Fascism, workers and the 'national community'. posted by lenin

Tim Mason has described how the Hitler regime, even once it had physically liquidated its trade unionist and socialist opponents during the first half of 1933, was not capable of simply overriding the interests of the working class. It had instruments of terror, such as the politically committed 'soldiers' of the SA, who would happily apprise intransigent workers of the new spirit of national community if they failed to accept wage cuts and degraded working conditions. And it could rely on the existence of a vast reserve army of labour created by the depression to coerce workers into accepting a more subordinate status. Yet the Nazi regime had to engage the working class and try to s[t]imulate their support. The working class was sufficiently important to the Nazi self-image and propaganda that the Nazi Party's records tended to overstate the extent of working class membership drastically, sometimes doubling the real levels. In truth, at least according to Richard Evans, workers were often those quickest to leave the Nazi Party having joined it, and the real means by which the Nazis expanded beyond their traditional lower middle class backbone was by integrating segments of the upper middle and ruling classes.

The spectre of the working class constantly hovered over the Nazi regime. This is hardly because workers were serenely insusceptible to Nazi ideology. Many workers bought Goebbels' propaganda wholesale, and were quite convinced by the idea of restoring the colonial programme in order to overcome the depression. Those who had not been immersed in traditions of socialist activity were the most vulnerable. Even in conservative Bavaria, however, where repression and depression atomised and disoriented the working class most thoroughly, the evidence suggests that workers were severely hostile to the new regime. When the Nazis created the 'Council of Trust' to consolidate its rule in the factories, early elections showed large numbers of workers, sometimes as many as three-fifths, rejecting the Nazi candidate. Such hostility was felt and expressed most vociferously as wage cuts, longer working hours, and terrible shortages compounded the unpopularity of the regime between 1933 and 1936, with oppositional groups gaining ground in the factories. If the working class no longer expressed its demands in explicit slogans or in the language of Marxism (quite apart from Nazi repression, the disarray of German Marxists in the face of the Nazis' rise to power had pretty well discredited them and angered their supporters), they explicitly expressed a class antagonism which could become the basis for a powerful movement against a highly fractious state. Throughout the Reich, working class self-organisation and collective action was increasingly in evidence in the later 1930s. Though it was rarely understood as directly political resistance to the Nazi state, the regime had to take it seriously and find ways to counteract it.

While the social Darwinist doctrines which the Nazi leadership embraced strongly militated against welfarism, minimum wages or other such anti-competitive practises, the Nazis were nominally a 'workers' party', and had spent a great deal of the pre-1933 era wooing the socialist working class. They were committed to the creation of a 'national community', and such - it was imagined - would eventually be generated through war, in the mythical spirit of 1914. But in the meantime something had to be done about the workers besides the wave of repression and surveillance that was immediately introduced. The Labour Front, though it was a coercive organisation which posed no threat to the German capitalist class (which duly joined the organisation) was one attempt to produce such a feeling of community, and various legal forms were introduced to permit workers to petition their bosses or seek the intervention of the Trustee of Labour, who was to enforce codes of industrial chivalry, in which the role of the employer was now that of a carer as well as a leader. The Nazis had abolished genuine democratic restrictions on employers as well as every gain made since the fall of Bismarck. But the Labour Front, despite the formal restrictions on its scope of operation, eventually became a means by which employers - usually smaller employers - could be disciplined into accepting some concession or other.

It is important to be clear about one thing: to the extent that Nazi institutions pressured employers to assimilate to the imaginary new social order this did not, ever, mean that the Nazis were siding with the workers in a class dispute. One result of Nazi terror was that real wages sank even below the miserable levels that had persisted under Hindenburg and von Papen for the first few years of Nazi rule, (the recovery in later years was a side-effect of the armaments boom). The overwhelming impact of Nazi rule was to disarm the working class, demolish its political parties, drive down its wages, and place a repressive police state at the service of the employers. The conservative-romantic propaganda about a national community that the business class had been disseminating throughout the 1920s became part of the official ideology of a state with an unprecedented grip on the production of ideas. In the long-term, the decimation of working class self-organisation with the resulting retreat to the private sphere and the individualisation of economic struggle arguably laid the ground for a much less politicised working class and a much more stable capitalism in the postwar era. Yet, while that was an admirable record from the point of view of employers, the Nazi Party didn't intend to be simply an anti-communist dictatorship. It intended to turn ordinary Germans into racial warriors.

It was a crucial goal of the Nazis to convert workers to the 'national socialist' doctrine, since these workers would be the footsoldiers of a total war - to colonise Eastern Europe and enslave Russia, having helped conquer Spain and invaded Belgium and France. They had, somehow, to produce a social concert without fundamentally transforming relations of production. (Despite all the talk of a 'planned economy', the Nazi regime didn't in fact obtain real state control of the economy until mid-way through the war, instead tending to rely on close alliances with major corporations such as IG Farben.) The Nazis therefore tended to settle on aesthetic solutions, emphasising the Beauty of Work, the inherent value of artisanal labour, the necessity for 'happiness' to pervade the working environment. This was met with sullen forms of resistance, including defacement of redecorated work premisses and 'anti-social' behaviour.

When it finally came to total war, however, it was necessary to do something very different. Only a politically committed minority could experience a war to the finish between Nazi Germany and its geopolitical rivals as a great adventure and a noble exertion of a restless race. 'Strength Through Joy' was a slogan even less persuasive in the battlefield than in the workplace. So, it was necessary to redistribute wealth in a new way. Götz Aly has shown (in his recent book, Hitler's Beneficiaries) that the Nazis, so far from relying on Germans of any class paying for the war, actively sought to transfer most of the economic burden of the war from German taxpayers to the citizens of conquerered territory. The reason for this was that, the so-called 'Augusterlebnis', the conservative fantasy of Spirit of 1914, could not be duplicated in September 1939. On the contrary, it was obvious that years of Nazi indoctrination, relentless propaganda, repression, the destruction of political opponents, the cranking up of antisemitism, had not created the indicated 'national community'. It is true that this was in part because Hitler had been driven by a national economic crisis to launch his war of expansion far more quickly than he had intended, and thus hadn't adequately prepared the ground for war fever. But Hitler was supposedly an adored national leader. Yet, while Churchill could expect British workers to pay for a war with severely restricted consumption and the purchase of war bonds, Hitler was unable to expect the same of German workers. Instead, the regime bolstered welfare provisions with state subsidies to welfare provisions rising from 640.4 million Reichsmarks in 1938 to 1,119.2 million Reichsmarks in 1943. Meanwhile, invading Nazi soldiers brandished Reich Credit Bank certificates with exchange values set at such levels that they could buy local produce very cheaply. Such measures were paid for with plunder and extortion, in which the Nazis imposed enormous levies for the 'services' supplied by occupying troops and received payment in labour, resources and in several cases, goldbricks.

Aly is far too committed to the implausible idea that the Nazis practised a kind of racially exclusive egalitarianism ("Nazi socialism", as he calls it). In showing how much the Nazi state came to rely on the proceeds of brutal extraction and slave labour to sustain popular acquiescence, he by no means demonstrates that German workers actually benefited from Hitler's war as his title implies. Rather, welfare programmes ameliorated a situation of severe hardship created by war. Similarly, while (according to Aly) most of the increase in taxation within Germany was paid by those with the means - the capitalist class - the overwhelming bulk of profits from the war also went to this class. War was a highly profitable investment on their part, as it often is for businesses, for whom warfare is one of the few activities that will induce them to part with a chunk of their profits. The main force of Aly's argument, however, is that German workers were not 'willing executioners' but largely bought off by a regime anxious to forestall resistance. That of course demands a further interrogation as to the state of a people so available for purchase in this way. And there is no doubt that most ordinary Germans acquiesced in the war, while millions either had knowledge of or complicity in its most barbaric expressions, from slave labour to genocide. But then it is no part of this argument that the German working class remained in a state of pristine opposition to Nazism, splendidly unaffected by its barbaric cadences, secretly in a state of permanent opposition. Rather, it is just that structurally the working class proved impossible to integrate into the Nazi dream of a racial-national community of solidarity - far more so than middle class sectionalism, for example - precisely because of the elitism that characterised Nazi ideology and practise.

Labels: capitalism, fascism, hitler, nazism, working class

A Comedy of Murders posted by lenin

"Von Clausewitz said that war is the logical extension of diplomacy; Monsieur Verdoux feels that murder is the logical extension of business." - Charles Chaplin

Labels: capitalism, chaplin, monsieur verdoux

The superprofits of catastrophe capitalism posted by lenin

I told you that this sort of thing would happen.

