179 Comments

1. Lisa:

   Michael Hudson is now Kucinich’s senior economic advisor. Good summary of a recent interview at:

   http://www.itulip.com/forums/showthread.php?p=14554

   25 August 2007, 2:06 pm

2. Lisa:

   Hudson’s book can be found at:

   http://www.michael-hudson.com/books/superimperialism.pdf

   Peter Gowan’s book, “The Globalization Gamble,” can be found as a pdf file at:

   http://marxsite.com/Gowan_DollarWallstreetRegime.pdf

   It can be found as a Word document (rtf) at:

   http://www.iwgvt.org/files/9-gowan.rtf

   25 August 2007, 2:52 pm

3. Lisa:

   Two interesting and insightful articles by Nigel Maund can be found at:

   http://www.safehaven.com/article-3134.htm

   http://www.safehaven.com/article-2693.htm

   25 August 2007, 2:56 pm

4. Stan:

   The really scary thing about this is that (1) allowing the economy to completely “correct” would bring the Great Chicken home to roost in such a way that it would almost instantly destabilize the economy in ways which inevitably lead to political destabilization. We keep re-inflating the bubble to stave off this crisis, guaranteeing that the next will be worse; and (2) that this invokes the “too big to fail” principle. These so-called mortgage companies are merely part of huge derivatives portfolios that have now insinuated themselves into every aspect of the global economy.

   http://www.washingtonpost.com/wp-dyn/content/article/2007/08/20/AR2007082001539.html

   http://online.wsj.com/article/SB118714343807498116.html?mod=googlenews_wsj

   http://www.turkishpress.com/news.asp?id=190727&s=&i=&t=Rescue_of_big_US_mortgage_firm_eases,_does_not_end_concerns

   We’ll be paying for this, just as we — to this day — work many hours each year to pay for the Savings and Loan debacle.

   25 August 2007, 5:35 pm

5. peggy:

   For a viable if imperfect alternative to the speculation-based financial system, see Islamic banking.

   25 August 2007, 7:21 pm

6. Lisa:

   Two more interesting articles by Maund:

   http://www.gold-eagle.com/editorials_05/nmaund112906.html
   http://www.gold-eagle.com/editorials_05/nmaund060106.html

   25 August 2007, 9:49 pm

7. Dirk:

   Islamic Banking? – Sorry Peggy, but reading this thread, I thought it would be about a more intelligent critique of capitalism than Adolf Hitler and Ford delivered. The same old story: the only thing wrong with capitalism is financial capital, is the collection and payment of interest, also commonly called riba in Islamic discourse. Just as Adolf Hitler and Ford said. There’s good capitalism, productive capitalism on the one hand – and bad capitalism, financial capitalism on the other hand. Those evil bankers and jews. Without them we would just be happily ever after…

   sarcasm off.

   I hope people here are really into “unraveling the language of finance”. And maybe they should just start with a lecture about vulgar “anticapitalism” is…

   Hello from Germany,
   Dirk

   STAN REPLIES: How does a reference to the Sharia usury-prohibition leap into finance vs productive, then take another velociraptor jump to Ford and Hitler? Sounds like an orthodoxy-bound left intervention to me… leap to conclusions based on a term, excise the scratch (some perceived deviation from the schema) lest it turn to gangrene. Bait the offender with suggestions she is racist or anti-Semitic (which I don’t believe for a moment). Maybe we should start with a lecture about vulgar argumentative fallacies and jumping to conclusions. Or even minding your manners.

   Dirk, its hard enough to have a forum where men and women have principled decent conversations together. The reason for that is that men — unaware of their socialization, if we are being generous — adopt these magnified-aggression personae online; and women — out of their own long and tedious experience with this dominator-style in real life — decide they have better things to do than put up with more boyshit. So they leave (as some have done even here where we are trying to balance between openness and the maintenance of a safe space). Then the boyz can posture away with each other, strutting and shadow-boxing here in our virtual locker room, and occasionally stop and ask, why aren’t there any women here?

   Get it together, or it will be goodbye in Germany.

   As to your “vulgar anticapitalism,” I hope you will read Gowan’s book. He is an editor at the New Left Review, hardly a Buchananite publication. There really is a difference between the financial and productive poles of capital, and within the financial pole there is a speculative pole. The behaviors of these financial actors are at the very center of the meltdown we are seeing right now. The repressive measures against the financial pole, implemented as part of the overall Keynesian reconstruction after the Great Depression, have been systematically broken down. Gowan (schooled in marxian econ-analysis), Goldner (a Luxemburgian Marxist), Liu (a partisan of the old CCP), and Hudson — among others — have described these breakdowns, and the consolidation of power by the financial pole… Hudson and Gowan making a clear and well-supported claim that the US State has used this consolidation as a weapon of imperial-state power. While the orthodox left has decried the collapse of the trade unions’ power as a loss rooted in outsourcing and-or failure to aggressivley enough prosecute the ideological struggle in the working class; the reality is that the patterns and forms of bourgeois ownership have changed. The center of gravity has shifted into those vast oceans (… derivatives, hedge funds) composed of smaller speculative instruments. The working class no longer has an efficacious target for its struggles (even in those places where this class is aware of itself as-a-class). When a large holding company, which makes no distinction between return-on-investment (ROI) from capital market investiments (hot money) and profit of the surplus-value variety (productive capital?), has a problem with Company X experiencing “labor difficulties,” they don’t even have to look at the specifics. It’s merely part of the overall portfolio. If the numbers say it is becoming a drag on (speculative) ROI, then they sell sell sell, sending the share-prices tumbling, and ruining the enterprise without a how-do-you-do. What the above authors have done is allowed themselves to question the old, mechanical formulae of orthodox marxism in the study of today’s epoch, and revised their theoretical assumptions based on new evidence instead of religious dicta. Imperialism is not operating the way Lenin and Hobson and Hilferding said. Not even close. This site is not one where we hyper-valorize productive capital. In fact, we are on record again and again saying that productive capital is “producing” a lot of stuff that is useless or malignant, and wrecking the biosphere in the process… and that productivism on the left is a historical anachronism (rooted in patriarchal dualism). But the world we live in, the very one where people muddle through, raise their kids, and try to figure out from day to day how to get by, is one that is being shaped by the dynamic relationships between these meta-economic forces… including (and now especially) the interplay between the productive and financial poles of capital. These two poles were separated and one repressed in the past, because there was a recongition that the hot-money tempo of finance capital, particularly when it was dominated by speculative activity, was so frenetic that it outstripped the cool-money tempo of productive investment, and created an unpredictability that is anathema to productive investment. As the US saw its power eroding with the rise of Germany and Japan and the debacle of Vietnam, it began a shift away from finacial-pole repression, then turned on the printing presses… and used this financial tempo and this surfeit of currency as weapons to preserve its dominance (along with using the Department of Defense as its main export-market surrogate). Deep in the background, like the monster under the bed, of course, there was The Bomb. I hope others will try and decipher Henry’s piece here. One does not have to be familiar. Familiarize yourself by studying it, finding the definitions and linking, and going through this the same way one eats an elephant… one bite at a time.

   And Peggy’s allusion to interest-prohibition has merit, especially when one considers that aside from mortgages, the debt-slavery of the US population right now is based on usurious credit-card rates.

   26 August 2007, 2:54 am

8. Y.K.:

   Stan,

   I’ve been reading these pieces over the last few months and I’d appreciate some of your intellectual energy, seeing that you’ve read this material in some depth and have generously offered your interpretations. I’ll admit that I’ve only had the chance to skim over Gowan and Hudson’s books, but I intend to read them in detail at some point soon.

   1. What exactly is the Federal Reserve and how does it differ from other central banks? (please provide links or article / book titles also). I’m especially interested in the relationship between the Federal Reserve and the state as such, not least the Treasury.

   2. I’ve been trying to make sense of Say’s Law and fit it into the relationship between production and finance. I haven’t read Say nor do I understand all the debates about his “law”, but there is clearly a lot of ideology involved in all the major positions. I want to understand the Marxist and socialist perspectives on Say’s Law in particular.

   Basically, I’m stopped at the claim that the employer is actually a producer who pays employees to consume. I tend to think of the employer as the owner, the worker as the producer. So this would seem to undermine the agents of the “law” and complicate the logical transition to the financial sphere, although I acknowledge some kind of circularity between production and consumption. Hudson’s articles on the “New Road to Serfdom” and “Saving, Asset-Price Inflation, and Debt Induced Deflation” are my main points of reference.

   3. I’m also looking at pre-capitalist or non-capitalist economies with currencies of gold, silver, and precious stones, with some use of credit in the form of bills of exchange. Any recommendations to make better sense of these largely non-fiat monies? I’m also interested in anthropological or sociological viewpoints (i.e. cultural and social as well as economic dimensions).

   Thanks again for your stimulating and brave efforts.

   Y.K.

   STAN: I am not an expert in any of this, and certainly can’t speak for one position “within Marxism” (not only because there is debate in that tradition, but because I am kind of a post-marxist).

   IfI understand Say’s Law correctly, it denies that there is such a thing as overproduction… kind of an “if you build it, they will buy” POV. Obviously, I don’t believe that; and I agree that workers are producers, in the same sense that the old man did.

   What Marxism does not account for well, and what has grown in importance, imho, since WWII, is demand-production. This has much to do with the come-lately role of the US in the macro-global-economy as consumer of last instance… about which Maria Mies says much with regard to gender. Many marxists want to dismiss the preoccupation with “consumerism” as a somehow under-developed theory, or partial consciousness… a kind of liberal moralism. But as practice and ideology, and in its criticality to completing the valorization circuits of global capital, I’d argue that metropolitan consumerism is extremely important to understand.

   Hornborg’s essay on money (Money, Reflexivity, and the Semiotics of Modernity) in his book The Power of the Machine, is a fascinating — if arcane — anthropological account of money, and one by which I have been pretty strongly influenced.

   Hudson’s “New Road” is brilliant and accessible pamphlet; and we’ve linked it at Insurgent American. Strongly recommended.

   Liu’s series on “Banking Bunkum” gives a very good history of the Fed and compares it to other central banks.

   On “pre-capitalist or non-capitalist economies”, I hope others will give some help here, because (aside from Hornborg) its an essentially blank file in my drawer. I’d be as interested as you are.

   And thank YOU.

   26 August 2007, 7:18 pm

9. Lisa:

   Good charts illustrating the way the FIRE economy is “wrapped” around the productive one are at:

   http://www.michael-hudson.com/articles/debt/0406SavingInflationDeflation.html

   The same charts are nice enlarged at:

   http://www.itulip.com/forums/showthread.php?t=891

   26 August 2007, 11:31 pm

10. Stan:

    Thanks Lisa. Very helpful. Re-iterating here, at least for myself, there are some assumptions about productive capital that I cannot share with (gold-bug or Keynesian) capitalists: that full employment is – in itself – a good thing, when we don’t ask the question what is being produced; that growth in the productive sector is good, when – paraphrasing Boulding – belief in ceaseless growth in a finite world is economic madness. There is also an assumption I cannot share with the productivist left: that industrialism will continue to be the way we ensure the greater good after we have political power.

    But Hudson is showing with some pretty accessible graphics how the hot-money/cool-money time-fractal builds a general contradiction, ie:

    …new tangible investment and employment decline as investors find it easier to obtain price gains in stocks, bonds and real estate than to make profits by investing in factories and other tangible means of production.

    This is the dynamic that underwrote the fraudulent bookkeeping at Enron, et al. Everyone was in a race to the bottom to show that their company looked better in a hot-money portfolio. What tricked everything up was that real estate — a tangible — was being bid up (in a bubble) in a speculative frenzy created by the gaseous fictional value of the US printing press.

    They can’t just devalue the dollar now (tho there has been some of that) in a way that takes the rich along with the poor on the crash landing. They have to shift this dramatic devaluation onto the backs of the small debtors… while they bail out the holding companies whose portfolios were stuffed with giant mortgage-lenders.

    It’s class warfare from above.

    27 August 2007, 6:06 am

11. Stan:

    Time Fractal:

    Industry and agriculture, transport and power, and similar production and consumption expenditures account for less than 0.1 percent of the economy’s flow of payments. The vast majority of transactions passing through the New York Clearing House and Fedwire are for stocks, bonds, packaged bank loans, options, derivatives and foreign-currency transactions. The entire stock-market value of many high-flying companies now changes hands in a single day, and the average holding time for currency trades has shrunk to just a few minutes.

    The usurious economy (and the basis of those credit card offers in your mailbox every day):

    …over time a rising proportion of this inflow of interest, dividends and rent is plowed back into new loans rather than invested in tangible capital formation.

    Perhaps this is a better document to begin with than Henry’s. What say you all?

    27 August 2007, 6:15 am

12. Stan:

    Okay, now I see why the earlier question from YK on Say’s Law. I am studying Lisa’s link.

    Hudson is not quibbling – as we might – about the definition of producer, but taking Say’s at its face-value, and reading it in the context of capitalist theorists (Keynes, eg). His reference makes no attempt to step outside capitalist logics, but to explain the thought processes contained within them; and the aspect of Say’s that he is emphasizing here is “circularity.”

    I wrote back and forth with MH for a while when we were both on the same discussion list (A-List); and he decried the left (of which he is a very quiet and cunning member, I’ll venture) for its inability to speak the language of finance, that – like the language of medicine – is arcane, yes, but also descriptive of things that are no one else’s preoccupation… but which are incredibly formative of our current epoch. He said that we haven’t had our hardware upgrade; and so we are using an obsolete computer (left orthodoxy).

    I see this self-education project the same way the CIA used to see the training of linguists and development of area studies. If we are to be effective intelligence analysts in this strange land, then we have to speak the language and understand the cultural thought process. Because this strange land now occupies us.

    footnote: The same applies to having men involved in the struggle against gendered power, eg. We can most effectively serve the cause as agents (interpreters and guides) in the realm of the occupier.

    27 August 2007, 6:35 am

13. Y.K.:

    Stan,

    Thanks for the links to the Liu articles on central banks. I hadn’t seen them before and it will take me some time to read them.

    1. Again, I haven’t read Say and I only occasionally look at early modern European history, but doubtlessly he has to be historicized for his “productive” bias. He writes in the late 18th – early 19th century, when most of French wealth centered on agriculture. The industrialization of France hadn’t really happened yet, while British industrialism had just begun. This site from the New School has many good links and essays, including this page on Say: http://cepa.newschool.edu/het/profiles/say.htm

    2. I don’t know much about “demand production”. I do know that the US had to create markets, i.e. consumers, both internal and external, for its excess production after WW II. So at first glance, I’d say that “demand production” is just the active creation of markets for excess supply, with all of the propagandized subjectivity required to make people buy a lot of garbage. You mention Maria Mies… any links or other suggestions for consumerism? How does consumerism “complete the valorization circuits of global capital”?

    3. It’s funny that you say “old man” and I presume you mean “the bearded one”. We tend to call him “grandfather”, and like a good grandfather he’s not right about everything, but right enough to deserve plenty of respect. I tend to think that the analysis of money had problems because of the incomplete volume III. There is an excellent and interesting discussion of money in a book about Chinese history in Van Glahn, Fountain of Fortune, which I’m currently reading. Highly recommended.

    At the same time, money in general would seem to belong to the sphere of wealth transfer (“finance”) instead of wealth creation (“production”); furthermore, finance would seem to always depend on production for its value, although finance can disrupt production.
    I agree that there needs to be less useless production, but given grandfather’s concern with the exploitation of labor, it would make sense for him to begin with living labor and the creation of capital from production, such capital being “dead labor”, in his terms.

    So I tend to support the idea that finance became prominent in the last four decades or so due to problems of decreasing profits in production. In perhaps simplistic terms: Money needs commodities but not visa versa. It doesn’t matter whether those commodities are stolen like oil (raw materials) or created like a tank (manufacture).

    Money can’t facilitate any exchange or preserve any value without some commodity to exchange or value. Money has its own laws, but in the larger scheme and in the longer term, money can’t exist without production. Barter economies would seem to demonstrate this because money is not relevant in them, but exchange exists, value exists. This might set me against Hudson to some degree.

    The collapse of the credit bubble is due to the squeezing of production / consumption for the sake of financial speculation because all these speculations are based on the poor working(wo)man at the bottom making monthly payments. S(he) requires a job, food, and shelter at a minimum, which obviously diminishes rentier profits. But no job or worker means no profit for the money men.

    So that brings me to the monopoly capital school. I’m thinking in particular of recent essays about “Monopoly-Finance Capital”: http://www.monthlyreview.org/1206jbf.htm and “The Financialization of Capitalism”: http://www.monthlyreview.org/0407jbf.htm .

    I should say that I find it a general failing of economists and social scientists to emphasize prediction. Prediction is a comforting illusion borrowed from the natural sciences that ultimately denies human freedom. So the fact that Sweezy couldn’t “predict” financial power doesn’t mean much to me. I’ve usually seen it as a mark of maturity in a thinker when he / she discards mechanistic prediction. Samir Amin, for instance, doesn’t emphasize prediction as much these days as he seemed to do in his earlier writings. I’m slowly reading his geopolitical analysis in “Beyond US Hegemony: Assessing the Prospect for a Multipolar World”. There are other ways to think about future possibilities.

    So, perhaps I can summarize these thoughts with a question: what kind of causal relationship exists between finance and production?

    4. Question for everyone: What kind of US political program can be organized around debt? It seems clear to me that many have fallen into debt in the US because prices are inflated due to the increase in the money supply and the greed to create derivatives. The current common options for the peons consist of military / industrial complex servitude, escape from the country or general economy, or incoherent and short-lived revolt … the latter which is scarcely to be found, but surely cooking beneath the surface. The US also has the most extensive system of debt control anywhere in the form of the ubiquitous “social security number” and “credit report”, which have become an extremely effective means of labor discipline. How can people undermine the “New Serfdom”?

    -Y.K.

    27 August 2007, 12:38 pm

14. Y.K.:

    I’m listening to lectures by Greg Albo. They are clear, dense, and very helpful.

    “Turbulence: Financial Capital and the Credit Crisis”

    http://www.socialistproject.ca/theory/

    27 August 2007, 4:57 pm

15. Lisa:

    Good article on investment banking shenanigans:

    “Investment Landfill: How professionals dump their toxic waste on you”

    http://www.safehaven.com/article-7893.htm

    27 August 2007, 6:15 pm

16. Lisa:

    Some helpful articles can be found at:

    http://www.globalresearch.ca/index.php?context=listByAuthor&authorFirst=Richard%20C.&authorName=Cook

    27 August 2007, 6:18 pm

17. Lisa:

    Concerning assumption about the purely positive view of productive capital, there is Stan’s article, which comments on Hudson’s work and also critiques it from this perspective:

    http://www.insurgentamerican.net/download/StanGoff/FoodandFinance.pdf

    27 August 2007, 6:31 pm

18. Lisa:

    See the following Wikipedia article for certain possibilities of coping with a de-industrializing future and a large population:

    http://en.wikipedia.org/wiki/Appropriate_technology

    27 August 2007, 6:35 pm

19. Lisa:

    Another good exposition of the sub-prime crisis:

    “Liars’ loans”

    http://www.bbc.co.uk/blogs/thereporters/robertpeston/

    27 August 2007, 11:43 pm

20. Stan:

    Your move, Mr Bernanke
    By Walter T Molano

    There is a consensus in the northern latitudes of the Western Hemisphere that the US Federal Reserve under chairman Ben Bernanke will magically solve the markets’ woes. Asset prices rallied last week, as television commentators debated whether the US central bank would cut interest rates by 25 or 50 basis points. Politicians from both sides of the aisle called for a reduction in rates and an increase in liquidity FULL

    By Daniel Daianu for Southeast European Times in Bucharest – 27/08/07
    photo

    Financial turbulence has the potential to trigger a global economic recession or slowdown, delivering severe shocks to business, industry and services in numerous countries. [Getty Images]

    More than a few voices are saying all is not well in financial markets. Even some leading central bankers have expressed worry. Financial turbulence has the potential to trigger a global economic recession or slowdown, delivering severe shocks to business, industry and services in numerous countries. A crisis could erupt in the financial markets themselves, or it could be triggered indirectly by a major shock – such as the dramatic rise in the price of oil several decades ago. FULL

    And Gowan

    28 August 2007, 6:23 am

21. Timothy R. Anderson:

    Petruno. A columnist who writes about Business for the Los Angeles Times newspaper and their website, too !

    Anyway, he’s saying, today 8-28-07 , that the stock market mood swings might not be over. Heck, without the support of the Federal Reserve ….. pumping in loads of FLUID into the corpse ……. the mood swing would’ve swung so far off the rails
    that the entire Dow Jones Industrial Average
    would’ve sunk to shoe-sizes-numbers !

    I ain’t an expert but I ‘ m guessing that this year will end Dec. 31, 2007 with the Dow Jones Industrial Average below 11, 111 . 00

    What do I base that on ?

    My own will to shoot my mouth off in forums such
    as these !

    Tim
    http://www.latimes.com ( if you wanna know the Petruno
    take on the situation )

    28 August 2007, 1:29 pm

22. Timothy R. Anderson:

    The following is from my local newspaper’s
    Business section, Friday, August 10, 2007 :

    ” The Federal Reserve added a
    larger-than-normal $ 24 billion in temporary
    reserves to the U.S. banking system . ”

    Comment by a person who has far less than
    $ 24 billion ! That’d be me !

    What if it hadn’t added that money ?

    Yikes ! Scary, scary !

    29 August 2007, 12:08 pm

23. peggy:

    Well, I am way far out of my depth here, but there seems to be little discussion of what has been called “the service economy.” Many people, like me, are not involved in the production of things at all, but in the provision of services – teaching, nursing, writing software and all the rest. Such services are essential, and we get paid for performing them, but they do not contribute to capital growth in any direct way that I can see. In principle, therefore, it would be quite possible to have full employment, with everybody or nearly everybody performing some necessary service for a living, and not have capital growth. As much as my employer tries to “market” my service as contributing to capital growth by producing “human capital” (= people who are capable of performing specialized and expensive services) really I am doing no such thing. It is true that there is a more-and-better ethos involved in all this: a demand supposedly exists for more and better medical care, more and better software, and whatever else. But there is a limit to how much medical care a given population can absorb, and to the extent that it becomes capitalized, medical care becomes a polarized service, concentrated on serving the rich, while ignoring the poor. And even the rich do not necessarily benefit from lots of expensive medical care, or teaching, or software for that matter.

    Would it not be true to say that finance capitalism is a giant overgrown parasite on the smaller system of producer consumer, which can take the form of people in a community providing needed services to each other in exchange for money which just goes round and round in the community? If the whole finance capital system collapsed, would it not be possible for the smaller system to continue intact, more or less? Is the smaller system so hugely dependent on the larger system? Or are we not just being led to believe this, so that we will be scared into helping to maintain the larger system by saving and investing? I mean, Stan, earlier you said that I should save and not spend. But now it seems that my savings are precisely my contribution to the larger system of finance capital, which is a great evil.

    Sorry for rambling – just thinking out loud, I guess.

    29 August 2007, 11:26 pm

24. peggy:

    p.s. Stan writes:
    “Class again. Inflation is bad for investors and lenders, who want the purchasing power of collected interest, etc, maximized.”

    Then I’ve really got it all wrong. Up until now, I thought inflation was most likely to hurt ordinary joes and janes, who saw the price of a loaf of bread skyrocket, while their wages and earnings did not. Like was has happened in Zimbabwe.

    And I thought inflation was caused, in large part, by speculative finance: buy low, sell high, where what you are selling high is exactly the same thing as you bought low a day ago. Does anybody talk anymore about rising wages being inflationary?

    30 August 2007, 12:08 am

25. Y.K.:

    Dear Peggy,

    As I see it, our question is basically the same about production vs. finance. You’ve emphasized the practical and I’ve emphasized the theoretical, but we both tend to side with production (“Would it not be true to say that finance capitalism is a giant overgrown parasite on the smaller system of producer consumer… If the whole finance capital system collapsed, would it not be possible for the smaller system to continue intact, more or less?”- peggy).

    That’s why I suggest that we think about pre-capitalist and non-capitalist political economies, such as gift, barter, feudalism, etc. History doesn’t just tell us about the past, it also points to future possibilities.

    I have a few responses.

    1.) Scale and causation: Even though the nominal monetary value of the financial sector is bigger, “real” production of value seems more important socially. How? Derivatives are a kind of fictional capital dependent on someone working off their debt through production of “real” capital. In that respect, production is causally “bigger” than finance, even if finance has bigger numerical “size”.

    If you consider the use-value of a commodity, production is the major system socially and economically. You can use a chair or a bicycle, but you can’t use a derivative, not even to keep you warm because it exists electronically. Credit money, which assumes that someone will work to pay it off, is basically trading on rights over labor and the products of labor, it is a sheer exchange-value. In short, production is the socioeconomic basis of value, but not the political cultural basis because global society is politically dominated by capitalists.

    So logically it seems that if you eliminate the producer, the system falls, but if you eliminate the financier, life can continue. This is your point, and I think it is important to stress this fact because it’s important for people to know, even if only to know, that they can be independent of capital and still live. US Americans, mostly involved in wage labor and with hardly any peasantry / farmers, experience their dependence on capital as nearly total, which ultimately sets the stage for fascism. What this means in practice: a general strike can still bring down the financial system.

    Given the nature of industrial society, however, we still need money however to effect all kinds of economic activities. So it isn’t as easy as simply eliminating money, but rather the ultimate goal is to gain political control over money for its equitable use and distribution. I presuppose the need for widespread deindustrialization. I’m just pointing out dependency and the development of value, I’m not suggesting the total irrelevance of money.

    2.) I would also like to see some more links / articles/ books / discussion about “service”. Often, people discuss a service-goods continuum ( http://en.wikipedia.org/wiki/Service ). Often there is a mixture of goods and services in a single economic act, the usual example being a restaurant: you pay for the good of the food and the service of the waiters / cooks. I would like to see a fuller response to your question: “services are essential, and we get paid for performing them, but they do not contribute to capital growth in any direct way that I can see”.

    I would add however, and I’m sure Stan would agree, the most important service for the US is military labor. No soldiers, no empire. The “financial imperialism” of the US depends on military power. Hudson himself has said this in an interview. The basis of the military is the soldiers, not the machines. No gun without a shooter. Take away the military services, and the financial imperialism goes too.

    In part to solve the problem of military labor, the US builds missiles and robots, in the hopes that they can reduce the need for soldiers to the point at which Dick / Rummy, etc. can invade a country all by themselves. No need for propaganda or politics.

    So it would seem that the “production of service” can play a role in capital formation. I’m not sure how this applies to all forms of service, such as your work.

    4.) Hudson discusses “forced savings” and the creation of savings as a counterpart to producing debt. I’m not completely certain about this point and perhaps someone else can address this important question. But Goff’s advice is probably sound on the individual and smaller scale: if you save and minimize your debt, you will suffer much less than someone with a lot of debt. No one can make additional claim your income. So saving and reducing debt looks like a sound defense, especially if you live in the post-bubble US.

    5.) I share your skepticism about “human capital”. I’ve always thought that the distinction should refer to labor: skilled or unskilled labor. “Human capital” sounds as though capital does all the hard work!

    6.) As for the important inflation question, perhaps someone can recommend a good article on “exporting inflation”?

    Y.K.

    30 August 2007, 7:35 am

26. Craig:

    peggy:

    “Then I’ve really got it all wrong. Up until now, I thought inflation was most likely to hurt ordinary joes and janes, who saw the price of a loaf of bread skyrocket, while their wages and earnings did not (emphasis mine).”

    What you described is a way average people get hurt by inflation, and it is accurate. In fact, since the early 1970′s, the average American’s income has been stagnant or declining when adjusted for inflation. On the other hand, inflation is awful for lenders. If you loan at 8% interest and inflation is 2%, you’re happy, but if you loan out at 8% and inflation is 8%, you’re not actually making any money, and if inflation is above 8%, you’re actually losing money on the loan. When the Fed lowers interest rates, it becomes easier to lend and to borrow, which favors lenders, leveraged businesses, and people taking out mortgages.

    “And I thought inflation was caused, in large part, by speculative finance: buy low, sell high, where what you are selling high is exactly the same thing as you bought low a day ago.”

    Inflation comes in part from the government borrowing money through Treasury bills. Investors always have the “risk-free” option of buying a T-Bill to earn a return, which means the money supply will always increase. It also comes from banks loaning money out to investors, such as when banks loan money to hedge funds to buy securities, which the hedge funds then use as collateral for more borrowing. It doesn’t come from speculative finance as you described, because the buying and selling of securities is a zero-sum game; there has to be a buyer and a seller on each transaction, and the counterparties take any losses from buying low and selling high.

    30 August 2007, 8:38 am

27. Legume Sam:

    Inflation would reduce the value of my approx. $30,000 student loan debt… this is doubtless one reason why the Powers That Be are afraid of it…

    30 August 2007, 2:00 pm

28. Stan:

    Precisely.

    The fact is, Bernanke and Greenspan still cleave to the old wages-make-inflation formula quite religiously.

    That inflation hurts the average Jane-Joe is irrelevant (so does the unemployment that is seen as the “cure” for inflation). It hurts those who “make money” as rentiers. Please read the Gowan piece linked in the comment above. This distinction of “rentier” is crucial to understanding.

    Expansion of the money supply relative to aggregate total commodities is supposed to result in inflation. If the non-existent pure market existed. 5 commodity units = 5 currency units. Increase to 10 currency units, and the price will float to 2 currency units to each commodity unit.

    But the rules do not apply to the US. The international currency market will not sell the dollar down because they have bought so much US debt (like China and Japan with T-Bills), and because they have to hold US dollars as central bank reserve currency to defend their own currencies from speculative attacks (like what happened in Asia eight years ago).

