29 February 2012

From Permanent Austerity to Post-Industry: Thoughts on Nevada's future.

Nevada was barely a state under Fordism, the population of the whole state in 1970 was 496,960, yet the state and in particular Las Vegas became the promised land of Neoliberalism. In Las Vegas work was plentiful and housing was cheap, booms in profits were matched with booms in standards of living, and all this happened with a tiny state presence. Sure Las Vegas was dominated by three industries  gambling, construction, and realty  but no one saw any reason to worry. By 2008 the state population had reached 2,738,733 with 72% of those people living in Las Vegas.

The house of cards collapsed with the rest of the global economy. Tourism declined, heavily leveraged construction projects ground to a halt, housing prices plummeted, workers were laid off, people defaulted on their mortgages, and 15,000 people left the city. Ill try and make a more detailed analysis how this crisis unfolded in a later post but suffice to say, its bad.

Now three years into the crisis folks are beginning to ask whats next for Nevada. A recent Economist article (Rolling the Dice January 7th, 2012, pg. 28) profiled some recent steps taken by the new governor of the state, Brian Sandoval. His main drive is to diversify the Nevada economy, to bring in tech business, medical services, warehouses among other things. In a nutshell he wants to bring the post-insdustrial dream to Nevada. But is this possible? Can growth be restarted in Nevada with call centers?

Lets focus on the capital already there. Nevada has two main industries, gambling (with which we might include a cluster of vice industries) and mining. For much of the 20th century Nevada was the only possible home for both of these. Mining still cant leave since Nevada is home to the USs largest gold reserves, but things are changing for gambling. In the last three years several states have become more open to gambling, many including Ohio and Maryland legalizing Las Vegas-style resort casinos. These new casinos will have a slightly different clientele make-up but the effect will be a striking shake-up in the geography of the industry. A casino is rural Ohio won't draw the high rollers, but it will more efficiently reap the diminishing disposable incomes of Americas working class. The high rollers will still go to Las Vegas to some extent but many, especially those outside of the US and Europe, will go to the new gambling centers of Macau and Singapore. Frankly, if I were a high roller Id pick these new spots since they're new and not designed to appeal to the riff-raff like Las Vegas casinos are.

Whats more theres little market pressure to preserve the current geographic configuration. Outside of Indian Reservation gaming, the industry is pretty well consolidated into five companies, most of which have their fingers in Vegas, East Asia, and the emerging smaller US markets. All of this is adding up to a doomsday proposition for Las Vegas on the scale of Detroit in the 1970s.

So were looking ahead to potential massive capital flight from one of Nevadas main industries. Lets talk about prospects for attracting industries and other forms of capital. The Economist article notes a major obstacle to this when it states that Nevada produces too few knowledge workers to attract gee whizz industries. It also does too little research on its campuses to seed start-up companies. One could add to this infrastructure  the American Society of Civil Engineers gave Nevada a C in 2007  and resources, seeing as its basically a giant desert and relies on Lake Mead, which it shares with Los Angeles and whose water levels dropped 115ft between 2000 and 2010. The reason for many of these issues is simple: Nevada has been a libertarian paradise since its creation.

Nevada has no corporate or personal income tax. In 2004 Nevada ranked 48th in per capita state government expenditure with $3,723.13, whereas California (ranked 10) was at $5,686.48. Nevada already has low public spending on most of the core social services that are being attacked in other states. In fact Nevada has capped the percentage of taxes on net proceeds in the mining industry. That cap is now 5 percent, meaning that the state has created tax incentives to stay in Nevada for the one industry that cannot actually leave the state. Nevada and the city of Las Vegas should be rich public entities, given that for most of its boom the major industries were geographically handcuffed. But theyre not because the wild-west libertarian spirit has meant a voluntary and permanent austerity that has only been mitigated by heavy unionization to push wages up.

This means that the Nevada economy is remarkably inflexible. There is little expertise outside of gaming/hospitality, mining, and military developments, and underfunded educational institutions block any change in this. Add the weak infrastructure inhibiting aggregation effects, i.e. efficiencies in things being closer, so much of Las Vegas is tailor-made for the casinos and little else, and Nevada doesnt look like a very good place to pump capital into.

You dont have to be a devout Keynesian to see that theres a lot of stuff that would require investment before there could be a meaningful basis for growth: schools, better public transit, better cargo transport, better water usage and supply, etc. But the casino or mining companies have no interest in directly funding or planning this kind of thing and the industries Nevada is trying to court have no incentive to do it. Under a regime of permanent austerity the only source of capital left, the state, just doesnt have the funds to do it. It means weird things happen like conservative lobbyists asking for tax increases.

So Nevada faces a timely issue. The existing regime of accumulation has failed and capital has begun to leave it behind. At the same time there is no viable source besides the state to provide the necessary alterations to the objective conditions for accumulation, and the political climate makes it almost impossible to imagine big publicly funded projects. Sounds familiar, right? Economic deadlock, matched with equal political deadlock. How to square that circle? I never thought Id say it, but I think Nevada is pretty important right now.

