Eyes on East Asia

In A.D. 2013 war was beginning. Well, not exactly, or at least not yet. But things may be creeping in that direction. Amidst all the brainless yammering about the so-called “fiscal cliff,” the hoopla of the Presidential inauguration, the emergence and bloody resolution of the Algerian hostage crisis, and French neo-colonial adventures in North Africa, the escalating geopolitical tension in Southeast Asia has receded into the background of the news cycle. That will probably change in due time, though. With old, nationalist hatreds flaring up and a global economic outlook that is anything but rosy, there is reason to believe that the situation may soon reach a boiling point. In the succinct words of China's own, inimitable Global Times, “Peace Will Be a Miracle if Provocation Lasts.”

Why Obama is so disappointing

Krugman’s column today patiently explains to the skeptics on the left that Obama’s first term was actually (invoking Joe Biden) “a big fucking deal”. But Krugman only betrays the fundamentally static conception of the world that lurks behind his analysis. (This is also the problem with his critique of Stiglitz’s argument for the role of inequality in continuing economic stagnation, and the source of his failure to connect the dots between capital’s growing share of income at labor’s expense and the dysfunctions in the economy, as well as for his far too sanguine view on the prospects of a near-term return to economic health.)

For Krugman, the baseline “normal” for our society is a growing neoliberal economy. When things go wrong, it’s because of policy mistakes: the failure of the Fed to reign in the real estate bubble in the mid-oughts, inadequate regulation of finance, not enough stimulus to put things back on the right track after the crash of 2008. There’s a sort of natural equilibrium of the economy that’s just waiting to be brought into being by the right kind of macroeconomic management. Other realms of society, like cultural trends and popular ideologies, are unrelated to the neoliberal economy, whether functioning normally or not — like any mainstream economist, subjectivity lies beyond the scope of Krugman’s models.

From this assumption, Obama’s first term has been a pretty big deal. Health reform, which had been impossible for decades, was passed. Tax changes will reduce the incomes of the top one percent of earners by 6 percent, and 9 percent for the top one-tenth of the top one percent. A reregulation of the financial industry inconceivable less than a decade ago is now being implemented. To Krugman’s list we could add the consolidation of acceptance for gay rights, the end of the war in Iraq, the successful avoidance of a complete collapse in 2008-2009.

Scuffle in the market

There is a debate about market socialism happening on the Jacobin site. It began with Seth Ackerman’s article that briefly lays out the evolution of market socialism in the Eastern Bloc countries, considers the success of central planning in setting prices, and ends by endorsing a socialized capital market. John Quiggin replied to Ackerman by addressing some of the limitations of Ackerman’s proposal, particularly in regard to the feasibility of such ideas in the current political climate. This isn’t meant to be an adequate summary of the ideas, so please read them for yourself!

It’s very heartening that a discussion like this is happening at all. The neoliberal era has been plagued by an intellectual atmosphere that was ably characterized by Margaret Thatcher in her slogan “there is no alternative.” But I think that there are also important problems in how both Ackerman and Quiggin have approached the question of a socialist economy. Rather than provide an in depth review of these articles, I’d like to present this as an opportunity for discussion. To get things going, I’ll start with a few observations:

• Ackerman places little weight on defining capitalism, simply starting “from the common socialist assumption that capitalism’s central defects arise from the conflict between the pursuit of private profit and the satisfaction of human needs.” But it would be just as relevant, arguably far more so, to start from the assumption that the central contradiction of capitalism is between ever increasing productivity on one hand and the continuing necessity of human labor, on the other. What are the implications of Ackerman’s assumption?
• Quiggin’s reply is helpful in that he raises the current political context as a necessary factor in evaluating what kind of society we can and should be fighting to create. But despite his sensitivity to political issues, Quiggin argues for reforms that hardly seem radical, and may actually be reactionary. Breaking up the big banks, for example, would merely substitute of the tyranny of the market for that of Big Finance, making the industry harder to regulate and forestalling the use of finance for badly needed investment to mitigate environmental destruction and encourage development in poor countries. However, it is worth mentioning that Quiggin has also presented much more interesting ideas elsewhere.
• To what extent is the debate that we need to be having economic, and to what extent should it be critical of the categories in which economics as a discipline grasp the world? It seems to me that Ackerman and Quiggan for the most part take the meanings of these terms, such as profit, to be self evident, even if they find the operation of profit to have some negative outcomes. And how can we bring such a critical perspective to bear on a practical left politics?
• It’s interesting that both authors feel the need to raise participatory economics and then to quickly dismiss it as a desirable economic system with little elaboration. Whether or not they are correct, it might be enlightening to have a fuller account of its merits and flaws.

