he insisted. “We are for a model where the majority decides for itself.”
And how to motivate individuals, the great failure of socialism? “The only answer to motivate the individual in a different economic process would be democracy” in which there are “inalienable liberties,” he said, where the communitarian spirit cannot be violated either by the wealthy or the apparatchiks.

He said he admires Che Guevara, because of his “concentration on the individual” and not the collective. “We can find stimuli that aren’t simply material but are also moral in the construction of another society,” Mr. Besancenot said. “For Che, communism wasn’t just a phenomenon of production, it was first a phenomenon of conscience.”

MR. Besancenot is regularly mocked by more traditional French figures for his earnestness and naïveté, dividing the left to the benefit of the right. He is “the dream of Sarkozy who wishes him to be to the left what Le Pen is to the right,” said Pierre Moscovici, a candidate for the Socialist leadership, referring to Jean-Marie Le Pen, the leader of the far-right National Front.
As for this “mysterious anti-capitalist party,” he continued, “there’s no concern to look for solutions, no consideration of the world as it is.”

The contempt is returned. Mr. Besancenot calls the Socialists dupes of the system. “What they think is their biggest strength is their biggest weakness, the practice of power,” he said, “implementing right-wing ideas” and sacrificing principle for minor reforms.

Daniel Cohn-Bendit, the Green member of the European Parliament and a leader of the May 1968 uprising, says Mr. Besancenot remains captive to the past. “These comrades resist capitalism but they haven’t parted with” older notions of revolution, he said. But Mr. Cohn-Bendit may yet support the new coalition, which has been backed by José Bové, the anti-globalization campaigner.

The French are deeply pessimistic about the future, and what may attract many to Mr. Besancenot is his rejection of certitude. “My generation is full of doubts,” he said. “For me that’s not a problem, it’s almost better to have doubts than certainties. We don’t have a social project key-in-hand. We don’t have a New Jerusalem where we can go live.”

La Botz on the Bailout

2008-09-29T14:14:00.003+01:00

The Financial Crisis: Will the U.S. Nationalize the Banks? by Dan La Botz
MRZine
September 28th 2008

The political conflict over the Bush administration's plan for a bailout of the banks, brought about both by differences with the Democrats and even more intensely with rightwing Republicans, makes it highly unlikely that Congress will be able to pass a bailout plan that can stabilize the financial situation along the lines that Secretary of the Treasury Henry Paulson originally asked for. Paulson wanted a $780 billion check to clean up the banks' books by taking their bad loans off their hands. Many believe the price tag would ultimately come to a trillion dollars. He simply wanted taxpayers to save the banks. While a minority of rightwing Republicans reject the fundamental basis of the plan, the Democrats would add conditions -- Congressional oversight, better terms for homeowners, limits on executive salaries, and other items -- which would (from the bankers' point of view) weaken the plan and limit its effectiveness.

Even if Congress can quickly arrive at an agreement with the Bush administration and Secretary Paulson about the bailout, the financial situation in particular and the economic situation in general will probably get worse. The underlying problems facing American capitalism -- the failure of the United States in Afghanistan and Iraq, the rising cost of petroleum, the continuing and increasing competition from Europe and Japan, and now the ascendancy of China -- make it very likely that the country's economic power will deteriorate, leading to the decline of the United States as a world power. Beyond that are structural and systemic weaknesses in the American economy and society as a result of neoliberal capitalism which have caused a deep disjuncture between the vision of the United States as a post-modern, high-tech economy and the reality of a nation with a crumbling infrastructure, a disintegrating public education system, inadequate health insurance, and persistent problems of poverty.

The economy is already in a recession. Whatever the ultimate bailout plan, the financial situation could well continue to unravel, curtail credit, and shrink the broader economy, leading to a deep recession or depression. The U.S. Congress, both Democrats and Republicans, might then be forced -- despite their deep aversion to any form of government ownership -- to not only bail out the banks but to buy them. The increasingly popular sentiment that the bankers should be made to pay for the crisis opens the door to the notion of nationalization of the banks. What would it mean to have the government own the banks?