So will Nevada be able to diversify its economy? Will Tony Hsheih save Las Vegas? Its still unclear but we can now refine the question. What kinds of alterations of the objective conditions for accumulation would actually work? Are server farms and call centers enough to make Las Vegas become Minneapolis instead of Detroit? And will the political climate be enough to allow these things to happen?

There are really only two questions here, what would actually help Las Vegas and Nevada, and how could we make that happen. My impulse for the first question means figuring how this dream of a post-industrial economy would work and asking ourselves whether theres a difference between server farms, call centers, and green energy or even small-scale, high-efficiency manufacturing, and what meaningful steps could be taken to make it possible (if it is). The second question is a different matter, we have to track not only the electoral situation, but the arrangement of forces and gathering storms within the rest of Nevadan society. The economic packages of the casino union contracts are coming due this spring, the immigration movement is heating up nationwide, and Occupy Las Vegas isn’t dead yet. Answering these questions is vital though if we want to do theory that actually matters to our work on the ground and the possibilities of rebuilding a left and actually improving lives.

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Post Script

To end this post I should say something about the strategy implied by the previous paragraph. Theres been a lot of debate on this blog about whether we should be talking about reviving accumulation as opposed to overcoming the very notion of accumulation. I hope this closer analysis of Nevada and Las Vegas helps clarify what I, Walker, and others, I think, have been getting at. In Las Vegas theres a few strong unions, the casino workers in particular, some strong immigrant rights organizing (link: Las Vegas May Day 2006) and thats about it. Occupy Las Vegas is small and ineffective (if energetic). The vestiges of the direct action peace movements that organized against nuclear weapons testing are largely defunct and disconnected from other organizing. There are no neighborhood organizations, and there is no organized left presence (besides some anarcho-primitivists and a few confused socialists).

In Las Vegas, a place that is an important example for other US cities for the reasons I went through above, an explicit and meaningful movement to overcome capitalism cannot happen any time soon. This is not because the citizens of Las Vegas are too reified in their consciousness to be able to think about socialism  I have more faith in people than that  but because both the movement and the material conditions arent there. The union rank and file will not become revolutionary, and collectivizing casinos doesnt do anyone any good (mines are a different story, but I don't see that happening anytime soon). So what should we do? Let it become Detroit? Swept away into the Mojave sands? I dont think that's fair or progressive.

Instead I think we need to get serious about asking how we can make Las Vegas and Nevada a better place and plant the seeds of revolutionary struggles to come. This doesnt mean jumping into the Republican v. Democrat debate of taxes and spending. This doesnt mean bringing Paul Krugman on a speaking tour of Nevada. It means asking concretely and in detail what can be realistically accomplished and what it would mean. We have to figure out how affordable housing, better public transit, better water efficiency, public investment in light manufacturing, or green energy would connect to improve the lives of Las Vegans in the short term and how we could realistically win them.

This is still the realm of the NYTimes editorial page. The next step is when we also ask how the struggles over these concrete proposals can develop the expertise, political consciousness, and relationships that would form the basis for future revolutionary organizations. That means things like organizing study groups among radicals in different parts of The Movement, that means pushing organizations to be militant and uncompromising, and it means building institutional infrastructure for the rank and file to push the leadership of the various organizations forward. This means using concrete, winnable struggles that would have real lasting impacts to lay the groundwork for revolutionary movements and to learn what an adequate revolutionary politics might look like. In essence the line that I and others on this blog have been developing is less about hopelessness or an endless deferral of freedom and more about getting concrete about what it means to participate in a revolutionary struggle, given the historical conditions. I'm fighting for human emancipation, and I want to be serious about winning.


  1. I like the main article, but the post-script is what is really important.

    I suppose the first question I have is whether or not you realize that this viewpoint is not new?

    "It means asking concretely and in detail what can be realistically accomplished and what it would mean... to improve the lives of Las Vegans in the short term and how we could realistically win them."

    This is the program of reformism, pure and simple. I'm not using that word pejoratively, but in its most basic sense: a politics that enunciates reform of and within the existing system as the goal of its activity. Social Democracy prior to WWI also held to a Minimum and Maximum Program.

    The second question that comes to mind is whether or not you realize that what follows in terms of what we might call the 'plan of action' has been said by a hundred or more "revolutionary" groups in the United States alone?

    "The next step is when we also ask how the struggles over these concrete proposals can develop the expertise, political consciousness, and relationships that would form the basis for future revolutionary organizations... to lay the groundwork for revolutionary movements and to learn what an adequate revolutionary politics might look like."
    (I shortened the reference to each paragraph, but each entire part ought to be read.)

    This is the common strategic orientation, nominal theoretical differences and nuances of implementation aside, binding together the IWW, the ISO, Solidarity, the Spartacist League, the Marxist-Leninist Party, the Maoists who founded ACORN, ad infinitum. This was the orientation of groups I participated in from Spark to Working People's Action and Education Network to the Direct Action Network, over 15 years.