Labels: capitalism, disaster politics, environment

Solution posted by lenin

In times of famine, Vladimir Ilych Lenin took a robust line on speculation. "We can't expect to get anywhere," he told the Petrograd Soviet in 1918, "unless we resort to terrorism: speculators must be shot on the spot".

Labels: capitalism, financial sector, food prices, lenin, leninism

Melting the ice posted by lenin

Just a quick reminder: we could well be finished soon. Yes, the WWF are back with new results that confirm the worst: the arctic ice caps are melting even faster than we thought. As the ice melts and more of the surface is water, the temperatures rises more because the water can absorbe heat that would be reflected by the ice. The climate doesn't change in a linear fashion: it has sudden flips. It can sustain stability, like a canoeist, under immense pressure from different fluctuations. But beyond a certain point, it capsizes. The tipping point as far as arctic ice is concerned is that elusive point when nothing we can do can make any difference at all, and it has just got closer. If the tipping point is reached soon, then the arctic ice is gone for good. It will gradually eliminate many populous islands, of course, but we could handle that. Like most refugees, the residents will be pushed about from country to country and forced to live and die in shit and misery, and hated for the oxygen they waste. And we could presumably live with the destruction of the non-commercial forms of life that thrive in the Queensland Wetlands, the Kilimanjaro and the Amazon basin. And, as the ice melts and the Alps crumble because their sub-zero cohesive has trickled away, we can all expect a hearty laugh as mountaineers and cabin-dwellers are crushed to death under avalanches.

However, we may not be as happy with one third of the planet becoming uninhabitable by 2100. And we may be uncomfortable with hurricanes striking hitherto unprecedented zones, such as the recent one that swept into Brazil. One of the bases for hurricane development is a sea with a surface water temperature of higher than 26.5C, which is why the phenomenon has hitherto been so familiar in the Carribean. Raise global temperatures, increase the total amount of warm water, and you get more hurricanes. The hurricane that barrelled toward Spain only to die out may be the first of a new Mediterranean breed of deadly storm. America will find its fertile crescents turned into dustbowls again, but this time on an unimaginably greater scale. Southern Africa will dry up and, while the Sahel region will get more rainfall, it will come in Monsoons that simply destroy the surface earth and provide little basis for agriculture. You think today's food prices are high? Then, of course, you have to consider the interaction of these scarcities with global markets and the geopolitical structure supporting them. Scarcity and destruction is not only a moneyspinner for a privileged elite that could comfortably fit in a small football stadium. It is a driver of war too. Who, faced with failing crops and desolate land, would not be tempted by Lebensraum? All of that is based on a one degree rise in temperature, the most optimistic scenario, the first circle of hell in Mark Lynas' Six Degrees. Add a couple of degrees, and it gets a lot more grim. This is not about mother earth or the various species of plant and animal life that one may or may not eat. The planet will overcome all this, probably even if we drop the big one. It is our viability as a species that is in question. Perhaps the best solution is to rely on the people who gave us colonialism, the arms race, the arms industry, death squads, aerial bombardment, genocide and nuclear annihilation to come up with a neat market-based solution to our imminent demise. Perhaps we should wait and see if they can develop a technological solution. Bear in mind that, as with pharmaceuticals, they may be more interested in giving us something that can help us live with our horrible condition for a while rather than curing the problem. I don't know if it wouldn't be better to just take over the whole system ourselves and see what we can do about it. If it calls for a reduction in economic output, then I'm sure we can handle it. If Lafargue's 'right to be lazy' becomes a duty, I can't imagine too many complaints. Why not?

Labels: arctic ice, capitalism, disaster politics, environment

Support for 'free market' sinks. posted by lenin

I suppose it is to be expected that the term 'free market' is used as synonymous for capitalism as such. On the basis of the most recent PIPA poll, support for 'free markets' has tumbled since 2002 in most countries. And most of those who do support the 'free market' want it to be strongly regulated (ie, they don't actually support a 'free market'). The results indicated that support for the 'free market' was sliding long before the current banking crisis. Given the current global failure of entitlements, and the growing recession, the crisis of confidence is likely to grow. But grow into what? In some European countries, the Left is growing (Germany and Greece). In Italy, it has just experienced a catastrophic defeat, mainly on account of being chained to a neoliberal administration in the era of manifest neoliberal failure. What did Prodi promise after his election victory in 2006? "Shock therapy". I shit you not. Where was he by early 2007? Up shit creek without a paddle. It is amazing that the left coalition has survived this long, what with the insistence on keeping troops in Afghanistan, driving through, er, 'free market' reforms, and expanding a US base in the country. In the UK, it is very difficult to imagine New Labour winning the next general election - it isn't that the Tories are popular, it is that enough of Labour's voters won't come out (and in London, 22% of them are considering a vote for the shaggy right-wing sociopath from Have I Got News For You). Most Britons have no confidence in Brown's ability to handle the crisis, and the reason is that they know they're just going to get more of the same. Unless the radical left makes some strides quite quickly, not only will there be a Tory government, but the Nazis will have representation in the London Assembly and boost its standing in local councils.

Labels: capitalism, crisis, free markets, hegemony, neoliberalism, recession

It's bad for you. posted by lenin

The warnings about soaring global food prices are just flooding in. From the IMF riot to the food riot. Aside from causing starvation among large swathes of consumers, fluctuations in global commodity prices typically wreak the most havoc for small producers. Multinationals and agricommerce don't have this problem, because they are diversified and have the resources to wait out slumps or spirals. While the chaos resulting from the subordination of basic human requirements to global markets can cause social collapse, an erosion of the moral geography, and intensified social conflict of the kind that has afflicted Sudan and pre-genocide Rwanda, the people who are meant to make money from it keep making money from it. Currently, the emphasis on biofuels and the shift of investors away from bad bets in subprime to staple goods have conspired to drive the prices up. So, although there is more than enough rice to meet every individual's dietary requirements, we are told there is a 'scarcity'. That's capitalism for you: even where's plenty, there ain't enough.

In light of all this, I have some questions. To wit: what is that shit you're eating? Why are you so fat, yet malnourished? Why is it that for the first time the number of obese people (1 billion) exceeds the number of starving people (850 million)? And how are those two facts related? Answer come later. The basic facts of starvation are reasonably well known. In the nineteenth century, the world champions of famine were India and China, both subjects of colonial exploitation. India suffered on average a million famine-related deaths a year in the last quarter of the twentieth century. China suffered several severe bouts of famine, costing between 9.5 million lives and 13 million lives in 1877-8, and a further million lives in 1892-4. In the 1877-8 famine, some prefectures saw 95% of the population die. Mike Davis describes in Late Victorian Holocausts how these were a part of a global wave of synchronised hunger of unprecedented savagery, coterminous with the high point of colonial repression and the subordination of much of the planet to capitalist imperatives for the first time. There had been famines in previous millenia, a combination of natural catastrophe and social failure. But nothing like this had ever occurred before. Both India and China defeated famine due to developmentalist policies since the mid-20th Century, even if the recent introduction of neoliberalism has put this outcome in question. The provisions in India's post-colonial Scarcity Manuals, Alex de Waal points out in Famine Crimes, have prevented the descent to epidemic starvation at several key moments - he cites the 1970-3 drought relief response in Maharashtra, which "stands as a model of effective famine prevention by utilizing the provisions of the Scarcity Manuals to the full".

China did suffer one appalling famine in 1959-61, with mortality estimates ranging from 15 million (the Chinese government's figure) to 43 million (the figure reached by the reformist Chinese economist Chen Yizi). The reasons for this, as one would expect, are as much political and economic as natural. The sudden, drastic changes in property forms and incentives associated with the catastrophic 'Great Leap Forward' dramatically reduced output, while at the same the government was appropriating grain for mass export to pay debts to the Soviet Union. Nonetheless, barring that atrocious failure, China did fundamentally depart from its at least century old status as the 'land of famine'. It raised life expectancy all round as a result of social protection systems. In one comparison Amartya Sen and Jean Dreze noted that "India seems to manage to fill its cupboard with more skeletons every eight years than China put there in its years of shame" because of the former's lack of of social protection. (In connection with this debate, you might wish to check out Mobo Gao, the anthropologist and left-Maoist critic of Dengism, who argues that the 'Great Leap Forward' notwithstanding, the Mao years were beneficial for rural China. His latest book also takes to task Jung Chang and Jon Halliday's sensationalist account of the Mao years with some convincing arguments.) At any rate, in South Asia today, mass famine is not the pervading reality it once was, although it remains a risk in North Korea, Bangladesh and Cambodia for different reasons. This is because starvation is not a naturally occurring phenomenon, but the result of a particular political economy. The fact that 6.6m children starve to death each year is no accident of the weather.