Historically the Populists, various labor parties, and the Socialist and Communist left have raised the slogan of nationalization of the banks as part of a process of bringing about socialism. Their argument has been that if the banks were owned by the government, and the government were controlled by the people, we could democratically plan an economy to meet the needs of all. Nationalization of the banks would form part of a plan of socialization of the economy -- banks and corporations, mines and factories, airlines and railroads -- brought under the control of a combination of citizens, workers, and consumers. We would put our children, the elderly and the infirm first, and organize the economy to provide jobs, housing, health care, education, and retirement benefits for all. Bank nationalizations in reality, however, have usually just been a stage in the boom-bust cycles of modern economies, a period when the state lends its strength to finance to see it through hard times, and once finance has recuperated, the state returns it to its private owners so they can continue to reap the benefits of wealth plus interest.

When Governments Nationalize the Banks
In recent history governments have nationalized banks when the pressures of internationalized financial markets and international competition have made it difficult for them to control and stabilize their finances and currency. During the last couple of decades, countries as different as Mexico, France, Sweden, and Japan carried out partial or more or less complete bank nationalizations to regain control of the financial situation.

Japan's experience more than a decade ago was much like that of the United States in many ways. After a period of great productivity and prosperity in the 1980s, in the early 1990s, Japan's housing bubble burst, leaving Japanese banks holding sheaves of bad loans. The Japanese housing boom collapsed just as China began to become an export competitor.1 After neglecting the problem for some time the Japanese government intervened, spending $440 billion dollars of its taxpayers' money to nationalize the weakest banks, infuse capital into the stronger banks, and to protect depositors.2 Japanese banks were required to create a Business Revitalization Plan, at the center of which was a capital/asset ratio. Some economists and journalists have suggested that Japan's solution -- partial nationalization and partial financial support for private banks -- could provide a model for the United States in the current crisis.
Sweden handled its financial crisis of the early 1990s through a quasi-nationalization. The Swedish Social Democrats -- not the conservatives -- had deregulated the banks in the 1980s. But in the early 1990s Swedish real estate values began to fall and banks were left holding bad loans. Sweden spent $11.7 billion to rescue its banks but in return received warrants, that is, paper granting the government the right to buy stock in the banks whenever it wished. This constituted a quasi-nationalization of the banks restoring public confidence. As part of the Swedish deal, banks had to write down their losses, sell their distressed assets, and later the government sold the shares it held in the banks.3 The government's temporary control allowed the financial situation to stabilize, and the re-privatized banks reentered the national and global financial markets strengthened, though still subject to the ongoing, worldwide crisis of capitalism.
Both Mexico and France nationalized their banks in the 1980s in response to international financial pressures and international competition. In Mexico, the government of President López Portillo raised the banner of the Mexican Revolution as he nationalized the banks in an attempt to regain control of finances and to stop capital flight abroad. In France, the Socialist and Communist parties and the middle class Radical party had adopted in 1972 the Common Program of the Left, which called for the nationalization of the banks. But in France too it was the new international character of finance which led the government to nationalize the banks in large part to get control of the expanding money supply.4

Lessons of the Experience
Without going into all the details of the Japanese, French, and Mexican cases, we can note some similarities in the experience of nationalization of the banks. First, an important sector of bankers resisted nationalization and, when finally forced by the government to relent, fought for higher compensation for their property than originally offered . . . and usually won. Second, in none of these cases was bank nationalization complete, with some domestic and foreign banks usually excluded. Third, where banks were more completely nationalized, the bankers opened new financial institutions which tended to engage in banking functions and significantly drained off capital. In general, bank nationalization tended to contribute to the centralization and modernization of the banking industry as a whole. In all cases after a few years the nationalized banks were reprivatized, usually to many of the same financiers who had previously owned them.