    When you say, "So what should we do? Let it become Detroit? Swept away into the Mojave sands? I don't think that's fair or progressive." you need to understand that really, you can't do anything about it except to speak the truth. Do you think similar people with similar ideas, but much larger forces, did not exist in Detroit in the 1970's and 80's?

    Who else will make the critique of Tony Hsheih's Capitalism with Asian Values aka Silicon Valley Capitalism aka "neo-liberalism" and how it ties into global capital? Your alternative program, which you are pulling together based on what you think other people need, has no base and no backing (you made this point yourself), while Tony Hsheih has a ton of money and a globally respectable model of capital formation.

    Everybody wants to "get concrete", "get their hands dirty", do "real work", "win". What no one wants to do is allow for the fact that sometimes the right action is to think. In all things, it is as important to know when not to act as when to act.

    What I am suggesting is that the desire to "do good" threatens to overwhelm one's critical capacities. Maybe what people here can do that no one else can do is a serious intellectual work, which is less edifying, especially when it has no academic career attached to it, but which is no less necessary.

  2. The comment on reification was not lost on me, by the way. I think it is profoundly wrong to approach the matter this way, however, out of a desire to have faith in people. The problem is not faith in some basic human intelligence, decency, dignity, etc., but an understanding of the contradictory nature of the relations which structure our lives which makes it possible to experience those relations as breakable, transformable, and the material on which they act as repurpose-able.

    The problem with transforming the world is certainly not a lack of material conditions. We could rapidly and aggressively transform the world away from capitalism in a few decades.

    The real problem you pose is the lack of a movement. Why isn't there a movement? Can you explain the lack of a movement by the lack of consciousness or the lack of consciousness by the lack of a movement? Where does a social movement come from? Not from revolutionaries. Where does a revolutionary consciousness come from? Not from revolutionaries. Where do the adequate material conditions come from? Not revolutionaries. What revolutionaries can bring are ideas which clarify and sharpen the practical critique being made. If such a practical critique has not arisen of its own accord, we cannot put our shoulder to the wheel and make it happen.

    Rather than being pessimistic however, my wager is that Greece and Spain augur the future. It is to those struggles that we ought to pay attention and see what they have to say, what actions they are taking, where their limits are developing, and what relation they bear to other struggles of the last 10-15 years (Argentina in 2001-3 comes to mind, maybe also Bolivia.) We thus have a very important intellectual work to do, which is to discuss the potential in front of us for transforming the world and the kind of critique necessary to help expose the inability of capital to resolve the crucial problems because it has never resolved them and today only looks to make them worse.

  3. Thanks for your comments Chris, they're level headed and astute.

    You're right, my position is by definition reformist, but I think that comes from my commitment to being part of these struggles in a non-revolutionary moment. It's possible to articulate more revolutionary positions from within these movement, and we need to, but it's not possible to move the unions in Vegas to taking over the hotels and running them collectivity, nor is it even clear if that would be revolutionary.

    On the note of my inheritance from the established left, you're right. I've been strongly influenced by the cornucopia of the left including many of the groups you mentioned (I am a proud IWW member). But again I think that that position is relatively unavoidable for a revolutionary that is committed to concrete struggles in a non-revolutionary moment.

    I noticed that all the groups you mentioned were Marxist (except the IWW). I wonder whether the Anarchist/Anti-Authoritarian left has other modalities. I'm thinking of groups like Love and Rage, Bring the Ruckus, NEFAC, Common Struggle, and the Institute for Anarchist Studies. This tradition is very alive up here in Portland and I've found some of their thinking very interesting.

    I do think your orientation toward the future of Las Vegas is interesting. It's true, capital will do what it will do, the best we can hope for is making is easier for capital to help the people of Las Vegas, which is the position I articulated.

    But I wonder whether there are different ways to do that, ones that include more thorough critiques of capitalism (beyond even a critique of neoliberalism). Specifically I can see an analysis that discriminates between capital formations. I believe Tony Hseih is a hack and a idiot whose plan to revitalize downtown will not only not work it will also do human harm. But bringing data centers or green energy I think has the possibility of being different. I think it could fit into larger global economic forces differently, and I think it opens up possibilities for revolutionary struggle that can be articulated even while we demand them in a reformist mode. Specifically collectivizing a data center is a lot more interesting than collectivizing the Luxor. I'd be curious to hear your thoughts on that.

    On the note of reification, I do believe that the chief obstacle to revolutionary struggle right now is subjective. But I think we need to do some work to clarify what that means. Let's do that work!

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  5. One thing I would like to get clear about, Chris: Do you think that there is some incompatibility between "doing serious intellectual work" and organizing people around the sorts of issues that Earl mentions?

    On the flip side, "serious intellectual work" can find no practical application in the absence of organization. True, we do not create a movement by building an organization. But in a moment of crisis, a bunch of disorganized individuals with a keen analysis of the crisis will be easily overwhelmed by a bunch of blinkered reactionaries who are well-organized. How then should we organize?

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