    The little bite-sized devaluations are strategic in nature, well-planned, and designed to write off some of the US debt’s purchasing power without sending the $$$ into freefall.

    No one is going to create the stampede that wipes out their own central bank’s reserve currency, or their own (never-to-be-repaid) US debt (because it is a dominant-currency asset in the main consumer markets of China and Japan).

    It’s a game of chicken. Sell us short, and we’ll tear the whole edifice down.

    In order to finance this profligacy, they run the printing press like they just got into Dad’s whiskey cabinet. China and Japan are financing the Iraq war, not us… yet.

    But this printing of money that never falls to its true commodity-parity creates a reservoir of fictional exchange-value. That fictional value is represented in real money, and money does not like to sit in the mattress. It gets invested in faddish speculation schemes that result in a gazillion miles of useless fiber optics or in tulip-frenzy real estate prices.

    That’s the bubble. Herd behavior runs the capital markets sky high (buy, buy, buy!!!), until something sobers everyone up.

    The trick if you’re a rentier capitalist is to make sure when the party is over, the chicken goes to someone else’s roost. (Sorry for the mixed metaphor.)

    And all the stuff about the Euro challenge is a non-stater. No one has the home market of the US that can absorb a challenging currency. The Euro is a satellite currency to the US dollar.

    Rubles may end up being a different story. We’ll see. The scope of potential Russian energy production over the next decade, (and that of the SCO when it comes to fruition) given the reality of peak oil, is a helluva sponge… and its in something tangible and in demand, oil and gas.

    30 August 2007, 5:28 pm

29. Richard:

    This stuff is all very helpful. Thank you all for the many links–I esp. look forward to reading Gowan and Hudson. (And Stan your Homeland Security series at Insurgent American has been great.)

    I just finished reading Empire of Capital by Ellen Meiksins Wood. A very illuminating book on the ways in which the US, as the enforcer of global capital, must increasingly resort to military action–actions perhaps without specific or attainable goals–because of its long declining economic power. Similarly, the new (since WWII) capitalist imperialism, while demanding free movement for capital, rather than resulting in the obsolescence of the nation-state (as some have claims) actually results in the proliferation of such states–and in fact relies on the existence of states for the day-to-day order it needs to function (who else can “agree” to structural re-adjustment dictums?). Anyway, I highly recommend her book (as well as her excellent book, The Origin of Capitalism).

    31 August 2007, 8:33 am

30. Lisa:

    Two interesting posts from the Gang of 8:

    http://finance.groups.yahoo.com/group/gang8/message/11999

    This extension of the financial crisis to Germany as reported in the piece below is grave, but far from unexpected. We have had similar reports from other economies and more and more broadly similar reports can be expected from pretty much all around the world, intensifying in the weeks ahead.
    It is wholly in accord with what I predicted in “America’s Suicidal Statecraft”.
    There still is a tendency, in the report below and elsewhere, to ascribe the difficulties to the “subprime crisis.”
    There is no doubt that there is a crisis deriving from subprime mortgages, especially but not only in the United States.
    However, that is only one manifestation of a crisis which extends to virtually the whole current financial “system” – hedge funds, private equity, the carry trade, wholesale indebtedness extending to households, corporations, international trade and public financing, and all the rest.
    It was and is a “system” based not only on high risk but on the certainty that it must – inherently – collapse, only the timing of that collapse being rationally a subject for substantive debate.
    Indeed, our financial “system” has been and is a sort of massive, global Ponzi scheme. Wikipedia says that “A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going. The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. ”
    We seem to be getting closer now to a moment of widespread collapse. As more “incidents” like that in Germany are brought to public notice, disquiet will inevitably spread and it is hard to imagine that elements of widespread panic will not emerge and rapidly intensify.
    Governments and regulatory authorities have failed to control developments which have brought us to this point. To a large extent they have indulged in neglect and denial and, even now, seem to believe – or is it only hope? – that they can control the plunge into financial disaster by “rescuing” individual financial enterprises.
    While it is understandable that such efforts at “rescue” will be made and, up to a certain point, must be made, they cannot resolve what has now become a “systemic” problem of gigantic proportions. We must see it in those proportions and in that perspective.
    It would now seem not to be a matter of rescuing a financial “system” which was inherently unsustainable but in finding a course or courses towards new, more rational, more responsible financial arrangements – nationally and globally – to replace the “system” which is convulsing in its death throes while, for the moment at least, all we seem able to do is look on.

    James Cumes

    ————————————————

    http://finance.groups.yahoo.com/group/gang8/message/12102

    Big banks move back to centre stage
    By John Authers, Investment Editor

    Published: August 24 2007 17:41 | Last updated: August 24 2007 17:41

    “If I mistake not, the distress of the year 1857 was produced by an enemy more formidable than hostile armies; by a pestilence more deadly than fever or plague; by a visitation more destructive than the frosts of Spring or the blights of Summer. I believe that it was caused by a mountain load of DEBT.”

    There is nothing new under the sun. The quote is from Edward Everett’s Mount Vernon Papers, cited in T.E. Burton’s Crises and Depressions of 1917. Everett added that “the whole country”, “individuals and communities, trading houses, corporations, towns, cities, states” were labouring under a weight that caused business relations to be “arrested” and “the great instrument usually employed for carrying them on, CREDIT, broken down”.

    I am grateful to the reader who sent me this quotation. It aptly describes the financial “distress” the world has suffered in the past weeks. Good economic times begat greed, excessively easy credit and then a collapse when the cycle began to turn.

    We appear to be teetering on the side of avoiding a crisis, but only after money markets suffered their worst panic in a quarter of a century. The credit crunch of 2007 cannot yet be consigned to history.

    We can, however, begin to discern how it will change the future shape of markets. We may well see a turning back of the clock, although perhaps not as far as 1857.

    For decades, the trend has been towards “disintermediation” – the replacement of banks by markets as the engine room of the financial system.

    The securitisation of mortgages – taking packages of mortgages, converting them into a bond and trading on the markets – was one example. Mutual funds now hold more assets than banks, and money market funds are bigger than deposit accounts.

    Hedge funds dominate trading in equity markets and are setting up as lenders, becoming in effect alternative banks, who just happen to be largely beyond the reach of regulators.

    These innovations are not going to go away. But judging by the way the crisis has been handled so far, big banks and their balance sheets are moving back to centre stage.

    The greatest jolts to confidence in recent days have come from mortgage securities – where complex instruments have left “bad” subprime loans inextricably mixed with higher quality mortgages – and from money market funds.

    BNP Paribas helped trigger the panic by closing a money market fund to redemptions. Like other money funds, an attempt to improve yields a little had left them contaminated by possible subprime losses. That in turn led money market funds to fly to the quality of government bonds, abandoning asset-backed commercial paper and intensifying the plight for mortgage lenders as they did so.

    When the Federal Reserve moved to soothe the money markets, it did so by lowering its “discount rate” – at which it makes loans to banks but not to other financial intermediaries such as hedge funds.

    The idea was that the big banks would borrow from the Fed, and dispense the funds to clients who were starved for liquidity (like mortgage financiers and hedge funds). The Fed was in effect delegating any bailout to the big banks.

    The discount rate, despite its name, is at a premium to the Fed Funds rate, which covers the rate at which banks lend to each other. So the banks had to pay for the privilege.

    But several did so, in a symbolic gesture. More meaningfully, Bank of America, with the largest deposit base of any US bank, put $2bn into Countrywide, the biggest US mortgage lender, whose reliance on commercial paper led some to fear for its survival.

    BofA has an advantage: the cheap funds that it derives from its depositors. They lend to it at much cheaper rates than capital markets operation can get.

    So the crisis has seen the power of traditional banks reassert itself. Regulators rely on them for dirty work.

    This was not unfair to the big banks. Another financial constant, around since long before 1857, is “moral hazard”: the notion that the existence of a safety net will encourage excessive risk-taking.

    After the 1929 Wall Street crash and the Great Depression, regulators overreacted and mandated a fragmented banking system. That structure was blown away amid the merger mania of the late 1990s.

    That has left many banks, in Europe, the US and Asia, who are “too big to fail”. This creates moral hazard. There will be a bailout for them if they take bad risks.

    Henry Kaufman, a Wall Street legend known as “Dr Doom” for his pessimistic forecasts in the 1970s, said in 1998 that the vast new banks would have to become quasi-public utilities and accept public regulation that would make them “too good to fail”.

    This was prophetic. Along with the return of the banks, we will see a retreat from complexity, more reliance on human judgment and tighter credit.

    Will we ever again see a cycle of over-optimism and easy credit, followed by a crash? Of course. That cycle has been repeating itself since at least 1857.

    STAN: Wow, thanks again. Here is a link to the Gang of 8 message board, where one can lurk and read. Hudson and Liu are on this list (derived out of the financial discussions of the old Crashlist, then A-List of Mark Jones and Michael Keaney). Liu seems to think that the impending crash might well turn the 2008 elections into a contest of competing populism. Which is pretty double-edged, given the nation’s current xenophobia.

    31 August 2007, 10:40 pm

31. peggy:

    Thanks Y.K., Craig, Legume Sam, and Stan. The game of chicken is explained again, more simply, at http://www.motherjones.com/news/feature/2007/08/great-american-mortgage-crisis.html?src=email&hed_20070831_ts2_The%20Great%20American%20Mortgage%20Crisis

    But also, I recall reading somewhere a while ago that the US and China were engaged in a similar game of chicken (with China holding so many dollars that the US could not afford to cross China economically, and similarly China could not afford to let the dollar collapse). It’s kind of a policy of economic M.A.D., like nuclear M.A.D. during the Cold War and the arms race. It is still not entirely clear to me whether the parties involved got into this game by accident or on purpose.

    1 September 2007, 12:07 am

32. Y.K.:

    Highly recommended recent interview by Michael Hudson:

    “From Cold War to Class War”:

    http://www.kpfa.org/archives/index.php?arch=21767

    Around minute 42 or so he explains what I’m sure most people know: The high price of housing, created through a credit bubble designed to serve the rentier / financial class, has broken the will and ability to strike. Most are two or three paychecks away from defaults so they cannot afford even a short term interruption of income.

    While the financial economy has “wrapped around” the productive economy like a python, so too has credit-based capital sociopolitically “encircled” labor.

    In the US, people can easily pay 50% of their income for housing. In Germany, people pay about 20%, still too high. The highly inflated price of housing occurs through the expansion of credit money. Inflation has been concentrated in housing, but not very much in goods and services comparatively. The rentiers, the “real owners” in Carlin’s terms, receive income either through interest, when a borrower effectively pays to “rent” capital in the form of a house mortgage, or through the common meaning of rent, meaning a payment to use land, in most cases an apartment space.

    Missed payments can have terrible consequences, unlike in any other society to the same degree. The powerful credit report can prevent people from acquiring housing, work, school, and new credit, often needed to match the rising prices. Anyone can check the report to make sure that you are “worthy”. The absence of a credit card can make it nearly impossible to get a car to buy bread or to travel long distances by plane in a country lacking a public bus and train transportation system. Hmmm… no house, no food, no work, no education, no movement without “good” credit? This keeps everyone very disciplined and breaks resistance.

    Wonder not why there is no anti imperialist or anti capitalist movement of substance! The material conditions greatly encourage a survivalist quietism and pitiless authoritarianism, along with a pro-genocide legion of fascist ass-kissers.

    Conclusion after listening to this report: All the talk about socialist societies not working is bullshit, especially if the US “won” the Cold War with a military paid by others. Most of the critique of socialism is wrong, and I’m not talking reasonable opposition to industrialism or to Stalinism. The socialist bloc fell in large part because they lacked “unlimited” credit, secured by petrodollars at the point of a gun.

    Carlin’s “Education and the Owners of America”:

    http://www.youtube.com/watch?v=ccYoVnBc_fk

    3 September 2007, 7:38 pm

33. Bernie Maopolski:

    For more reading on money see JW Smith’s work at http://www.ied.info.

    Money is a social tool but is monopolized by the powerful similar to land and other resources

    3 September 2007, 8:46 pm

34. Lisa:

    Two interesting articles:

    Trinkets and treasure: China tames the US

    http://atimes.com/atimes/China/IH31Ad02.html

    ————————————-
    The Predicted Financial Storm Has Arrived

    By Gabriel Kolko

    http://www.zmag.org/sustainers/content/2007-08/29kolko.cfm

    —————————————————-

    Y.K. Thank you for the Hudson interview!

    Lisa

    3 September 2007, 10:57 pm

35. peggy:

    Not to seem individualistic, but individuals can avoid this system, if they try a bit. Case: at the age of 38, a woman becomes divorced. She has no credit and no credit card, and she wants to buy a car. She goes to the bank, and one of the people there explains that she needs to build up a credit record in order to get a loan for the car. Fortunately for her, she has a more or less steady job and no outstanding debts. She goes to the local credit union (that employees of her employer can join), takes out a loan for the car, gets the car, and pays off the loan on time. Later, again fortunately for her, she gets a much better job. She finds a house she likes, goes to the bank, uses all her savings as a down payment, gets a bank loan at a reasonable interest rate, and pays off the mortgage in six years. Meanwhile, her kids are so smart and she is so poor that the kids procure full scholarships at good universities, so they end up with no debt at all. This woman could quite well afford to go on strike, and she would do so if necessary, but so far the union to which she belongs has not called for a strike.

    Now, granted, this woman has enjoyed more good fortune than many, but still she is baffled by how so many people, who are in a position to avoid the debt trap, do not do so. Very intelligent, highly educated young people. What gives?

    4 September 2007, 12:43 am

36. peggy:

    Lisa – Thanks for all the good links. I especially like the LATimes one about China.

    4 September 2007, 7:10 am

37. Y.K.:

    Dear Peggy,

    This is a very sunny universe that you’ve imagined and I’m sure that people can provide a thousand anecdotes as counterfactuals. At each point, your examples presuppose that someone can use credit and pay it off. You also assume a variety of rational and benevolent authorities, as well as legal unionized labor, stable savings, good health, and a lot of luck. That is not the situation for the majority in the US.

    Your view also has a strong illusion of meritocracy: “if you just keep your nose to the grindstone” everything will turn out ok for you and your family. It’s just not realistic and it doesn’t address the situation of most people.

    Peggy, often in class war the system actively hunts for you. If you are an Afghan / Iraqi / Yugoslav refugee, you can’t just get in your van and put the hotel charges on a credit card. What if you are native American and the white man wants your forest, gold, oil, desert for nuclear weapons experiments? Even in the US, “avoiding the system” isn’t possible if you are weak and a target, like a young urban black male ripe for prison time.

    In our day, authorities are insanely irrational, violently incompetent, and insatiably greedy. Their predations will destroy your job, take your money, crush your health, steal your children for war or servitude. You aren’t a citizen-subject in their eyes. You are a kind of animal, available for fleecing, bloodsucking, and devouring.

    Your view is consistently looking from the bottom up and from the inside out. You need to practice looking from the top down and outside in to understand *how the powerful see you*.

    For an example of a “top down” view, look at the elite so-called “ivy league” universities, where the students are often the parents of former students, such as Bush I and Bush II at Yale. There is a “legacy” system and the smart children in your example have to make room for them. In fact, for every visible Bush, there are literally 100s upon 100s like him at those places at various stages of pampering and privilege. Part of Cheney’s inferiority complex, and in some ways, his subordination to the other cynical power brokers, is his lack of educational pedigree. Rumsfeld graduated from Princeton, Gates from William and Mary, Baker from Princeton, Bush from Yale and Harvard, but Cheney flunked Yale and went to Wyoming. Rice and Powell are marginal not just because they are black, a major irreparable defect, but also because Rice got her degree in Denver and Powell from public schools. There is a strict hierarchy among the people who run the US, which is why the last election had two precisely similar candidates, Bush and Kerry, who attended the same exclusive fraternity, Skull and Bones, in the same exclusive male-only apartheid-era school, Yale. This is the reality for today’s top power brokers. Anyone else is outside at the bottom.

    From the “outside in”, you might imagine yourself as completely devoid of debt, owning private armies with millions of dollars of property, plenty of land, and the latest weapons at your disposal. Imagine that you, like Cheney, can meet all your needs in your self-sufficient military bases run by mercenaries. You look down on the toiling masses of society. Do you care at all about the needs of a little mother to get a job, raise children, go to school? If you wanted their capital or labor, why would you negotiate if they are disorganized and unaware of your power?

    You need to look at the Carlin video: “they don’t give a shit about you, at all, AT ALL!”

    .

    4 September 2007, 7:33 am

38. Y.K.:

    Dear Peggy,

    I know it’s scary. But it isn’t possible for most people to wiggle through the system, especially as the economy worsens. It’s important not to fall into the trap of survivalism. That’s precisely what Stan is criticizing at the Insurgent American site.

    The problem with individualism is that there is a deliberate strategy by the powerful to atomize society as a way to prevent resistance. Financialization and automobilization are faces of this strategy. So excessive individualism actually works to their advantage because it is part of a “divide and conquer” plan.

    You have to survive, but only to live and fight another day. It isn’t viable to just focus on a microscale personal universe and hope for the best.

    .

    4 September 2007, 8:09 am

39. skol:

    If it is possible to wiggle out of the system through your personal universe…well, yeah, go for it. Your personal universe and the system are normally mutual, but not then. Or so I’m told; I still don’t understand how keeping yourself out of debt affects the system as a whole.

    STAN: It frees you to fight.

    4 September 2007, 4:16 pm

40. peggy:

    After I wrote and sent that post, I realized that it would be perceived as it was by Y.K. and skol, and I apologize for seeming to blame the victims of a merciless economic system over which they have no control – those who really and truly cannot escape debt. I will not try to defend myself here by pulling out my street creds (which are not plastic cards) and ripping you guys to bits with them, much as I feel like doing that at this moment.

    Everybody who posts on FS has the ability to get out of debt and stay out. Don’t whine and make excuses. You damn well can do it. So are you doing what you have to do, or are you just talking? On Insurgent American, Stan has given much valuable information about how to get off the grid, if not entirely, then enough not to be a slave to it. You can’t free anyone else until you free yourself, after all. The young people I talked about at the end of my last post, those who have the opportunity to free themselves, who *can* free themselves but choose not to, because they *want* to be part of the system they see all around them, those ones I have sympathy for, because they don’t realize what they’re getting into. But you who say, oh it’s such a big system we can’t possibly get out of it, and meanwhile you enjoy its benefits and write elegant critiques of that system that those who are really its victims have no use for at all, don’t you dare get uppity with me.

    Y.K., I really have enjoyed your posts a lot, and I hope you keep posting. Just don’t make unwarranted assumptions about people, please.

    4 September 2007, 7:24 pm

41. Craig:

    peggy:
    Not to seem individualistic, but individuals can avoid this system, if they try a bit.

    You can only avoid the system completely if your actions are not monetized. The loans you take out finance the banking system. The property taxes you pay on the home help finance the municipal bonds your town took out, probably at an excessive rate. Your savings really amount to a cheap loan back to the banks. If you buy anything, you’re subsidizing layers of borrowing you’ll never see.

    The modern American arc is towards more control, not less. Social Security is really an obligation in addition to a benefit, only to the nation’s economic system as a whole. Pensions become an obligation to the company, and 401(k)’s become an obligation to the equity markets. Housing is a form of obligation, too. When you buy a home, you’re buying into the lie that it is an investment, because otherwise you’re just spending way more than you ever would in rent. Taking this further, as Henry Liu points out, dollar hegemony means a surplus in dollars is also an obligation to nations like Japan and China. This is why there is so much fear regarding the housing and stock markets. The retirement nest-eggs people thought they had are evaporating, and not because they were screw-ups, either, but because the system itself is failing.

    Here’s my anecdote. I found out that my dad, who is a year from retiring, might lose his job. His employer, a large bank, will probably fire about 10,000 people out of its 60,000 US employees, and it’s doing this because the bank is up to its eyeballs in subprime loans. I work in finance, and I’d love to quit and do something useful like work full-time to end the war, but what if he gets fired? I’d have to help support him and pay his taxes on the home he can no longer sell. Even if he keeps his job, the dip in the stock market means a drop in the income he hoped to earn from his 401(k), which means more belt-tightening during retirement.

    The only other thing I could do to fight the system is pull all of my money out of that bank. In fact, if you want to fight the system, do what you can to lower the GMP, or Gross Me Product. Don’t buy crap, don’t get a new car, or even an old one, don’t take out a loan, avoid buying food, earn and save less money, or, if you must save, get the highest interest rate you can. I can tell you that Wall Street doesn’t want your home, they just want a cut, and there’s really no way to avoid it if your actions involve money, so you may as well shrink the pie and move towards economic activity that isn’t monetized. Be the liquidity crunch.

    4 September 2007, 11:34 pm

42. peggy:

    Here’s something

    http://www.newyorker.com/online/2007/09/03/070903on_onlineonly_surowiecki

    that hints that maybe, just maybe, popping of the Wall Street bubble will not spell the end of the world for the rest of us. And maybe, just maybe, the Fed will let it go ahead and pop.

    Anybody wanna take bets on this one?

    4 September 2007, 11:51 pm

43. Stan:

    I am definitely far from getting off the grid. Like anyone else who is not (1) single, (2) childless, and (3) financially independent, I am still a wage slave, and my obligations to others holds me in the grid.

    One of the mistakes we make in thinking through our response to this is we unconsciously adopt the Economic Man model of classical liberalism. Each person a little, decision-making island with the abstract ability to say yes or no to anything.

    Getting off the grid (and the basis of this is independence from the monetized economy) is not an individual effort for most. For it to happen in a mass way will require community effort, mutual-support, careful construction of alternatives (growing food, establishing local clinics, eg)… and politics.

    The basis of independence is land. Land is taxed, even after you have the title. Taxes ere paid in legal tender, a political phenom, and enforced politically. Unpack it from there.

    Dependence is not a choice; it is structural. Going off the grid might be a personal choice for those who have the means, but it means jackshit to the VAST majority of people living, eg, in the US. IA is pushing experimentation in getting off the grid as a learning curve, the training of future leaders, and the de-bugging of design, as part of a different strategic orientation.

    Just as the commies of old salted the sweatshops by becoming assembly line workers themselves… not out of personal choice, but as a matter of political strategy to be where the action is… we have to see relocalization and permaculture as the movements and spaces where we can learn what we have to learn, and where we can begin to detach political cadres from the grid who can exercise their independence to do independent political struggle.

    The majority of people will be pushed into using the tekniks of reloc/permacult not by choice, but be the grimmest necessity, as the house of cards begins to topple. We have to put these skills into the hands of conscious political actors now. And continue to stay engaged in topical political campaigns (antiwar, eg) as well as select the mass movements that have structural grievances combined with visible targets, and the potential for the deepest structural changes, eg, feminism and environmental justice.

    The left’s selection of the trade union movements in the past were based on (1) a marxist conviction that class was the main social contradiction, (2) the belief that the most organized sectors of that class (unions) represented the greatest potential for shifting issue-struggles into struggles of a class-for-itself, (3) the belief that what was stopping this class-for-itself recognition was false consciousness (ruling class ideological hegemony), and that (4) one could not convincingly make a case against that hegemony without participating in the day-to-day struggles of the workers. The idea — correct in my view — was that people learn in struggle.

    But if we study the past and unpack the present and look to the future, there are some important points to make, as correctives.

    (1) Calling economic class the “main contradiction” is arbitrary; and a fearless examination of the evidence suggests that gender is a deeper structural contradiction, and the experience of racial-national oppression engenders (no pun intended) a broader, more effective form of resistance at this conjuncture than class… which is frequently developed within the class-itself in racial, patriarchal, and nationalist terms. This has become the subject of various histories of “whiteness” in the US.

    (2) Actual social revolutions in the 20th C may have been led by Communists — who were effectively organized to take advantage of civil war — but the popular impetus has always come from the tillers of land… NOT proletarians (urban wage workers) Mao recognized this directly, and took intentional advantage of this off-the-grid status to develop his People’s War doctrine for China. Build the resistance patiently in the countryside, then gradually encroach on the encircled metropolis (which depends on the countryside, and exploits it).

    (3) The trade union movement in the US is not only not representative of the majority of the US wc, it is thoroughly compromised and locked tightly in the political embrace of a bourgeois party (Democrats). Moreover, the wc itself has been deprived of effective targets by the financialization of the economy. Listen the the Hudson interview linked above. Capital has won this round… even as it also represents the beginning of a very tough end. Resistance requires social movements that have grievances, targets, and broad conscious support.

    (4) We cannot continue to conveniently ignore that any struggle waged for control of the “means of production” has to be critical of specifically what it is that we are producing. This applies to industries that are ecocidal, and it applies to the production of war materiel. It also applies to the vast conglomeration of useless shit being marketed through demand production (advertising) in the US to keep open the circuits of capital between Shanghai, Wal-Mart, and Meadowlark Lane. The US working class (including the technical-petit bourgeoisie employed as cubicle-slaves) will not have the time or inclination to fight the system upon which they depend, and that system is entering a period of terminal crisis. Organizing them primarily AS-workers is a strategic error. We need to begin now developing the emergency-learning centers that they will inevitably turn to in the future.

    (5) People experience themselves as more than workers. Oddly enough, Marx was first concerned with the source of alienation… even if subsequent schemas invoked in his name became unifocal and mechanical. A revolutionary project has to connect with its future agents on a psychological level, including dealing with their fears.

    (6) The organizational forms of past left organizing were grounded in a 19th Century male notion of mechanical rationalism; and the strategic theory that this form represents is as obsolete as the warfighting doctrine of Napoleon. The state is still a target, one that cannot move as it were, but the question is, How do we effectively confront that target? What we don’t do is try to match our mass against its mass in a single, unified blow. I suggest that we re-work the Maoist thesis of surrounding the city from the countryside, even if it means constructing the “countryside” in the abandoned interstices of the failing system.

    These are only a few of the caffeinated thoughts that occur to me in the context of this discussion.

    5 September 2007, 6:31 am

44. Linda c:

    I have been implementing suggestions from IA into my life, and have been slowly persuading certain friends and family members to do the same. I, am still a “wage slave” and have “obligations to others” that holds me to the grid, also.

    Like many everyday “Joes” and “Janes” we can only do our best. We have little knowledge of how Wall Street or other financial instutions work. The extent of our knowledge is Bank/Car loans. I am learning – that’s what it’s all about for “us” – knowledge.

    I have land, on which we hope to start a small co-op type farm, next growing season. I, also, have paid my bills down to only one payment – excluding utilities (which will come with time) and have started back to school in an emergency medical field. If, as a single mom, I can take search and rescue classes on the weekends, learn to use a compass, grid maps, and still encourage others to “make a change”, then everyone can. It takes a dedication to making a difference and hopefully starting to rebuild the future for our children and grandchildren.

    We, hopefully, one day will be able to “get off the grid” and take others along with us. As Stan and many have pointed out time and time again – it is not an individual thing, it is a community commitment. I have selected my community and with them we are making a commitment to SLOWLY making it “off the grid”. In doing this I have no doubt that we will grow stronger and be able to “exercise our independence to do independent political struggle” after all “people learn in struggle”.

    The key is “commitment of community”.

    Again, I have to say thanks to everyone that posts here. I have learned and will continue to learn. Knowledge in an empowering thing.

    And Peggy – you go “girl” – stay strong – you are right, after all it “starts at home”.

    5 September 2007, 10:44 am

45. DeAnander:

    because otherwise you’re just spending way more than you ever would in rent.

    not true in my town — for the last 15 years at least my mortgage payments have been significantly lower than the rent I would have paid for the same property. I think this will vary wildly from one state/county/city to another, it is hard to generalise.

    5 September 2007, 11:14 am

46. Lisa:

    Interesting article from Sanders Research, which also comprises a critique of the Austrian position.

    To Bail or Not to Bail

    http://www.sandersresearch.com/index.php?option=com_content&task=view&id=1314

    5 September 2007, 11:49 am

47. Craig:

    not true in my town — for the last 15 years at least my mortgage payments have been significantly lower than the rent I would have paid for the same property. I think this will vary wildly from one state/county/city to another, it is hard to generalise.

    In individual locales, this may be true. Overall, however, home prices in the U.S. have grown at a rate far outstripping both inflation (core inflation – Henry Liu makes a good argument that inflation is really much higher) and median incomes, especially between 2002 and 2006. If home prices were such that mortgage payments were close to the traditional percent of yearly income, home prices in the U.S. would drop by something like 20-30%. Needless to say, if that actually happened, the world financial system would implode. The system sustains itself through cant regarding home ownership as an investment, perpetuated by propaganda like the TV show “Flip This House”.

    5 September 2007, 11:54 am

48. Y.K.:

    Peggy,

    You’re beginning to sound like a supporter / apologist for the banking system. I don’t feel a need to pull out my “street creds” either and I avoided listing a myriad of cases that falsify your “hypothetical”. You aren’t really blaming other people; actually, I don’t see you thinking about other people much at all. Mostly, you appear convinced that you can escape.

    You are thinking too much about your microuniverse so you misperceive reality. The world doesn’t consist of a series of microuniverses, it is also a whole. If you are in the US, you can’t escape even if you wanted; at best, as Craig noted, you could avoid the system “if your actions are not monetized”, but your example is totally monetized at every step.

    If you understood inflation alone, you would realize that living without debt on an individual level doesn’t matter when the entire US economy is in debt. What about the example of Craig’s father, who might lose his job because of his bosses’ debt speculation? What about his father’s payments on pensions, which could vanish when the bubble completely unwinds? What about the US government, which has indebted each US man, woman, and child over a 100,000 dollars? What about the declining value of the US dollar against other currencies, which will raise the prices on everything and cause large scale unemployment? How will you wiggle out of that? Debt is social, it isn’t individual.

    Guys like Stan, others, write “elegant critiques”, but I suggest that years of government service have brought him dubious benefits, to say the least. Often the best criticism and activism emerges from those who have survived to fight.