The nationalization of banks does not necessarily represent a progressive measure, nor is it a logical next step toward socialism. Government ownership of banks, at least partial ownership and sometimes complete ownership, is quite common around the world. Many capitalist nations -- both developed and developing ones -- have nationalized their banks during the twentieth century. A 2002 study of banks found that around a third of all banks were government-owned, though such bank ownership was more common in the developing world.5 In capitalist societies governments engage in the nationalization of banks to reestablish financial stability and improve their economic position in the international market, not to advance the common good.

The Slogan of Nationalization in a More Radical Time
Bank nationalization had a different character in an earlier era. During the 1930s a far more radical left than that of the 1980s had raised the slogan "Nationalize the Banks!" as part of a revolutionary, transitional, or radical reformist program aiming at the establishment of socialism in a not too distant future. Socialist parties around the world had since the nineteenth century called for the nationalization of the banks, transportation and communication, industry and mining. The idea was that nationalization formed an integral part of socialization, of banks and industries which would be guided by a national economic plan elaborated democratically either by a kind of parliament or by national representatives of workers councils. For some the Soviet Union's experience -- a nationalized economy which brought about rapid industrialization and victory in World War II -- represented a confirmation of their notions of the value of centralized planning. Only later would the problems of Stalinism or bureaucratic Communism, that is, undemocratic centralized planning managed by a totalitarian dictatorship and forced labor, become clear to all.

In France, liberated at the end of World War II by a combination of Allied invasion and national resistance movement of the Maquis' guerrilla bands, there was a great revulsion against the Third Republic, the Vichy government, the French elite, and capitalism more generally. Socialist and Communist Party influence was great, and it was in this atmosphere and under this pressure that the French government nationalized the largest banks on December 2, 1945. This was a far more popular and democratic nationalization than those of the 1980s and 1990s, but it did not fundamentally change the character of French capitalism. Socialists, Communists, and Christian Democrats then joined together in the Three-Party Alliance, and established the Fourth Republic.

During this first bank nationalization, the new French government established a Bank Control Commission with the power to oversee the running of both the nationalized banks and the remaining smaller, private banks. But there was also a National Credit Council appointed by the government, which played a key role in determining the policy of the banks. It was made up of seven members chosen for their expert financial knowledge (from the nationalized and private banks, from the foreign trade banks, and from the stock exchange), seven representatives of the country's labor unions, including the bank workers, and ten representatives of various economic interests (agriculture, cooperatives, foreign trade, shipping, chambers of commerce, and craft organizations). A cabinet minister presided over the council and the governor of the Bank of France served as vice-president.6

France's nationalized banks worked with the government and private industry to fulfill the 470 billion franc Monnet plan for reconstruction and development. The nationalized banks were used in particular to finance other nationalized firms, such as the gas and electric company. Often the nationalized firms were less sound and less profitable than the private corporations, so the nationalized banks became a kind of government subsidy to state industry. Whatever the left parties had envisioned when they supported nationalizing the banks at the end of the war, and some no doubt saw nationalization as a step toward socialism, it became part of the process of reconstructing European capitalism. European social democracy gave up the struggle for socialism and undertook instead the management of capitalism along Keynesian lines. While the social democratic welfare state provided reforms, it could not ultimately escape the vicissitudes of capitalism and, like the American liberal welfare states, had to bend before neoliberal reforms in the 1980s.

The Question of State Capitalism
Nationalization of the banks has usually represented a recurring stage in the experience of modern capitalism, which is to say state capitalism. At its birth, capitalism shared the cradle with the modern state. The two grew up together, two brothers testing their strength against each other, and drawing strength from the tests. As they matured, they transformed capitalism into imperialism, and used their strength to extract wealth from the societies of Asia, Africa, and Latin America.