Well, then, given that starvation is a historical and not natural phenomenon, given that struggle has proven that we have the technology and political capacity to prevent it, why is it so persistent? Why should the problem of malnourishment and mortality from starvation be getting worse when the technical means to deal with it are more abundant now than ever before? The best answer to these questions to date has been supplied by the former World Bank employee and UN consultant Raj Patel in his justly praised Stuffed and Starved. First of all, let's go back over obesity for a moment. Obesity is related to a bunch of other health problems, such as cardiovascular disease and diabetes. Both obesity and diabetes among the poorest citizens of advanced capitalist societies are shooting through the roof, while India and China are today the world leaders in cardiovascular disease, and childhood obesity is increasing rapidly in China as the market is opened to Western food producers. New Labour, when it gets in the mood, likes to exhort us to be healthier in our dietary choices. This might even be useful as general advice, but in the government's case it functions as a kind of apologia for its neoliberal policies by placing the emphasis on individual choice, when the individual has precious little of it. To the extent that it is treated as a social issue, it is a means by which the poorest population groups are stigmatised - it becomes the basis for moral panic. Sometimes, it becomes infotainment, the stuff of satirical muck-raking and exposé. But the dietary restructuring of the average human being in late capitalism is not merely the result of poor choices, misleading advertising or the spread of certain corporations. And obesity can no more be the object of moral reproach than starvation. So, here is the answer to questions one and two above: the shit you're eating is likely to be high in sugar and fat, because that is what is most likely to be on offer, especially if you live in a poor area of the developed capitalist countries and especially if you're black in America. The supermarket industry is particularly responsible for this state of affairs, and it mirrors the segregated dimensions of poor health related to malnutrition in the US. Firstly, by freezing out smaller producers of fresh fruit and vegetables, thus depriving consumers of choice beyond those adopted by the supermarket for its own convenience; secondly, by 'red-lining' poor African-American or Hispanic neighbourhoods and refusing to set up branches in them, so that residents are left with a limited range of foods such as corn dogs and frozen pizza, high in saturated fat; thirdly, where they do set up in black neighbourhoods, they systematically stock lower quality foods; and finally, they charge higher prices to poorer urban consumers, so that they can buy less of the shit that is available. The global food industry is structured in such a way that urban workers in rich capitalist societies are more and more likely to be offered an inferior range of high fat, high sugar foods, with more places to consume alcohol and fewer food markets with a poorer range of products. As usual, America's fat can bears a lot of the blame: even if you happen to live near the US (ie, if you're a Mexican family living just south of the border), your chances of suffering from health conditions adjoining obesity with malnourishment are increased. It isn't an accident of geography: if you're working class, this is how you're expected to get by. High-energy food is an important component in the reproduction of labour, and is particularly handy if quick to cook or pre-cooked. Alcohol provides a sort of self-medication for the stress and boredom and growing depression that most people are subject to. The all-too-brief sense of warmth and well-being is also an ideal social lubricant among workmates. All of these factors help produce larger frames with more body fat, even while you get a sub-standard nutritional intake. Among those who manage to avoid piling on adipose layers may be the 35.1 million Americans who don't know where their next meal is coming from because production is organised according to market principles that recognise no human need, but only demand backed up by purchasing power.

Of course, the way in which the extension of these market principles has been encouraged by the IMF among others has added to the ranks of the impoverished in various ways. India's 'Green Revolution', just as much as China's neoliberalism, is responsible for removing social protections for small producers; enclosing the land for capital; ruining whole swathes of the population by pushing them into the red; generating a landless proletariat with few prospects who can flee to overcrowded urban areas or try to eke out an existence in former rural communities; and creating a quite remarkable rise in the rate of rural suicide. Well, actually, rural life is tough all around - suicides are higher among farmers than any other economic group in the UK. Sadly, their main champions are puce-faced right-wing bigots who should have their farms expropriated and nationalised. One of the few challenges to this trend, Brazil's landless workers' movement (the MST) is perceived as a mortal threat by the food industry. Where they succeed, for example, McDonalds may end up having to pay more to its suppliers for the soy beans it uses in the McNuggets that you're stuffing your face and padding your ass with. They will keep more land to work as cooperatives, and those cooperatives won't be producing soy, because it isn't economically viable for them to do so. McDonalds gets less profit if Cargill has to withdraw from its Brazilian plantations, take down its illegal port and find somewhere else to monoculture the fields. That is un-American. Besides, the MST's ecological concerns and socialistic doctrines obstruct capitalist practise - that land should ideally be owned by an oligarchy that extracts maximum profits by providing the cheapest possible labour working on one big export product. Of course, by turning food production into an export-led industry while allowing most of the profits to be siphoned out of the country, you do run the risk of leaving large numbers of people impoverished and malnourished in Brazil. And in Brazil, a body broken by poverty will process fat rather badly and potentially end up obese even without eating a large amount of food. But at least that means that you can have several high-fat, high-sugar meals in your local fast food outlet every day. It doesn't even have to be McDonalds. The smaller the store, the more likely it buys in the cheapest meat with the most additives and the least nutritious value from probably the same people that sell the slightly better quality stuff to the big chains. So, that answers question number three. Sure, people starve. Sure, it's poor quality food. Sure, there's shit in the burger. But isn't that life? No, that's capitalism: it's full of shit and its bad for you.

Labels: capitalism, colonialism, fast food, food industry, food prices, malnutrition, neoliberalism, starvation

Schadenfreude posted by lenin

Labels: capitalism, left list, neoliberalism, recession, respect, socialism

Auguring Armageddon posted by lenin

By now, the panic quotes are flying in thick and fast. You can see a sample of them here. Big investors, and big capital, are saying that this could be the big one, a collapse of a kind we haven't seen since - well, take your pick between World War II, or 1929. The federal reserve has slashed interest rates as it always does when recession starts to bite, and organised a huge bailout operation to save Bear Sterns, but no one is kidding themselves that this is going to solve the problem. There is talk about the financial crisis spilling over into the 'real economy', as if this was a problem that started with some bad loans. Will Hutton told Observer readers on Sunday that American industry was doing perfectly swell, thanks in part to something he chose to call 'free trade' (doesn't exist, never will), and was being put at risk by a greedy and arrogant financial class. It's a tempting idea, and it's an analysis that I suspect much of the soft Labour left and many union leaders support, since the upshot is that we should rein in finance capital and invest heavily in manufacturing: quite the opposite of the strategy adopted by Brown and Darling, who have based their recent bland budget and broader economic strategy on the most benign possible forecast. In fact, their only recent intervention of any kind was the horribly belated nationalisation of Northern Rock, and they are now taking the opportunity to shed jobs rather than protect them, so that it can be returned to the private sector on profitable terms. That's a measure of the cravenness of our government's pursuit of neoliberalism: at all costs, the City must be appeased, because it is Gordon Brown's most cherished source of growth. Of course it is right that the running down of manufacturing and the financialisation of the economy has done us no favours, producing some of the lowest growth in post-war history. And it has certainly weakened the bargaining power of labour, while bringing immense rewards to the ascendant rentiers, not just in Britain but globally - Fortune's recent ecstatic fawning over the accomplishments of a tiny billionaire class making the point. However, bad loans are an artefact of deeper structural problems in the global economy, and the problem isn't reducible to the 'subprime' market either.

Take a sojourn, if you will, in that mad, hedonistic, irresponsible decade known as the 1990s, in that mad, hedonistic, irresponsible, incontinent continent known as North America. How louche we all were, how flush with cash and ebullient with it. Well, not all of us. Not the majority who actually weren't flush with cash and netting big rewards on the stock market. Not those whose incomes froze for most of the period laughably known as the 'new economic paradigm' or just the 'New Economy' (a marketing gimmick as sickly sweet as New Coke, and every bit as durable). Not those for whom benefit cuts and welfare-to-work programmes left them poorer and more exploited than ever before. And not those who had to work three or four jobs to keep the family eating. But if the 1980s saw Wall Street assume a commanding position in the US economy, by the 1990s it was a major cultural fetish as well. Everybody who was anybody came to know the thrill of combining technophilia with the bull market swagger: you could not only buy shares, but do so online. In fact, approximately 80% of the increase in financial net worth was accounted for by the top 20% of the population. Most who tried dabbling in shares lost money, but they weren't the ones on the news or selling books. Dude, made a cool two mil: easy bucks, money coming from nowhere, now I got a botox smile and rims. Anyone can do it. It was as if God had blessed America (by the way, I'm surprised that Obama doesn't see the virtues of a slogan like "God damn America"). The Clinton administration, having abandoned its reformist programme, was bigging up the bond market. With wages low, and labour conditions deteriorating, some profitability was restored to capital. The stock market was flooded with cash, and IPOs (in which investors plough money into an upstart entity in exchange for a share of future profits) were bankrolling a wave of flimsy new ventures that would mostly go under by the turn of the millenium. Take a look at Doug Henwood's The New Economy - the ratio of financial assets to GDP shot up in the mid-1990s to close to 950%. The Bubba bubble was only briefly interrupted by the threat of the South-East Asian financial crisis spreading, but with the bailout of Long Term Capital Management, the survival of the US economy compounded the consensus: the American model was working, while the old corporatist dinosaurs of Asia and the Rhineland were floundering.