    Individualism is the ideological equivalent of scattering before an invasion. Rest assured that the rich don’t think individually, they focus on their class. Cheney wants to attack Iran because he thinks that it will be the best for his class and he doesn’t want them to blame him for failure, so that member of the US gentry is not thinking like an individual at all. That’s why only solidarity can resist the onslaught of the rich.

    5 September 2007, 2:11 pm

49. Y.K.:

    I’m having some posting trouble, so please excuse any repeated information.

    …
    Roubini is not a leftist, but an informed skeptical economist. He is quite upset about the impending disaster: “there is very little that we can do”:

    Video: http://www.cnbc.com/id/15840232?video=477902343&play=1

    Blog: http://www.rgemonitor.com/blog/roubini/

    5 September 2007, 2:15 pm

50. Linda c:

    Y.K.

    You are right – the entire US economy is in debt and Craig’s father might lose his job because of his bosses’ debt speculation. “Debt is social, it isn’t individual”.

    If we as a society don’t take responsibility for our own personal debts – why bother to try to be a functioning part of that society. You stated it very well – “That’s why only solidarty can resist the onslaught of the rich” and I will always believe the key is the “commitment of community”. The commitment to your community is to take responsibility for your own personal debts – not to throw you hands in the air and proclaim “there is very little that we can do”.

    But, then again, the average Joe and Jane can’t grasp these kinds of things.

    [moderator intervenes momentarily: is it that the "average" person, whoever that is, cannot grasp these things or that they have been systematically taught not to grasp, or even perceive, these things?]

    5 September 2007, 4:41 pm

51. skol:

    If debt is social, how do we help others through it?

    5 September 2007, 6:00 pm

52. peggy:

    Y.K., in your earlier response to me, you represented the world as though it were divided into multibillionaire ruling class Cheney-types, and hunted and tortured people of color, such as inner city young black men. But most of us are neither, and the stereotype of the inner city black you present would anger many African Americans.

    The world is not as simple as you would have it. Even the US is not as simple as you would have it. In fact, you have left out all the people who live outside the US: like for instance factory workers in eastern China, disenfranchised rural non-Chinese in western China, farmers in India, Australian aboriginals, people from the Pacific Islands to the Arctic circle who are seeing their homes destroyed by warming and rising oceans (warming and rising oceans caused by who?), the countless babies who die every day for lack of clean water (underground aquifers tapped and dried by who?), and people in other countries from Bolivia to Sri Lanka who actually are engaged in armed struggle against wealthy ruling classes. And then you accuse me of not thinking about other people!

    The collapse of money lending institutions in the US is a tiny blip on the global radar, but some of us are acting as though this blip (because it happens in the US) is going to effect everybody in the world, so obviously we have to pay attention to this first.

    Which brings us around to the omnipresent gender hierarchy, which has been discussed so often before on FS. Many here would not tolerate your condescension, your assumption that you know better than others (most of all women) about just about everything, the way you belittled me for bringing in personal experience, as though you are above personal experience, as though personal experience were not important, as though I am incapable of abstract thinking.

    I absolutely agree that people cannot act in isolation, they cannot change anything by just dropping out, by just taking care of themselves. But it is necessary to start somewhere, do some little thing like grow a tomato plant, or better yet, BE a peasant, BE a factory worker, BE a plain old middle class woman, KNOW what it’s like, KNOW how to fight for yourself, as well as for others like you. Think concretely for a change. Think about real people with lives and names and imperfections, and BE WITH them, get to know them, instead of living out on some effing cloud that you imagine is the real world. If you pay attention to who they are and what they say, THEN they will pay attention to what you say, and THEN you will have the beginnings of collective action.

    End of rant.

    5 September 2007, 7:48 pm

53. peggy:

    p.s. Stan, when Linda wrote “But, then again, the average Joe and Jane can’t grasp these kinds of things,” I think she was being ironic.

    5 September 2007, 8:14 pm

54. Y.K.:

    There will be pension crisis due to mortgage backed derivatives. If the main business invested speculatively, as in Craig’s example, then they probably put pensions into those “investments” as well. So it is possible to lose a job, a pension, and maybe a house too. The first article is by Liu, the last is an interview with Hudson.

    I’m still having posting trouble so please excuse repeats or fragmented posts.

    …

    “The bursting of the housing bubble will act as detonator for a massive pension crisis.”

    http://www.atimes.com/atimes/Global_Economy/IC17Dj01.html

    …

    “Without changes to the 30-year-old pension protection system, he said, the PBGC could itself become insolvent”

    http://www.washingtonpost.com/wp-dyn/content/article/2005/06/12/AR2005061201367.html

    …

    “Corporate America played has used what is effectively workers’ money to finance mergers and acquisitions, and a lavish lifestyle for executives. The cruelest irony? When the PBGC collapses, requiring a huge government bailout, it will be taxpayers who will foot the bill. So, some of the same people who already gave up income for a promised pension will indirectly pay a second time to rescue their own [reduced] pension.”

    http://www.tompaine.com/articles/2005/05/31/the_disappearing_pension.php

    …

    “As for the bubble economy, pensions and Social Security will go first. The US can’t afford to bail them out and still plan the giveaways to the wealthiest 10 percent of the population who are the net creditors to the bottom 90 percent. Pension obligations were expected to absorb only 5 or 10 percent of production costs, but now they are absorbing nearly all the reported profits, and threaten to eat into the money available to repay the banks and bondholders. The big investors want to be paid, and this means taking money that was earmarked for employees.”

    http://www.counterpunch.org/shaefer04232003.html

    6 September 2007, 6:25 am

55. skol:

    wikipedia: Debt-based monetary systems. Good summary and start point, and hasn’t been bogged down yet by status-quo NPOVing.

    6 September 2007, 7:33 am

56. Y.K.:

    Peggy, I didn’t write to insult you. But if you look at your comments again you will see how you focused on an individual and rather fantastic solution, which presupposed the justice of the existing power structure, and then berated others for “whining” and “making excuses”. Your sympathies were also with people who “want to be part of the system” rather than those who “critique” it. My objections were to these sentiments. If those aren’t your views or if your views have changed, then please clarify.

    As for “debt is social” and “commitment of community”, I can only say that *US debt has to become political*, in the same way that Third World debt became political to some degree over the last two decades. Debt is a political relationship and a social relationship, not simply an economic relationship. Debt is a political right to appropriate wealth.

    Focusing on “personal debt” can help free someone to fight, but the core problem is collective debt, imposed from above. The US government has indebted every man, woman, and child in the US over $100,000. The printing of dollars has increased housing costs and will cause widespread inflation, eroding any savings and dramatically increasing the cost of living. Debt will cause job and pension loss, perhaps governmental shutdown. These have been common historical realities for other parts of the world, and there is no God-given reason that they shouldn’t happen in the US too. These are economic, not individual forces. This is my interpretation of Stan’s comments: “Dependence is not a choice; it is structural”.

    Look at this article about differences between the USSR and the US to get a sense of the possible scenarios over the next several years: http://energybulletin.net/23259.html

    The relative gap in time between the turbulence in the financial markets and the coming problems in the general economy is basically the difference between pushing a piano off a rooftop and waiting for it to smash. In this sense, “Capital has won this round” but most of us don’t know it yet. I greatly support a re-worked Maoist thesis, not least because of the emphasis on the periphery and on rural life.

    And I think that there is very little time to put the pieces into place, in both theory and practice. So let me finish my post with an excerpt from communication with a friend. The key elements are the economics of debt, the politics of military defeat, and the development of an authoritarian society.

    ”Actually, I’m not so concerned about the 2008 election. It doesn’t matter so much anyway because the problems are too deep for the state to do much at this point and the collapse will still be taking place through 2009.

    The bigger problem is the 2012 election, even if the US government doesn’t attack Iran. The troops will trickle back defeated and there will be a lot of angry, damaged, battle-hardened soldiers. A sizeable proportion of Americans aren’t anti-war, they’re just anti-defeat. The economy will be much worse and there will be time for more social problems to develop, especially in terms of violence and repression. Inevitably, there will more populism / nationalism, which sets the stage for a real upward moving fascist politics to fill in the authoritarian state that has been built. It’s still a real possibility.

    There is a general consensus among historians that debt payments from WWI, which impoverished the Germans to the point of starvation and caused a general drop in the entire country’s class level, set the stage for fascism. The US played a sordid and indirect role in this affair by insisting on regular payments on war loans from the French and British “victors”, who in turn squeezed Germans for reparation payments after the Axis had failed to build its own empire like the British, French, and Americans.

    Basically, the economic and eventually social problems facilitated radical right politics, which the German state supported over more progressive and equitable solutions, fearing loss of power over capitalist industrial profit most of all. Only when the lower class popular fascist movement, often consisting of ex-WWI soldiers, organized and terrorized the falling middle class and made common cause with the increasingly delegitimized upper class state elites, did we see the full development of German fascism in the early 1930s.

    The early fascists talked a lot about anti-capitalism, but stopped talking about it completely when they gained state power through alliance with the rich elite. Thus the lower class political right and the upper class economic right joined. Then they purged their genuine populists, in the so-called “Night of the Long Knives” of 1934, and continued by violently disciplining the rest of German society. They increased industrial production of weapons as a means to gain cheap raw materials, such as oil and grain, as well as slave labor, from their east. They were checked primarily by the Red Army, which lost tens of millions of people, compared to the US, which lost about 100,000, or one-third of its total casualties, in Europe.

    In the US, we are often told to focus too much on “race” instead of “class”. But that is a US problem. It’s not viewed that same way in Europe. Yes, the Nazis were racists but they spent most of their time agitating against reparation debts, so economics over politics. The German term “Herrenvolk” means “People of Lords”, which is somewhat closer to the idea of a dominant nation than “master race”, as it is typically translated. All this means is that the class problem is more fundamental than the race problem to understand fascism, even though both go hand in hand.

    The US right (Democrat or Republican) retains positions of authority. They just lack leadership at the top. But that situation can change quickly. I hope not, but I’m being realistic and historical about these matters.

    I’m not predicting anything about the future. I’m just pointing out past events and conditions with some analogies to the present. History doesn’t simply repeat itself, despite the oft-quoted cliche.

    But anyone informed about the situation knows that there is a realistic chance that politics might get worse and go further to the right because there doesn’t seem to be a substantial socially progressive resistance movement.”

    6 September 2007, 7:51 am

57. Linda c:

    Yes, I was being ironic.

    But, the moderator put another spin on things that has given me something to think about.

    6 September 2007, 7:55 am

58. Stan:

    Here is a nice little video that describes a theory of money.

    6 September 2007, 8:02 pm

59. Linda c:

    Thanks, Stan – Will pass it on.

    And Y.K,

    After reading your last post I think we are are in the “same book” but just on WAY different “pages”. Ie I will never be (or really even want to be) on your page. But, it’s good because I have learned some things from what you are saying.

    7 September 2007, 3:31 pm

60. YK:

    Dear Linda,

    Each of us always has their own page, just as long as we are in the “same book” it doesn’t really matter. There are plenty of people in the world who live in entirely different (and well-fortified) libraries!

    I very much believe in “commitment to community” as part of building a new community on the local and global scale. My main point is that we will make a strategic error if we approach debt from an individualistic perspective. It seems clear that Stan wants to discuss “the language of finance” because he recognizes that finance is a political problem. I tried to stress that social and economic forces take hold during debt that negate solely personal solutions, so that even good people can easily get swept up negative change. I think we all recognize that debt isn’t just economic, but very much collective, social, and political.

    Insurgent American outlines a variety of ways to build community as the crisis deepens, so that people can survive and thrive.

    8 September 2007, 5:14 am

61. Billy Kelly:

    FINANCIAL MELTDOWN:
    THE END OF A 300 YEAR PONZI SCHEME

    Ellen Hodgson Brown

    September 3, 2007

    Panic struck on Wall Street, as the Dow Jones Industrial Average plunged a thousand points between July and August, and commentators warned of a 1929-style crash. To prevent that dire result, the U.S. Federal Reserve, along with the central banks of Europe, Canada, Australia and Japan, extended a 315 billion dollar lifeline to troubled banks and investment firms. The hemorrhage stopped, the markets turned around, and investors breathed a sigh of relief. All was well again in Stepfordville. Or was it? And if it was, at what cost? Three hundred billion dollars is about a third of the total paid by U.S. taxpayers in personal income taxes annually. A mere $188 billion would have been enough to repair all of the 74,000 U.S. bridges known to be defective, preventing another disaster like that in Minneapolis in July. But the central banks’ $300 billion was poured instead into the black hole of rescuing the very banks and hedge funds blamed for the “liquidity” crisis (the dried up well of investment money), encouraging loan sharks and speculators in their profligate ways.

    [... more ...]

    [Moderator's note to original commenter: please don't paste in entire articles. It is far more eye-friendly to post an excerpt and a link, which I is what I turned this long pasted-article comment into.]

    8 September 2007, 11:47 am

62. Lisa:

    Article by Mike Whitney:

    Are The Banks In Trouble?

    http://www.informationclearinghouse.info/article18335.htm

    8 September 2007, 12:58 pm

63. Barb:

    C’mon, people, Max and Stacey at http://karmabanqueradio.com have been laying out this crisis and why it’s happening for over three years now, explaining very concretely the financial terms and the connections between the financial markets and the debt in everyone’s lives, and further still how it’s affecting the environment, financing the war, ending up in the pockets of hedge fund and deriviative managers.

    It’s a simple confidence trick: loans have been sold on as though they were assets, with the lowest interest rates for those with the most money and the highest interest rates for those with the least. The scramble on Wall Street the last year or so has been to sell all this bad paper to pension and savings funds (based on people’s last real economy assets) before it all blew up. It’s now blowing up.

    Some people here will probably hate the way Max in particular expresses himself, if not also his somewhat confused personal libertarian/with-regulation-capitalism-isn’t-really-that-bad/Americans are all fat, gas-guzzling sheeple politics, but the info has always proven sound and referenced. And the explanations of financial terms and products are extremely down to earth!

    Their advice, which is to get out of the US, is not something most people can take, nor will most people have the cash to hedge their pensions with enough gold bars, or in the Gulag Wealth Fund (private prisons, Blackwater, weapons etc) . But Karmabanque have also created a useful tool with Karmabanque Index (www.karmabanque.com), to see where to most effectively to withdraw what dollars you have. Wouldn’t it be fun to at least bring down Coca-Cola?

    I’ve been interested to note that one thing the angry millionaires (to say nothing of the Left) have been quiet about is the notion of local currencies. (en.wikipedia.org/wiki/Local_currencies) Along with all the recommendations in IA it would be another one to find about and start organising as a local hedge against hyperinflation. It may not be so much about getting ‘off-grid’ but creating our own grids. Here’s the Wiki US list: en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States

    Another thing Americans can certainly do is refuse to buy newly-manufactured products made by slave/child/bonded labour anywhere. One thing that always stikes me on return visits is how much stuff there is!

    An end to the fetishisation of individual home-ownership might be too great a leap, but if your local elected council doesn’t own it the Chinese or some bank will. Bush’s ‘Ownership Economy’ means ‘We own you’.

    Most of the rest of the world thinks the US government has gone stark raving mad, and a lot of the Left in the US, from Dems to Sparts and beyond, still refuse to recognise that Bush, Cheney, Goldman and Co. are not involved with playing the game, they’re ‘turning over the chessboard’ (as a friend told me Joan Didion put it – sorry can’t find the quote online) – economically as well as politically. Warren Buffett has already called Americans ‘a nation of sharecropers’ – it looks like the plan is to leave Americans in the capable hands of the Chinese.

    I’m sorry for the people who are suffering and who will suffer during this economic meltdown – I am one of them though over here in the UK! – but I also can’t help thinking it’s about the only chance humanity in general has of surviving beyond the next few generations.

    9 September 2007, 5:20 am

64. Stan:

    Hi Billy.

    Introductions from Stan: Billy Kelly is a member of Veterans for Peace, and a Vietnam vet who spends a substantial amount of his time now in Vietnam doing the right things.

    We took a couple of cold showers together on the Gulf March.

    9 September 2007, 11:26 am

65. Dirk:

    Hello,
    Maybe my reaction was “boyish”, but although I did regret reacting in this way, Peggy’s proposal simply shocked me.

    Stan wrote:
    >>The repressive measures against the financial pole, implemented as part of the overall Keynesian reconstruction after the Great Depression, have been systematically broken down. Gowan (schooled in marxian econ-analysis), Goldner (a Luxemburgian Marxist), Liu (a partisan of the old CCP), and Hudson — among others — have described these breakdowns, and the consolidation of power by the financial pole… ] This form of thought, then, is not to be understood as anachronistic, as the expression of historical nonsynchronism (Ungleichzeitigkeit), any more than the rise of racial theories in the late nineteenth century should be thought of as atavistic. They are historically new forms of thought and in no way represent the reemergence of an older form. It is because of the emphasis on biological nature that they appear to be atavistic or anachronistic. However, this emphasis itself is rooted in the capital fetish.

    The turn to biology and the desire for a return to “natural origins,” combined with an affirmation of technology, which appear in many forms in the early twentieth century, should be understood as expressions of the antinomic fetish that gives rise to the notion that the concrete is “natural,” and which increasingly presents the socially “natural” in such a way that it is perceived in biological terms. The hypostatization of the concrete and the identification of capital with the manifest abstract underlie a form of “anticapitalism” that seeks to overcome the existing social order from a standpoint which actually remains immanent to that order. Inasmuch as that standpoint is the concrete dimension, this ideology tends to point toward a more concrete and organized form of overt capitalist social synthesis. This form of “anticapitalism,” then, only appears to be looking backward with yearning. As an expression of the capital fetish its real thrust is forward. It emerges in the transition from liberal to bureaucratic capitalism and becomes virulent in a situation of structural crisis.

    This form of “anticapitalism,” then, is based on a one-sided attack on the abstract. The abstract and concrete are not seen as constituting an antinomy where the real overcoming of the abstract—of the value dimension—involves the historical overcoming of the antinomy itself as well as each of its terms. Instead there is the one-sided attack on abstract reason, abstract law, or, at another level, money and finance capital. In this sense it is antinomically complementary to liberal thought, where the domination of the abstract remains unquestioned and the distinction between positive and critical reason is not made.

    The “anticapitalist” attack, however, did not remain limited to the attack against abstraction. On the level of the capital fetish, it is not only the concrete side of the antinomy which can be naturalized and biologized. The manifest abstract dimension was also biologized—as the Jews. The fetishized opposition of the concrete material and the abstract, of the “natural” and the “artificial,” became translated as the world-historically significant racial opposition of the Aryans and the Jews. Modern anti-Semitism involves a biologization of capitalism—which itself is only understood in terms of its manifest abstract dimension—as International Jewry.”

    http://resourcepage.wordpress.com/2007/03/01/postoneasns/

    Dirk

    16 September 2007, 11:26 pm

66. Stan:

    Dirk,

    I’m glad you fleshed this out, and did so without personalizing the debate. I’ve been meaning to write something about this very issue in one of the upcoming episodes of “Homeland Security.”

    There are any number of sub-sets to living theory that present us with dilemmas. Break down one epistemological wall, and it’s not very long before we run smack-dab into the next one. Ideology is a simple thing to define, but deep-going and complex in its structure, and secured like a web at many very visceral points.

    DeAnander is looking into the tangled issue of Zionism right now, which is one of those contradictory minefields. We have often taken on the pornography debate here, another ideological minefield.

    Unfortunately, many of the most important questions are not addressed in polemical contexts (because some short term political goal is at stake, like an election, eg).

    I couldn’t agree with you more that the capital fetish is operating overtime on this count. I just received a review copy of Ellen Hodgson Brown’s Web of Debt, which is a very well-researched history of money that is also positively toxic with veiled anti-Semitism.

    Just so this doesn’t become totally arcane to those unfamiliar with a Marxian perspective, “fetishism” is a term that refers to a particular form of ideological mystification, wherein social power (implying a social relation) is concealed, generally by objectification or naturalization. De and I have both frequently cited Hornborg, whose book The Power of the Machine applies this concpet to industrial machines, that is “machine fetishism.” One of Marx’s most enduring contributions to social struggle has been this idea, which he first applied to commodities, which present themselves to us as “fetishes,” that is things-for-sale that appear as if by magic (or nature), even though they embody within them — now unseen — an deeply oppressive social relation.

    “Capital,” which we have all been trained to understand as an abstract sum of money-and-goods in a perennial re-investment process, is actually a social relation between real, breathing human beings… a violent and oppressive one.

    In writing for From the Wilderness, a job where I was remunerated, I was in close contact with a whole community of Malthusians, Gold Bugs, populists, and borderline survivalists. This is exactly the community you allude to, that can easily (though not inevitably) get pulled into Illuminati and Jewish Banker conspiracy explanations of the world.

    The penchant for conspiracy-thinking — frequently reinforced by the fact that the ruling class does engage in conspiracies — is a reflection of the limitations of their thinking, specifically that failure to see at least two key social relations, imho: capital and gender. (This is where I diverge from more classical *ha ha* Marxist descriptions, by including gender on a par with class.)

    People want the world to make sense (1), and they want to convince themselves that the world is controllable (2), even if that control is being exercised by an all-powerful cabal. The latter — the idea that people can control events — is certainly, as you say, not a pre-modern, but a uniquely modern (see the latest on science and law at IA) phenom, as is racism, and as is — btw — “terrorism”. Read Mahmood Mamdani on this one.

    The problem is, however, that the Marxist tradition, which has become ossified into doctrines instead of living theories, has remained reflexively engaged in a seemingly life-and-death struggle with Malthusians and the anti-financiers, instead of seeing them as we often do liberals… people standing on the cusp of change, hungry to understand, who are worthy of our persuasive efforts. The greater problem, associated with this practice of orthodoxy, is that many self-proclaimed Marxists are themselves philosophcal idealists (and therefore non-”Marxist”) of the first order. They believe that right action is an outgrowth of right thinking, and so find themselves in an endless cycle of debates that become ever more irrelevant to the very masses they would persuade… all this to the detriment of practice (as materialists, we should be seeing that right action leads to right thinking, no?). But I digress…

    On the issue of finance capital, Marxist (especially Leninist) orthodoxy is plainly wrong. Within the community that is engaging in these debates — and I think they are critically important debates, or I wouldn’t be writing this against the clock as I prepare to go to work —

    While capital is a social relation, this broad generality does not concretely describe our current conjuncture, in which the financial pole of capital — which is clearly in the circulatory andnot productive realm — has risen to a profoundly determinative position. My own argument, and one taken from analysts like Gowan, Liu, and Hudson, is NOT that this is a banker’s cabasl in operation, but that it is part of a wide retrenchment strategy by the US imperial state to hang onto power.

    This in no way contradicts the notion that the system operates in many respect independent of any individual, including members of the dominant class. It does not substitute a conspiratorial world view for the reality of capital-as-social-relation. It says we have to look at this social relation concretely, and without a lot of pat answers from yellowing socialist playbooks.

    Capital is destabilizing, as Marx noted that all class systems eventually do, in the face of mounting contradictions in the nature of this relation, as well as between, as Harvey describes it, the territorial logic of the state and the financial logic of capital. The directive force behind this conjuncture is NOT, as Lenin and Hobson would have it, “monopoly capital,” but the US State, which is using finance capital as a weapon of statecraft. This does not erase class as a reality, but it does fly in the face of a lot of leftist dogma.

    We cannot avoid these topics — any more than we can avoid the Malthusians’ correct assertion that shit like oil can’t last forever — just because they will inevitably lead to deeper mystifications. We have to confront those mystifications as we meet them, deconstructing them along the way, without that godawful leftist tendency to burn heretics.

    These issues have tactical and political signficance. Tactical, because all tactical failures are ultimately intelligence failures, and if we are desribing a system in a framework that is obsolete (or was wrong to start with), ie, the Lenin-Hobson theses on the structure of imperialism, then we are less likely to adopt efficacious tactics. Political, because there is an exurban-based “middle class” in the US that is the actual majority population, and wherein reside many of the ideological proto-tendencies you yourself describe. This sector is now entering a phase of protracted crisis (inaugurated by a housing crisis that has been predicted by people like Gowan, Liu, and Hudson). Engaging in an ideological struggle not against these people but to persuade as many of them as possible is critical right now, because (1) they are human beings and (2) they are potentially dangerous as a class if abandoned to the Right, must be a high political priority.

    That means starting the conversations with them at a point where we can — like the weather — talk about something we are both looking at. Money, for example. Debt. Alienation, by whatever name.

    Gotta go to work.

    17 September 2007, 7:07 am

67. Required:

    “They believe that right action is an outgrowth of right thinking, and so find themselves in an endless cycle of debates that become ever more irrelevant to the very masses they would persuade… all this to the detriment of practice (as materialists, we should be seeing that right action leads to right thinking, no?)”

    and

    “all tactical failures are ultimately intelligence failures”

    - Stan

    Aren’t these two statements contradictory? Isn’t saying “right action is an outgrowth of right thinking” the same as saying “all tactical failures are ultimately intelligence failures”?

    17 September 2007, 8:44 pm

68. Required:

    Also, feel free to delete this or incorporate it into the previous post, when is the next chapter of the Insurgents Handbook going to be up?

    17 September 2007, 9:16 pm

69. Linda c:

    Stan,

    With the last paragraph you wrote, came back the words -

    “cannot grasp, or systematically taught not to grasp, or even preceive, these things”. You are right, with “them”, it has to be as simple as the weather. Money/debt is much easier to comprehend, for them, than Finance/Capital. As times progressively worsen in this country, “they” will be attempting to find out, “what the hell is going on” – and the Right will be there ready and waiting to explain it to “them”.

    The title of this thread is “Unraveling the language of finance”. It has taken a lot of time and even more effort, but, a lot of the language has been unraveled. That is why I am here, spending time and effort – to learn. It goes back to knowledge which is empowering. With that empowerment, maybe we can talk about “the weather” when it really matters.

    18 September 2007, 12:01 pm

70. Charles:

    What practical-critical _activity_,practice, do these new developments in political economic theory suggest ? Shouldn’t we be organizing marches on Wall Street ?

    27 September 2007, 4:55 pm

71. Charles:

    I’m on A-list where Michael Hudson and Henry Liu are. I was on earlier lists with Henry. We discuss and debate the nature of present day finance capital on PEN-L and LBO-talk. So, I have some familiarity with this topic.

    Isn’t it true that even if there is a financial crisis, there is no automatic revolution ? Even if the capitalist system is different today than in 1900, it will not end itself. There has to be a class, a mass of people who end it. The bankers , financiers, rentiers, hedge funders, investment bankers, Federal Reserve bankers, Treasury Secretaries, fund managers, World Bankers, IMFers Wall Streeters, transnationalists, and the rest are not going to respond to some “crisis” by saying “we give up. Y’all can institute a new system.” It will take a movement of masses , conscious masses, socialist ( yikes did I say that ?) conscious , communist ( double yikes !!!! did I say that ?!) masses to knock the wall over. Mao’s dictum still stands. The wall will not fall over by itself. Somebody had to push it.

    We have to define some revolutionary activity for masses of people against finance capital for the revolution to occur. Understanding the new nature of money is necessary , but not sufficient for this rev. What say ye ?

    27 September 2007, 5:14 pm

72. Stan:

    Permaculture.

    27 September 2007, 5:51 pm

73. DeAnander:

    Permaculture

    27 September 2007, 6:07 pm

74. Stan:

    Isn’t it true that even if there is a financial crisis, there is no automatic revolution ?

    Well put. The question that gets raised is — if we stipulate that social revolution is desirable, and I would so stipulate — what is the nature of this revolution? How does it take place? Who does it?

    But saying that the system will not end itself — aside from being wrong — doesn’t automatically mean that the agent of that social revolution will be a class, unless we broaden that definition a good bit. And the premise that “it will not end itself” does not mean that social revolutionaries will identify with any particular ideological trend.

    It was Marx who said that no social system ends until it has exhausted its own possibilities. What we are seeing now — if we look at it in a compressed time fractal dating back to WWII — is the serial exhaustion of adaptations in capitalist patriarchy to its own self-generated crises.

    What we are not seeing yet is the generalized destabilization of the system itself as a simultaneous eocnomic, political, and military-security crisis… and if any one of these aspects remains stable in any crisis, history has shown that that aspect — in conjunction with people’s real fear of social cataclysms — will maintain sufficient equilibrium for the ruling class to construct its next adaptation.

    The strategic theory implicit in the thinking of the traditional left is an analog of 19-20 Century warfare, based on the principle of mass.

    Warfare is the most tempting metaphor for social struggles, in part because it is familiar, and in part because war is one general species of conflict in a continuum of social struggle. I might say there is also some boyshit in our affinity for war metaphors; but that evaluation is tempered by two beliefs: (1) the ruling class is perpetually at war against us, so we have war whether we like it or not, and (2) the assignment of social conflict to the masculine sphere of action in a system of compulsory heterosexuality does not make it illusory, it reflects a gendered division of labor that cannot be undone through the “reactive valorization of the feminine.”

    What the 20th Century created were the conditions that revealed the inadequacy of this mass-warfare notion of strategy, and probably its obsolescence. We are seeing that now in real time in places with names like Khowst and Mosul.

    We have to define some revolutionary activity for masses of people against finance capital for the revolution to occur.

    The question of which “we” comes up first here. I contend that this “we” has been described on the left in a purely ideological fashion, and that this is plainly wrong… as well as being philosophically idealist.

    But I’ll go a step further and argue that there can be a lot more than one revolutionary activity (nature succeeds through strategies of diversity and complexity, no?), and that mujch of this activity need not be directed against finance capital, but that — like good insurgents — we avoid quixotic confrontations that exhaust our capacities, and devote a good deal of our time and effort to literally building base areas in the abandoned and-or unoccupied spaces of the system, and perfecting our capacities to solve the concrete problems of the near future.