Throughout the world, including in the United States, at every stage of development government provided capitalism with a legal framework, with a domestic market, with government subsidies for the construction of infrastructure, and often with vast grants of land, lucrative contracts, and periodic infusions of capital. Government and finance have a particularly close relationship; they are practically Siamese twins sharing the same nervous and circulatory system. In the United States, the Secretary of the Treasury and the Federal Reserve Bank are the point of connection and each is as much a part of government as of finance. In the modern world, the token of and the tendency toward state capitalism is ever present.

Some have seen nationalization per se as a step toward socialism. In the nineteenth century, some argued that state nationalization of industry by the governments of Bismarck of Germany or Napoleon III of France represented socialism. Karl Marx and Friedrich Engels, the founders of modern socialism, disparaged and ridiculed the idea that the state might hand down socialism from above. Engels wrote,
"But of late, since Bismarck went in for state ownership of industrial establishments, a kind of spurious socialism has arisen, degenerating now, and again, into something of flunkeyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic. Certainly, if the taking over by the state of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of socialism."

Engels pointed out that in Europe in the late nineteenth century various nations had nationalized banks and some industries, but, he insisted, ". . . the transformation, either into join-stock companies and trusts, or into state ownership, does not do away with the capitalist nature of the productive forces."7 Neither does the capitalist state's nationalization of banks represent a step toward socialism.

Rudolf Hilferding, the Austrian-German socialist economist, wrote in his book Finance Capital published in 1910:
"Finance capital does not want freedom, but domination; it has no regard for the independence of the individual capitalist, but demands his allegiance. It detests the anarchy of competition and wants organization, though of course only in order to resume competition on a still higher level. But in order to achieve, and to maintain and enhance its predominant position, it needs the state which can guarantee its domestic market through a protective tariff policy and facilitate the conquest of foreign markets. It needs a politically powerful state which does not have to take account of the conflicting interests of other states in its commercial policy. It needs also a strong state which will ensure respect for the interests of capital abroad, and use its political power to extort advantageous supply contracts and trade agreements from smaller states; a state which can intervene in every corner of the globe and transform the whole world into a sphere of investment for its own finance capital.8

The Russian Bolshevik political leader and intellectual Nicolai I. Bukharin, following Hilferding, would argue in his book Economics of the Transformation Period published in 1920 that out of imperialism and war had arisen "a new model of state power, the classical model of the imperialist state, which relies on state capitalist relations of production."9

While many things have changed since 1910, the tendency of financial institutions to seek the protection of the state in a world of intense foreign competition remains. While Hilferding and Bukharin seem to have envisioned something like the literal fusion of the state and finance, what we have seen instead throughout the modern period is an oscillation of periods of quasi-fusion through nationalizations and of quasi-independence during periods of privatization. Whatever the exigencies of the moment, in the face of international competition, diplomatic rivalry, and foreign wars, financial institutions and the state will tend to seek out relationships of mutual benefit to the dominant bloc of finance capital. Nationalization of the banks tended to be a moment in this oscillating relationship, the moment of the salvation of the banks by the state.

The Role of Nationalization in the Program of the Left
Yet the socialist argument that banks controlled by a government of the people could be a step toward socialism does have merit. Left social movements and political parties should raise the idea of nationalization of industries and the banks propagandistically and educationally, but this notion only has socialist implications when linked with the idea of working-class control of the state. The slogan "Nationalize the Banks!" as an agitational point makes sense only when there is a mass movement and a working class ascendant which has the power to use nationalization even under capitalism as a tool to weaken private capital. The left has usually called for the expropriation of the banks without compensation, though perhaps in some situations it might be possible to buy them and permanently retire the bankers. The slogan of nationalization becomes most meaningful as part of the program of the left when we make it clear that we mean the socialization of industry under democratic control, combined with workers' control of production itself. The goal in the end is the most democratic control of the government and the economy.
The problem for the left today, however, is to organize to build labor and social movements, and to build a political party of the left which could put such a demand as "Nationalize the Banks!" on the agenda. Today the problem is to keep the government from simply using the taxpayers' money to save the banks and sending them back on their merry way. We have to be part of the struggle to make sure that that doesn't happen.