However, one consequence of basing a boom on low wage growth and poor productivity growth is that consumption had to be supported by debt. So, by 2000, households' outstanding debt as a proportion of personal disposable income reached 97%: an all-time high, and higher than the 80% during the second half of the 1980s (see Brenner's The Boom and the Bubble). By 2000, over 40% of new-home mortgages were financed with down payments of less than 10% of the value of the home, while it was estimated that a quarter of new mortgages were being issued to people who were broke. (Robert Brenner's The Economics of Global Turbulence). Household savings also declined drastically in the US during the 1980s and the 1990s. From 1950-1980, household savings were at a ratio of 8-9%. In the 1990s, they averaged 5.2%, and in the years 2000-3, 1.9%. People have been spending more and more of their available income, and without this change, it is estimated that household consumption would have grown 1% slower in the years 1992-2000. In other words, to even get the modest rates of growth attained through the 1990s, which averaged 3.4% per year, the American economy had to be systematically leveraged so that the effects of upswings and downswings were magnified. (Henwood's After the New Economy; Andrew Glyn's Capitalism Unleashed).

Corporate debt also soared, so that interest payments actually wiped out a great deal of the profits that were being made: between 1997 and 2001, the ratio of manufacturing net interest to manufacturing net profits rose to 40.5%, a postwar record (Brenner's The Economics of Global Turbulence). Even after a slump in 2000-1, the credit bubble continued to swell. More intricate forms of structured credit were devised to spin out more value from less 'real' input. Investors sought to maximise returns through high-risk derivatives, the credit default swap market (in which more secure institutions such as hedge funds are paid to guarantee a creditor against losses in the event that the debtor defaults), total return swaps (in which investors accept the costs of holding an asset, such as depreciation, but gets the full return from it), and collateralised debt obligations (a form of mortgage securitisation). With techniques of labyrinthine complexity, they sliced, diced and tranched debts, distributing risks and rewards across portfolios, with the effect of increasing the chances of both gains and losses given any credit event. When the market booms, all seems to be going splendidly. Debts seem to be being paid - and if individuals or companies lack the funds to make the payments, they can always borrow more money to keep up the payments in the existing debt, on the assumption that future growth will sustain them. Amazingly, it did not. Manufacturing died on its arse, wages froze, job growth was slow, and eventually both individuals and corporations were defaulting on their debts. The underlying structural imbalances in the US economy brought this about. The crisis of profitability that struck all advanced capitalist countries in the 1970s was managed in the US by financial liberalisation, which gave the US ruling class wider opportunities for extraction across the world, but which also led to slower growth rates; busted labour unions, which reduced labour costs for employers, but also led to higher borrowing, with the savings and loans crisis prefiguring the current credit crunch; reduced taxes for corporations and profits, which meant both a transfer of the tax burden to the poorest, and also a reduction in welfare as a supporter of consumption. The financialisation policy put a premium on shareholder value, adding pressure to the drive for short-term profits rather than sustainable growth. It also exaggerated the value of executives who could deliver such profits, so executive pay soared, especially in the form of stock options in which executives were encouraged to share in the value created under their management. This partially accounts for the wave of corporate scandals - fictitious accounting, rigging information, concealing operating expenses. It wasn't just a boon for executives: companies that succeeded in inflating their value could acquire competitors and run them into the ground. (Glyn, Capitalism Unleashed). Huge costs are incurred, of course, but mainly by employees and customers. The criminal justice system doesn't take corporate crime very seriously, and well-placed executives and owners can usually protect themselves from the worst effects of a crisis. Concurrent with all this is the growing centralisation and concentration of capital. Mergers and acquisitions followed by rationalisation and downsizing has meant that most Americans are employed not by the biggest owners, but by small employers who are themselves highly leveraged and exposed to the deep insecurity built into a neoliberal economy.

In short, it will not do to speak of a small class of arrogant financiers causing all these problems. If it really was as simple as that, then the rest of the capitalist class would be beating down the doors of power to demand reform, and plead for restraints to be applied to the ostentatious upstarts. And they would get it.

Coda: One of the major global banks to have suffered least so far from this collapse has been HSBC, one of Britain's 'big five'. It did have substantial exposure in the 'subprime' market. It did experience considerable losses. Yet, its profits increased quite substantially on last year: know why? Because they had shifted a huge amount of their investment from the United States to Asia, particularly China. After recent losses, they seem to have cut investments in the US drastically. Although those economies are hardly insulated from any crash in the US, consumer spending has been rising for years in China, and the country is about to open up its financial sector even further. Further, it looks set to invest more overseas. So far Chinese growth has been a huge boost to US capitalism, but it seems clear that any major crisis in the US will redound to the benefit of China in particular. China is the fourth largest economy in the world by nominal GDP, just above the United Kingdom. It is the second largest economy in the world by the arguably more accurate measure of purchasing power parity, just below the United States, and not very far below either (see the IMF's figures). China is one of the few countries in the world, alongside India, to have experienced a higher growth in capital accumulation during the 1990s than in previous decades - almost everywhere else, capital accumulation was much slower, including in the United States. (Glyn, Capitalism Unleashed). Of course, what China doesn't have, and can't possibly compete in, is an empire. To be sure, it does occupy Tibet - as we see, in a quite repressive fashion - and Taiwan would like its independence. Yet, compared to America's awesome global dominion, this is a handful of beans. Parenthetically, one has always hoped for a more radical Tibetan liberation movement to emerge, something with enough blood in it to put Richard Gere off his soy beans. Yet, one can't help but marvel at the hypocrisy of liberal critics such as Steven Spielberg and Mia Farrow banging on about the fucking 'genocide Olympics', as if they didn't live in a country that was not merely investing in another country whose elite is waging a vicious counterinsurgency war but actually prosecuting a far more vicious one in several countries that they don't even own yet. The main point I would make, however, is that while policymakers will attempt various means including protectionist ones to defend the economy, this whole situation is likely to make the US ruling class far more reliant on its military power. The grab for Iraq was a crucial part of the intense competition with China, and winning that competition - frustrating the rise of a major geopolitical rival, as the PNACers insist - is probably going to involve more assertiveness in South Asia. They'll need to control Pakistan as well as Afghanistan. They'll want their military bases back in Uzbekistan. They'll want to control as much of the oil and gas reserves near the Caspian sea as they can keep out of Russia's hands. And they'll have to do something about Latin America, where growing moves toward independence are undermining US capitalist interests and letting China in on the action. A crisis doesn't just mean economic turmoil; it means a more deadly and fraught world system.

Labels: capitalism, financial sector, imperialism, ruling class, us economy

American Revolution: a preemptive strike against liberty. posted by lenin

Insult the Founding Fathers as a bunch of genocidal, slave-holding white supremacist patriarchs, and you're liable to irritate somebody's stupid little fetish. You're disdaining 'progress' or 'Enlightenment' or 'modernity' or something of that kind. Or, if your foil is the sort of boorish salon contrarian that likes to babble on about secularism while shovelling enough coke up his nose to cover the Himalayas from peak to base, you might be told that you're being 'obvious' or 'boring'. Of course, producing that sort of reaction is often the best reason for making such statements. But there are other reasons too. The fable of America's origins in liberty and rebellion, and its peculiarly missionary quality, is still one that commands a great deal of irrational support from various quarters, and it is the basis for an unenlightened exceptionalism whose function is to turn the global projection of violence and tyranny into a story of the expansion of human freedom. At most, an acknowledgment of America's serpentine origins in the system of colonial slavery might result in a grudging admission that, after all, progress didn't go far enough on this occasion.