    Understanding the system, and its current and near-term evolutions and dynamics is an intelligence function (using the war metaphor, if it is a metaphor). It is a means to anticipate certain trends and their consequences, in order to get out in front of them (the principles here being initiative and tactical agility).

    Understanding the new nature of money is necessary , but not sufficient for this rev. What say ye ?

    Agreed. But what is neither necessary nor sufficient is a mode of operation that mirrors the mass strategy of centralized, bureaucratic, (entropic) technomass warfare.

    Permaculture is one key practice and practical design philosophy that is already concerning itself with figuring out what a new future can look like. We needn’t worry about finding the political line that accompanies this practice. That already reveals itself, and will continue to do so. I have confronted it in my own homeowners association… a phenom that people like Mike Davis have been trying to explain to the left for a minute now.

    The politics is local; and it is spatial. Suburbanization is an intentional, systematic, and politically crafted process that replaced de jure segregation with de facto segregation, eg, and it is class-based, but not by the same taxonomies of class that have been chiseled into the granite of leftist orthodoxies. If you want to find the bases of political power that we will confront in the future, look no farther than your local metropolitan Chamber of Commerce.

    Given what we now know about the energetic limits to growth and the inevitable biospheric calamities of industrialism, relocalization must be the centerpiece of any sensible alternative future (call it socialism if you like, or communism, or communalism, or a rubber duck). By claiming territory now, and beginning the physical transformation of that territory, we are basing our future struggles on real ground, and not on the “correctness” of our ideologies.

    Decentralization of effort is required if “we” are to have any tactical agility. The appropriate place for non-directive centralization is in the production of useful intelligence.

    And all victories are not triumphs over an enemy, but oftentimes also the non-antagonistic products of our own creativity. Concentrating all efforts at creating a new future in the agonal activities of conflict generates a conflictual consciousness, and the militarization of social networks.

    Somewhere in this vague observation is part of the deep critique that is still waiting on the subject of that formative 20th Century transnational movement, Marxism-Leninism (Etc.-ism), and with it the M-L faith, shared with capitalists, in the “conquest of nature” notion that underwrites the ideologies of industrialism… which we can now show is on a turbulent glide path into crashing failure. No effort to substitute what any of us might describe as a humane future for humanity for a post-industrial horror show (a real possibility) can ignore the “industrial” part of this equation; and that requires much more than refinement of stale theories and attempts to perfect the Grand Unified Party Line. It will require engineering, but a new type of engineering wherein design is driven by some basic ethical considerations.

    Fortunately, we already have these efforts underway, even though they are pretty much invisible to the left; and these efforts are significantly larger, more well-organized, self-resourcing, and locally embedded than the left is. That tendency is called permaculture; and when it is combined with the political instincts of the left, which are often good until we inflect them with our orthodoxies, and with a deep feminist consciousness, it will be formidable. What we need to understand is that they are more advanced than we are.

    28 September 2007, 4:48 am

75. Charles:

    But saying that the system will not end itself — aside from being wrong — doesn’t automatically mean that the agent of that social revolution will be a class, unless we broaden that definition a good bit. And the premise that “it will not end itself” does not mean that social revolutionaries will identify with any particular ideological trend.

    ^^^^^
    CB:Yes, thanks for the correction in precision. The system will not end itself in a way that “we” want it to. It may end itself in barbarism and catastrophe, but ,you know…
    “We” in the sense of “We, the People” of the earth, the vast majority of humanity. “Mass” may carry some male supremacist or militarist connotations, but the important connotation that _we_ must retain is the great many, as opposed to the few. That is, through the millenia of class divided society, there have been small elite, ruling classes living off of the surpluses produced by the masses of productive workers. This sense of class and masses will not be obsolete in the revolution that ends capitalism and patriarchy. Margaret Mead was wrong when she said it will be a small group that makes the change. It must be an enormous group, not an elite few. In other words, it will have to be truly democratic.

    My thought on no “particular ideological trend” is that the necessity to study and learn the thinking and ideas of Mies, Hudson, Liu, et al. implies focus on an ideology, a specific and particular ideological trend.

    ^^^^^
    It was Marx who said that no social system ends until it has exhausted its own possibilities. What we are seeing now — if we look at it in a compressed time fractal dating back to WWII — is the serial exhaustion of adaptations in capitalist patriarchy to its own self-generated crises.

    What we are not seeing yet is the generalized destabilization of the system itself as a simultaneous economic, political, and military-security crisis… and if any one of these aspects remains stable in any crisis, history has shown that that aspect — in conjunction with people’s real fear of social cataclysms — will maintain sufficient equilibrium for the ruling class to construct its next adaptation.

    ^^^^^
    Uhhuh, though Marx argued – and it’s not true just ’cause he said it – that crisis has always been integral to capitalism as a way of correcting itself. Creative destruction. The new features to this since WWII are global warming and oil depletion. They could mean the system “ending itself” in barbarism. They are what make accurate your correction (above)of my statement ” the system will not end itself.”

    My thought is that the “Stalinist” concept of “general crisis” is similar to the notion
    “generalized destabilization of the system itself as a simultaneous economic, political, and military-security crisis…”

    ^^^^^^^

    28 September 2007, 4:13 pm

76. Masada Peacenik:

    Hey ‘Required’

    “==> Aren’t these two statements contradictory? Isn’t saying “right action is an outgrowth of right thinking” the same as saying “all tactical failures are ultimately intelligence failures”?

    [moderator: incomplete post? were you going to say something to Required about this question?]

    28 September 2007, 4:18 pm

77. Linda c:

    I have become an avid Henry Liu enthusiast. He has the ability to explain, when I cannot begin to comprehend, the language of finance. Mr. Liu opened a door for me that was, previously, tightly, closed.

    As for permaculture – it is embedded. It will grow with the orginazion and resourcing it needs to become much more localized. As we become more and more “abandoned” – things will grow.

    28 September 2007, 4:37 pm

78. Charles:

    But I’ll go a step further and argue that there can be a lot more than one revolutionary activity (nature succeeds through strategies of diversity and complexity, no?), and that mujch of this activity need not be directed against finance capital, but that — like good insurgents — we avoid quixotic confrontations that exhaust our capacities, and devote a good deal of our time and effort to literally building base areas in the abandoned and-or unoccupied spaces of the system, and perfecting our capacities to solve the concrete problems of the near future.

    ^^^^
    CB: If I follow you here, I think it’s a mistake to claim that the classical Marxist sites of class struggle are now abandoned and or unoccupied spaces of the system. Industrial or “productive” capital have not been utterly wiped out by finance capital. The fact they are dominated by finance capital does not mean that unravelling this mess won’t include a lot of good ole Leninism. On that point, consider that Lenin ( Hobson or whomever) termed imperialism “finance capital”. It amazes me how those who have toesed Marxism-Leninism into the dustbin as religion don’t notice that Lenin pointed to the trend toward dominance of industrial capital by finance capital.

    Yea, lets have strategies of diversity and complexity , and diverse and complex strategies, including still rallying the proletariat, the wage laborers. Service workers are wage laborers , by the way. The service sector does produce commodities. Commodities are not just material objects. My recent eye operation for detached retina was a commodity. So, when Peggy asks about services as a basis for capital, I say, look at the medical industry making profits. The proletariat is not just workers in manufacturing. Bank tellers are in the proletariat. Anybody who earns a wage is in the proletariat. The working class is 90% of the population. Most of the proletariat are women.

    ^^^^^
    Understanding the system, and its current and near-term evolutions and dynamics is an intelligence function (using the war metaphor, if it is a metaphor). It is a means to anticipate certain trends and their consequences, in order to get out in front of them (the principles here being initiative and tactical agility).

    ^^^^^^^
    CB: Agree. I always thought of this as the reason we revolutionists study economics, why it is necessary to study _Das Kapital_, _Imperialism_ etc. It’s why I pay attention to Liu, Hudson, PEN-L, Perlo, Henwood. However, Hudson’s analysis must be seen as explanation of a current situation that derives out of early 1900′s imperialism and 1800′s capitalism, before that. The hostility to Lenin’s analysis and method is not smart. Show how _some_ things have turned into their opposite from that analysis ( _some_ things are not different from then; some of the fundamentals of capitalism are still as Marx explained them) Don’t discard it as religion. Lenin himself would demand that we have a new concrete analysis of the current concrete situation. It _is_ Leninism to look for how things have changed since Lenin lived. Leninism is the very opposite of religion. It’s dialectics (See Engels on Hegel in _Ludwig Feuerbach_ for example; the revolutionary, aspect, change, is absolute; the conservative aspect is relative). The notion that everything changes is the exact opposite of the concept of God, religion. There are no Rocks of Ages. But it is ________ ( derogatory term) to act as if the current circumstances just fell out of the sky anew, to fail to show how the current circumstances derived out of the circumstances of the previous era.

    By the way, oddly enough Hudson seems to claim that the patterns of money he’s talking about existed in ancient “Iraq” , Mesopotamia, at the origin of commodity production. He’s got articles on archaeology. Go figure.

    Anyway, we can’t change the world , if we don’t understand it , as you say above ( I think)

    28 September 2007, 5:22 pm

79. Stan:

    Th abandoned spaces of the system are not categorical (productive capital); they are literal (the 9th Ward of New Orleans, vast stretches of Detroit).

    Lenin’s thesis was that monopoly capital (an economic category representative of a larger economic class) was the determinative force above and below the states’ political classes. What Gowan and Hudson demonstrate through meticulous and rigorous research into the facts is that in the United States a “super imperialism” has emerged where the power of that state takes primacy and with it a determinative role.

    Gowan and Hudson show clearly how the US state — privileging the power of the state internationally over that of and sometimes to the detriment of the “bourgeoisie” — has used finance capital as a weapon of statecraft in a very particular way that was never anticipated by Lenin, Hobson, et al. Rather than explain that, I’ll refer folks to the two books: The Global Gamble, and Super Imperialism.

    It does not “derive out of” any earlier epoch except in the post hoc retrojection of some linear continuity thesis of inevitability. This is not just a fallacious way of thinking about this, but about everything (and I’m not clear, Charles that your “derived out of” remark meant exctly this but it is the historian’s fallacy, and it is too common to leave alone). In fact, if I recall my logic correctly, the post hoc ergo propter hoc fallacy is the same fallacy writ small and given a sexy-sounding Latin name.

    We fit the known facts (and remain ignorant of the far more numerous unknown facts) to the historical outcomes, and imply or assert causation where we find correlation.

    This process is in evidence in most history (which is barely more than propaganda), and it is in its most unfortunate evidence (imho, since I was so involved in this world view) with Marxism-Leninism… where even the term implies some inevitable continuity (which is exactly what Stalin meant to do when he invented the term after Lenin died, wherepuon we have other continuity thesis evolutions, like Marxism-Leninism-Maoism, or Marxism-Leninism-Maoism-Gonzalo-Thought, etc etc etc).

    My problem is not with Marx, you see. I study Marx, have studied Marx, and find that Marx is indispensible. It Marx-ISM I have come to take issue with, and not fromthe outside, but as a very active participant in Marxist practice and debates.

    Marx made a few essential and lasting contributions: in particular the deconstruction of the commodity, the concept of reification/fetishism, the theory of value at the point of production, etc.

    On the other hand, (1) Marx made many errors that reflected the prevaioing episteme of his own epoch (patriarchal dualism near the top, fetishizing the machine, technological optimism, and the idea that the proletariat will be the agent of socialist revolution), and (2) there are many other people since Marx, both inside and outside the “marxist” lineage, who have made suppositions, discoveries, and philosophical leaps, who are just as useful in understanding the world so we can change it.

    I use Hudson, Liu, and Gowan, even though none of them has a decent critique of industrialism… for that I go to Illich, Mies, Shiva, Jensen, Merchant, Hornborg, etc. Nor do any of these guys seem to get gender in any deep way… for that, I rely on Pateman, hooks, Connell, Hartsock, MacKinnon, etc etc etc etc — long list here.

    Not to be too post-modern, but no Grand Unified Theory can keep up with actually existing complexity combined with non-linear dynamic change. (No, I’m not copping to pomo, because I still believe existence is more than narrative.)

    This is why the real challenge in people learning to think, and think on their feet politically, is epistemological… which leads us back to lived experience as the most powerful determinant of how we know.

    What Marx-ISTS have done is erected ideological barricades between themselves and “actually existing complexity combined with non-linear dynamic change.” That is why any critique of Marxists is perceived as an attack (or “hostility to Lenin”).

    The key assumptions that Marxism has not come to terms with imo are its patriarchal “objectivity,” its technological optimism, and its historically unsupportable belief that the proletariat wil be the agent of world revolution. These core values (articles of faith, since each has been thoroughly and successfuly rebutted), combined with a bunker mentality, lead to various and sundry forms of myopia… serious myopia that has led Marx-ISM down the path of increasing irrelevance and decreasing influence on the political stage.

    The proletariat only “rallies” in very narrow circumstances. The proletariat is completely dependent on captialism, and has shown no willingness to overthrow it at all… only to get a few contingent better deals along the way. The proletariat is also, by the way, involved in making mostly useless or harmful shit… but that’s another story.

    Proletarians have far more identities than just proletarians. Even referring to them as such, in the way you do, smuggles a Marx-IST conslusion into your premises.

    My daughter works in a clinic as a receptionist. She does not like her job. But she also has problems with boyfriends, with racial shit, with her girl-indoctrinated preoccupations with weight, consumer preoccupations with status, etc etc. Marx-ISM assumes that this one aspect of her life (relation to the boss) takes absolute priority, and that assumption is both arbitrary and wrong…. and it is based on that article of faith, that class trumps all other experience (“objectively” of course, and when she says that is not the case, then in the dual universe of Marx-ISM, that is explained away as “false consciousness”).

    I haven’t even begun to go into Dunbar’s number yet, or the implications of “management,” but after a shower, some garden work, breakfast, a bit of house mantenance, some chat-time with my significant other, and laundry, I’ll come back to that. Suffice it to say that scale matters, and the first proto-state (built into ML organizational doctrine) that rises over and above the masses germinates with the need for management.

    29 September 2007, 8:46 am

80. Charles:

    CB: I had said:

    Uhhuh, though Marx argued – and it’s not true just ’cause he said it – that crisis has always been integral to capitalism as a way of correcting itself. Creative destruction. The new features to this since WWII are global warming and oil depletion. They could mean the system “ending itself” in barbarism. They are what make accurate your correction (above)of my statement ” the system will not end itself.”

    ^^^
    CB: I should have said the new features to this since WWII are NUCLEAR WEAPONS, global warming and oil depletion. The greatest threat to causing barbarism is the threat of nuclear holocaust.

    29 September 2007, 3:06 pm

81. Charles:

    Stan said: Permaculture is one key practice and practical design philosophy that is already concerning itself with figuring out what a new future can look like. We needn’t worry about finding the political line that accompanies this practice. That already reveals itself, and will continue to do so. I have confronted it in my own homeowners association… a phenom that people like Mike Davis have been trying to explain to the left for a minute now.

    The politics is local; and it is spatial. Suburbanization is an intentional, systematic, and politically crafted process that replaced de jure segregation with de facto segregation, eg, and it is class-based, but not by the same taxonomies of class that have been chiseled into the granite of leftist orthodoxies. If you want to find the bases of political power that we will confront in the future, look no farther than your local metropolitan Chamber of Commerce.

    Given what we now know about the energetic limits to growth and the inevitable biospheric calamities of industrialism, relocalization must be the centerpiece of any sensible alternative future (call it socialism if you like, or communism, or communalism, or a rubber duck). By claiming territory now, and beginning the physical transformation of that territory, we are basing our future struggles on real ground, and not on the “correctness” of our ideologies.

    Decentralization of effort is required if “we” are to have any tactical agility. The appropriate place for non-directive centralization is in the production of useful intelligence.

    And all victories are not triumphs over an enemy, but oftentimes also the non-antagonistic products of our own creativity. Concentrating all efforts at creating a new future in the agonal activities of conflict generates a conflictual consciousness, and the militarization of social networks.

    Somewhere in this vague observation is part of the deep critique that is still waiting on the subject of that formative 20th Century transnational movement, Marxism-Leninism (Etc.-ism), and with it the M-L faith, shared with capitalists, in the “conquest of nature” notion that underwrites the ideologies of industrialism… which we can now show is on a turbulent glide path into crashing failure. No effort to substitute what any of us might describe as a humane future for humanity for a post-industrial horror show (a real possibility) can ignore the “industrial” part of this equation; and that requires much more than refinement of stale theories and attempts to perfect the Grand Unified Party Line. It will require engineering, but a new type of engineering wherein design is driven by some basic ethical considerations.

    Fortunately, we already have these efforts underway, even though they are pretty much invisible to the left; and these efforts are significantly larger, more well-organized, self-resourcing, and locally embedded than the left is. That tendency is called permaculture; and when it is combined with the political instincts of the left, which are often good until we inflect them with our orthodoxies, and with a deep feminist consciousness, it will be formidable. What we need to understand is that they are more advanced than we are.

    ^^^^^^^

    CB: Is there a connection between the New Financial Order and the future Permaculture World ?

    29 September 2007, 3:08 pm

82. Charles:

    Lenin’s thesis was that monopoly capital (an economic category representative of a larger economic class) was the determinative force above and below the states’ political classes. What Gowan and Hudson demonstrate through meticulous and rigorous research into the facts is that in the United States a “super imperialism” has emerged where the power of that state takes primacy and with it a determinative role.

    ^^^^^
    CB: Do Hudson and Gowan agree that Lenin’s analysis is correct for the early 20th Century and that their theory about the current situation is a change from then ?

    29 September 2007, 3:35 pm

83. Charles:

    It does not “derive out of” any earlier epoch except in the post hoc retrojection of some linear continuity thesis of inevitability. This is not just a fallacious way of thinking about this, but about everything

    ^^^^^
    CB: That’s quite a claim , Stan. You are really going to have to prove that tough. For one thing, there’s no notion of inevitability in what I’m saying, so, you seem to be off on the wrong foot from the get go. It’s really “fallacious” to claim that superimperialism just fell out of the sky. The old maxim “nothing comes from nothing” is still true.

    ^^^^

    (and I’m not clear, Charles that your “derived out of” remark meant exctly this but it is the historian’s fallacy, and it is too common to leave alone). In fact, if I recall my logic correctly, the post hoc ergo propter hoc fallacy is the same fallacy writ small and given a sexy-sounding Latin name.

    29 September 2007, 3:42 pm

84. Legume Sam:

    Stan suggests:

    Gowan and Hudson show clearly how the US state — privileging the power of the state internationally over that of and sometimes to the detriment of the “bourgeoisie” — has used finance capital as a weapon of statecraft in a very particular way that was never anticipated by Lenin, Hobson, et al. Rather than explain that, I’ll refer folks to the two books: The Global Gamble, and Super Imperialism.

    Question of clarification: are we sure it’s the US state that’s using finance capital, or is it (a fraction of) finance capital using the US state?

    29 September 2007, 7:59 pm

85. Lisa:

    New Interview with Michael Hudson:

    http://www.solidarity-us.org/node/260

    See his site for two other interviews available as downloadable mp3′s:

    http://www.michael-hudson.com

    2 October 2007, 5:32 pm

86. Lisa:

    URL’s for the other two new interviews:

    http://michael-hudson.com/audio/070921taxplot.mp3

    http://michael-hudson.com/audio/070815ClassWar.mp3

    2 October 2007, 11:59 pm

87. Charles:

    Stan suggests:

    Gowan and Hudson show clearly how the US state — privileging the power of the state internationally over that of and sometimes to the detriment of the “bourgeoisie” — has used finance capital as a weapon of statecraft in a very particular way that was never anticipated by Lenin, Hobson, et al. Rather than explain that, I’ll refer folks to the two books: The Global Gamble, and Super Imperialism.

    ^^^^^^^

    Charles: What constitutes the US state ? What group of people ? The President, Congress, Supreme Court, governors ?

    3 October 2007, 12:46 pm

88. Charles:

    New Interview with Michael Hudson:

    http://www.solidarity-us.org/node/260

    Scamming Social Security
    — Susan Weissman interviews Michael Hudson

    …

    SW: In your article you state that what Bush is trying to do is build the next bubble — which begs the question, Michael, are bubbles the only growth plan for capitalism these days?

    MH: Well, it’s what a hundred years ago was called “finance capitalism.” Marx used the term “fictitious capital,” Henry George said “fictive capital,” everybody realized a hundred years ago that securities and debt wasn’t the same thing as physical capital.

    SW: Your book Superimperialism was just reissued by Pluto Press about a year ago, right?

    MH: Yes, and there’s a new book coming out next month, Global Fracture, on the international economic order and how the U.S. essentially has applied parasitism on a world scale.

    …

    MH: So the class war is put back in business. Greenspan knows there’s a class war, Bush knows there’s a class war; the only people who don’t know there is a class war are the victims.

    ^^^^^^^

    CB; “Finance capitalism” ? And who exactly was calling it “finance capitalism” ? :>) I’m trying to figure out what kind of game you guys are playing pretending like you got some new theory.

    5 October 2007, 4:16 pm

89. Charles:

    On the other hand, (1) Marx made many errors that reflected the prevailing episteme of his own epoch … and the idea that the proletariat will be the agent of socialist revolution),

    ^^^^
    CB: This sort of came up on a list lately when somebody asked “Was Marx correct about the proletariat ?” My answer was “history is not over yet”.

    Impatience with the proletariat may be a bit of linear thinking. Those lunkheaded Leninists have said that processes do not proceed in straight lines ( i.e.linearly), but by zig-zags, ebbs and flows , non-linearly. The Russian Revolution and following decades saw the rise of the proletariat in a flow of leading the first period of socialist revolutions. Of course these were far from perfect, and the bourgeoisie figured out how to crush them through world historic levels of nuclear tipped, military aggression. As a result , we have entered a period of ebb of proletarian led socialist rev. But Marx’s notion is “epochal” , which is to say it is across many generations. We tend to want it to happen within our lifetimes, and when it doesn’t get frustrated. There is a big new problem of overcoming capitalist super-militarism, but really the human race has no choice but to solve that puzzle. It’s still, as Red Rosa said, socialism or barbarism, with the added gigantic problem of transitioning out of petroleum-based technological civilization.

    The role of wage-laborers as agents of socialist revolution is not just a wish of Marx’s. It is based on an objective characteristic of capitalist social structure. There is no other group, but this overwhelmingly large mass of the population that has the self-interest in revolutionizing capitalism; and their overwhelming numbers fulfill the historic goal of democracy, the end of elitist ruling classes.

    Or do you have a theory of another group, sector of society, that would be actually motivated to make that big move ? The logic has to be more than that the proletariat hasn’t done it yet.

    Finance capital of 2007 has lots of new tricks and devices, but it still plays them on the great majority of the population who in various ways work to make a living. The pension fund thefts Hudson discusses are those of workers. The Social Security Bush is trying to steal for the New Financiers is that of the proletariat.

    The proletariat is not defined as working at big machines. It is defined as wage-laborers. It is the _industrial_ proletariat that works in big factories. In the period of the rise of big factories, concentrated locations of socialized labor, it made sense to focus on the industrial proletariat. Of course, large machines haven’t really gone away. It is more they have been scattered more over the globe, and not concentrated in places like Detroit. But even with the necessity of making an alternative to petroleum based civilization, we cannot yet say the next form of organization will not have concentrated locuses of socialized labor, non-petroleum based factories; nor that there will not be a world wide web of this labor, soft globalization. In fact, that lesson from world history probably should not be lost. We probably don’t want to go back to localized tribal forms. We, the People of the Earth , the human race, must stay an interconnected whole, less we revisit the nightmare of racism and the like.

    Even in this ebb, the proletariat, the working class masses of some places give indication of fulfilling Marx’s prediction, as in Venezuela

    October 05, 2007
    Venezuelans Tend to View Socialism More Positively Than Capitalism

    Large percentages, however, say they simply do not know

    by Patricia Guadalupe
    GALLUP NEWS SERVICE

    5 October 2007, 5:02 pm

90. Legume Sam:

    Charles suggests:

    There is a big new problem of overcoming capitalist super-militarism, but really the human race has no choice but to solve that puzzle. It’s still, as Red Rosa said, socialism or barbarism,

    Given the lack of progress made by socialism per se, and the degree of acquiescence granted to capitalist super-militarism, I suppose the worst-case scenario is of a global ecological disaster which wipes out enough people to make further “capitalist development” impossible, say three or four billion…

    5 October 2007, 6:44 pm

91. DeAnander:

    And who exactly was calling it “finance capitalism” ? :>) I’m trying to figure out what kind of game you guys are playing pretending like you got some new theory.

    who is “you guys”? Hudson and Liu are cited at IA and FS, but not members of the editorial collective

    I think they are trying to critique finance capitalism for a USian audience that has been brainwashed to run screaming and barricade itself into the nearest closet when it hears the word “Marx.” this means they have to reinvent some wheels, rhetorically speaking.

    5 October 2007, 7:07 pm

92. Stan:

    The contrary of theorizing once in 1919, then ossifying that theory into a doctrine, is in describing concretely what we can see right now.

    Michael Hudson has done a financial history of the US, called Super Imperialism, that does not posit a theory, then selectively find the evidience that supports the theory. It traces the specific history of an imperial nation that performed a remarkable bit of magic by preseving and expanding its contingent power as a hegemon by becoming the world’s biggest debtor.

    Henry Liu reports on financial matters in the arcana of present-day finance using the perspectives of anti-neoliberalism and dollar hegemony.

    Peter Gowan traced the relaitonship between Wall Street and the US government, using dollar hegemony, to make post-New Deal capital markets a weapon of US statecraft, and gives the example of the Asian “meltdown” to support his thesis.

    This kind of research is not designed to either defend or attack Lenin’s theses on imperialism (which Ortho-marxists might suggest provided all the basic answers we shall ever need… a religious impulse); it looks at the evidence, draws its conclusions, and lets the historical chips fall where they may.

    My best advice, for those who are interested, is to read the material. All three are availabe, for free, on the internet now. Litmus testing cannot substitute for reading the material.

    If we read a bit of the material, and discuss what is written, we can digest that together, and even call on the authors — all of whom are accesible — to participate as well.

    Michael Hudson just wrote two days ago to correct one of my references to him in a pamphlet on the Green Revolution, and he is now the Kucinich campaign economic adviser. SI is on the net for free. So is Gowan’s book. Henry’s work is archived at AT.

    5 October 2007, 7:50 pm

93. Stan:

    I’m as big a fan of Luxemburg as any (for her point that primitive accumulation remains a constant in capital accumulation); but she was also a eurocentric developmentalist who had no sympathy for the “backwardness” that was wiped out on the march to industrial “progress.”

    Consequently, I reject her “socialism” outright, as I now do all socialism that remains infected with machine fetishism.

    -Barbarian

    5 October 2007, 7:55 pm

94. rootlesscosmo:

    My answer was “history is not over yet”.

    Impatience with the proletariat may be a bit of linear thinking. Those lunkheaded Leninists have said that processes do not proceed in straight lines ( i.e.linearly), but by zig-zags, ebbs and flows , non-linearly.

    The trouble here is that with a predictive mechanism like this, nothing can ever be falsified (history being not over) or tested (since any departure from the predicted path can be put down to zig-zagging.) So you can always account for everything, and there’s no way to falsify any claim; comfy, but of limited usefulness, and a long, long way from anything that can really call itself scientific, since if science is about anything it’s about making testable, falsifiable claims.

    5 October 2007, 8:06 pm

95. DeAnander:

    Machine fetishism accounts for much that is wrong (imho) with implementations of Marxism. Ideologies of centralisation, “rationalisation,” “efficiency” underlie the Soviet projects of forced collectivisation and upscaling farms and factories to maximum size… basically modelling “society” or “the state” or “the nation” as a machine, a great big clockwork or diesel engine to be operated for maximal productivity…

    The “timeline of history” meme [i.e. that there is a Forward direction which leads to a Utopian or at least improved future, and a Backward direction which we are very glad to have left behind us because it leads to the Bad Old Days when life was Nasty Brutish and Short] is very powerful — not just in RL’s time but perhaps even more in our own. Progressivism is the “other religion”, maybe the dominant religion, of the metropoles; and of course one can adduce lots and lots of supporting data, i.e. “back then” primitive patriarchy had freedom to brutalise women openly, in the family and in public, without even token laws against; non-marital slavery was also perfectly legal; the whole concept of “human rights” is a fairly recent innovation; and so on. Hey, that’s Progress!

    But that means looking “back” only to selected histories; if we go back even further, to some of the indigenous traditions that the Progressivists worked so hard to wipe off the face of the earth, we often as not find a higher social standing for women, more tolerance of homosexuality, a non-market model of “slavery” that is hard for imperialists even to comprehend (in which captives of war become adopted family members of winning clans/tribes). One of the telltales so often ignored by Progressivists is that in the early Anglo colonies in N Am, a fair amount of effort had to be expended by authorities to recapture and bring back Anglos who had been captured by “Indians”. Frankly, most of the captives — especially if they were poor, children, or female — preferred their lives with the tribes and when returned to the imperial/capitalist colonies, often escaped to rejoin their new families in the forest. This was a vexing ideological problem for the colonisers who were so certain that their culture was “advanced” and superior.

    So even the notion that tolerance or freedom are greater in more “advanced” cultures is questionable; in a sense the tolerances and freedoms practised in the Western metropoles today are “backwards” in that they resemble pre-imperial culture more than the history of imperial cultures.

    There is also the parable of longevity, i.e. that we “live longer and are healthier” than “primitive people” — but alas, recent palaeo-anthro research suggests that early gatherer-hunters had a lifespan, average height, and degree of general health that was never equalled again until high technocracy post-WWII (a high technocracy which operated by stealing longevity and health from billions to concentrate it, as a metered and purchasable product of nonsustainable industry, in the imperial metropoles).