1 Steve Lohr, "From Japan's Slump in 1990s, Lessons for U.S.," The New York Times, February 9, 2008.
2 Yuka Hayashi, "International Finance: Japan's Bank Crisis Is Combed for Lessons," The Wall Street Journal, August 13, 2008;
3 Carter Dougherty, "Stopping a Financial Crisis, the Swedish Way," The New York Times," September 23, 2008.
4 Sylvia Maxfield, "The international Political Economy of Bank Nationalization: Mexico in Comparative Perspective," Latin American Research Review, Vol. 27, No. 1 (1992), pp. 75-103.
5 Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer, "Government Ownership of Banks," The Journal of Finance, vol. 57, No. 1 (Feb. 2002), 265-301.
6 Margaret G. Myers, "The Nationalization of Banks in France," Political Science Quarterly, Vol. 64, No. 2 (June, 1949), pp. 189-210.
7 Friedrich Engels, Socialistm: Utopian and Scientific, in: Karl Marx and Friedrich Engels, Colected Works (Moscow: Progress Publishers, 1970), Vol. III, p. 144, fn. and p. 145.
8 Rudolf Hilferding, Finance Capital: A Study of the Latest Phase of Capitalist Development (London: Routledge & Kegan Paul, 1981), p. 234.
9 Nicolai I. Bukharin, Economics of the Transformation Period (New York: Berman Publisher, 1971), p. 37.
Dan La Botz is a Cincinnati-based teacher, writer, and activist. He is the author of Rank-and-File Rebellion: Teamsters for a Democratic Union (1990), Mask of Democracy: Labor Suppression in Mexico Today (1992), and Democracy in Mexico: Peasant Rebellion and Political Reform (1995), Made in Indonesia: Indonesian Workers Since Suharto (2001) and the editor of Mexican Labor News & Analysis, a monthly collaboration of the Mexico City-based Authentic Labor Front (FAT), the Pittsburgh-based United Electrical Workers (UE), and the Resource Center of the Americas. His writing has also appeared in Against the Current, Labor Notes, and Monthly Review among other publications.
URL: mrzine.monthlyreview.org/labotz280908.html

Callinicos in East London Advertiser

2008-09-26T15:18:00.001+01:00

Callinicos in East London Advertiser
Global market collapse is ‘opportunity’ for Left, says SWP professor
25 September 2008
by Ted Jeory

THE current crisis in global financial markets presents a crucial “moment of opportunity” to rebuild the Left in politics, one of Britain’s foremost socialist thinkers told a public meeting in London’s East End.The world was “confronting a major historical turning point” in the march of capitalism, particularly the system of neo-Liberalism that has dominated the last few decades, Prof Alex Callinicos told the meeting in Bethnal Green’s Oxford House centre last night (Wednesday).

Prof Callinicos, a prolific author on Marxism and member of the Socialist Workers Party’s central committee, told the audience of 50 that unless the Left began to organise better, workers would once again be exploited as businesses strove to cut the real value of wages to maintain profits.

He was giving his talk as American politicians debated the merits of an $800 billion rescue package for US markets.“I’m not arguing that capitalism is going to fall apart though,” he said.“To get rid of capitalism, we need the mass of working people to be determined to get rid of it.
“As long as that doesn’t take place, the system will revive. “Already, they are resorting to massive action on the part of the State. But instead of putting the money in the pockets of working people, they are rescuing the financial institutions of greed that caused the crisis in the first place.“Their solution is to make us pay for it! And in order for banks and other companies to push up profits, they’ll need to push down real wages.”

Prof Callinicos, professor of European Studies at King’s College, London, and the great-grandson of famous historian Lord Acton, asked: “So what do we do?”