Alfred Blumrosen and the late Ruth Blumrosen, who were civil rights lawyers when not writing history, performed a stunning attack on the commonplace interpretation of the American Revolution as one overwhelmingly motivated by the pursuit of liberty. Their compelling book, Slave Nation, which has been endorsed by no less an authority than David Brion Davis, is by no means politically radical, but the conclusions it draws are radically at variance with the consensus. There is compelling evidence that the revolution, at least from the perspective of the elites who led it and benefited from it, was motivated primarily by the desire to preserve slavery in the face of powerful emancipationist currents in British society, particularly the working class, which were already exerting a profound effect. The background is familiar. The early Hanoverian political order, issuing from the first truly capitalist settlement, was also a comparatively libertarian one for the colonists. Guaranteeing a number of minimum rights to subjects of the constitutional monarch, it both excluded the masses from political power and produced a doctrine of patriotic liberty - the 'freeborn Englishman' - that was fully compatible with the lack of democracy, various kinds of coerced labour, and rigid class rule. It was a doctrine that would be appropriated in various ways: used to justify war against England's colonial opponents by Pitt the Elder (the early days of democratic intervention); taken up as a weapon of opposition by John Wilkes; and of course conscripted to the cause of the American revolt. Given the pace of economic development in the colonies, the control exerted on matters of trade by the ruling oligarchy in London was a burden and increasingly depicted as a violation of the rights of all the freeborn colonists. The development of radicalism in North America was coterminous with an increasingly radical domestic critique of Hanoverian Britain, and it was the ideology of individual liberty that sustained both.

Anti-slavery activism was increasingly evident in both the colonies and in England itself, again rooted in an asserion of the rights of the individual against tyrants of all kinds. In London, freed slaves were encouraging slaves brought back to the metropole with their master to rebel and escape, while radical activists such as Granville Sharp were waging legal battles to win freedom for slaves. In the American colonies, the anti-slavery movement was pioneered by the Quakers. Its demands made an impact on the direction of the Patriot movement and were reflected even in the gestures gestures and words of those who were up to their necks in the slave trade. So far, so familiar. What then follows is that the libertarian impulse, which radicalised in the course of the revolution, helped trigger the revolution in France and provided an opportunity for Haiti to throw off the shackles of slavery and produce the first serious omen that the institution was untenable in the long run. In doing so, it also contained the seed of the future liberation of slaves in the United States. Through a close reading of Locke, as President Bush has suggested, the American revolutionaries made individual dignity and freedom the abiding concern of what has become the world's most powerful state, turning the latter into a matchless arsenal of liberty.

But suppose that a significant motive behind the American revolution, a far more compelling immediate cause of revolt than taxation, was the defense of the institution of slavery - that, so far from being merely accomodated by revolutionaries, or conserved by them in spite of their rhetoric, it was actually a major cause of the revolt? The Blumrosens show that a potentially devastating legal precedent, a victory of anti-slavery advocacy in England, added flames to the tinderbox and ensured the cooperation of colonial elites to preserve the institution of slavery through the declaration of independence. In 1772, a slave named 'Somerset' by his master, an accomplished colonial entrepreneur named Charles Stewart, had been baptised and sought his freedom in England. He was recaptured, enchained, and placed on a ship to Jamaica where he would be sold. Those who had agreed to be his godparents petitioned the King's Court on his behalf and - because of the previously successful legal advocacy of Granville Sharp, were able to win a decision to let him go, since his detention by force was incompatible with the laws of England. It was not that one slave had been freed - it was that any slave in England might, because of this precedent, claim the right to leave his or her master. And the news got around.

The colonial context provided some reason for slaveholders to be alarmed. Colonial legislation could easily be overruled by the Privy Council, and already had been several times. The British imperial power had faced opposition to its taxation policies, and even stimulated serious revolutionary upheaval for short periods. It had perpetrated the infamous Boston massacre against opponents of its rule (one of those 'motley crews' of multiracial workers discussed by Linebaugh and Rediker). But even so, most of the insurgency had died down until the affront of 1772. If parliament asserted its supremacy in relation to the colonies, and the highest legal opinion in England held that slavery was such an odious state of affairs that it could not be permitted in England, might not a skilled campaign with mass support actually obtain the judgment that the colonies as territories subordinate to His Britannic Majesty were subject to the same law? The rise of slavery had enabled the colonial ruling class to contain social discontent in the south by phasing out white indentured labour, permitting white workers to own one or two slaves and thereby enabling them to school their children and reduce the burden of labour they had to contribute toward their own existence. It was seen as an essential component of the southern system, but the same senior spokesman for the British colonial administration who had represented the government in imposing the stamp tax was now also responsible for describing their system as 'odious'. Virginia slaveholders were terrified that their slaves would take the opportunity to rebel, run away, and take their chances with the mother country. The southern colonists started to look at ways to secede, but they could not be sure that the northern colonists would join them in a bid to protect slavery: slavery was less common in the north, though still legal there, and anti-slavery agitation was more common. It has been imagined that the petition by the Virginia colonists requesting that the King abolish the international slave trade was an appeal to end slavery - clearly, no such thing. The fact was that the domestic slave population could reproduce itself, at least in Virginia if not in other parts of the south where conditions were more harsh. And voices were beginning to be raised that the importation of so many blacks was diluting the culture and intellectual advancement that whites could bring to bear. But what it did was permit a vague anti-slavery flavour, which Jefferson could take up without actually calling for the abolition of slavery itself (there is, as Gerald Horne writes, some doubt about the sincerity of his earlier anti-slavery opinions, but no doubt that he later drifted toward the belief in a biological inequality of races).

So, it was the Virginia Resolution calling for intercontinental correspondence on the topic of Britain's abuses that first united the previously disunited colonies, leading to the first Continental Congress in 1774, which sought to assert the rights of the colonies with respect to their property. This was more than demanding the resolution of taxation issues, which could have been achieved without declaring independence from parliament. It was about ownership of all varieties, particularly of slaves. The southern rebels were able to cut a deal with John Adams, representing the other significant colony of Massachusetts, in the defense of slavery, and Adams would continue throughout the revolutionary era and beyond to resist all moves toward emancipation. Subsequent declarations repeatedly asserted and defended the rights of the 'peculiar institution', and it was no incidental matter that the British would try to fight its counterinsurgency war on the cheap by encouraging slave rebellions. If the colonists drew on Locke's 'natural rights' theory to justify their independence, they had to prevaricate where this seemed to conflict with their defense of slavery. Jefferson provided the relevant tweaking: instead of all men being 'born' equal, they were 'created' equal. A state of manhood and thus equal right could thus be 'created' by the decisions of white slaveholders looking at the case of slaves whom they might wish to manumit. The Articles of Confederation would specifically defend slavery's mandate across the states and implicitly rebuke the 'Somerset' decision.

And so on - without the original stimulus and the congress in 1774, without the deal over slavery ensured, northern and southern elites could not have united. There would have been no American nationhood since, until that point, the colonies were more integrated into the imperial centre than one another. Without the sustained efforts to preserve slavery by northern and southern revolutionaries, there would have been no revolution, or at least not then. That the 'pecular institution' would go on to exert such a dominating effect over the political life of the country, both in its domestic and foreign policies, is hardly surprising. It was the 'property right' par excellence, the reason for the revolt, and the basis for the future prosperity of the independent colonies.

Labels: american revolution, capitalism, hanover, progressivism, slavery, stageism

A grand don't come for free. posted by lenin

Consider: "There were 469 US billionaires, worth a combined $1.6 trillion, while the 656 billionaires who live outside the United States are worth $2.8 trillion." That is the upshot of the latest Forbes billionaire list. Leave aside the thought that US troops probably kill more Iraqis every week than are on that list. I just wondered if it was possible to calculate how many man hours of labour produced the $4.4 trillion of wealth that is enjoyed by this very small number of individuals. Obviously, we could pretend that the canniness of these investors was itself the key magical ingredient that produced all this wealth, and then the problem would no longer exist. That claim has the grave disadvantage of being insusceptible to proof or disproof, of course, like most forms of magical thinking. On the other hand, if the value embodied in that wealth was principally produced by labour, then surely it would be possible to produce aggregate figures for all the man hours of labour that went into producing it.

Let's say, hypothetically, the average value produced by a single man hour of labour across the globe was $40. That would be 11 billion man hours of labour. I have no idea what the actual figure, supposing it was obtainable, might be, but I'm just trying to get a sense of scale here. For this 1,125 people to live in the manner to which they are accustomed, it really must take billions of man hours. Well, obviously they didn't do all that work between themselves. Let's put it another way. Warren Buffet increased his wealth by $10bn last year. That would be 250 million man hours right there. And say the average worker does 2,500 hours of work a year (that would be a 48 hour week every week), this would mean that Buffet's increase in income over twelve months was supplied by 100,000 people all working long hours without holidays - workers in Fruit of the Loom, Dairy Queen, Ginsu and other firms owned or co-owned by Buffet. Bill Gates got a $2bn increase over last year. At fifty million man hours of labour, that would be 20,000 workers going flat out to produce just his 2007 bonus. Again, these figures are entirely speculative, for the purposes of constructing some scalar conception of this wealth in relation to the work that made it. A grand don't come for free. $4.4 trillion took a mammoth exertion across many sectors of the international labour force to produce. In practically every newspaper and television report, the tone of the response to this annual Oscars ceremony for the uber-rich is laudatory, of course, and viewers are encouraged to admire the go-getters and dynamic wealth-creators who have locked up so much of the booty. Where, the commentariat gushes, did all this wealth come from? It's amazing. It's the touch of Midas. It's the Sage of Omaha. It must be magic. These men rule because of their godly prowess among mortals. It is the only explanation. All hail.