    This notion of Progress is a slippery one; it’s undeniable in narrow technological terms (a computer built today is faster, lighter, and easier to use than one built 20 years ago). It’s undeniable if we stick strictly to “quantity of cheap junk manufactured”, which is greater today than it ever has been. Or even if we measure things like “number of hours that must be worked at wage labour in order to buy a shirt.” But if we start counting trees, fish, feet of topsoil or potable water sources, then “backwards” people were far wealthier than ourselves; and their food, provided that they could get it, was of higher quality, more nutritious, less likely to be contaminated with poisons and bizarre adulterants. We are supposed to regard these deficits as far less important than a steady supply of cheap shirts, I guess.

    The Backwards meme is tremendously powerful in that it shuts off the ability to imagine any social organisation other than industrial capitalism (or industrial communism). Any challenge to machine fetishism is immediately marked up to “Luddism” and an ignorant nostalgia for the Bad Old Days, which were so horrific that no sane person could possibly want to “turn back the clock”. The very notion of looking backward in time (or outside what is often called the “mainstream of history”, meaning the history of imperial metropoles) for useful survival skills, alternative social organisation concepts and praxis, etc., is deeply heretical; like hackneys hitched to the carriage of our betters, we are fitted with blinkers permitting us only to look forward.

    5 October 2007, 10:02 pm

96. peggy:

    New book out by Naomi Klein – The Shock Doctrine: the Rise of Disaster Capitalism. Might be worth a look.

    6 October 2007, 10:28 pm

97. Stan:

    Thank you, De. To the chase, as always.

    The Earth’s land area is about 149 million km2, but only 85-90 million of that is reasonably biologically productive (117 million km2 are “vegetated”). 15 million km2 serve as croplands. 2.5 million km2 serve as irrigated cropland, and this could hardly be expanded by more than 50%. Typical soils are about 11 inches deep, and weigh about 400,000 tonnes/km2 (t/km2). This suggests a total cropland topsoil inventory of 6000 Gt. This is based on 1970s data at the high end of the range of measurements. Just correcting for topsoil losses since then (See below) would give an inventory of about 4000 Gt. Another recent estimate gives 3600 Gt. But when topsoil depths drop below about 6 inches (a typical depth of the root zone of crops), productivity drops off sharply. The most optimistic estimate for the rate of topsoil formation from sub-soil in croplands is 1″/3 decades (11000 tonnes/ km2/ decade). The most optimistic rate of formation of topsoil from sub-soil on grasslands and forestlands is about a tenth of that – as is the rate of weathering on bedrock to form sub-soil. Averaging all the estimates of soil formation rates would give numbers only a half or a third of these.

    http://home.alltel.net/bsundquist1/se1.html

    Groundwater is the second largest reserve of freshwater on earth. It also makes up 40% of the freshwater used in the U.S. alone. Groundwater is found within underground aquifers in the “zone of saturation”. A zone of saturation is located where water fills in all of the spaces that are in the lower layers of soil. The water table is located at the top of the zone of saturation. These aquifers need to be recharged by rainwater and other water sources. The recharge rate is slow. In many areas groundwater is being removed from the aquifer faster than it can be replenished.

    http://academic.evergreen.edu/g/grossmaz/WORMKA/

    Peak Oil is the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil ‘production,’ meaning extraction and refining (currently about 84 million barrels/day), has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline, hence ‘peak’. Peak Oil means not ‘running out of oil’, but ‘running out of cheap oil’. For societies leveraged on ever increasing amounts of cheap oil, the consequences may be dire. Without significant successful cultural reform, economic and social decline seems inevitable.

    http://www.energybulletin.net/primer.php

    These are real problems of a scale that is measurable. We can predict general trendlines, and even time-windows of step-change disruptions.

    We can also imagine perfectly practical measures that will begin to correct these trajectories, and I would argue that the first worldwide Manhattan Project should be the establishment of local water-catchment, graywater, and vermiculture projects all over the world.

    The reason these are not practical is political; and the reason they are not politically practical is economic.

    If I were studying intelligence for a military operation, I would not bother reading military theorists. I don’t need Boyd, Clausewitz, Dragomirov, or Bloch. I need to know the situation and mission, the terrain and weather, the assets available to perform the mission, and the size, location, composition, and disposition of my opponents, as well as the criticality, accessibility, recuperability, vulnerability, and effect on local populations of my mission on a particular target.

    Politics is a contest for or against power, kind of this military analog writ very large, and in a far more complex and dynamic situation.

    What is not included in the operational schema above are “tactics and techniques.” You can recite these mnemonics until the cows come home, but if you don’t know how to navigate, shoot, move, communicate properly, and sustain… it’s all a non-starter.

    Since we don’t have (and probably don’t want — for reasons we’ll get to later — big institutions (our own Pentagon) filled with specialists and coordinated by hierarchies of staff, we have to figure out how we generate these “fighting” essentials, from macro-intelligence down to local sustainment and tactics (to constantly ensure that they “match”), as…. and this is the limb some of us are out on, but there seems little to lose at this point… networked generalists.

    As Iain Boal recently noted in his excellent diatribe against Malthus:

    I want to make this very clear: I am not in any way saying that the earth’s resources should be used up willy-nilly, that societies shouldn’t concern themselves with how to live on the planet in the most sane and sustainable way possible. But it’s always – historically – an empirical, local, question: How much water is available? How much grazing will a pasture allow? Who’s encroaching? How much mast for the pigs or firewood is X entitled to? Will we have to send Y away to work in the city?

    (emphasis added)

    What Boal also noted, and what De has noted time and again — this is critically important — is that our enemy relies predominantly on one practical (as opposed to ideological) strategy: enclosure.

    Luxemburg explained this in The Accumulation of Capital; Harvey harps on it in his deconstruction of neoliberalism; Hornborg develops the anthropological history of it; it’s not hard to understand or find citations.

    The problem with orthodox leftism is that it largely sees enclosure as anecdotal, and still sees the system only from the point of production. This is an ideological blinder, even though when Marx first articulated his theses on point-of-production (Hartsock calls it the first standpoint theory), it was an incredible breakthrough. But that breakthrough happened in the 19th Century. It is now 2007.

    What we can see clearly now is that enclosure is a constant in capital accumulation, and it mirrors the strategic imperative of other systems of power, like gender, colonization, and industrialism, too.

    Yet this is not enough on its own to meet our intelligence needs. We need to know specifically how enclosure is being accomplished now, as well as where and how it is faltering or failing.

    The abandonment of New Deal financial-pole repression, and the evolution of capital markets in their current forms, have already defeated every strategic orientation of the left that is derived from (1) point-of-production centrality and (2) the strategic methods of specialization-centralism (as opposed to generalism-localism).

    At the same time, these forms have evolved out of a series of iatrogenic crises over the last several decades, and each iteration of evolution seems to have a shorter shelf-life… an indication that we are moving toward some kind of generalized systemic collapse.

    The political question, then, seems to be how to best achieve two simultaneous goals: fighting the most disastrous effects of the system on ourselves and others, and developing viable, practical alternatives now for the period when the systemic collapse occurs. It is possible that these two imperatives can be synergized… which is kind of what IA has been muddling toward.

    7 October 2007, 8:34 am

98. DeAnander:

    One of the battles of our times is over the Enclosure of information — patents, copyrights, official secrets, omerta — and the new player in the game is the internet plus digital encoding, a technology shift that enables information sharing very quickly over long distances at low cost and has not (yet) been brought under centralised control by Authority. You can tell how rattled authority is by this, by the frothing and hubristic rhetoric of the RIAA and MPAA — “it’s a crime for the consumer to make a backup copy of any copyrighted digital media they own” and their risible (were they not so punitive and unjust) attacks on individuals… but that’s a whole other thread topic. Corporadoes had finally managed to Enclose and control all but a few marginalised traditional media sources (print, radio, tv), and then along comes http and an explosion of point2point multiay instead of one2many one-way connections (indymedia vs fox news, youtube vs CNN, blogs vs Time magazine etc). I am not predicting that the internet = populist revolution, because a tool is not an outcome; but it does make the process of Enclosure a bit more difficult for our masters, it makes it easier for us to document and share our analysis of their shenanigans, and that has to be good.

    7 October 2007, 10:54 am

99. Charles:

    who is “you guys”? Hudson and Liu are cited at IA and FS, but not members of the editorial collective

    I think they are trying to critique finance capitalism for a USian audience that has been brainwashed to run screaming and barricade itself into the nearest closet when it hears the word “Marx.” this means they have to reinvent some wheels, rhetorically speaking.

    ^^^^^
    CB: I can go with that. I’m wondering about their replies to me. All they have to say is we are developing new rhetoric.

    Also, as time goes on, more and more new USians have not grown up under Cold War brainwashing, and probably will not be averse to learning about classical communist concepts.

    8 October 2007, 2:26 pm

100. Charles:

     The trouble here is that with a predictive mechanism like this, nothing can ever be falsified (history being not over) or tested (since any departure from the predicted path can be put down to zig-zagging.)

     ^^^^^^^

     CB: First, there have been socialist revolutions as predicted. So, that passed the test at a first level. This is what I always say to Popperians who bring up falsification tests. Anyway, the “predicted path” was not utterly departed from.

     Also, socialist revolution still exists in Cuba; and Communist Parties still lead in China and Viet Nam.

     ^^^^

     So you can always account for everything, and there’s no way to falsify any claim;

     ^^^^^
     CB: No , the falsification test was passed with the Russian Revolution. Thus, I answer Popperian challenges, frequently.

     ^^^^^

     comfy, but of limited usefulness, and a long, long way from anything that can really call itself scientific, since if science is about anything it’s about making testable, falsifiable claims.

     8 October 2007, 2:33 pm

101. Charles:

     Machine fetishism accounts for much that is wrong (imho) with implementations of Marxism….

     ^^^^
     CB: And militarism. The Soviets had lots of nukes too, and it was the competition with capitalism that had humanity moving toward nuclear annihilation. Thus, Soviet “surrender” was in the best interest of humanity. By their surrender of the name “socialism” and the leadership of the Communist Party, the Soviets put the interests of humanity above keeping a communist front.

     IMO, the Soviet machine fetish, was not an abstract belief in machines, as the term fetish would imply. It was similar to the militarism and the lack of democracy (Stalinist dictatorship). The Soviets could not keep pace with capitalist production without big machines. Socialism had to imitate capitalism to keep from being overwhelmed militarily. Even as it was there were all these complaints about masses of consumer goods.

     In sum, capitalism was able to force the first socialism to choke itself with industrialism, militarism and militarized politics. Solving this problem is a gigantic problem for the next non-capitalism, whatever the rhetorical name we give it.

     8 October 2007, 2:45 pm

102. Charles:

     The contrary of theorizing once in 1919, then ossifying that theory into a doctrine, is in describing concretely what we can see right now.

     Michael Hudson has done a financial history of the US, called Super Imperialism, that does not posit a theory, then selectively find the evidience that supports the theory. It traces the specific history of an imperial nation that performed a remarkable bit of magic by preseving and expanding its contingent power as a hegemon by becoming the world’s biggest debtor.

     ^^^^^^^
     CB: The facts underlying the theory of Marxism were gathered by Marx. It is not a theory spun from thin air and then applied to facts , or whatever.

     Leninism is precisely an updating of Marx’s theory based on _some_ changes in the facts of the world around the turn of the century. It is the exact opposite of a theory spun from thin air and applied to the facts. It is a theory developed to deal with changes in the world factual situation at the turn of the 20th Century.

     The world has changed _some_ from the factual situation of Marx’s day and Lenin’s day. But not everything has changed. Some aspects of Marx’s theory ( like ficticious capital) and Lenins updating of Marx’s theory persist. Some aspects have changed. That’s what I mean by deriving today’s theory from the base of the earlier theories rooted in facts. Not all of Leninism is out of date. Some of it is. I regularly describe what I see as changes in capitalism from then. For example, interimperialist rivalry has turned into its opposite, imperialist unity. That was in response, ironically, to the historical fact of the existence of the Soviet Union. In other words, the Bolsheviks (including Lenin) impacted the facts so as to change the world from the fact of interimperialist rivalry by leading the bringing into existence of the SU. The imperialists had to unite _against_ the SU, over the course of several decades, especially after WWII, thus negating the interimperialist rivalry fact from Lenin’s concrete thesis. Relative imperialist unity persists in 2007. That’s an example of why the way I think about it is not doctrinaire, but alive, awake, paying attention to the new facts, a concrete analysis of the concrete situation. Concrete means the here and now, and what’s new. The Marxism I learned emphasized the importance of always paying attention to what is new and developing, dialectics. Things changes, including capitalism.

     However, Lenin or Hobson or Hilferding’s observation about the domination of industrial capital by finance capital is a fact that has not changed. It has expanded or flourished. It has new forms like hedge funds. It is not doctrinaire to observe that that aspect is a development of a trend noted by Leninists that is still alive, going on. It is not ossyfied thinking. It is living thinking.

     I accept Liu-Hudson’s dollar hegemony or “debtor jujitsu” (my term, dominating by being a debtor is sort of a using somebody else’s strength against them) thesis. I trust their expertise. However, as I asked in my earlier comment on this thread, “what is to be done ?” with this knowledge that the U.S. is using its debtor status to dominate. Otherwise it’s something like knowing that the Halley’s comet will come again. It is true, but it doesn’t help us to save ourselves from capitalism. I’m not saying it’s easy to come up with a suggestion for practice. But those of us who want to change the world, and not just interpret it must always ask this question, no matter how tough it is. I myself don’t have an answer. I have proposed in activist meetings that we consider marching on Wallstreet. I am open to that being criticized and rejected. It is just a way to try to get the conversation about practice going. It’s agitation on my part. Agitation is a Marxist thingy that is not out of date (smile).

     Maybe the Hudson-Liu idea doesn’t suggest new practice. In that case, it is interesting, but if it doesn’t impact what we should do…

     For Marxism, the test of theory is practice. That is not ossyfied thinking either. It is the essence of thinking that is alive, including in 2007.

     8 October 2007, 3:26 pm

103. Linda c:

     With work on “Unraveling the …..”. Liu has helped me comprehend the basics. This doesn’t mean that I will “run screaming and barricade myself into the nearest closet when I hear the word “Marx”. It means that I am willing to learn and, with that knowledge, try to make intelligent decisions. It takes the knowledge of people like Liu to help open the minds of the “brainwashed” – at least those willing to learn. “Marx” is a major input for the ones of us that are looking for and craving knowledge.

     Could it be that some of the ones less knowledgeable are trying to overcome being “brainwashed”? Each of “us” have to find our own way of “understanding”. For some it is much less complicated than for others.

     There is a lot of time spent trying to “retool” our minds to comprehend and make informed decisions. It is blogs like this one and the information that can be “gleaned” from them that makes this extreme task much less complicated.

     So “you guys” remember that I/we are greatful for your input. If it is “laziness” or “industrially cultivated ignorance” – the “Average American” has to have time to be able to understand and comprehend. There is much to be learned, and I am afraid not a lot of time to do it. As Stan said – it has to be as simple as talking about the weather.

     8 October 2007, 4:56 pm

104. Sam:

     I find this line of thought puzzling. If the insights furnished by someone are accurate, that in itself is useful. Nothing useful is possible without truth. A plan of action founded on misperception and misinterpretations–in short, not in line with reality–could not possibly be worth considering.

     On a much more individual note, I feel that the idea of wanting to “change the world” is simply sentimental. Most people who think along those lines are simply dreamers who lack both a sense of real proportions and real self-knowledge. People who actually have changed the world in some important or decisive manner (assuming it was for the better, all things considered) usually never intended such a result. The threads of causality are very complex, and “the road to hell is paved with good intentions.”

     8 October 2007, 7:14 pm

105. Sam:

     Sorry, it was not clear that my remark was prompted by Charles remarks, and not by those of Linda, which immediately preceded mine.

     At any rate, I should also have added that I have appreciated much of Charles’ intelligent and valuable commentary.

     8 October 2007, 7:17 pm

106. Charles:

     At any rate, I should also have added that I have appreciated much of Charles’ intelligent and valuable commentary.

     ^^^^
     CB: Thanks , Sam.

     ^^^

     I find this line of thought puzzling. If the insights furnished by someone are accurate, that in itself is useful. Nothing useful is possible without truth. A plan of action founded on misperception and misinterpretations–in short, not in line with reality–could not possibly be worth considering.

     ^^^^^
     CB: I agree with you that a plan of action is best founded on truth and reality. I’d even say that the test of the truth of a proposition is action or activity or practice based on it. ( That is not an original idea with me).

     Now I must admit that I do a lot of talking and theorizing on email and otherwise. So, much of my practice is as if mere verbal insights are “useful” to me. But I have to be self-critical about that. It is ultimately just “shooting the bull”, running my mouth. Satifying to me, but truths about patriarchy, global warming, dollar hegemony, et al. must be used to _try_ to , dare I say, change the world, save the world from these big problems facing humanity. Or they should be, anyway.

     ^^^^^^^

     On a much more individual note, I feel that the idea of wanting to “change the world” is simply sentimental. Most people who think along those lines are simply dreamers who lack both a sense of real proportions and real self-knowledge. People who actually have changed the world in some important or decisive manner (assuming it was for the better, all things considered) usually never intended such a result. The threads of causality are very complex, and “the road to hell is paved with good intentions.”

     ^^^^
     CB: I’m not entirely clear on how wanting to change the world is sentimental. I’m trying to think what you mean. Perhaps, you mean it is, “idealistic”, something from the past that is not possible. Maybe. If so, we all are in big trouble.

     I understand what you mean by complex causality, and unintended results. It may be another sentimentality, but, if we are going to consider these momentous matters, I think we should strive to effect our intents, rather than accidently stumbling upon ending global warming or racism et al.

     9 October 2007, 11:27 am

107. Charles:

     By the way, DeAnander, on the “you guys” thing, my impression is that it’s all guys who are the main proponents of the thesis in question: Liu, Hudson, Stan, Gowan, Gouldner.

     9 October 2007, 12:07 pm

108. Charles:

     On machines/mechanicism/ autonomism

     I’d say the problem is not machines, but a technological/machine regime based on fossil fuels , which are causing global warming, other pollutions, and are finite , and so will eventually, and relatively soon on a historical scale deplete.

     If we could develop a technological regime based on some substances other than petroleum, we would want those machines and efficiency ( of course in the long run there might be a new problem of depletion) Efficiency means less work, more leisure for people. Machines are labor saving devices, and under a non-profit system they can create more leisure time for people.

     The Soviet imitation of capitalism in terms of industrial and mass production failed, in part , because the working class did have significant, though not full socialist ideal, power, and workers really in charge aren’t going to work themselves as hard a capitalists maximizing profit rates.

     Capitalism doesn’t actually maximize production , but profiteering. Capitalism regularly and systematically destroys lots of production in crises to raise the profit rate back up.

     The machine metaphor and mechanical thinking have been criticized for a while. I remember it coming up in the 1970′s. It is similar to the metaphor as “linear thinking.” Organization of human society must be higher than a machine by two levels. Animals are organisms and have features of consciousness et al that machines don’t have. Humans have culture and language which are a level of organization above other organisms. Humans and their societies have potential for self-correction, feedbacks systems, goal setting that machines don’t have without human overseers. There are no perpetual motion machines, no machines that can run without human supervision.

     Overall, society can’t be organized like a machine because it consists in conscious, goal seeking beings not inert components. However, there are elements of human society that are best established as like machines, or “automatic”. This is the case of rules, laws, customs. For example, we want people who drive cars to automatically and mechanically stop at a stop light that is red.

     9 October 2007, 12:40 pm

109. rootlesscosmo:

     the “predicted path” was not utterly departed from.

     Woody Allen once did a parody of Nostradamus: “Two great nations will go to war, but only one of them will win.” What a visionary! A historical model that can be confirmed by the whole history of the Soviet Union (including its unforeseen collapse), by China during the Great Leap Forward as well as China today (both under the continuous leadership of the Communist Party), and that can also be “back-corrected” by citing “zigzags” and “contradictions,” is too vague to be falsified. (I don’t understand how
     the falsification test was passed with the Russian Revolution. What did that falsify?) Marx, and others self-identified as Marxists, had many keen insights, but the claim that “Marxism” (which Marxists themselves can’t agree on a definition of) is itself a science, just doesn’t hold up.

     9 October 2007, 1:13 pm

110. Charles:

     On pre-capitalist economies see Eric Wolf, Marshall Sahlins (_Stone Age Economics_), Polyani. Also, Lewis Henry Morgan. Karl Marx (Precapitalist Formations; International). Also, anthro text books, e.g. Conrad Kottak.

     In 1981, I wrote a paper attempting to summarize the spirit of my career as an anthropology student: _Indigenous Knowledge in Aboriginal Land Recovery_. I proposed that because primary ( not “primitive”) culture has survived for 100,000 plus years, and class divided society has survived for only 12,000, and now there is the threat of nuclear annihilation of the species ( including possibly extermination), we can say that primary culture is more fit, in the Darwinian sense, than capitalist society, so far. This is a sort of counter “progress” idea.

     However, a collapse of capitalism won’t just automatically fall into good “barbarism”/primary culture. The financial crises of the 1920′s collapsed into fascist barbarism ( fulfilling Luxembourg’s prediction)

     I once discussed briefly with Mark Jones whether we could/should aim to deescalate our level of production to the scale of a ” modern technological feudalism” , rather than horticulture/foraging. 6 billion foragers or horticulturalists might not work out so good. Maybe it would. Feudal ( I don’t mean the Lords and Ladies and Priests and surfs social structure) scale production might be a viable permaculture.

     9 October 2007, 3:48 pm

111. Stan:

     Machine fetishism:

     Like all power structures, the machine will continue to reign only as long as it is not unmasked as a species of power.

     -Hornborg

     His orientation is deeply Marxist in one key respect. He adapts Marx’s insight into commodity fetishism to an examination of the machine.

     Power here is understood as a social relaiton builton an asymmetrical distribution of resources and risks. Power relations are culturally constructed but masquerade — to the powerful and powerless alike — as inevitable and natural.

     We can amend that a bit to substitute “objective” for “natural,” as in existing independently of its social construction. Hornborg makes note of Luxemburg’s most salient addition to the Marxist tradition of analysis… that capitalism always, without exception, is dependent for its continued existence on the non-capitalist sphere… or “primitive accumulation”.

     He also uses world-system categories to examine the relaitonship between “core” and “periphery”, the latter being the place where most of the “primitive accumulation” takes place to support the surplus-value accumulation in the core, as well as the core’s essential political power over the periphery.

     Brewer observes that Marx viewed capitalism as a system that can exist by itself, without necessarily having to expand geographically. It was Rosa Luxemburg who presented the thesis that a capitalist system cannot constitute its own market but is condemned to expansion, and thus in the long run to destroying its own conditions of existence. Some years earlier, in 1902, John A Hobson had argued [as Lenin would, led by Hobson -SG] that monopoly conditions and capital accumulation reduced demand and encouraged export of capital, and that the incentive to protect foreign investments and markets generated “imperialism,” defined as territorial expansion.

     Others, like Gunder Frank and Prebisch-Singer and Wallerstein, had taken note of the phenomenon of “unequal exchange,” that is, workers in the core receive a lot more for their “socially necessary labor time” than workers in the periphery. Hornborg critiques both world system folk and ortho-marxists on different accounts. “Core-periphery,” when seen as a first premise can only be defined tautologically. “Unequal exchange” undermines labor-power as the primary arbiter of value.

     This led Hornborg and others to seek resolutions to these contradictions, primarily because there still seemed an element of verisimiltude in the theories of both schools. This led Hornborg to physics.

     One way to assess the occurrance of unequal exchange may be to look at the direction of net flows of energy and materials (concrete, productive potential), buth without falling into the trap of equating productive potential with economic value. On the ocntrary, it can be analytically demonstratedthat unequal exchange emerges from a kind of inverse relationship between productive potential and value. Logically, in accordance with the Second Law of Thermodynamics (cf, Georgescu-Roegan), the productive potential of a given set of resources diminishes as it is being converted into a product, that is, as its value or utility increases.

     Hornborg even points out that narondnik Serhii Podolinsky had tried to convince Marx and Engles in the 19th Century to include natural science in their economic constructions, but they ignored him.

     Another perspective that needs to be introduced … is Ilya Prigogine’s concept of “dissipative structures”. Dissipative structures are systems that stay far away from thermodynamic equilibrium by continually drawing in exergy (negative entropy) from the outside and exporting entropy, or disorder, they produce in the process.

     DeAnander’s aphroism on thermdynamics and irreversibility is featured among our random quotes: The Second Law of Thermodynamics – you can’t win, you can’t break even, and you can’t get out of the game.

     This is the basis of how the Machine — regardless of the “relations of production” — acts as a dissipative structure that enlarges at the core and accelerates the extraction and disorder in the periphery.

     Systemic ratios of exchange and energy appropriation are at the very foundation of our industrial infrastructure. Unequal exchange in the world system is what reproduces machines, and machines are what reproduce unequal exchange.

     Machine fetishism is related to fossil energy depletion only inasmuch as that depletion has confronted captialism with its most inescapable contradiction. The fact that there is no substitute for fossil energy in the real world seems to have escaped the apprehension of much of the left… and not for the reasons that the typical malthusian peak-oiler would grasp. The thermodynamics of imperialism, available through the passageway of understanding machine fetishism’s impications, represents what might be called — with approval from Marx’s ghost I reckon — a deep historical materialism.

     Mark Jones got this part, but good, and he had little patience with what he called the “radical technological optimism” of most of the left that was still waiting for a deux ex machina (pun intended) of limitless energy to rescue their industrial utopia from the ashes of irreversibility.

     Here are indeed material objects of our own making over which we seem to have lost control… The disembedded condition of the various artifacts of industrial technology has made it possible for people in the center of the system… to equip them with … signifieds, such as “growth,” “progress,” and “development”. The fetish character of the m achine resides in its ability to present itself ot our consciousness as a local achievement rather than as a product of the confluence of global flows. It is high time to demystify the social forces that seem to literally animate our machines, beginning, perhaps, by asking why tey continue to be so unevenly distributed over the face of the Earth.

     What Mark said again and again was that we had to use the fossil energy, but that those uses should be prioritized toward the energency tasks of a soft post-capitalist energy landing for humankind.

     The “fuedalism” you suggest might be better called relocalization. Polanyi’s theory of “embeddedness” is central here.

     9 October 2007, 6:51 pm

112. DeAnander:

     An essential Alf Hornborg paper on Unequal Exchange

     it seems to me axiomatic that without unequal exchange there is no such thing as accumulation, whether primitive or complex.

     9 October 2007, 7:27 pm

113. Stan:

     Wow, De! Good find. This is the canonical core of Hornborg’s theses…

     Carole Pateman (The Sexual Contract), also taking on the labor-theory-of-value — from a different angle — showed how the social relation that is capital is in fact a form of “civil slavery” (as opposed to political slavery), enforced by contract.

     Carolyn Merchant, likewise, anticipated Hornborg’s syntheses with The Death of Nature, in which she fundamentally unmasked the gendered applications of Cartesian dualism that show themselves not only in ruling class theory, but among leftists.

     It is the combination of the LTV and the Man-Nature conquest meme that constitute fatal flaws in orthodox Marxism to this day.

     What Hornborg as well as this site are criticizing is not “the machine metaphor.” We are saying that the machine itself is a “dissipative structure” that cannot escape its essential nature as exploitative.

     The reason “dissipative structure” is not part of the Marxian lexicon, or part of the general lexicon, is that people don’t know what it means. No big deal. There are a lot of things we don’t know. But once a concept is introduced and substantiated (which Prigogine did); and once it is recognized as a real thing, it is irresponsible to ignore those phenomena that have wide-ranging implications.

     The resistance to these implications on the left have not been scientific in the least, but ideological. It is disruptive of a schema that is built on LTV, class-as-primary-contradiction, conquest-of-nature, etc. So the inconvenient stuff just gets ignored or misrepresented. When Mark Jones used to bring this stuff up on the old lists, he was quite often treated like everyone’s crazy uncle… especially toward the end when he was asking if gender wasn’t as determinative as class, stating that post-capitalism wouldn’t be industrial utopia but a long period of ecological triage, and suggesting we might learn more from Vandana Shiva than Lenin.

     10 October 2007, 6:18 am

114. Legume Sam:

     Some offhand comments:

     The notion of “dissipative structures” has been taken up by Paul Prew. His conclusion:

     The question to be asked, really, is whether we proceed with capitalism until we reach an ecological bifurcation point that leaves the habitability of the earth in question for the vast majority of the population, or we reach a social bifurcation point that leads us to a social system of production that is dissipative, nonetheless, but does not threaten the flowing balance of nature.

     It’s important, too, to contextualize Charles’ comment:

     The Soviet imitation of capitalism in terms of industrial and mass production failed, in part , because the working class did have significant, though not full socialist ideal, power, and workers really in charge aren’t going to work themselves as hard a capitalists maximizing profit rates.

     The Soviet system worked just fine as long as the Soviets were catching up with the capitalist powers. As a contender state, the first big Soviet task was to turn a war-torn, famine-plagued, starving peasant nation into the first space-faring superpower. The historical record bears witness to the success of this mission.

     Unfortunately, the Soviet system refused to bend when it had the option, in 1956 when the Hungarians revolted, or in 1968 when the Czechs did so. Soviet liberalization at those times would have placed them in the mainstream of capitalist society, i.e. with the rest of the global working class, at a time in history when the economic advancement of the working class could have walked hand-in-hand with the cultural trends of those eras of history.