He continued: “First of all, we need to say, ‘no—we’re not going to pay for your crisis’.
“We need to break through the kind of pay limits that Gordon Brown is trying to impose on the public sector.
“Then we need to organise the world and society on a different logic and end the blind process of competition. We need planning so that we can work out where we need to go.“But we need that planning to be democratic—we need socialism.”

He was asked by an East London Advertiser reporter after the meeting that if capitalism was able ride out the collapse of two major investment banks, whether the system was adaptable and robust enough to survive most turbulence.

“Capitalism is adaptable,” he replied. “But it is surviving because the Left is weak. The Left needs to organise and grow support.”
The crisis-provoked shift in wealth from Western economies to countries like China could be a “good thing”, he argues. But more than that—the US is much more of an imperialist power.“If America is weakened, that’s also good for the world.”

Prof Callinicos was a significant figure in the row that led up to the split between the SWP and MP George Galloway’s Respect Party last year.

Wallerstein on NATO

2008-09-02T13:22:00.002+01:00

Commentary No. 240, Sept. 1, 2008
"Can NATO Survive Georgia?"

Amidst all the journalistic brouhaha about a new cold war, most analysts are missing out on the real crisis that has been crystallized by Saakashvili's imprudent excursion into South Ossetia. The very existence of NATO has been put into question.

To understand that, we have to go back to the beginning of NATO as an institution and a concept.

The story began in 1947 when the United Kingdom and France signed the Treaty of Dunkirk, pledging mutual assistance in case of a revival of German military aggression. In 1948, this grouping was expanded to include the Netherlands, Belgium, and Luxemburg in the Treaty of Brussels, in a move still designed to defend against Germany. Later that year, the five nations set up the Western Union Defence Organization, with a combined chiefs of staff committee. There are two things to note about these treaties. The United States was not part of them, and they were aimed primarily at Germany, not the Soviet Union.

The founding of NATO in 1949 came in the wake of the Berlin Blockade of 1948. NATO in effect nullified the Western Union defense treaties. It was focused not on the dangers of renewed German militarism but on the cold war between the United States and the Soviet Union. From the point of view of the United States, NATO served several purposes. It was a message to the Soviet Union that the United States was committed to maintaining the existing boundaries of the division of power in Europe, which had seemed threatened by the Berlin Blockade. It was a method of reconciling the French and the British to the rearmament of West Germany. And it was a way of controlling the military operations of the allies by undoing their nascent military structure and subordinating their troops to a U.S. command.

The political leaders and the majority of the population of western European countries were initially quite favorable to the concept of NATO. For them, it guaranteed that the United States would indeed defend them should the Soviet Union come to think it could violate the Yalta arrangements. And France was now ready to accept West German rearmament as a part of their historic reconciliation. France, however, chafed at the third objective - keeping French troops under U.S. command, which is what led Charles De Gaulle in 1966 to withdraw from the NATO command structure and require its headquarters to move from Paris to Brussels.

Beginning in the 1970s, western Europe had not only gotten over its worries about Germany but had begun to think that the Soviet Union no longer posed an imminent menace of invasion. Various countries, and not only France, began to think of how they could bring a tamer, post-Stalinist Soviet Union into more intensive cooperation with western Europe. This was notably the case with West Germany's Ostpolitik. And when, in the 1980's, the idea was broached of a gas pipeline from the Soviet Union to western Europe, this was favorably received even by the United Kingdom under Margaret Thatcher.

The United States was dismayed by these developments. It unsuccessfully opposed the gas pipeline. It sought to discourage all talk of reviving a European army that was not part of NATO. In general, it became considerably less friendly to the idea of Europe as Europe, one that was separate from a North Atlantic community.