Labels: billionaires, capitalism, exploitation, ruling class

"Down With the Velvet Revolution!" posted by lenin

After having been so rude to the Fidelistas on one or two of the blogs and websites, I read this piece in The Guardian, and began to feel penitent. Allow me to quote:

The dearth of suspense [over the selection of Raul Castro for the presidency] underscored the authorities' tight control over the island and its 11 million people, many of whom hanker for relief from poverty harsher than that experienced in eastern Europe before the fall of the Berlin wall.

The Bush administration called on Havana to move towards democracy, an implicit acknowledgment that Cuba retained the initiative despite Washington's economic embargo.

This is not one of the worst articles I've read, to be fair, but it does grate against common sense. Poverty in Eastern Europe before the collapse of the Eastern Bloc? Yes, okay, there was plenty of it, but what about after? Surely one of the more unfortunate metaphors he could have chosen. And what about that economic embargo? Does it have anything to do with poverty in Cuba? Well, this is to be expected. Corporate media is the Land of Forgetting, a constant stream of Shocking Images and headline grabbing events with no context and no connections, just a very random assortment of things. Journos have to work fast and, if sense and context is required, they are under immense pressure to rely on internalised narratives supplied by official ideology.

One of the effects of Washington's economic embargo (and constant warfare) was to make Cuba highly dependent on the Soviet Union and Eastern Bloc, with whom most of its trade was conducted. It was partly for this reason, and the revolution's failure to spread, that Castro adopted the Sovet Union's model of economic development, which entailed strict targets and a highly disciplined labour force. In a way, they didn't have much choice - in order to develop in a highly hostile world system, they had to produce a huge surplus of commodities and try to export them. They couldn't afford to have serious discussion and dissent, otherwise they risked seeing the whole system unravel and get incorporated into the Washington Consensus. The invasion, the nuclear stand-off, the surreptitious guerilla warfare, the terrorism, the hotels blowing up here and there, airline hijackings, 630 assassination attempts and so on, also contributed to making the island state quite a repressive one. Falls in worldwide commodity prices could make the system very vulnerable, and stagnation in the Soviet Union could lead to lower growth in Cuba. For all that, the Cuban economy sometimes did better on average than Latin America as a whole. And, despite the collapse of the Soviet Union and Eastern Bloc, the Cuban revolution survived. You can't explain that simply by reference to the 'tight control' of Fidel Castro and his bureaucratic clique. It has, clearly, a substantial popular base because of the changes it has managed to achieve in extremely difficult circumstances.

What would have happened if the Cuban regime had fallen in 1989 or 1991? Realistically, it would not have become a thriving workers' state. It would not be a rich little Barbados either. What other state in the Carribean would it most closely resemble? Haiti. An American plantation with an exiled ring of death squad mercenaries ready to discipline the population as and when required. I mean, really, if people want to talk about dictatorship and poverty, look no farther, and it can't be more than a few dozen miles from the Cuban mainland. Constant US subventions, the repeated crushing of democratic dreams, virtual slave labour, staggering poverty, horrible inequality, low life expectancy, hardly any public sector, just a disgrace and constant misery. A whole new class of Andy Apaids, bumpkin billionaire oligarchs, gangster capitalists, would have sprang up. Life expectancy would have plummetted and poverty would be far worse than it is.

In Russia, the catastrophe of shock therapy was unleashed on 2nd January 1992. The shock came in two ways – first, the price explosion (food suddenly cost four times what it used to), and second, the massive public expenditure cut-backs. Inflation did drop – from almost 250% in January 1992 to approximately 30% in December 1992. Progress indeed. By 1995, it was estimated that 80% of Russians had suffered a serious decline in their income. Income from work for families had dropped from being about half of all income at the start of the 1990s to just 39% in 2000. From a mortality rate of 11 per thousand in 1990, the death rate soared to 15 per thousand in 2000, peaking in 1994 at almost 16 per thousand. In fact, in this “unprecedented peace time mortality”, we find an alarming underlying truth about Russian society. Between 1990 and 1999, there were 3,353,000 excess deaths in the whole Russian territory. Male life expectancy fell from 63.5 years in 1991 to 57.6 years in 1994. Female life expectancy fell from 74.3 years in 1991 to 71.2 years in 1994.

In Cuba today, the average life expectancy is a bit higher than that for the average American and is among the highest in the world, and that average takes no account of the horrifying nadirs in life expectancy for the poorest in the US. This is just because healthcare is a priority in Cuba, whereas in the United States profit is the only priority. You don't set up systems to look after human beings under capitalism - what about self-reliance and responsibility? - so naturally you just let the workings of the market wipe out the surplus population. Cuba has a slightly lower infant mortality rate than the United States too. Recently, there has been a severe increase in infant mortality in the south-east of the United States, which has reached 17 per thousand live births among black people, a figure comparable to Vietnam and Albania. Cuba, while it is not a socialist paradise, is a functioning state against all odds, and the population has been spared the fate of the poorest Americans. Inequality is rising in Cuba, but it remains one of the least unequal societies on the planet, which is one indicator of social justice. It has overcome a legacy of racist segregation and colonialism and slavery in a way that other states have not been able to. Unfortunately, it looks like Raul Castro is preparing to liberalise the economy further, presumably hoping to see growth on the current Chinese model of mixing neoliberalism with strong political oversight. But China doesn't have the disadvantage of implacable US hostility, which has shut off most sources of US investment and income from multilateral institutions that are effectively controlled by the US. China isn't in the American back yard. China is important to US capital, and can retain a measure of independence. Cuba, to put it crudely, is just going to get fucked.

I would love to see Cuba become a thriving socialist society and overcome its present impoverishment and difficulties. But the only way that can happen is if Latin America and the Carribean is revolutionised, (quite independently of the top-down politics of Castro, I might add), and if the American Empire is defeated. ALBA, (the Bolivarian Alternatives for the Americas, uniting Cuba, Bolivia and Venezuela) is a step forward in that direction. So, just to rile the neoliberal consensus and just to play nice with the Fidelistas, I am toying with a new slogan: "Down With the Velvet Revolution!" Obviously that ain't a cri de coeur.

Labels: capitalism, cuba, development, neoliberalism, socialism, stalinism

Segregation, apartheid and the interpenetration of race and class. posted by lenin

It is a fairly commonplace myth in liberal historiography about South Africa that apartheid was a result of the triumph of illiberal Afrikaaners over the more liberal southern Cape which had the most British influence. It is actually a mytheme in British culture too, expressed in the joke: "Why is Holland so laid back? Because they sent all their mad bastards to South Africa." Another myth is that part of the reason for the ability of the racist-nationalist power bloc to impose entrenched segregation and then apartheid is the lack of pragmatism on the part of resistance groups such as the ICU, the Communist Party and the AAC, but this is to conflate pragmatism with liberalism and social compromise, itself a fairly commonplace gesture in bourgeois ideology. The marxist revisionists of the 1970s and their slightly pomo challengers in the 1980s provided the tools to take these myths apart, but they also furnished new insights into the ways in which 'race' operated as a regulatory principle and how it interacted with class. I am always intrigued by the way the fiction of race blends in with other social forms - class, ethnicity and gender, most obviously. One can easily think of examples: when I grew up a 'Protestant-looking' household was one that could pass for middle class; class itself is itself often understood as a kind of 'ethnicity'; the ideology of 'race' is usually coextensive with a conception of proper gender relations; and, as we will see later, the stratification within classes based on skills and trade has been susceptible to racial ordering. The racially ordered labour system in South Africa is as good a basis as any for investigating these interconnections

The roots of formal apartheid in South Africa, introduced in a series of measures by the Afrikaaner Nationalist government elected in 1948, were established in a sequence of legal, political, economic and ideological mutations that began with the transformation of the Southern African economy by the rise of mining capital. The principle of white supremacy had been established in various ways before – for example, in the Shepstonian policies of colonial Natal which “provided a ready-made rationalisation” for segregation (John Cell points out that the Natalian expert on the ‘Native Question’, Maurice Evans, also held that Natal and Basuto-land provided some of the fabric for possible segregation). And the constitutions of the Orange Free State and the Transvaal Republic insisted on "no equality between coloured people and the white inhabitants". However, an increasingly stark, and rigid, racial order emerged in the late nineteenth and early twentieth century. Through the imposition of racially organised restrictions in the labour system in the late 19th Century and the elaboration of legal doctrines pursuant to the subordination of the ‘Native’ after the Boer War, the ascendant capitalist elite sought to integrate African peasants into the labour supply on an affordable basis. The colour-coding of labour legitimised this subordination and helped to frustrate the development of class consciousness among the growing working class. Crucially, it met some of the demands of white workers on terms that could be accommodated by the ruling class.