     Instead, the Brezhnevists held onto power until 1991, at which late date the Soviet Union joined the rest of the world by degenerating into a Thatcherist raiding party. Much of this little history is a synopsis of Kees van der Pijl’s Global Rivalries from the Cold War to Iraq, which I discussed at length on DKos. From the book:

     The demise of the USSR was the result of a collapse of confidence within the state class, part of which joined the shift to privatizing the economy that was set in motion by forces emerging from the shadow world of criminal gangs and regional bosses. Soviet indebtedness increased from $28.9 billion in 1985 to $54 billion in 1989, and when Moscow adopted G-7 and IMF recommendations for a withdrawal of the state form the economy, it placed the USSR under the discipline of the regulatory infrastructure of Western capital. (246)

     That’s all water under the bridge now, of course. I think there are two main points to be drawn from Soviet history as such. First off, “motivating the workers” is not just a matter of which political economy will do it best, but of the historical situation in which the workers find themselves. Secondly, the “machine fetishism” of the Soviet Union (and by extension of all the other countries) made sense in terms of the atmosphere of competition forced upon the world by imperialism. If you didn’t want your country victimized by the machines of the imperialists, you got machines of your own.

     In van der Pijl’s history, however, the competition between the “Lockean heartland” of imperialist nations and the “contender states” has fractured into a number of competing centers of power. Imperialism, moreover, has practically run out of planetary surface to exploit (having brought the oceans as well toward a tragedy of the commons), and so capitalist discipline has turned inward, toward the enclosure of genetic codes through genetic engineering (going hand-in-hand, of course, with the expansion of intellectual property law as such). The real economic growth of the system, as was pointed out July’s Monthly Review, is slowing toward an eventual halt. The competition of the nations in terms of “economic growth,” then, has been replaced by the inertial energy of a number of financial oligarchies as they use the system to exploit the rest of us on what’s left of the planet. So the old paradigm which van der Pijl had so much fun eviscerating no longer applies. A new one will have to take its place: the debate about its contours was kicked off by Saral Sarkar’s Eco-socialism or eco-capitalism? eight years ago. It will, as Stan suggested above, be an era of ecological triage.

     Now, as for Stan’s pronouncement that “The fact that there is no substitute for fossil energy in the real world seems to have escaped the apprehension of much of the left…”, I feel it needs a bit of elaboration. There are, of course, plenty of alternative energy sources to be gotten from the universe. The question at hand is one of whether or not they will substitute for the 85 million barrels of oil the world-society consumes every day (as of 2005), with a 2% yearly increase to boot. Fossil fuel energy is cheap energy — it requires little energy input and yields enormous quantities of energy in return. A system of political economy that was in touch with what Marx (in Capital) called the “man-nature metabolism” could thrive off of considerably less energy, indefinitely; but this is not what the eco-capitalists envision. They are deluded; so every time you read about new “enormous” reserves of energy being discovered or harnessed, think about that 85 million bbls./day figure.

     10 October 2007, 11:20 am

115. DeAnander:

     I personally have learnt a lot more from Vandana Shiva than from Lenin…

     10 October 2007, 1:32 pm

116. Stan:

     Me too.

     And I stand corrected in my articulation of the fossil energy issue. What cannot be replaced over time is the number of generated kilojoules now taken from fossil energy source.

     Diversification — using the precautionary principle (no nukes) — of energy sources is absolutely necessary; but the overwhelmingly central issue now is not generation, but conservation. We simply cannot continue to use the amount of energy we do. That is not a moral statement but a literal one.

     Even stated this way, we are risking the trap of the malthusians and idealists. This is not an equation, but a political question. How do we get there from here? And before we conjure up things that are not politically possible now, then we have to ask old Lenin’s question: What is to be done? Now.

     10 October 2007, 5:01 pm

117. DeAnander:

     We have reached a juncture where what is “politically possible” is physically impossible, and what is pragmatically necessary is “politically impossible.” It is a breaking point, one way or another.

     Radical/justice politics at this point is very much about the art of the possible, as in the art of making the human enterprise physically possible in a finite eco and hydro system, and making the necessary adjustments — to culture, money, individual values and behaviours — politically and socially possible.

     Reactionary politics is about the art of the impossible — as in continuing the pretence that the physically impossible can continue as usual, and persuading the people that no other path is possible.

     10 October 2007, 5:53 pm

118. Stan:

     Breaking point. Well put. When folks ask what can be done, we have to be honest enough to tell them, (1) organize to hasten the end and (2) prepare for another beginning.

     Where can we find synergy on these accounts?

     Hint: It is not what will happen by lesser-evil voting; and it is not by organizing ideological grouplets pretending to be revolutionary vanguards.

     The future has to be germinated like a weed in the crack of the pavement… using the available space, even as it widens the breach.

     Lots of weeds… it’s a big pavement.

     (Excellent book review, btw, Sam. I had no idea that Sarkar was Maria Mies’ life-partner.)

     10 October 2007, 7:34 pm

119. Legume Sam:

     (Excellent book review, btw, Sam. I had no idea that Sarkar was Maria Mies’ life-partner.)

     Thanks Stan.

     The future has to be germinated like a weed in the crack of the pavement… using the available space, even as it widens the breach.

     I keep imagining that if we could arm the Bloods and the Crips down in South Central LA with jackhammers, and get them to tear up the concrete of some of those abandoned parking lots outside of vacant strip malls out there, before putting in gardens… it’s probably just a fantasy…

     10 October 2007, 9:44 pm

120. Stan:

     Radical/justice politics at this point is very much about the art of the possible, as in the art of making the human enterprise physically possible in a finite eco and hydro system, and making the necessary adjustments — to culture, money, individual values and behaviours — politically and socially possible.

     This is quotable, with a density worthy of a short exegesis.

     Radical (from the roots)

     “the art of the possible”… often referring to acting with an understanding of “the way people think, learn, and communicate”

     “making the human enterprise physically possible in a finite eco and hydro system” … there is that permaculture thing again… getting to the engineering and systems design required to do something which we can observe for results

     “making the necessary adjustments — to culture, money, individual values and behaviours — politically and socially possible.”

     culture

     money

     individual values and behaviours

     The reason I’m kleig-lighting across De’s text is that it actually lays out a superior substitute for a “political program,” the latter of which generally sound like manifestos, and that act as fuses for sectarian explosions. Informed and practical, this still captures the main strategic imperatives, as strategic directions, in a way that can be locally and creatively implemented (no “aim-the-main-blow” discipline here).

     The politics will happen, because whatever we do we will encounter resistance when we begin to have an effect. That becomes more tactical than strategic.* But the part about finding practical solutions… gets short shrift from much of the traditional left (though it is proceeding quietly all over the place)… is where far more work is needed.

     The beauty — for now — of this communications medium is that we can accomplish a very substantial media bypass to communicate our work to like-minded others and exchange ideas and information. So it seems very appropriate here to link De’s earlier post on Demand Reduction… the antidote for the maladies of the global financialization era.

     _ _ _

     * Strategy is about winning the war; tactics is about winning battles. Forgive the militaristic analog. Because tactical success is so dependent on contingent conditions — which are thoroughly unpredictable — there is little point in wasting time trying to anticipate and therefore make cookie-cutter solutions for these “battles.” Centralization will inevitably lead to management (Dunbar’s number); management will inevitably lead to bureaucracy (they are essentially the same thing at an early tipping point); bureaucracy will lead to rule-bound dog-waggery (another DeAnander-ism); dog-waggery and entrenched interests to loss of tactial agility. Decentralize!

     11 October 2007, 5:41 am

121. Linda c:

     Thanks! Really great stuff the last two days.

     11 October 2007, 8:28 am

122. Charles:

     1929 Redux: Heading for a Crash?
     By Robert Kuttner, AlterNet
     Posted on October 8, 2007, Printed on October 11, 2007

     The following is Robert Kuttner’s testimony before the House Financial
     Services Committee on October 2.

     full: http://www.alternet.org/story/64684/

     11 October 2007, 11:19 am

123. Charles:

     DeAnander:
     I personally have learnt a lot more from Vandana Shiva than from Lenin…

     ^^^^^
     CB: What did you learn from Vandana Shiva ? And where in the world has her theory and action plan been tried and proved itself to be true ?

     11 October 2007, 11:25 am

124. Charles:

     the “predicted path” was not utterly departed from.

     Woody Allen once did a parody of Nostradamus: “Two great nations will go to war, but only one of them will win.” What a visionary!
     ^^^^^^^^
     CB: Ha, ha, ha.

     There will be revolutions led by the working class against capitalism.

     This would be falsified if there never were any revolutions by the working class against capitalism.

     There were working class revolutions against capitalism. Thus, Marx’s theory is not falsified.

     ^^^^^^^

     A historical model that can be confirmed by the whole history of the Soviet Union (including its unforeseen collapse), by China during the Great Leap Forward as well as China today (both under the continuous leadership of the Communist Party), and that can also be “back-corrected” by citing “zigzags” and “contradictions,” is too vague to be falsified.

     ^^^^
     CB: Marx predicts there will be socialist revolutions. He doesn’t say there won’t be counter-revolutions.

     Zig-zags is not back correcting. It was always there as part of the theory in that the theory explicitly claims to be dialectical.

     ^^^^^

     (I don’t understand how
     the falsification test was passed with the Russian Revolution. What did that falsify?)

     ^^^^^
     CB: See above. The Russian Revolution did not falsify the theory. It confirmed it. It passed the falsifying test for Marxism. The Popper issue is that a theory must be able to state something that will falsify the theory for the theory to be scientific. Marxism passes this test by stating a condition that would falsify the theory. That condition is “there never occur any socialist revolutions.”

     ^^^^^^^

     ^^^^^

     Marx, and others self-identified as Marxists, had many keen insights, but the claim that “Marxism” (which Marxists themselves can’t agree on a definition of) is itself a science, just doesn’t hold up.

     ^^^^^
     CB: I disagree. Marxism is very good social science. Social science is different than natural science in some ways because it deals with human beings who are conscious, have aims and purposes ,etc., unlike inert matter. Social science , historical science is more like biology than physics.

     11 October 2007, 11:57 am

125. Charles:

     Carole Pateman (The Sexual Contract), also taking on the labor-theory-of-value — from a different angle — showed how the social relation that is capital is in fact a form of “civil slavery” (as opposed to political slavery), enforced by contract.

     ^^^^^^^
     CB: Marxism terms the wage-labor/capital relation ”
     wage slavery”. Marxism specifies that the wage labor/capital relation takes the form of a contract, enforced by the state. How is this different from what Pateman showed ?

     11 October 2007, 12:01 pm

126. Charles:

     Brewer observes that Marx viewed capitalism as a system that can exist by itself, without necessarily having to expand geographically.

     ^^^^^
     CB: In the Communist Manifesto, Marx clearly describes capitalism as a world system, necessarily expanding geographically.

     “Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railways extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the Middle Ages…

     It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation…

     The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere….

     The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image. “

     11 October 2007, 12:13 pm

127. DeAnander:

     Blue-skying: there’s a big difference between control and transformation. “Main blow” theory is battle theory, assuming a hierarchical (chess game with kings, court pieces and pawns) opposition: if you take out the King, you win (i.e. if you strike a decisive “main blow” at the opponent’s centre or command or strength, you win because they are disabled and “disorganised”).

     If you are trying to make cheese out of 4 gallons of raw milk, there is nowhere to aim a “main blow” that will cause the milk to surrender, wave a white flag and instantly turn into cheese in obedience to your superior force. To make cheese, you introduce a culture (bacteria and/or fungi) — a small amount relative to the mass of the milk — and you stir thoroughly to distribute the active culture throughout the milk. Then each active bacillus or fungal spore does its thing wherever it finds itself, and you let it self-organise into (you hope) cheese.

     I think there are good reasons why culture has two ambiguous but related meanings. Human culture is very much like a transformative ferment of human nature, and cultural change is very like fermentation (whether that be leavening in bread, yeasts in wine, bacteria in cheese and sauerkraut, or whatever): it has to be distributed and it has to work locally with whatever nutrients it finds to hand.

     The analogy probably breaks down at some point, but where it holds up (imho) is that no one has yet made cheese or wine by industrial, forced-tempo, standardised, command/control processes that matches the quality of artisanal, slow-process, local cheese and wine.

     “Main blow” thinking is imho male mammal thinking — maybe even reptile thinking — modelling social change as the sparring of adult males over mating “rights” in season, a struggle of macro organisms; it models humanity and society as a small herd of one species rather than a (vastly more complex) whole ecosystem or medium. The “main blow” is the clever trick or shift that forces the other stag to his knees in defeat, or the decisive grip on the other dawg’s throat that makes him roll over and whimper. And as such it is valid: in fencing, wrestling, and other formal arts of war, success and failure hinge on decisive single moments of balance and applied force.

     But all that the capture of a king in a hierarchical war can achieve is to set up a new king — maybe a better one by some marginal degree, but still, just another king. To transform the culture away from domination and centralised authority, or away from obsessive consumerism towards sustainability, requires a process far more subtle and more diffuse. More like cheesemaking. More like gardening than carpentry, as the saying goes. And more like either one than like a fist fight or singlestick match.

     11 October 2007, 3:17 pm

128. Charles:

     What Hornborg as well as this site are criticizing is not “the machine metaphor.” We are saying that the machine itself is a “dissipative structure” that cannot escape its essential nature as exploitative.

     ^^^^^^^
     CB: You keep referring to a “machine fetish”. You claim that society is organized like a machine. The latter is a metaphor since society is not actually a machine. A “meme” is a metaphor. This is a different meaning for “exploitative”.

     ^^^^The reason “dissipative structure” is not part of the Marxian lexicon, or part of the general lexicon, is that people don’t know what it means. No big deal. There are a lot of things we don’t know. But once a concept is introduced and substantiated (which Prigogine did); and once it is recognized as a real thing, it is irresponsible to ignore those phenomena that have wide-ranging implications.

     ^^^^^
     CB: I’m not ignoring it. I’m not obligated that you’ve proven it either, that we “know” it. It’s a hypothesis. Does Prigogine, a Marxist, claim that the concept of “dissipative structures” makes Marx’s concept of LTV obsolete or that it shows LTV or “Man-Nature” conquest meme (metaphor) are fatally flawed ? Despite many your many repetitions of the claim, I think you are mistaken in attributing to Marx the basic, Western, “Man-Nature” conquest meme. Marx’s ( and Engels’)concept of the relationship between human society and nature is ecological/symbiotic. ( See Lou Proyect’s many discussions of this; See _Marx’s Ecology_ by John Bellamy Foster http://www.monthlyreview.org/marxecol.htm ). Struggle for existence is not the same thing as “conquest”.

     11 October 2007, 3:42 pm

129. Charles:

     This is the basis of how the Machine — regardless of the “relations of production” — acts as a dissipative structure that enlarges at the core and accelerates the extraction and disorder in the periphery.

     ^^^^^
     CB: As Lenin noted in _Imperialism_ and you say he did above, in the imperialist phase, the “core”, the metropoles, the imperialist centers, begin to export capitalist relations of production to the colonies (the “periphery”). This was a reversal , a change of the old export of commodities to the colonies ( note: Lenin analyzes a change from Marx’s day; typical Marxism). With that many machines went and are going. This process has been going on since the early 1900′s. Now the machines , the industrial points of production, are scattered all over the globe – socalled deindustrialization, which is really scattering of industry. Thus, we have maquilladores, auto plants in Brazil, Korea, Japan, South Africa; Much manufacturing in China,and many other scatterings of industrial manufacture. So, now many machines are in the periphery. The above “core-periphery” model is old dogma. Religious thinking. It fails to take account of how things have changed.

     11 October 2007, 4:20 pm

130. Required:

     It’s interesting, an increasing amount of the discussion on FS/AI is sounding quite similar to the kind of things I’ve heard coming from Anarchists for a while. The advocation of decentalised activity and community building projects. I remember seeing somewhere on either FS or AI the statement to the effect that their will be no revolution this time round and what we are preparing for is more of a collapse, again very similar to Derrick Jensen anarcho-primivist positions.

     I tend to agree, but years of activity inside a vanguard grouplet has instilled in me the notion that to believe that the working class won’t stage a revolution is to have become “demoralized.” I can see that it is essentially the same as branding all critiques as “insane” or part of a “anti-revolutionary syndrome,” (have others encountered this?) but part of me is still unsure about all this assessment.

     Do people see the decentralized strategies as anarchist? If not what differentiates them. If so, how significant is this? I’m assuming the adoption of decentralized tactics is being advanced on the basis that it is the most effective for right now, largely because it prevents a “loss of tactial agility.” When is this not the case? When would a hierarchical structure be preferential?

     11 October 2007, 7:01 pm

131. Stan:

     Vandana Shiva is alive, right now in 2007. She writes volumes which are all quite worthy of reading. She is very active in political struggles in India, the second most populous nation on earth.

     Lenin has been dead since 1924. My mother was born in 1925, and she is 82. I am a fan of Lenin, though not a worshipper; but he didn’t know fuck-all about what 2007 would look like any more than we can know what 2090 will look like.

     Marxism-Leninism was a term he never heard. Stalin made it up as part of turning ML into the state religion for a majority-peasant society that was barely literate. Marxist-Leninist was part of an effort to posit a completely unscientific continuity thesis in history that drew a straight line of inevitability from Marx (who would have held this whole idea in the utmost contempt) to Lenin, and by extension, to Stalin.

     Marx was not a Marxist-Leninist.

     Peasants. The Bolshevik Revolution was not a workers revolution. The mass of people who gave it its greatest force were soldiers born of the peasantry. That’s why a sickle went on the flag. The Chinese Revolution was in a peasant society. Both were overthrowing feudalism, just like the American and French Revolutions. These were not proletarianized societies. There has never been a capitalist system overthrown by the proletariat in a proletarianized society; and in my considered opinion, there never will be. Proletarians exist within capitalism; and they are dependent on that system. They will not bite the hand that feeds them, even though it’s the master’s hand.

     You claim that society is organized like a machine.

     Show me where I said that. I explicitly said — and you quoted me — the problem is the machine itself.

     The manufactories of China are also dissipative structures; look at China buying everything it can get its hands on from the rest of the world: oil, steel, et al, $564 billion-worth in 2004 alone. That is the basis of the developing clash between the US and China.

     But the question is not merely of machines that are sued to make commodities (for export in many places), but the agglomeration of technomass in the form of computers, washing machines, cars, dishwashers… all the shit that we now require to simply live in a concentrated technomass society.

     Here is a Marxian concept: the cost of social reproduction.

     What is the minimum $$$ necessary to survive in the USA, for the vast majority of us?

     Now, what is the minimum required to survive for a Haitian?

     The difference is that in the latter, the average person has NO machines.

     Here is an account of how things are changing:

     Per capita world oil production, 1950: 7/10 liter per day
     Per capita world oil production, 1960: 1 1/10 liter per day
     Per capita world oil production, 1970: 2 1/2 liters per day
     Per capita world oil production, 1980: 2 1/3 liters per day
     Per capita world oil production, 1990: 1 2/3 liter per day
     Per capita world oil production, 2000: 1 4/10 liter per day

     Per capita US consumption today: More than 4 liters a day

     Imported oil as percent of total US consumption, 1972: 28%
     Imported oil as percent of total US consumption, today: 60%

     Top net oil exporting nation, 2007: Russia
     Second largest net oil exporting nation, 2007: Saudi Arabia
     Largest net oil importing nation: United States
     Second largest net oil importing nation: China

     Machines are not merely points of production. They are the structured environment of our daily lives.

     And when Marxist environmentalists start to talk seriously about the gendered character of modern applied science and how it relates to ecocide, I’ll take them seriously. I have read Lou’s stuff on Marx and Leibig, and corresponded with JBF. This is all good; but there are other, equally valuable, and sometimes deeper, analyses of the issue that are outside the Marxist canon.

     As to the LTV, please read what Hornborg says in the pdf De attached, and address the critique directly.

     11 October 2007, 7:26 pm

132. skol:

     Quick digression, if none of you mind: First, I found a sample of The Power of the Machine on Google books. Here is the link for those interested. It contains the first few pages of all chapters. Second, this unequal exchange thing… Is this something that’s easily understood in the head? I.E., is it something I oughta be able to get with a basic understanding of CAFTA/NAFTA, etc? If China is exporting a good worth $3 to America, and I buy it for $10, and the employee who made the product is paid .01$ on average per good, then that’s an example, right?

     12 October 2007, 12:16 am

133. YK:

     This article claims that the global oil supply is larger than commonly supposed:

     http://www.engdahl.oilgeopolitics.net/Geopolitics___Eurasia/Peak_Oil___Russia/peak_oil___russia.html

     Perhaps there is a combination of “biotic” and “abiotic” sources of oil. In any case, I’m somewhat skeptical because the official Russian and US theories both appear to have an underlying notion of practically unlimited supply… US: “If we dig in enough places” vs. Russia: “If we dig deep enough”. There is also little sense of the environmental damage of oil use. Any other responses to this piece?

     12 October 2007, 3:40 am

134. Lisa:

     New two-part article by Henry Liu at his site:

     http://henryckliu.com/index.html

     Super Capitalsism, Super Imperialism and Monetary Imperialism
     Part I: A Structural Link
     Part II: Deregulation: Global War on Labor

     12 October 2007, 1:05 pm

135. Charles:

     ^^^^^
     CB:

     Vandana Shiva, may have some good ideas. I just asked which of them DeAnander learned from. I prefer to hear from DeAnander than just read Shiva, because DeAnander is right “here” and I can talk to her. I prefer to think about the combination DeAnander/ Shiva ideas, because DeAnander is really alive relative to me, in that I can converse with her directly, with all due respect to Vandana Shiva.

     A person can be dead and their ideas still pertinent after they are dead. Charles Darwin has been dead for longer than Lenin. Yet, his ideas are still fundamental in the biology of 2007. He “knew” something about 2007′s animals and plants. The person who invented the concept of ecology has been dead probably as long as Lenin. Yet, you don’t think he knew nothing about 2007. Pigigrone or however you spell his name is dead. Yet, you use his ideas. The person who discovered penicillan is dead, but penicillan still works. Probably most of the ideas we used today were discovered by people who are dead. That’s a main way that human society is unique from other species. The ideas of dead generations are used and part of living generations.

     ^^^^^
     Stan: Marxism-Leninism was a term he never heard. Stalin made it up as part of turning ML into the state religion for a majority-peasant society that was barely literate. Marxist-Leninist was part of an effort to posit a completely unscientific continuity thesis in history that drew a straight line of inevitability from Marx (who would have held this whole idea in the utmost contempt) to Lenin, and by extension, to Stalin.

     Marx was not a Marxist-Leninist.

     ^^^^^^^
     CB: I don’t use the term “Marxist-Leninist”.
     I agree with what you say to some extent, and Lord knows Stalin was problematic, but I don’t quite think he was utterly non-Marxist, nor am I sure that Marx wouldn’t have agreed with him some. Afterall, Stalin was being non-dogmatic in substance in that, as you say, he was deviating from Marx , (even as he formulated things as a dogma). There were things about 1930 Russia that Marx couldn’t have anticipated. To stick strictly to the book of Marx would have been, as you point out often, unMarxist. Stalin’s pragmatics and not going by the book strictly, but the immediate situation, was Marxist. Yea, he got involved in mass murder. OK I denounce him. But the SU fought off the biggest invasion in the history of the world. That was Marxism. I think the cult of the personality stuff ( a critique made by comrade Khrushev in an example of criticism-self-criticism one never sees from the bourgeoisie) was of course “incorrect” but it was part of the whole desparate program that Stalin and the other Soviet leaders put together to try to stave off the inevitable invasion from imperialism. It’s goal was the unity needed for military struggle. For all they knew inthe early 30′s, it could have been a united group of imperialists, Germany, France, England and the U.S. who would invade Of course, I “denounce” Stalin and Stalinism, but I also see that the whole vulgar Marxism of it was due to the extremely desparate and vulnerable circumstance they found themselves in. I don’t know what I would have done. I’m not sure that an intellectually correct, scientifically correct, sticking to the book of Marx approach would have survived the onslaught. Marjority peasant population was the hand they were dealt. Forced industrialization was incredibly vicious ( besides indulging the machine fetish), but the German’s would have conquered them if it hadn’t been done. Outlawing abortion was arch-sexist. But practically they needed to grow the population to build steel etc. to have soldiers. Crushing intellectual freedom was undemocratic and unscientific. But, in preparing for gigantic war, dumb ideological unity must be favored over diverse brilliance in the short run.

     In the end, Stalinism suffocated Soviet socialism. I agree. But Stalinism was forced on the SU by the circumstances of imperialist military onslaught, economic blockade etc.

     So, I agree with your analysis of the degenerate nature of Stalinism compared to “real” Marxism, but it is a complex tragedy that made it so.

     ^^^^^^^
     Stan: Peasants. The Bolshevik Revolution was not a workers revolution. The mass of people who gave it its greatest force were soldiers born of the peasantry. That’s why a sickle went on the flag. The Chinese Revolution was in a peasant society. Both were overthrowing feudalism, just like the American and French Revolutions. These were not proletarianized societies. There has never been a capitalist system overthrown by the proletariat in a proletarianized society; and in my considered opinion, there never will be. Proletarians exist within capitalism; and they are dependent on that system. They will not bite the hand that feeds them, even though it’s the master’s hand.

     ^^^^
     CB: I agree with especially the historical claims you make here. Of course, there were a lot of industrial workers in the SU with forced industrialization, but they were not “born” in capitalist enterprises. On the other hand, they were paid “to each according to work ” still. They were wage-LIKE-laborers, paid with money. But I agree substantially with what you say.

     I would not say proletarians will never overthrow a capitalist society in the future. In places like Venezuela, there are so many poor, that it may happen. I.E. there are masses of proletarians who are sufficiently alienated from the system to bite the hand of the master. Also, consider that the peasant revolutionary masses in Russia and China were dependent upon the system they overthrew.

     Also, China is “growing” a proletarian population and a capitalism. The Communist Party is doing this, in my opinion, exactly, because they found out there is no road to socialism bypassing capitalism. Exactly how, they will oversee the proletariat there overthrowing the capitalism the CP itself is allowing to grow is more than a notion. But the CP’s claim that they are still aiming for socialism implies that they intend to try something like that.

     ^^^^^^^
     You claim that society is organized like a machine.

     Show me where I said that. I explicitly said — and you quoted me — the problem is the machine itself.

     ^^^^^^^
     CB: Ok you didn’t say or and don’t think society is organized like a machine. Somebody said something about Leninists talking about society organized like a big machine, but that’s not your point.

     What do you mean by a machine ? Not trying to be dogmatic or anything , but I usually use Marx’s description/definition from Capital Vol. I.

     Do you think that tools are a problem too ? I try to read the thermodynamic and dissipative structures stuff, but I really can’t see how the existence of machines can just take over control of human society. With respect, that is fetishizing the machine in Marx’s commodity fetish sense. Commodity fetish is in brief people thinking that the commodities are alive and the people who exchange them are not. A relationshoop between people is understood as a relationship between things. Though a machine moves it is not alive. It is a thing. What ever the energy input into the machines they can’t run without humans. There are no perpetual motion machines. We can just turn them off.

     Just a thought. This machine fetish idea sounds like Heidegger or the Frankfurt school, with their anti-technology.

     I’ll continue to study dissipative structures, but I cannot see how the problem and ultimate solution is in changing human ideas, social relations. Machines and tools will do what we make them do.

     ^^^^^^^

     Stan: But the question is not merely of machines that are sued to make commodities (for export in many places), but the agglomeration of technomass in the form of computers, washing machines, cars, dishwashers… all the shit that we now require to simply live in a concentrated technomass society.

     ^^^^
     CB: Would the purely technomass aspect be a problem if we didn’t have global warming and fossil fuel eventual depletion ( and maybe water depletion) ?

     ^^^
     Machines are not merely points of production. They are the structured environment of our daily lives.

     ^^^^^^^^
     CB: I can see this as a problem because the machines are so totally dependent upon fossil fuels, for energy and material in plastics , etc. So, we when we have to stop using this petroleum based technological regime, we will crash.

     I can’t quite see how the structure of the machine in the abstract ( if some different basis than fossil fuels were found) controls our lives and makes us act in the wrong way, if that’s what you are saying.

     Let me see if I can open the Hornberg PDF.

     12 October 2007, 4:59 pm

136. Charles:

     I’ll continue to study dissipative structures, but I cannot see how the problem and ultimate solution is NOT in changing human ideas, social relations. Machines and tools will do what we make them do.

     12 October 2007, 5:05 pm

137. Charles:

     I can’t find that Hornberg PDF. Will look again.

     On machines, do you have a problem with windmills ? I think if you showed how windmills create the same problems as cars or steel mills, we’d get to the crux.

     12 October 2007, 5:14 pm

138. Charles:

     And when Marxist environmentalists start to talk seriously about the gendered character of modern applied science and how it relates to ecocide, I’ll take them seriously. I have read Lou’s stuff on Marx and Leibig, and corresponded with JBF. This is all good; but there are other, equally valuable, and sometimes deeper, analyses of the issue that are outside the Marxist canon.

     ^^^^^
     CB: On the gendered character of modern applied science and ecocide, I take it you mean that European science has some deep structural mental motive by which its main goal or method is to conquer nature and “kill” ( “cide” is a Latin root for “kill”) nature. As much as I loathe the conquering ethos of Western Civilization and its science as its servant, Nature is so enormous, I really can’t see how even the white boys could think they could conquer all of it. I can see a goal of total control of the relevant parts of their earthly environment and near outer space. But even they can see the basic predator-prey principle we discussed here once. If a predator kills off its prey species completely , the predator too will die out. Surely , even George Bush can see that if we destroy the resources we are dependent upon, we will soon whither away.