The strain was intensified with the collapse of the communisms in 1989 and the dissolution of the Soviet Union in 1991. Since NATO had been created as a structure to defend western Europe against a Soviet Union governed by a Communist party, what function did NATO now have? The United States was determined to maintain NATO, and sought a new definition of its role. It was also determined not to permit the emergence of an autonomous European structure, delinked from the United States, and worse still, possibly creating the "common European home" that would include Russia, and which Mikhail Gorbachev had proposed.

The immediate structural question for NATO was the issue of expansion - to include or not the former Soviet satellites, which were now emancipated from their links with the Soviet Union/Russia. The United States pushed hard, almost immediately, for their incorporation into NATO. The western Europeans were less enthusiastic. The former satellites saw their incorporation as their link to the United States, as protection against Russia, and as a gateway to economic betterment. The United States saw their incorporation as a constraint on Russia's possible resurgence but even more as a guarantee that "Europe" would not be able to delink from its U.S. close alliance, since these countries would oppose it. And western Europe was less enthusiastic precisely because they understood what the United States was doing.

The Iraq war exacerbated the situation greatly. Donald Rumsfeld gloated over two Europes - "old" Europe, which was effete and uncooperative, and "new" Europe, which was committed to the same world objectives as the United States. Actually, in the immediate situation of the 2003 U.S. invasion of Iraq, there were three Europes: Rumsfeld's "new" Europe (that is, the former Soviet satellites); those that refused to join the "coalition of the willing" (notably France and Germany); and those western European countries that in 2003 supported the U.S. invasion of Iraq (notably the United Kingdom, Spain, and Italy). France and Germany pulled closer, politically, to Putin's Russia in their common opposition to the United States at the United Nations.

The strain continued. When the United States pushed this year for the launching of the process to include Ukraine and Georgia in NATO, they met strong opposition not only from France and Germany but from the United Kingdom, Spain, and Italy as well. Indeed they had strong support in only four of the eastern European states - Poland and the three Baltic states. The other eastern European states were reticent as well.

Then came Saakashvili's march into South Ossetia and Russia's vigorous and successful riposte. Poland and the three Baltic states immediately gave full support to Georgia, and the United States a bit less rapidly raised its rhetorical level, and sent in warships with humanitarian aid.

What did western Europe do? Immediately, and without consulting anyone, President Sarkozy of France negotiated a truce in the fighting, and then got the European Union to endorse this fait accompli. Chancellor Merkel of Germany then got into the act with further negotiations with Russia. Even Silvio Berlusconi of Italy was telephoning Putin. All this while, Condoleezza Rice was out of the real diplomatic picture.

Did the diplomacy work? Only of course up to a point, as controversy continues about where Russian troops are presently stationed and Russia's definitive recognition of the independence of South Ossetia and Abkhazia. But western European statesmen keep making statements about how one should be careful not to cut off ties with Russia. And it seems the most the western European press can do is to scold Russia that it is they who are breaking friendly relations with western Europe. Most revealing of all is the report in the New York Times that Poland, the Czech Republic, and the Baltic states are calling not Rice but Angela Merkel, asking her to use her influence to help resolve the situation. Angela Merkel has made it clear that Germany will not be rushed into approving Georgian membership in NATO.

Most remarkable of all is an op-ed in the Financial Times by Kishore Mahbubani, a senior academic in profoundly pro-Western Singapore. Mahbubani says that 10% of the world is united in condemning Russia, and the other 90% "is bemused by western moralising on Georgia." He says Mao Zedong was right in one thing - the distinction between the primary contradiction and the secondary contradictions with which one must always compromise. "Russia is not close to becoming the primary contradiction the west faces." He ends by saying that it is Western "flawed (strategic) thinking" that is causing the world to be a more dangerous place.

The United States is not yet ready to listen to the sage counsel of its own friends in the non-Western world. Western Europe is grappling its way to understanding what's at stake for them. NATO cannot survive the irrelevance of its strategic activity in what Mahbubani calls the "post cold-war era."

by Immanuel Wallerstein