With those points raised, please feel free to weigh in with your thoughts.

Labor Roundup: The Strike in an Age of Austerity, part I

Permanent Crisis has featured some excellent discussion on the relations between concrete social mobilizations and the potential for the development of radical or critical forms of consciousness (e.g., here and here). This post is an initial contribution to that line of analysis, and takes as its object the evolving nature of the strike both as a social phenomenon and as a specific tactic. I focus here mainly on the recent return of old-school strike tactics and union militancy; future posts will first address the role of the strike in the radicalization of existing unions (e.g., CORE and the Chicago Teachers Union), and then the strange things that happened under the aegis of the “general strike” during the Occupy mobilizations (see here).

As has been extensively documented on this blog and elsewhere, the massive financial collapse that hit the core of the capitalist global economy in the autumn of 2008 kicked off what could turn out to be the terminal crisis of neoliberalism. The intervening four years between then and now has seen the gradual onset of a deep recession of global scope, forcing people all over the world to endure prolonged unemployment, slashed wages, the scaling back or elimination of vital public services, and, in the United States, the renewal of a deeply reactionary, nationally coordinated program to destroy the last ramparts of organized labor through an attack on public employees. Thus far, all the major political parties of the European Union, as well as the Republican and Democratic parties in the U.S., have marched in lockstep in their support for and imposition of these draconian economic measures, which they see as necessary for propping up an economic system that is clearly failing. The broad bipartisan support for these programs across the board, along with a still relatively scarce supply of credit – the main vehicle of economic growth under neoliberalism – suggests that the “austerity state” is here to stay for the foreseeable future.

Casting off the supply chains

On November 24 more than one hundred people were burned alive in the Tazreen garment factory fire in Bangladesh. This was not a tragedy but a crime. The factory did not meet safety standards, and there are reports that managers ordered workers to return to work when alarms were first heard so as not to lose money. It is known that the factory was producing clothing for Walmart and that Walmart had shortly before blocked a move to improve safety in Bangladeshi factories on the grounds of cost. Meanwhile the factory owners have offered compensation to the families of the killed workers at $1,230. Bangladeshi workers have responded with rallies and demands for improvements in safety and compensation in the industry.

Those responsible will of course deny that this is a crime. The factory owners have invoked the strictures of global competition and a lack of state support to justify their inability to maintain a safe workplace. Walmart has distanced itself from the factory, which was merely an outlier with poor management. They claim that a supplier was sending work there against the company’s directions, despite the fact that Walmart’s extensive knowledge, coordination, and influence over its global supply system is well known.

These positions are united in claiming that the fire was a tragedy after all, the result of personal irresponsibility or ‘bad apple’ factory owners who don’t live up to otherwise high standards for production. In doing so, they deny or obscure the fact that the global production system is just that, a unified system that has already embraced all workers and consumers into a semi-rational whole designed to create growth. It seems obvious that this is so, that for hundreds of years the fortunes of workers have been tied to the fluctuations of global markets whose effects national governments could only moderate but could never control. But it is also true that this global system embraces not just the factories operating within legal requirements but all of the various ways in which labor is sweated and money is turned into profit rather than investments in safety. It is a system that in the course of its normal functioning courts the mass death of workers and assigns a dollar figure to their lives.

So how has the movement against Walmart in the US reacted to the factory fire in Bangladesh? This question has a profound importance not only for the direction of labor struggles across the globe, but also our collective capacity to establish standards of acceptable ways for humans to live and work. The situation is ambiguous, with both progressive and regressive possibilities.

The Great Depression from crash to false recovery and on to accelerating disaster

A brief review of the early stages of the Depression in the United States—from the Crash of 1929 to the false recovery of early 1930 to the inadequacies of President Hoover in the face of a resurgent, uncontrollable crisis—will provide the foundations for posts in coming weeks.

Everyone knows that the Great Depression started with the Black Tuesday stock market crash in New York, 1929 October 29. Yet only six months later, President Hoover gave a speech in which he said, “I am convinced we have passed the worst and with continued effort we shall rapidly recover.” Hoover was not alone in this judgment: most commentators at the time agreed that recovery was well underway in the spring of 1930. In reality, the country—and the world—was beginning what would prove to be over a decade of collapse. Ultimately the economic disaster of the Depression was overcome only through the far greater political and cultural disaster of World War II.