However, this is not reducible to a ‘cheap labour’ thesis, which strikes me as a reductionist approach. ‘Race’ was not merely a pragmatic auxiliary to the capitalist management of the labour system, a cheap ‘divide and rule’ mechanism. The doctrine produced and imparted its own rationality, affecting the balance of risks for any would-be employer as well as for statesmen pursuing particular policies. The hyperstition of ‘race’ inflected debates about disease, population management and geography. And the relatively short-term goal of profitable mining was situated within broader debates about what constituted self-government (was it a political or cultural state?) and who was fit for it. It also interacted with religion (capitalist labour could be seen as an admirable system of reward and punishment for fallen man) and rationalism (in which segregated labour was eventually seen as the most efficient use of human resources for the improvement of all).

The historical context for this development is obviously one in which white supremacy was an organising principle throughout the colonial world, and in ex-colonies (for example, the post-bellum American Deep South provided much of the experiential input into the doctrine of segregation in the Republic of South Africa). This racial order infused and, to some extent, enabled the global emergence of nation-states and capitalist development. Initially, mining interests did not favour a rigid racial division of labour. Until 1885, the main mineral traded in Southern Africa was diamonds, and for much of the early trade, Griqua, Kora and Tlhaping producers were dominant. But white diggers had sought to impose their own monopoly on claim ownership with some success. For instance, while the British authorities in the Cape were reluctant to endorse overtly discriminatory legislation, diggers were required to have “a certificate of good character” from a justice of the peace or resident magistrate. The historian Paul Maylam notes that this did not prevent de facto white ownership and control of the diamond mining industry, and it may be that the policy was “racially laden” , particularly if one’s ‘race’ impeded a judgment of “good character”.

Even so, it is clear that whatever significant forms of segregation took place were still usually ad interim rather than premeditated and systematic. Indeed, the initiative often came from white workers who, beholden to a doctrine of "free white labour", sought to maintain and entrench their own relatively privileged status. What the mine-owners did want was to depress labour costs, and they did this by recruiting large numbers of African labourers for “unskilled jobs at minimal rates of pay”. This recruitment drive, especially as demand for labour outstripped supply in the 1890s, stimulated one of the many fears entertained by white workers – being ‘flooded’ or ‘swamped’ by cheap African labour.

The regnant ideology in the English-controlled Cape was assimilationist – the British would use what today is known as ‘soft power’ to win Africans “to civilization and Christianity”, as Sir George Grey put it. This assimilationist posture is often referred to in terms of a "Cape liberal tradition", but I question the utility of this phrase – it seems to re-describe rather than explain. After all, from 1875 there was a great deal of de facto segregation in the "liberal" Cape: for example on the railways, where one’s class of carriage was arranged both by class and race. Further, to de facto segregation was added de jure segregation with the National Reserve Location Act of 1902 which forced Bantu-speaking Africans into restricted locations. Parry makes the important point that the overall context of imperial rule had changed dramatically for Britain. If the British Empire in the first half of the nineteenth century had been expansionist, it had also attenuated its aggression with co-option and persuasion. The Indian Revolt of 1857 and the Jamaican Rebellion of 1865 both stimulated high-handed ‘revenge’ and an increasingly shrill assertion that the "lower races" could not be integrated and so would have to "disappear". Racial ideas meshed with Social Darwinist doctrines in official British propaganda. A new attitude to relations with the Africans was entailed, and it is one in which Victorian liberals were deeply implicated.

However, that background alone would not explain the scale, timing and nature of the transformation, much less the duration of employers’ resistance to entrenched segregation. It was the interaction of this transformation of imperial ideology with economic necessity that made was decisive. For example, the first of a series of cumulative transformations leading to entrenched segregation was arguably the 1894 Glen Grey Act, promulgated by Cecil Rhodes, which abolished communal land ownership, taxed those who could not prove they had worked in the last three months, and imposed male primogeniture laws for the inheritance of land, with the intended effect of driving more and more Africans who had hitherto subsisted on collectively owned land into the workforce. The legislation is named after the turbulent colonial territory that Rhodes was made Prime Minister of in 1890. The British had repeatedly considered similar measures to break up the old African social fabric and win the loyalty of some. It was initially conceived of as an adaptation to indigenous resistance, and this preceded the ‘mineral revolution’, never mind the arrival of Cecil Rhodes. However, the Glen Grey Commission that was put to work in 1892 was aware of the region’s hitherto protection from the pressures of the labour market, and hostile to it. And Rhodes was certainly anxious to satisfy his labour shortages. Whether or not the legislation was primarily intended to supply cheap labour, it did so, and provided a model for others who wanted to do so. At first blush, too, the legislation would not seem to advance segregation so much as integration, even if on a highly unequal basis, since its thrust was to drive African workers into capitalist relations alongside white workers. However, while it stimulated the production of a large African proletariat to work in the mines, it also established separate laws with respect to land and taxation. Segregation was not complete separation – it was separation for the purposes of domination and exploitation. The success of this policy inspired much of the legislation later recommended by the South African Native Affairs Commission (SANAC) and legislation enacted post-Union.

The significance of this legislation is not only the precedent it set. Part of its importance is what it says about the racial order that it was acting on. In South Africa, the arguably mundane business of specialisation of skills and class differentiation had been enchanted by its interaction with ‘race’. Just as certain forms of menial labour was seen as being beneath whites, skill was increasingly a cultural achievement rather than a vocational one, a gift of whiteness rather than of training and labour market fluctuations. Such conceits guided future legislation. In 1898, it was deemed that no ‘coloured’ person could hold an engine-drivers’ certificate of competency. And in 1903, the Volksraad in Transvaal adopted a regulation explicitly barring all but competent whites from underground blasting. When Chinese labourers were imported as a temporary stopgap to the labour supply problem in 1904, they were specifically excluded from over fifty separate skilled trades.

The production of the new racial order was a response to various actual and perceived problems for the rulers of South Africa. In the first place, the British were committed to the principle of white supremacy. The British high commissioner to South Africa, Viscount Milner, had explained to Prime Minister Asquith before the Boer War began that the principle of defending the ‘Native’ from oppression at the hands of both Dutch and English in South Africa was at odds with the principle of winning a loyal ally in the Dutch. Secondly, mining magnates had complained Paul Krueger’s administration and its failure to produce a steady supply of the needed labour especially for the Witwatersrand. The solution could not involve coercion of a too obvious kind, since the ‘Native Laws’ of the Boers that resembled slavery had been an issue utilised by the British government in its war propaganda. Yet, if the transformation that took place during and after the Boer War was animated in large part by the desire of central mining interests for cheap labour, the enabling discourses were legal, political, scientific, bureaucratic and cultural as well as economic. It required a vast effort at social engineering, the adoption of a bureaucratic rationality and a form of knowledge about the ‘Native’ that was neither as variegated nor ambiguous as that possessed by missionaries. As Adam Ashforth points out, the ‘Native’ had to be carefully constructed to be the subject of laws. SANAC, appointed by Viscount Milner following the Inter-Colonial Customs Conference of 1903 at which delegates from Britain’s regional colonies were in attendance, was to produce this kind of knowledge. The proper subject of ‘Native’ law was thus defined variously as ‘Kafir’, ‘Bantu’, ‘Native’ or ‘savage’, and this definition itself overlaid with assumptions of cultural inferiority and disability. In particular, he was understood to be bound by feudal political forms and antiquated modes of production that were unproductive. It was therefore necessary to impose restrictions on ‘Native’ land ownership, and undermine their existing social forms with the imposition of primogeniture. If only it were possible to “do away with free land,” one could “strike at the root of much that is most unsatisfactory in Native life”. Further, intermixture between the races should be avoided, and the ruling race’s supremacy should be carefully conserved. Capitalist social-property relations and white supremacy were cosubstantial with civilization.