     I am sure that most of the best ecological analyses are by non-Marxists. The issue raised here was whether Marx subscribed to a conquest of nature notiion. The problem with the non-Marxist ecological analyses is that we have to solve our social problems simultaneously and in an integrated manner with solving our ecological problems. I know this is a point of disagreement, but I don’t believe we can solve our social problems without at the very least the fundamentals of Marxism (appropriately updated of course, but to me appropriately updating to every current circumstance _is_ a fundamental of Marxism).

     I understand you are saying that women are “naturalized” in this thinking and so the conquering woman/nature thought gets turned into the conquering nature thought. Ok. Are you saying that by saying that and getting everybody to see it will stop them from trying to conquer nature, stop the scientists from discovering things with the goal of conquering nature ? How exactly does acknowledgement of the gendered character of modern applied science stop modern science from conquering nature ,killing our ecological system ?

     I found Hornberg PDF. Will read.

     12 October 2007, 5:58 pm

139. Stan:

     Not much time, because my 1 yo grandson is coming.

     Machine fetishism is a way to understand that technology is never abstract, not an juridical or moral indictment of machines, any more that Marx’s explanation of commodity fetishism was ain indictment of the things being sold themselves.

     On page 91 of TPOTM (Hornborg), in a discussion of semiotics (which is important, but again not familiar within the Marxist canon), he notes:

     Industrial technology is treated as given; only its use is symbolically constituted.

     But the technomass of the industrial metropoles — our built environment — was never abstracted from the social relations that built it. That built environment is not static, and it has an industrial as well as capitalist character.

     One reason the USSR could not hope to compete using the industrial model is its relative lack of an exploitable periphery. Lenin, not Stalin, advocated for Taylorism, perhaps the most dehumanizing and alienating aspect of mass production.

     As for fossil fuels, one cannot theorize outside their discovery, use, existence, and depletion. They were and are the only possible energy source sufficient for the industrial-technological take-off of the capitalist world system we now have (and for socialist states who attempted to compete inside that system). There are no replacements, joule for joule, nor in terms of energy density and portability. None.

     Energy is a phenomenon that is bounded within material reality and which operates according to a pretty intransigent tendency, ie, entropy.

     When you look at a place like New York City or even Raleigh, the materials that constitute our built environment and the economic flows that sustain us, it’s fairly easy to see that the input requirements for daily operation and for maintenance alone, not even counting the “growth” imperative in a capitalist economy, are enormous. Yet you do not see NYC or Raleigh producing its own food, much less its own locally sourced energy, its own bricks and mortar, its own silicon or platinum or steel or timber or gasoline or bauxite or petroleum byproduct or cloth or clay or silver or tin or even soap.

     Everywhere these things are “produced” (in economic terms), something is extracted (in ecologic terms). Every process of production not only dissipates the self-organized biospheric order at the point of extraction, and at the multiple points of extraction to get the other materials for “production,” but from an energetic standpoint, this is an acceleration of entropy.

     When you map these flows, the “goodies” flow toward the cores, and the shit flows back (with an attendant social disorder) to the peripheries. At IA, I did a pdf a long time ago on spatial patterns of capital, with maps.

     Nature self-organizes, as does the biosphere, but it does so at a certain set of tempos. Arguably, the most fundamental counter-entropic process in the biosphere is photosynthesis.

     The exponential expansion of entropic processes inhering in industrialism, and accelerated as well as politically consolidated by capital accumulation, has outstripped the capacity of the biosphere as a whole to recover self-organization from our own entropic existence. Humans, and all animals, are entropic phenomena. So being what we are is not some moral indictment.

     Understanding it gives us the responsiblity to ensure that we struggle to ensure the general integrity of the biosphere — exercise the precautionary principle about things we don’t yet understand — and learn to conform our activities to nature instead of conquer it (an impossibility unless we are bent on species suicide).

     Hornborg is challenging an epistemological assumption that emerges frmo modernist objectivism; that one can separate the structure from the use.

     12 October 2007, 6:48 pm

140. YK:

     I’m also excited about those new Liu articles. Hudson’s website has been down but he changed the address to the following: http://www.michael-hudson.net/. Links will probably have to be changed accordingly.

     It’s tough to argue against Lenin insofar as he was instrumental in taking the state. In the context of this discussion, it does seem strange that Lenin theorized the subordination of the state while his practice concentrated on seizing it.

     Perhaps I’m wrong, but I don’t see IA as anarchist. If it is, it is the socialist-anarchist kind. Rather, IA writers seem to recognize that the state is quite powerful, that civil society is too weak against it, so different strategies must be adopted to develop autonomy in contemporary US conditions, as part of changing the general political culture. The interesting metaphor about fermentation, transformation, and cultural change gives insight into this perspective.

     Given the importance of the state to finance in particular, especially in light of the non-economic, blatantly political character of debt, I’d be interested in a more extended discussion of the state, if it is opportune for the IA collective. Debt and fiat currencies are legal relationships. If the US state isn’t really involved in organizing production except in the military sector, does the role of the state mostly lie in the enforcement of international and domestic rent relations, rent here meaning control of money?

     Or in other terms, what IS the economic dimension of the state rather than how is the state USED? How does a finance perspective alter or augment the notion of the state, in relation to liberal and radical conceptions?

     Much love to Vandana Shiva, from whom I’ve learned a lot about the political economy of water. I especially like her peasant focus and profound dislike for the “white man”.

     STAN: De is out for a few days, so I’ll let her answer for herself. As for me, I am on sabbatical from calling myself a ***ist of any kind for a while. I’m finding from hard experience that ***ist is a fence, that keeps one in as well as others out. I have actually heard members of some groups ask other more “senior” members, What do we think about this issue? I like Chomsky’s remark about those who propose hierarchies bear the burden of proof. That seems pretty realistic to me, and a good ethical standard. I also like the ethical standards of permaculture. Intellectually, I hope we can all be omnivores. The main thing that has confronted my ***isms (besides gender) has been a growing appreciation of the impications of complexity theory… in particular the business about unpredictability being part of all complex systems. Shiva has been a point of attachment for De and me (the moderators, co-owners) because we have make an intentional decision to center the biological human body in our ruminations on society, and to use food as a constant point of reference, like magnetic north on a compass. Turns out to be a good one.

     12 October 2007, 7:33 pm

141. Charles:

     PEN-L has a thread on the current banking crisis.

     CB

     http://archives.econ.utah.edu/archives/pen-l/2007w42/msg00003.htm

     http://archives.econ.utah.edu/archives/pen-l/2007w42/date.htm

     Banking on a bailout

     ——————————————————————————–

     To: PEN-L@xxxxxxxxxxxxxxxx
     Subject: Banking on a bailout
     From: Marvin Gandall
     Date: Mon, 15 Oct 2007 12:40:45 -0400

     ——————————————————————————–

     Three leading Wall Street banks are pooling their resources to create a $100
     billion fund which will buy distressed short term asset-back paper from
     bank-sponsored entities called “special investment vehicles” (SIV’s) at a
     higher price than the banks would get in the market. It mainly appears to be
     a bailout of Citigroup, which is the most exposed to loss. A large amount of
     commercial paper comes due next month, and investors have been skittish
     about rolling it over, prompting fears that the SIV’s – Citigroup backs four
     of the ten largest -will have to dump securities to meet claims on their
     maturing debt.

     The hope is that the new super-fund will be able to regain investor
     confidence and market all but te most dodgy paper in a way the SIVs no
     longer can. Treasury secretary Hank Paulson is closely connected to Wall
     Street, and stands to take the heat for orchestrating the bailout -
     particularly from vulture funds poised to scoop up the debt at bargain
     basement prices. The arrangement is being defended, as the LTCM bailout was
     a decade ago, on grounds that plummeting prices and rising yields in this
     part of the short-term credit market would have much wider systemic
     consequences. Confidence in the stability of the financial system is still
     shaken by August’s turmoil, but it’s still not certain that other banks,
     themselves holding lots of junk, will participate or leave Citigroup
     twisting in the wind.

     Rescue Readied
     By Banks Is Bet
     To Spur Market
     By CARRICK MOLLENKAMP, DEBORAH SOLOMON and ROBIN SIDEL
     Wall Street Journal
     October 15, 2007; Page A1

     16 October 2007, 8:27 am

142. YK:

     I generally support a sabbatical on becoming an ***ist, as a means to develop new theory and practice, though I’m reluctant to characterize IA as capitalist, I must say.

     A interesting recent essay that touches on many of the themes covered in this thread:

     “The magic of debt, or Amortize this!”:

     http://www.eurozine.com/articles/2007-09-20-neilson-en.html

     STAN: Of all the ***ists, among those I am least likely to ever be is a capital***ist. (:

     16 October 2007, 6:36 pm

143. Charles:

     Stan, surely you are a feminIST (smile); environmentalist.

     17 October 2007, 10:26 am

144. Charles:

     As for fossil fuels, one cannot theorize outside their discovery, use, existence, and depletion. They were and are the only possible energy source sufficient for the industrial-technological take-off of the capitalist world system we now have (and for socialist states who attempted to compete inside that system). There are no replacements, joule for joule, nor in terms of energy density and portability. None.

     ^^^^^^^^
     CB: I agree with this. It would be stupid to disagree with it. However, fossil fuels are not the only basis of _machines_. Windmills are machines. The first machines of the industrial revolution were fueled by steam engines, not gasoline engines. The takeoff of capitalism to its current scale was based on fossil fuels, yes. But there was machine production before fossil fuel based machines.

     There is no way production could be anywhere near on the same scale as that of the fossil fuel based technological regime with the fuels we currently have , except maybe nukes. We will have to drastically ( and that’s an understatement) reduce machine production. But I’m not sure we won’t want to still have some machines ;much , much, much fewer machines, but not no machines. But may be that’s not what you are saying. Maybe you mean “fossil fuel machine fetish.”

     17 October 2007, 10:49 am

145. Charles:

     You mentioned the Hornberg PDF in terms of the labor theory of value. I want to do an organized discussion, but the crux comment is Marx discussed value in terms of use-value and exchange-value. Hornberg doesn’t refer to this. I agree with Hornberg ( citing Sahlins) that there is a subjective basis for valuing many commodities as useful. But Marx says the same on page one of Capital: use-value can derive from the “stomach or fancy.” Fancy is clearly a subjective basis. It is _exchange-value_ that Marx claims has an objective basis in the labor time to make a commodity. Human labor is the only source of __exchange-value_, not use-value. Marx specifically says that labor and Nature are the sources of use-value. This seems to be in consonance with Hornberg’s discussion of energy and resources coming from the earth.

     This comment is not focussed and “rigorous” , as I planned to try to do. I will try to make a more focussed comment with quotes from the article later. I couldn’t wait. Sorry. I’m a bit lazy today.

     In reading the Hornberg PDF, I notice that he cites anthropologists Leslie White and Marshall Sahlins. You may recall that I mentioned White and Sahlins a while ago here. White discussed the development of human society in terms of the 2nd Law of thermodynamics, energy capture and entropy in the 1940′s or before. Sahlins was his student. I was Sahlins’ student ( University of Michigan). Sahlins became a Levi-Straussian structuralist ( semiotician) about the same time I was his student. I was basically spoon fed Sahlins’ _Culture and Practical Reason_, cited by Hornberg in his article. I just mention that again to let you know I have unusual familiarity with both energy and culture, and semiotics. I kind of know what you are talking about when you discuss those subjects.

     17 October 2007, 11:49 am

146. Stan:

     When you read the Hornborg essay over, you’ll see that semiotics provides a kind of Rosetta Stone to resolve the contradictions between what Horborg calls objectivists and constructionists.

     He does not dispute Marx on fetishism at all. He says this insight — which Marx applied to peer into the commodity — is applicable to technology. That it cannot be treated as if it simply exists independent of social relations.

     The labor theory of value was adequate to show the relaitonship between a factory owner and a factory worker; but it proved inadequate to explain why a factory worker in Honduras making exactly the same commodities as a factory worker in France takes home only a fraction of the money of the French worker.

     In order to get to a non-normative theory of value, then, he needed to find some quantifiable criterion that explains and predicts unequal exchange. “Abstract socially necessary labor time” was not up to that demand.

     The additional challenge Hornborg confronts in The Power of the Machine is the fact that value is expressed in the money form… yet his experience as an anthropologist alerted him that money is as powerful as it is inexplicable.

     This is where semiotics comes in; and Hornborg wanted to address the question of money, technology, unequal exchange, and the environment (where he was convinced he could find his non-normative theory of value). A dollar bill would be fairly useless if it weren’t bursting at the seams with cultural and political meaning.

     He said money is an eco-semiotic phenomenon.

     Once we provisionally accept this, then there has to be some way to differentiate the various money-forms. For this, he turns to Polanyi and Polanyi’s theses on “embeddedness.”

     The link between literal mobility (the ability to appropriate time), property (the ablity to appropriate space), general-purpose money, and the way technology facilitates the “appropriation of time and space” (these are environmental, as in aspects of the physical environment).

     If you make a windmill in Michigan, it is not a “bad” thing; but it is inescapably a process that happens in a generally-technologized milieu, a built environment of high-entropy technomass. That technomass itself is inherently exploitative, even as that exploitation is imbricated with, but separately identifiable from, the extraction of surplus value.

     Hornborg recognizes that the exploitation of surplus value is incomprehensible without the interpretive framework of commodity fetishism. But in using this notion of objectivist mystification, applied by Marx to commodities, to unmask the constant regermination of unequal exchange, he is testing the thermodynamic (environmental) criterion of negentropy as a non-normative measure; and what he finds is that the highly-technological built environments of the metropoles are filled with these dissipative structures… machines… and more, that “value” can be found in most cases to be inversely proportional to negentropy.

     Fossil fuels actually created the malthusian breakout of the 19-20 C; but industrial machinery only turned to fossil energy out of iatrogenic necessity… because they had burned up most of their trees.

     Enter Luxemburg…

     17 October 2007, 6:25 pm

147. Charles:

     Yea, I started to read Hornborg over. I would like to see him discuss Marx’s distinction between use-value and exchange-value. I’m not sure we can say that Marx doesn’t understand the connection between the social relations and the technology he discusses. Marx does discuss machine technology at length. If we continue this, I’ll take a look at Marx’s discussions of that. I’m not bringing up from my memory discussions on point. Actually, now that I think of it, the contradiction between the private nature of expropriation and the social nature of production, may be where to get at this issue in Marx. Machinesw and factories cause a leap in the socialization of production. I’ll think about it. nIt’s hard see how Marx would not see the application of the fetish concept to technology, but…

     Horborg’s article is on unequal exchange, and as an anthropologist he’s focussed on the unequal exchange between imperialist nations and their colonies. I don’t think it can be said that Marxists don’t have a very developed theory of the unequal exchange between the imperialist nations and their colonies. Marx seems to notice that it is not based on wage-labor relations, i.e. it is not based on “the labor theory of value”. Marx does not apply the labor theory of value in his explanation of the colonial system. Marx discusses unequal “exchange” that is not wage-labor based in the sections on primitive accumulation:

     “The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England’s Anti-Jacobin War, and is still going on in the opium wars against China, &c.

     The different momenta of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive at a systematical combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But, they all employ the power of the State, the concentrated and organised force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with a new one. It is itself an economic power. (end quote)

     http://www.marxists.org/archive/marx/works/1867-c1/ch31.htm

     Slavery and colonialism were not relations in which the “labor theory of value” would apply. Marx doesn’t employ the labor theory of value in analyzing the colonial system. Marx’s reference to brute force is to be contrasted with the “civility” of the contract form in wage-labor relations. The brute force is the basis for “unequal exchange” beyond what would occur in the “labor theory of value” context.

     Then in the twentieth century, Lenin described the super-exploitation of the colonies by the imperialist powers. “Super-exploitation” means the “labor theory of value” formulas don’t apply. The “labor theory of value” yields “normal” exploitation, not super-exploitation. In other words, Lenin doesn’t employ the labor theory of value in analyzing the new colonial system of the early twentieth century, although he notes that the imperialist powers are starting to “export capital” instead of goods, to the colonies, which in the long run has meant that there are wage-labor/capital relations in the colonies and neo-colonies , the socalled periphery. So, for example we have today maquiladores plants in Mexico, plants in Brazil, Korea, South Africa, China, India, etc. (For purposes of your analysis , what of the scattering of points of production to the “periphery” ? That means there are lots of machines in the periphery now. There are fewer plants in Detroit, part of the imperial center)

     So, my general thought is that Marxists already agree with Hornborg that the “labor theory of value” doesn’t apply to the “unequal exchange” between the imperialist nations and their colonies. I can explain this in more detail, more detail of how “the labor theory of value” results in “normal exploitation”, and why references to “super-exploitation” therefore means that the labor theory of value is not being used in Marxist analysis of imperialist nation/colonial relations of unequal exchange.

     18 October 2007, 4:44 pm

148. Stan:

     There are not lots of machines in the periphery, even though there are many manufactories in the semi-periphery.

     Hornborg is not simply looking at factories.

     He is looking at the entire built environment. How many machines are in the average American house, compared to the average Honduran one? How much technomass constitutes the basic social infrastructure in the US, compared to Honduras.

     If you look at per capita energy consumption figures, this is amazingly clear.

     And how many of the manufactory machines in the periphery/s-p are simply transit points for the technomass they make, en route to the overdeveloped metropoles?

     19 October 2007, 6:18 am

149. Charles:

     There are not lots of machines in the periphery, even though there are many manufactories in the semi-periphery.

     ^^^^^^^
     CB: Where do you get this ? Mexico, Brazil, South Africa, Korea, China. The trend is running away plants from the U.S. to the colonies.

     19 October 2007, 9:05 am

150. Charles:

     What about the issue of unequal exchange ? Marxists have long had an analysis that the labor theory of value analysis does not apply to the brute forced superexploitation of the colonies. I don’t see where Hornborg’s article discusses the Marxist analysis of colonialism. How can he critique the Marxist analysis of colonialism without discussing the Marxist analysis of colonialism ?

     As to much more energy being used by the imperial centers than in the colonies, who could dispute that ? Marxists certainly do not. I would question as to whether the laws of thermodynamics are implicated in this fact. This is the result of a law of capitalist development, a social ,not physical phenonmenon. Leslie White is wrong at one level. Sahlins critiqued him.

     19 October 2007, 10:05 am

151. Josiah:

     I think a lot of people confuse the internationalization of production with the internationalization of ownership. Much of the industrialization in Brazil, Mexico and China is better understood as relocation of OECD investment capital than as independent development. The OECD countries are still home to 85% of the world’s multinational corporations. But 50% of all U.S.-owned manufacturing takes place outside the U.S., and 40-50% of manufactured goods and services imports to the US and EU are made by offshore US and EU subsidiaries. That is why UNIDO reports that:

     “Manufactured exports have grown faster than MVA [manufacturing value-added] in every region, reflecting the internationalization of industry. Developing countries again performed better than industrialized countries in both manufacturing growth and exports. By 1998 they had raised their share of world manufactured exports by 8 percentage points (compared with about 2 points for MVA). [emphasis added]

     The North still averages around 70% of output in most sectors of value-added manufacturing. The fact that internationalization of ownership has not happened apace with production explains why the industrialization of Pacific Asian countries occurred only in rough proportion to the deindustrialization of the U.S. “rust belt,” British cities like Manchester, Germany’s Ruhr valley, and (most dramatically) the Soviet Union. The ratio of industrialized to non-industrialized areas of the Earth has stayed fairly constant since WWII, but the parts have been rearranged.

     19 October 2007, 10:06 am

152. Linda c:

     Timothy,

     I’m paying attention – market down over 200 points this morning!!!

     Mood Swing?

     19 October 2007, 10:31 am

153. Stan:

     Marxists have long had an analysis that the labor theory of value analysis does not apply to the brute forced superexploitation of the colonies.

     A Haitian worker in an electronics factory in Port-au-Prince is not “forced” into a factory any more than an American factory worker is. This is not the qualitative difference between “free labor” and the corvee. Both these workers are “free labor.”

     Why does the Haitian worker receive $3 a day (maybe), when an American worker could not live as a beggar at the same cost?

     Unequal exchange is not the same “problem” as primitive accumulation. Unequal exchange presents a problem for the labor theory of value precisely because it operates within the surplus value model.

     Primitive accumulation is seizing an oilfield with paratroops, or running Colombian peasants off their land with death squads.

     Why does a proletarian in the periphery receive less than his or her counterpart in the metropole for doing the same thing?

     There is a relation here between the search for a non-normative theory of (exchange) value and primitive accumulation, but that does not imply an equal sign between PA and unequal exchange.

     Josiah has nailed this. The problem cannot be resolved by looking only at manufactories. There are other “flows” we need to observe, and “surplus value” does not give an account of this inequality.

     While entropy was being examined as early as 1824, the notion of negentropy didn’t come on the scene until 1943, with Schrödinger, and Prigogine didn’t discuss dissipative structures until the 1970s. These perspectives were simply not available to Marx… so no one is dissing the Prophet when we say that he didn’t have the whole picture and he didn’t have a crystal ball. His work is quite simply insufficient for our day; and his masculinism also makes some of his perspectives inappropriate for today’s liberatory political practices.

     In the vast majority of Haitian households there is no electricity, no washing machine, no dryer, no running water, no computer, no electric can-opener, no camera or camcorder, no entertainment center, no tv, no radio, no sheetrock, no lathed moulding, no char rails, no ceiling fans, no dishwasher, no air conditioner or heater, no clothes from Belks, no knick-knacks from a box store, no books or bookshelves, no carpets, no hardwood flooring, no factory-made lumber, no asphalt shingles, no concrete driveway, no car(s), no mailbox, no brick steps, no deck, no refrigerator, no manufactured furniture, no lamps, no framed pictures on the walls, no closets full of clothes, no box spring/mattress beds, no flush toilets, no showers or bathtubs, no medicine cabinets, no CDs or DVDs (or players), no telephones, no electrical outlets, no paved street in front, no streetlight, no magazines, no tools beyond a machete and a crude hoe, no stores down the non-existent street, no plastic colorful kids’ toys, no Pampers, no nearby and accessible school, no microwaves, no jars full of candy, no drawers full of silverware … etc etc.

     Manufactories are a fraction of the built environment!!! A high technomass built environment is a high-ly dissipative structure. Flows from negentropy through dissipative structures (imported order) to entropy (exported disorder) give a fuller and less normative account of unequal exchange.

     19 October 2007, 4:56 pm

154. Charles:

     Marxists have long had an analysis that the labor theory of value analysis does not apply to the brute forced superexploitation of the colonies.

     ^^^^^

     A Haitian worker in an electronics factory in Port-au-Prince is not “forced” into a factory any more than an American factory worker is. This is not the qualitative difference between “free labor” and the corvee. Both these workers are “free labor.”

     ^^^^^
     CB: Maybe all the workers in colonies and neo-colonies are now wage-laborers. Is that what you are saying ? There is no longer any non-proletarian, non-wage-labor in the “periphery and semi-periphery” ? I hadn’t thought about that. Nonetheless, at least the U.S. wars on the neo-colonies since WWII constitute indirect use of brute force to get the workers in neo-colonies to do something.

     As to how the labor theory of value yields different wages in Haiti or Honduras than in the U.S., the ”
     average standard of living” and thus the cost of reproducing labor power in Honduras is less than in the U.S., thus the normal wage in Honduras or Haiti is less. The fact that the average Honduran doesn’t have as many consumer goods, commodities , nor consumer goods of the same quality, as USian workers , the difference in consumer goods technomass, as you term it, renders a different cost to reproducing labor power in Honduras or Haiti versus the U.S.

     Of course, I don’t say this is ok. It shows that , contra Hornborg, the labor theory of value is not a normative theory. The labor theory of value as applied to the value of labor power is an objective theory , not a normative one.

     ^^^^

     Why does the Haitian worker receive $3 a day (maybe), when an American worker could not live as a beggar at the same cost?

     ^^^^
     CB: Because the cost of reproducing labor power in Haiti is less. The cost of reproducing labor power is determined by the accepted standard of living in Haiti vs. the U.S. Things like a car, refrigerator, furnace, electric toaster, television, radio, stove , all the durable goods, all the machines or technomass that you refer to reproduce labor power. Before the problem of obsolescence of technomass dependent upon fossil fuels, this was a good thing, the raised standard of living of workers in the US and Europe or “cost of reproducing labor power”

     ^^^^^

     Unequal exchange is not the same “problem” as primitive accumulation. Unequal exchange presents a problem for the labor theory of value precisely because it operates within the surplus value model.

     ^^^^^
     CB: Some of the unequal exchange that the peoples studied by anthropologists suffer is under colonialist force, and Marx discusses that dynamic in his discussion of primitive accumulation. I think you or Luxembourg even refer to ongoing primitive accumulation , don’t you ? Anyway, a more up to date discussion is by Lenin in his reference to super-exploitation. I cited Marx to show that from the beginning of Marx’s theory he took account of what happened to the peoples that anthropologists generally discuss.

     ^^^^^

     Primitive accumulation is seizing an oilfield with paratroops, or running Colombian peasants off their land with death squads.

     ^^^^^^^^
     CB: Yes, and though the brute force may not be used on the Honduran or Haitian factory worker right now, that brute force is still standing there in the background coercing these neo-colonial workers. Part of the reason the Honduran or Haitian “accepts” the lower standard of living, doesn’t strike as readily is because the neo-colonies are under fascist governments. The Haitian workers under duress of brute force more than you allow here.

     ^^^^^

     Why does a proletarian in the periphery receive less than his or her counterpart in the metropole for doing the same thing?

     ^^^^
     CB: Because her standard of living is less, and thus by definition the cost of reproducing her labor power is less than for a USian worker, which determines the level of wage. And this standard of living is accepted as less because of the military invasions and brute force visited on neo-colonial workers by U.S. military and comprador bourgeois/fascist regimes in the “Third World”.

     ^^^^^

     There is a relation here between the search for a non-normative theory of (exchange) value and primitive accumulation, but that does not imply an equal sign between PA and unequal exchange.

     ^^^^^
     CB: See above as to why, contra Hornborg, the labor theory of value as applied to neo-colonial circumstances is non-normative, i.e. objective.

     ^^^^^^^

     Josiah has nailed this. The problem cannot be resolved by looking only at manufactories. There are other “flows” we need to observe, and “surplus value” does not give an account of this inequality.

     ^^^^^
     CB: See above, super-exploitation of neo-colonialist workers is brutally forced by U.S. military and comprador regime military dictatorship.

     The lower standards of living in the neo-colonies, the vastly different technomasses of consumer goods, goods that reproduce the labor power of the neo-colonial workers which you observe is militarily forced on those neo-colonial workers.

     ^^^^^^^^

     While entropy was being examined as early as 1824, the notion of negentropy didn’t come on the scene until 1943, with Schrödinger, and Prigogine didn’t discuss dissipative structures until the 1970s. These perspectives were simply not available to Marx… so no one is dissing the Prophet when we say that he didn’t have the whole picture and he didn’t have a crystal ball. His work is quite simply insufficient for our day; and his masculinism also makes some of his perspectives inappropriate for today’s liberatory political practices.

     ^^^^^^^
     CB: As I said, Leslie A. White was dealing with the 2nd Law of Thermodynamics in the human society context in the 1940′s. Sahlins was dealing with it after that. See _Evolution and Culture_ by Sahlins and Service in 1960. We Marxists don’t treat Marx like a Prophet , but like a scientist, with updates and new theories by later scientists. How many times do I have to demonstrate that to you ?

     See my critique of Marx and Engels masculinism in one of the first essays I copied to your blog, another scientific update of Marxism by a Marxist, moi, in about 1996. Yet another demonstration that I, at least, don’t treat Marx like a prophet, but like a scientist, whose theories are updated and developed, based on experience and practice. In part of that critique I discuss the role of typically women’s labor , reproductive labor in reproducing labor power, importantly placing a feminist concept right at the heart of the labor theory of value.

     ^^^^^

     In the vast majority of Haitian households there is no electricity, no washing machine, no dryer, no running water, no computer, no electric can-opener, no camera or camcorder, no entertainment center, no tv, no radio, no sheetrock, no lathed moulding, no char rails, no ceiling fans, no dishwasher, no air conditioner or heater, no clothes from Belks, no knick-knacks from a box store, no books or bookshelves, no carpets, no hardwood flooring, no factory-made lumber, no asphalt shingles, no concrete driveway, no car(s), no mailbox, no brick steps, no deck, no refrigerator, no manufactured furniture, no lamps, no framed pictures on the walls, no closets full of clothes, no box spring/mattress beds, no flush toilets, no showers or bathtubs, no medicine cabinets, no CDs or DVDs (or players), no telephones, no electrical outlets, no paved street in front, no streetlight, no magazines, no tools beyond a machete and a crude hoe, no stores down the non-existent street, no plastic colorful kids’ toys, no Pampers, no nearby and accessible school, no microwaves, no jars full of candy, no drawers full of silverware … etc etc.

     ^^^^^^^^
     CB: Exactly. In the labor theory of value as applied to the value of wage labor power, this is a lower cost of reproducing Haitian labor power than USian labor power. Thus, a lower wage , not normatively, but objectively. By not normatively, I mean Marxist don’t consider it’s ok. This is exactly why Horborg is wrong that the labor theory of value as applied to the value of labor power is not a normative theory for Marxists.

     ^^^^^^^^^

     Manufactories are a fraction of the built environment!!! A high technomass built environment is a high-ly dissipative structure. Flows from negentropy through dissipative structures (imported order) to entropy (exported disorder) give a fuller and less normative account of unequal exchange.

     ^^^^
     CB: Yes, I see what you mean now. You are referring to the large amount of consumer commodities in the USian workers’ living standard as compared with Haitian or Honduran workers’ living standard. See above the Marxist account of this pursuant to the labor theory of value, and the value of reproducing labor power; and how the Marxist theory is not normative , but objective. The lower standard of living is forced on the neo-colonial workers and becomes an objective condition for the neo-colonial workers by that force.