Other discourses co-produced the new segregated order. The bubonic plague had arrived in South Africa in 1900, with the Boer War in procession. A surfeit of metaphors through which the ‘Native’ was understood as ‘disease-ridden’ came into widespread useage. The description was often used as if it were cognate with ‘lazy’, ‘uncivilized’ and ‘poor’. These metaphors contained a hidden cargo of economic resentment, but they also induced a set of policies designed to reduce the intermixture of African and white populations. In the case of Cape Town, the policy of moving Africans to Uitvlugt was considered a great success. It produced a temporary labour shortage, but this could be managed if the location was used as a source for labour to be funnelled to employers based on ‘pass laws’. Not only was the ‘Native’ considered diseased. He was also the source of viral discontent, especially where there was too great an effort to civilize him and where he had developed expectations beyond his means. He stirred up discontent and was unwilling to perform the manual labour that was required of him.

The SANAC recommendations provided the basis for future segregationist legislation. But as Legassick points out, a large part of the responsibility for disseminating these ideas is borne by those liberals who pressed for self-government for South Africa along the lines of Australia and Canada. Lionel Curtis, an advocate of integrating South Africa into a single Commonwealth state on the basis of self-government, was also one of the earliest explicit advocates of segregation. Other liberals, such as James Bryce, considered the ‘disaster’ of Reconstruction states in the American South an exemplary lesson in the danger of extending self-government to the ‘natives’. While the South Africa Act of 1909 granted self-government for whites, ‘Natives’ were the subject of authoritarian colonial relations. The Natives’ Land Act of 1913 restricted African land rights dramatically. Subsequently, some of the most violent labour disputes in the immediate aftermath of WWI - the South African government actually bombed the workers involved - involved the white working class wanting to avoid the status of 'Kafir'.

I leave the chronology there, although the resistance through the 1920s and 1930s, and what it says about combined an uneven development, is a compelling topic in itself. But let me put together some conclusions. It is obviously not possible to read off the transformation in South Africa’s racial order from economic developments. However, it is possible to say that among other things, the racial order was a particular ordering of labour, a colour-coding of labour’s status. It was increasingly seen as a natural means of managing both labour relations and the labour supply. The reshaping of the racial order did meet economic interests that were clearly expressed through policymaking institutions, and these emerged specifically from the transformation of the South African economy by the discovery of diamonds and gold in particular. It acted to consolidate Britain’s imperial tutelage of and economic position in the mineral-rich territory, by uniting its interests with those of whites in South Africa. Although South Africa’s capitalist class was not always the only or main agent pressing for entrenched segregation, only when that agency shifted from general resistance to aggressive support for such policies did the demand for them become effective. The spread of capitalist social-property relations and the imposition of white supremacy were co-extensive in a way that was possible chiefly because of the way in which capitalist relations were borne by the agency of empire. This is both because of the racist doctrines through which the British Empire came to understand its subjects, but also because it involved a capitalist society in an encounter with pre-capitalist societies which seemed self-evidently ‘backward’.

Labels: apartheid, capitalism, class and race, segregation, south africa

Northern Jelly posted by lenin

A friend of mine who works in the City and is knowledgeable about the laws, regulations and internal procedures of investment banking said to me the other day: "Investors are the most pampered people in the world. There are so many laws and regulations designed to protect their rights, it's unbelievable." Laws designed to protect the property rights of the owners. Who would have imagined such a state of affairs? Well, today investors are predictably furious about the temporary nationalisation of Northern Rock. If a neoliberal government like ours undertakes a nationalisation, you know it's serious. But the owners aren't happy. Their shares, their shares! The socialistic government has stolen their money! Somehow they promise to mount a legal challenge, just as the shareholders in Railtrack did when the government allowed the company to go bankrupt rather than bailing it out with yet further billions in public money. The City is also alarmed. The government exists, as far as they are concerned, to defend their interests and as far as they are concerned that means the guarantee of private profits with public money, and private ownership with public risk. This sort of thing gives people ideas.

Nevertheless, there cannot be too much shock. Practically everyone knew that nationalisation was the only option in this case, and it was simply not plausible to continue ploughing in billions - the Bank of England has loaned the company £55bn, which is eleven times its value at its peak last year, and many more times its present value of £380m, while - while the owners floundered and frittered it all away. If anything, it would have been an obvious decision several months ago, long before a single penny of subsidy had been issued. The government has tried desperately to avoid it. And after all, the nationalisation is only a temporary measure designed as much to protect the institution and return to private capital in good condition once the economy gets back into good shape. And it will be run by highly paid individuals from the banking industry, such as Whatever the shareholders say, the rentier class will probably be quite relieved as a whole. Even Martin Wolf of the FT backs the nationalisation and gives a few reasons why the grasping bastards who have run the thing into the ground shouldn't be given any compensation. The Tories are arguing that this decision amounts to a 'humiliation' for Alistair Darling, and are raising the spectre of a return to the 1970s (a much maligned and underestimated decade). On the one hand, it's faintly embarrassing in itself that to change your mind is supposed to be a source of embarrassment, but on the other hand, Darling has sort of brought that on himself by straining so hard to avoid nationalisation. Anatole Kaletsky is predicting catastrophe on the absurd grounds that nationalisation is a form of market 'distortion' and anyway the government is crap at running things. Are there really people who still believe in the free market fairytales? Does he not know how his employer pays the bills?

Nationalization is often a poor substitute for socialisation rather than a synonym for it. It is usually a prophylactic, in fact, against such measures, a manageable half-way house. In this case, it doesn't even go as far as that. It is a temporary stop-gap, without any guarantees as yet for the workers in the bank, which places £100bn of public money on the line, with the company's future co-determined by a small number of experts from the industry, in order to return the business to private ownership as soon as possible. But still, it does give people funny ideas. You know, in a world where Morales is nationalising the gas industry, Chavez nationalised much of the oil industry (and was going to nationalise the whole banking industry), and even the Scottish executive is planning to fully nationalise the railways, the convenient myth that public ownership is 'unrealistic' is starting to look, well, unrealistic. And that raises all sorts of questions. We were told that privatising utilities would bring us more efficient, lower cost services. British Gas has just jacked up the prices and is making record profits, while energy companies like Npower do the same. The privatization of water has been disastrous in many places, and in the UK it has led to exorbitant costs and low maintenance. The privatised airports are uncomfortable and overcrowded because they allot most space to commercial facilities and provide little seating or other amenities. Privatization also led to increased unemployment and diminished bargaining power for labour. In each of the industries privatized by the Tories, employment fell dramatically - in steel by 75%, in railways by two thirds, and in electricity and water by about a half. Right-wing economists complain about over-employment, but the danger was always in the contrary temptation - to cut necessary staff and make the service unsound. And what is the point of having 'competition' in the banking industry when they all provide much the same lousy service and rip you off? Wouldn't a publicly owned and accountable industry be better for customers? And why should we have to pay for their crisis? If a company can't or won't keep its business running to keep people employed, shouldn't the government use its initiative, nationalise, defend jobs and engage in industrial conversion if necessary? Oh, Jesus no, don't start thinking like that! Winter of discontent, remember? You don't want to go back to the bad old days, especially not when everything is so fabulous.

Update: It looks like the unions' fears were right: the government is going to shed thousands of jobs from the bank.

Labels: capitalism, nationalisation, neoliberalism, northern rock, socialism

Secularism is a chimera: my posish on the Archbish. posted by lenin

I've written a piece about this Sharia bullshit for Socialist Worker. It goes without saying that I oppose the Islamophobic tirades, but I hint at a problem with the Archbishop's position. For although Muslims should absolutely have the same rights as everyone else, the Archbishop's call is for a kind of 'integration' that I think enhances the power of the state to interfere in religious life. To expand a bit, I note that New Labour have been rather happy to try and co-opt a version of Islam that is acceptable to them. To give the state any more authority to determine in matters of religion, by separating an Islam that is compatible with "British values" from one that isn't, is to give it the ability to play 'good Muslim' versus 'bad Muslim'.

The liberal response to this is not only based on a misconception of what Williams said, but actually a misunderstanding of what secularism is. Many think that the reformation was fundamentally about separating religion from politics. It is true that Lutheran morality separates secular from sacred power, but the first legal achievement of the Reformation was the Peace of Augsburg, which formalised the non-separation of religion and politics by giving dictatorial power on confessional matters to local rulers. Really, secularism began with the policies of 'tolerance' pursued by early modern 'Enlightened' despots and liberal states, and it hasn't advanced much beyond that. I think the truth is that a complete separation of church and state is a chimera as long as the two exist as potentially competing sources of authority in the same territory. The state will inevitably seek to control religion, and religion will inevitably seek to gain a niche of authority for itself. The question is to what extent and in what way.

And here it becomes problematic. The capitalist state has no ba