     Look to permanent Martial law of a sort in the neo-colonies more than laws of thermodynamics to explain the lower living standards of workers in the colonies. Unfortunately, workers from the US ( and Europe) “man” ( gender term intended) the military that conquers the neo-colonies and forces the lower standards of living on them. Racism plays a gigantic role in this long history from Marx’s discussion of it ( as I quoted to you) right up to your discussion of it here. In South Africa and Israel there are European settler colonies still. Then there are many comprador bourgeois regimes in the neo-colonies, i.e. local Sambo regimes who force lower standards of living on their workers.

     22 October 2007, 2:09 pm

155. Charles:

     I forgot to add that the role of workers from the imperial centers carrying out the military force against neo-colonialist workers demonstrates the continuing primary validity of Marx and Engels’ slogan “Workers of all countries , unite ! “, which Lenin updated as “Workers and oppreessed nations of the world , unite !”

     Unfortunately, workers from the US ( and Europe) “man” ( gender term intended) the military that conquers the neo-colonies and forces the lower standards of living on them. Racism plays a gigantic role in this long history from Marx’s discussion of it ( as I quoted to you) right up to your discussion of it here. In South Africa and Israel there are European settler colonies still. Then there are many comprador bourgeois regimes in the neo-colonies, i.e. local Sambo regimes who force lower standards of living on their workers.

     22 October 2007, 2:17 pm

156. Stan:

     In Haiti, more than 70% of the populaitn lives in the countryside. Many of them do work, off and on, as wage laborers, often in the Dominican Republic cutting cane,etc.

     But the majority have not been proletarianized. That makes Haiti anomolous as compared with the whole world, where we are now past 50% in urban areas. I would further argue that being urban no longer necessarily qualifies one as part of “the reserve army of labor,” because capitalist produciton is in many respect contracting worldwide, certainly per capita, and that these people are now “stranded externalities,” ie, surplus people… de-classed entirely.

     Since we are contrasting “normative” with “objective,” and this is getting a bit arcane, I’m just linking the definitions for curious lurkers.

     Hornborg’s critique is not just of Marx, but of all economic descriptions of exploitation, because “unfairness” is a normative (moral) notion. Marx’s attempt to overcome this with by demonstrating surplus value extraction in the workplace, but in doing so he still attaches an implicit “ought to” to the whole notion of exchange value. Since more labor from the worker goes into the final product than the laborer’s buying power represented in a wage, the laborer “ought to” get more money… because it is unfair.

     What Marx was fighting here was a very specific construct of his day: the theory that value was an outcome of utility. Marx himself was fightingone theory of valuw withanother, as opposed to principally trying to develop a grand unifying theory of value (though he claimed it was “objective”). This was a polemical project, using what some feminists would later name “standpoint theory”: seeing the production process from the worker’s point of view, instead of the buyer-seller’s point of view.

     But he still claims that his representation is the criteria by which value “ought to be” judged. The problem was, and is, while the LTV explains some things, it is too frequently contradicted by reality to assign it that “objectivity” we might assign to a scientific principle… like inertia or the second law.

     The real problem for the theory is unequal exchange, and your attempt to rivet marxian reproduction onto it as explanatory (objective, you say), does not explain what Hornborg’s negentropy criterion does. Dissipative structures themselves, apart from coercion and political maneuvering and war, are inescapably made and maintained at the expense of peripheries, and produce peripheries in their operation.

     Your implicit claim that without force the peripheries could develop “better living standards” (a pretty normative term) is insupportable. The “standard of living” of the metropoles is quite simply not materially possible for the whole world.

     I’m leaving this thread for a while… got some pretty pressing time restraints; and I will leave the original text by Hornborg to speak for itself, and the debate to others.

     22 October 2007, 3:25 pm

157. Charles:

     I haven’t been focussing on the normative/objective issue, but since Hornborg and you keep mentioning it, first I showed how the Marxist look at unequal exchange in the colonies/periphery is objective at one level.

     Next, there are plenty of discussions of how Marx does not use the ltv applied to exploitation of wage labor as a normative standard. How in Marx’s analysis, the worker actually is paid the value of her labor power; and exploitation is due to the boss taking advantage that human labor power can produce more value than its own value. It sort of stands out how Marx does not make a normative argument here. It is often contrasted with Proudhoun or is it the other anarchist’s slogan “property is theft.”

     Above you say “but in doing so he still attaches an implicit “ought to” to the whole notion of exchange value.” and “But he still claims that his representation is the criteria by which value “ought to be” judged.”

     I’m not sure why it is so important to Horborg and you to find Marx “implicitly” making his ltv as applied to the value of labor power normative. But it seems more like you and Hornborg making his theory normative than Marx. Marx seems to explicitly claim his theory is not normative.

     My answer to you as to why the Honduran or Haitian workers have lower wages using the ltv/value of labor power analysis is pretty precise. Yes, historical science is not as precise as physics. It Is more like biology, or law/jurisprudence. However, the ltv as applied to the comparison of the USian worker and the Honduran or Haitian worker gives exactly what the facts show – lower wage where the standard of living is lower. You might want to acknowledge that.

     When you say: “Your implicit claim that without force the peripheries could develop “better living standards” (a pretty normative term) is insupportable. ”

     My claim is not implicit ,but explicit. The fact that they could not now develop “better living standards” does not refute my claim that the lower living standards are due to force used by the imperial nations and comprador regimes with respect to the ltv logic. That is due to the new development of the obsolescence of fossil based fuels. The current fact of “unequal exchange” referred to by Hornborg is explained by the history of force visited upon the colonial and neo-colonial workers by the imperial nations and the comprador regimes.
     ^^^^^

     The “standard of living” of the metropoles is quite simply not materially possible for the whole world.

     ^^^^^^^^
     CB: I agree with this. It is due to the newly discovered obsolescence of the fossil fuel based technological regime.

     22 October 2007, 5:01 pm

158. Charles:

     I had said “This is exactly why Horborg is wrong that the labor theory of value as applied to the value of labor power is not a normative theory for Marxists.”

     This should read “is a normative theory for Marxists.”

     22 October 2007, 5:07 pm

159. Josiah:

     Response to Charles:

     It is true that Marx’s labor theory of value corresponds with the average socially necessary labor time for a given commodity, not with the price of every individual commodity. Marx’s critics have pointed to examples of individual commodities whose market prices do not reflect differences in labor time, but Marx was talking about averages, not claiming to explain all the price variations on the market. As I read it, Hornborg’s argument is not that the LTV is wrong about the average socially necessary labor time (this is usually hard to quantify anyway, given the variables of the global economy). He is saying that is not a descriptive theory because it doesn’t aim to describe existing market price variations. It is a normative theory because it aims to replace the “normal” market price of commodities with a “real” one based on a society-wide average. Hornborg says that this is untenable for practical purposes, because market prices are social constructions unlikely to be replaced in daily use by an abstract average. Instead, he argues, we should examine the relationship between these social constructions and the material properties of the commodities themselves.

     He then argues that an industrial economy running on mineral and biotic energy inputs requires an inverse relationship between the level of “exergy” (or thermodynamic order) in a given commodity, and its market price. This is because manufacturing dissipates energy and produces waste/entropy at the same time as it “adds value”; so social construction of prices and the level of available energy have to run in the opposite direction. Nicolas Georgescu-Roegen made the same argument in the 1970s. He then says this leads inexorably to deepening relations unequal exchange:

     This means that industrial centers exporting high-utility commodities will automatically gain access to ever greater amounts of available energy from their hinterlands. The more energy they have dissipated today, the more “new” energy they will be able to buy—and dissipate—tomorrow. Although most of this transfer of available energy to industrial sectors is dissipated in production, and a small share returned to their hinterlands in the form of industrial products, a significant part of it is indeed “invested” in an expanding, industrial infrastructure in core areas of the world system. A self-reinforcing logic involving economies of scale in industry and the geographical constraints of resource extraction (cf. Bunker 1985) will continuously augment this process of accumulation and the unequal exchange of energy and entropy on which it is founded.

     There is some really interesting empirical evidence for this argument. Check out this essay by Stefan Giljum and Nina Eisenmenger (PDF). They show that, although North-North trade is “bigger” than North-South trade in monetary value, North-South trade is bigger in physical terms, measured by millions of tons of imports. For example, EU imports from Africa are worth much less than those from Asia (given the low prices of oil, minerals and foodstuffs versus manufactures), but those from Africa are greater than those from Asia, and close to those from the rest of the OECD, in physical weight. Most striking of all, while total EU exports and imports are roughly balanced in monetary value, EU exports are less than a third of imports in terms of physical weight. They show that, while the EU has a large net “surplus” of imported resources, most Southern countries have a large net deficit. So, even with balanced or nearly balanced payments, there is a drain of resources going in one direction.

     The figure [on p. 12] clearly illustrates the significant structural differences of the external trade relations [of the EU] in monetary and physical terms, respectively. While the monetary trade is more or less balanced (apart from a small deficit with Asian countries), the physical trade is characterized by a large trade surplus with all other world regions (including the non-EU OECD countries). This is mainly due to the high import of fossil fuels (around 60% of all imports in terms of weight) and abiotic raw materials and semi-manufactured products (together around 20% of all imports). The EU serves as a net exporter of crops and animal products to Africa, Asia and the former USSR and Eastern Europe. As physical amounts are much smaller than imports in the two categories mentioned above, however, they do not compensate the physical deficit. More than two thirds of physical imports originate in countries outside the OECD region, whereas OECD countries are a larger share of EU exports. On the average, EU-15 exports have a four times higher value than imports. With regard to trade relations with Southern regions, such as Africa and Latin America, one ton of EU exports embodies a value ten times higher than one ton of EU imports (Giljum and Hubacek, 2001).

     This shows how “value chains” conceal unequal exchange. There would be no commodities without mineral and agricultural raw materials. But most of the value (whether we’re talking coffee beans or iron ore) is “added” in the refining, manufacturing, transport and retail stages of production. And the higher up the value chain you go, the more narrowly ownership is concentrated–both horizontally (in terms of nations) and vertically (in terms of shareholders).

     [moderator leaps in: of course this "added" (speculative, financial) value goes along with massive dissipation of energy and real value, i.e. wastefulness, the depletion of soil and water, destruction and contamination of original source materials and locales, and consequent weakening/vandalism of biotic systems. this negative effects are further amplified by deliberate malice, in a calculated bid to destroy local food security, break the back of local autarky, enforce dependence on high-entropy industrial products and impose control-through-debt, etc. -- in other words there is massive "value subtraction" hiding behind this "added value"; all the energy inputs required to "add value" to raw materials by turning them into packaged and processed Product themselves imply damage and resource destruction in other locales... in other words the huge energy inputs that transform e.g. Argentine and Brasilian beef into McDonald's patties in Peoria are inextricably implicated in the devastation of Appalachia, Nigeria, Iraq etc -- and this is just another tangential pass across the surface of Hornborg's elegant argument... this long haul industrial model of unequal trade and "comparative advantage" also conduces to narrow ownership concentration by monocropping, hyperstandardisation, removing the element of local knowledge, artisanship, terroir, skilled craft, etc. from the production process -- see Ritzer on "McDonaldization" among others -- sorry to butt in, but I was enjoying this comment a lot and got carried away! -- DeA]

     While raw materials imports from the South look marginal in terms of market value, the OECD and its main export platforms in E. Asia and L. America would grind to a halt without them.

     23 October 2007, 12:12 am

160. Lisa:

     From Michael Hudson’s new site:

     Please Observe: website hijacked
     In early October 2007, my website michael-hudson.com was dumped ( by my web host http://www.gisol.com ) and then hijacked, and instead of giving in to extortions, I have moved my files to a new domain: http://www.michael-hudson.net . My new email address will be mhmichael-hudson.net I am sorry for the inconvenience.
     Michael Hudson

     23 October 2007, 5:18 am

161. Charles:

     Thanks Josiah ( and Stan).

     He (Hornborg) then argues that an industrial economy running on mineral and biotic energy inputs requires an inverse relationship between the level of “exergy” (or thermodynamic order) in a given commodity, and its market price. This is because manufacturing dissipates energy and produces waste/entropy at the same time as it “adds value”; so social construction of prices and the level of available energy have to run in the opposite direction. Nicolas Georgescu-Roegen made the same argument in the 1970s. He then says this leads inexorably to deepening relations unequal exchange:

     ^^^^^^^^
     CB: Is it being said that the unequal exchange is caused or deepened by certain laws of physics ?

     With respect my friends, I cannot understand this. It seems to me it is the “social construction of the prices” or political construction of the prices that causes the unequal exchange, not the laws of thermodynamics. The social construction here rigs the exchange in favor of the imperalist nations.

     I see what you mean about more dissipation of energy in the imperialist nations than in the colonial/peripheral nations. More of the world’s raw materials and energy resources are used up in the imperialist nations, both in production and consumption of goods and services. Many of these raw materials and energy resources are gotten from the “periphery and semi-periphery.” More are taken from the periphery to the core, than vica versa. There is a net plus to the core vs. the periphery. And the market, which is socially constructed, does this without the core paying more money to the periphery than vica versa. There is no net plus of money paid to the periphery by the core, as one might expect given that more raw materials go from the periphery to the core.

     Is this a valid paraphrase of what Josiah says ?

     I do not get how the physical fact of greater dissipation of energy itself in the core causes the periphery not to get paid by the core, which I believe constitutes the unequal exchange.

     Another question: Isn’t global warming a decrease in entropy ? I thought entropy was roughly speaking “cooling”, not “warming”. Isn’t the ultimate result of the tendency to entropy “heat death” ? Global warming is heat increase, not “heat death” ?

     23 October 2007, 11:19 am

162. Charles:

     Capitalism in the Era of Monopoly and Imperialism

     The chronic problems working people face today are rooted in the birth and history of the capitalist system itself. “Free” competitive capitalism was replaced at the end of the nineteenth century by monopoly capitalism. Great amounts of capital were assembled in a few companies in each industry, both in our country and internationally. At the same time, industrial and banking capital merged into finance capital, dominated by banking capital. These monopolies proceeded to divide up the world economically, each with their own sphere of control. To insure the stability of investment, corporations sought to dominate the governments within their spheres. The monopolies succeeded in backing up their economic division of the world with the military-political division of the world. Africa, most of Asia and Latin America, and parts of Europe were divided into colonies or semi-colonies of the U.S., Britain, Germany, France, Italy, Japan, the Netherlands, Belgium, and the other monopoly capitalist states.

     Vladimir Lenin, founder of modern communism, predicted that wars would break out to redivide the world, making the era of monopoly capitalism also the era of modern imperialism. The then existing division of the world could not satisfy those countries whose economies were growing most rapidly. The search for economic domination led to wars and world wars, which killed and maimed millions and subjugated whole peoples under extremely repressive and inhumane conditions.

     Soon the monopolies and the government in the U.S. (and the other imperialist countries) became intertwined, transforming into state monopoly capitalism. The state became a direct instrument to accumulate capital for the monopolies. As is often the case with reforms under capitalism, government regulation which resulted from popular struggles and were intended to alleviate some of the problems that afflict working people and society as a whole also had the effect of stabilizing the capitalist system and benefiting sections of monopoly capital. Some regulation has no broader social goal, but is used as a tool to partially overcome the self-destructive anarchy of private capitalist competition for the purpose of providing economic stability and greater profits for the corporations. The state also became a source of economic stimulation through tax collection from the whole people to finance military spending, “cost-plus” profits, and wars.

     Internationalization of Economic Life, Transnationals and Capitalist Globalization
     Following World War II, a scientific and technological revolution took place that resulted from the drive to maximize profits through advancing technology and productivity. It centered on new materials, on new means of transportation and communication, and more recently on information technology. These achievements enabled a new stage in capitalist globalization, a further socialization of world economic life, and a qualitative shift in the internationalization of production, still under private capitalist ownership.

     The capitalist world economy at first could not fully utilize these new developments—the existing forms of capitalist ownership were too restrictive. Signs of economic stagnation marked the mid-1970s. The capitalist answer was the growth of monopoly corporations into transnational corporations, whose reach extends beyond any one country’s sphere of influence. Stimulated by the internationalization of economic life and the scientific and technical revolution, these transnationals control many economic stages from financing to research and development, to sources of supply, to production, to wholesale and retail distribution. Internationalization gave the monopolies many more alternatives for resource extraction and production based on which country is cheapest for each operation. This enabled greater coordination and planning within the bounds of a single transnational and in temporary cartel-type arrangements with other transnationals. This process achieved a partial, temporary overcoming of some of the anarchy inherent in private capitalist ownership of production and distribution.

     Today, a few more than 500 transnationals worldwide, some 300 of them based in the U.S., dominate the capitalist world economy, the capitalist governments, and their international institutions. There are transnational banks, transnational industrial manufacturers, transnational arms dealers, transnational wholesale and retail distributive monopolies, transnational entertainment and publishing giants, and transnational conglomerates which own so many businesses it is almost impossible to tell what their main business is. By the 1980s, transnationals dominated economic and political life in the U.S. and around much of the globe.

     Combined with capitalist globalization, there has been the concurrent and related increase of chronic relative overproduction, unused capacity, and currency imbalances and speculation, leading to increased levels of unemployment and underemployment in all the major capitalist powers, and greater instability in most developing countries. The gap between rich and poor is growing both internationally and within the major capitalist countries, to unprecedented levels.

     26 October 2007, 1:33 pm

163. Stan:

     This tells us nothing of deriviatives trading, holding companies, veto power in the IMF or special drawing rights, currency speculation, dollar hegemony, speculative bubbles, or any of the other concrete features of today’s global capitalist system. These are not minor omissions, but the utter failure to revise one aging account of imperialism.

     There is not a single mention of money… what it is, what it was, what it is becoming, the role monetary hegemony plays in the world system, nada… and there hasn’t been even a whiff of inter-imperial war since WWII.

     26 October 2007, 8:05 pm

164. James:

     Re: “This tells us nothing of derivatives trading…”

     Maybe not, but isn’t it an excellent summary of quite a bit of what has transpired since the industrialization and modernization of the world? Perhaps you could have integrated his insights with those you apparently have regarding the financial dimension?

     27 October 2007, 12:01 pm

165. Charles:

     The following passage makes special mention of the qualitative shift in finance and the debate over the nature of this change being a new phase of “imperialism” or an even more fundamental change.

     ^^^^^

     A qualitatively new form of transnational capital has clearly emerged. Its features include _enormous new concentrations of finance capital_ (emphasis added), new forms of transnational monopoly, huge changes in the technology of mass production and manufacturing, a new global division of labor, and increasing poverty and decline for workers of the world in a global race to the bottom. Some individuals now own wealth greater than that of smaller countries.

     World capitalism continues to develop, reaching new levels of concentration and more advanced forms of global economic integration. Some see it as a new phase of what Lenin described as “Imperialism, the Highest Stage of Capitalism.” Others think of it as an even more qualitative change and see it as a whole new stage of monopoly capitalism. Regardless of your view, it is clear that capitalism has not reached its final stage and stopped developing.

     STAN: Charles, I knew the incredibly long post I just deleted sounded familar. It’s generic CPUSA stuff, straight from their web site. A link will do, if you want to point to that stuff; but we are not going to waste bandwidth here broadcasting CPUSA platitudes… most of which are so generic they remind me of the astrology section in the newspaper… stuff that is so generally true that anyone might find it prescient. This is a discussion forum, and not someplace to recruit to sectarian grouplets or give them an amplifier.

     29 October 2007, 3:03 pm

166. Charles:

     Henry C.K. Liu — Super Capitalism, Super Imperialism and Monetary Imperialism
     james daly james.irldaly at
     Next message: [A-List] Plastics are Forever

     http://henryckliu.com/page143.html

     29 October 2007, 4:19 pm

167. Charles:

     STAN: Charles, I knew the incredibly long post I just deleted sounded familar. It’s generic CPUSA stuff, straight from their web site.

     ^^^^
     CB: So what ? It wasn’t that long either. That’s just a false statement. Real terse. It was part of a longer piece. Covering lots of stuff your discussion does not, and it does so in language that can be understood by the average person. Your focus on finance is ignoring a lot of the actually existing economic world. That passage filled in a lot of gaps in your economic analysis. Capitalism is more than its finance capital sector, even if that sector has increased power today.

     ^^^^^^^

     A link will do, if you want to point to that stuff;

     ^^^^^
     CB: No, I want to put that actual language into the “discussion”. And I want the language judged without the mind distorting element of redbaiting and anti-CP thinking. What about the content ? Address the content. Your comment is _ad hominem_ here. “Oh. It’s from the CP. Must be a platitude. ” That a a logical fallacy in your “argument”.

     Are you really saying the content of that passage is platitudinous – true, but unimportant ? Give me a break. It’s every bit as important in understanding capitalism today as all the Hudson/Liu stuff. In fact, one can_not_ understand capitalism today without considering all the “platitudes” in that passage.

     Wake up. You’ve kind of gone off the deep end in your characterization of the CP, Marxism etc.

     [the other moderator steps in here: sorry CB, but your assessment of the redacted piece as more accessible or more relevant than other material on capitalism and finance seems to be a minority opinion personally I stopped reading -- with a big Ho Hum -- as soon as I got to the bit where capitalism is the cause of patriarchy and racism (both of which predate capitalism by millennia, except in the strangely ahistorical imagination of the CP faithful). it struck my fairly objective ear (never having been either a CP member or a CP hater) as rote marxist credo; and if I want rote marxist credo or even somewhat more interesting recent Midrash on Marx, I would go to wsws (which I sometimes do and encourage others to do). FS is not wsws. I endorse Stan's decision to redact the piece, and I'm also -- a rare occurrence -- exercising my editorial powers and cutting off this boyshit wrangling betwixt the two of yez right here if you want to point readers to classical or "canonical" material or canned essays, imho post a link, and save the screen space for more original, in-process, interactive thinking. reciting the Nicene Creed over and over again does not, it were, advance our theology.]

     6 November 2007, 4:20 pm

168. Charles:

     [PDF!!] The Decline of the West, Act II

     latest Truth and Beauty

     9 November 2007, 9:21 am

169. Charles:

     Bankruptcy laws backfire…

     http://www.bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer=patrick.net

     9 November 2007, 11:33 am

170. Charles:

     personally I stopped reading — with a big Ho Hum — as soon as I got to the bit where capitalism is the cause of patriarchy and racism (both of which predate capitalism by millennia, except in the strangely ahistorical imagination of the CP faithful).

     ^^^^^
     CB: The things I posted didn’t say capitalism is the cause of patriarchy and racism.

     Also, racism does not predate capitalism. Racism and capitalism come into the world together.

     Engels discusses the origin of male supremacy way before capitalism, before feudalism , even. I’m pretty sure the CP takes the same position on that as Engels. So, ……?

     9 November 2007, 11:39 am

171. Charles:

     it struck my fairly objective ear (never having been either a CP member or a CP hater) as rote marxist credo; and if I want rote marxist credo or even somewhat more interesting recent Midrash on Marx, I would go to wsws (which I sometimes do and encourage others to do).

     ^^^^^
     CB: Actually, the rote marxist credo would be _The Origin of the Family ( male supremacist family), Private Property, and the State_ , which takes the position that male supremacy predates capitalism. So, actually you agree with the rote marxist credo on that point.

     The rote marxist credo on racism,i.e. white supremacy, is that it originates with capitalism. And that is historically accurate.

     That is the rote marxist credo on both of these issues happens to be true as well as rote marxist credo.

     Whether it is interesting or Ho Hum is an individual thing. However, boredom vs interesting is not necessarily a good guide to what’s true. (smile)

     ^^^^^

     FS is not wsws. I endorse Stan’s decision to redact the piece,

     ^^^^^
     CB: Radact all you want. It’s your blog.

     I can bring water. I can’t make people drink it.

     ^^^^^

     and I’m also — a rare occurrence — exercising my editorial powers and cutting off this boyshit wrangling betwixt the two of yez right here if you want to point readers to classical or “canonical” material or canned essays, imho post a link, and save the screen space for more original, in-process, interactive thinking. reciting the Nicene Creed over and over again does not, it were, advance our theology.]

     ^^^^^^^^

     CB: I’m not advancing theology. You and Stan’s _mantra_ and chanting over and over again that I am does not make it so.

     The percentage of my posting original discussion is at least as high as anybody else’s, probably on the high end.

     9 November 2007, 12:00 pm

172. Charles:

     NY Times, November 8, 2007
     Markets and Dollar Sink as Slowdown Worry Increases
     By MICHAEL M. GRYNBAUM and PETER S. GOODMAN

     Stock markets plummeted and the dollar sank to a record low against the euro yesterday as investors worldwide grew skittish over rising oil prices and the prospect of a substantial economic slowdown in the United States.

     FULL ARTICLE

     MODERATOR’S NOTE: When posting long articles, please post enough to give us the flavor, then add the link from the source. This can be done in one of two ways. Just paste in the link, where we see the illuminated url, or link it in the tex (as above) by typing
     (all this to the left of the linked word or phrase). On the right of the linked word or phrase, put in < , then /, then a, then >…. all together. 12 November 2007, 6:27 pm

173. Charles:

     By Ellen Brown

     Why the relentless push for war with Iran? The nuclear weapons
     explanation is suspect. The most important impetus for war may not be
     oil or the bomb but that Iran has managed to escape the heel of an
     international clique of private bankers. We may be involved in a war of
     banking schemes, with Iran’s innovative interest-free banking model
     pitted against the compound interest trap that has captured most of the
     world in debt.

     http://www.opednews.com/articles/1/opedne_ellen_br_071109_behind_the_drums_of_.htm

     12 November 2007, 7:18 pm

174. Christine:

     Iran & the subprime mortgage meltdown.
     Is there any connection?
     Or: why on earth would Washington care about Iran, while our financial system is cratering?
     I believe our banking system, along with the mortgage industry and all related entities, are completely bankrupt and without value. Very similar to a very large log laying in the forest. From a distance, it looks solid; a very nice looking cedar which has tipped over. When you come to the tree, however, you lift off a piece of bark. The bark crumbles like dust. Under the surface, the wood has been turned to sponge, or powder with gazillions of bugs crawling inside the tree.
     The banking system is trying desperately to keep a lid on this crisis. It’s getting tougher to hide it, though, because the gangrene is spreading throughout the system. We’ve already seen some big indicators that something is seriously wrong with the system. Northern Rock Bank in the U.K., the U.S. housing market, it all points to the same thing: a Hologram system which vanishes if you turn it to one side.
     Banking.
     Bankers know that Image is incredibly important to their survival. Belief in the system is critical, and they typically give an image of being ultra-conservative, prudent and solid. That’s why they often use images which give a permanent image, like rocks (Northern “Rock”, Prudential which has the Rock of Gibraltar as its icon), permanence, solidity, what could be more permanent than a rock?

     The bank just needs to be prudent with their depositors’ money and not be engaged in risky behavior, and they should be just fine. All the customer asks is that the bank doesn’t gamble with their money.
     What the banks have done these past few years qualifies as reckless gambling, and bordering on self-annihilating. Buying up all that garbage called SIV’s, CDO’s and the like.
     They deserve to go belly-up, that’s how much Riverboat Gamblers they’ve been.

     Iran.
     So what does this have to do with Iran?
     Stan, I’m going to agree with you on your take with Iran. You had written a while back that you did NOT believe the U.S. will wage war with Iran, for a number of reasons. We’re not in a good position to be dropping bombs on Iran right now. The ramifications would be too dire, and Cheney knows it. The perceived payoffs for doing so are less than the cost of doing it.
     I believe they are beating the war drums in an effort to deflect attention from the upcoming meltdown.
     Notice how parallel the developments are?
     In fact, one day I heard a radio report about the mortgage crisis, how it’s spreading. JUST TWO MINUTES later, there was a report from Cheney warning Iran once again that “nothing is off the table”.

     I read European newspapers, and there is hardly anything about Iran. In fact, Iran is seen in friendly terms. The Swedish newspaper Dagens Nyheter, in fact, recently ran a series of articles about Iran. It was about “Iran – Lovely travel destination”. It was about upcoming tours, “Iran – filled with History” type of thing.
     Iran = a great big huge DISTRACTION.

     13 November 2007, 9:30 pm

175. Charles:

     Economic pessimism

     http://www.rgemonitor.com/blog/roubini/227330

     18 November 2007, 10:20 am

176. Charles:

     http://countercurrents.org/hensman171107.htm

     18 November 2007, 11:33 am

177. Charles:

     Liu on the meltdown

     http://www.atimes.com/atimes/others/Henry.html

     27 November 2007, 10:59 am

178. Charles:

     >December 7, 2007, Counterpunch
     >Wall Street’s Bad Boys and Their Washington Enablers
     >Banksters Gone Wild
     >By PAM MARTENS
     >
     >
     >
     For an in depth analysis of the problem that goes beyond the evil doings
     of a few bankers, read my 5-part Pathology of Debt – http://henryckliu.com/

     Henry C.K. Liu

     11 December 2007, 4:59 pm

179. Charles:

     December 11, 2007
     THE OTHER DERIVATIVE PROBLEM
     By Nathan Lewis

     By now everyone can recite how crummy mortgages got packaged into
     asset-backed securities, and how, after the tastier tranches were
     sliced off, the meat by-products got sent along to the CDO sausage
     factory to be made palatable again. Now CDO investors are puking up all
     over town.
     But there has been another derivatives party going on, where the
     bubbly is still flowing to a large extent. That, as many will relate,
     is the explosion in credit default swaps (CDS) that has appeared over
     just the past few years.
     Structured finance has been around since the 1980s, but the CDS
     market is essentially brand new.

     http://lists.econ.utah.edu/pipermail/a-list/2007-December/069588.html

     13 December 2007, 11:28 am

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