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Tag: fascist state economic management

SYRIZA, the Left and the long, slow, painful death of the nation state

I have been reading this post-mortem on the collapse of the first SYRIZA government, Greece and the “SYRIZA Experience”: Lessons and Adaptations. My purpose was to see if I could gain some fresh insight into SYRIZA’s failure and some fresh idea of how to recover from that failure.

The writer begins on a good enough footing:

“SYRIZA failed to stop austerity and neoliberal transformation in Greece.”

Okay, how did it fail? According to the writer, SYRIZA failed because it chose to remain in power, thereby becoming the new, Left, face of austerity and accepting limitations of national power in the European Union and euro common currency.

TitanicIn perhaps less diplomatic terms, SYRIZA accepted the domination of the ECB and EC over the Greece nation state and the corresponding lack of any effective Keynesian economic policy in the middle of what can only be called a full blown depression. By accepting these real limits on its room to maneuver, rather than resigning office, SYRIZA threw away the opportunity to retreat gracefully once it realized it was completely outmatched by the EC and ECB. Thus, a defeat was turned into a rout and utter disaster for the Left in Europe.

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Jeremy Roos’ failed critique of 20th century communism

In 2016 it is astonishing to still see this sort of stuff written by radicals:

“All class struggles under capitalism must therefore start from the most elementary question of social reproduction: how to make a living and reproduce the “general conditions of life” without direct access to the means of subsistence. As Manuela Zechner and Bue Rübner Hansen show in their contribution to this issue, the recent transformations and crises of capitalism have pushed this question to the heart of contemporary movements: How do we sustain ourselves under conditions of austerity, precarity and unemployment? How do we provide care (personal, medical, psychological) in the face of a crumbling welfare system? How can we build social power by increasing our reproductive resilience?”

In his most recent essay, Towards a New Anti-Capitalist Politics, Jeremy Roos argues that, in the 21st century, the class struggle must begin not with wage labor, but with what he calls social reproduction.

What is social reproduction? Apparently it means we have to figure how we can make a living and reproduce without a job; how will workers survive when they can no longer sell their labor power to capital.

This would be a generous interpretation of Roos’ argument, however. In fact, Roos seems intent to establish a laughable theoretical proposition that, “Reproduction is always prior to production, as the latter cannot continue without the former.” Based on this nonsense he also insists, the Left must “shift attention back towards the related struggles taking place within the sphere of realization.”

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Can SYRIZA be fixed? Can Greece?

If this Jacobin article, Becoming Syriza Again, is any indication, even the remaining radicals within SYRIZA have no idea why it is failing.

The writer acknowledges that the debate over Greece leaving the euro, which raged within SYRIZA for a period of time before the split, was an oversimplification. However, even now he proposes no alternative economic program that would allow SYRIZA to achieve its stated aim of bringing austerity to an end while avoiding Grexit.

He proposes a 5 step solution in which SYRIZA must:

  • Hold onto power;
  • Stop fighting with KKE and other Leftists;
  • Eliminate opportunism in its ranks;
  • Reconsider staying in the eurozone; and,
  • Put forward a new vision that inspire the country.

Here is my problem with this essay.

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The Myth of Secular Stagnation, Part One

What is behind the concern over secular stagnation? Is it possible to understand this concern within the context of the labor theory of value? I ask that because almost all discussion of secular stagnation takes place in the context of neoclassical/Keynesian theory. To answer the question, I will look at several papers and article on the subject summers-blanchard-bernankewritten from within neoclassical/Keynesian theory that attempt to make sense of the problem.

My perspective, however, will be unique in relation to the writers, because I will argue that stagnation is not a symptom of capitalist crisis per se, but a symptom of increasingly ineffective fascist state management of national capitals. In my perspective, capital has already suffered the breakdown of production on the basis of exchange value. This occurred in the Great Depression and was irreversible. However, after that breakdown, the fascist state stepped in and assumed management of the production of surplus value. The subject of the discussion of secular stagnation is the increasingly ineffective system of state management of capitalist production, not the operation of national capitals, per se.

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Greece is already a failed state: SYRIZA must let it die

By the time you read this, SYRIZA will likely be the governing party in Greece. That said, Laurel & Hardy3SYRIZA will find its desk filled with a large number of pressing problem, the most important of which — according to common wisdom — is what to do about the debt. Here is my suggestion: Tell Greece’s creditors to screw and let the state go bankrupt. The only path for SYRIZA out of the crisis is to let the already failed Greece state fail officially as well.

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In case you were wondering: Yes, the chief economic adviser to Tsipras is insane.

The title of this post is, by any measure extremely rude and provocative, but bear with me. If you can get through the first section of this post, which is extremely wonky, I will show why one of the most important advisers to SYRIZA is likely living in his own special world, and not subject to arguments founded in the real world. According to Einstein (or Mark Twain, or an old Chinese proverb or Benjamin Franklin — who knows for sure) insanity is doing the same thing over and over again but expecting different results. If this is true John Milios is insane, as I will prove.

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The ‘reformism’ of less work and the dull stupidity of Marxists.

Here is a comment on my blog post that was posted to Reddit’s socialism subreddit:

REDORDEAD: hmm yes in the age of austerity, in which an out of control falling rate of profit is causing massive reduction in work hours, automation of labor and mobilization of the world reserve army of labor the solution is the reformist demand for shorter work hours. what century are you living in?

WORKThe comment was fascinating to me, not just because I have heard it before, but also because I had no idea what it means. Reduction of labor is reformist? How so? On what basis does the redditor make this charge? Intrigued, I asked for clarification:  “Can you tell me what is reformist about demanding the end of wage labor?”

REDORDEAD: Thats not what you’re demanding. You’re demanding a reduction in the working day which capitalism already accomplishes through the rising organic composition of capital. Even Marx point out in Capital Vol. 1 that the movement for the 8 hour work day saves capitalism from itself by regulating the coercive laws of competition which cause the abuse and long-term exhaustion of the working class.

That’s not to say it can’t be a revolutionary demand given the right economic conditions, almost anything can be linked to the revolutionary demands of socialism given a mass party and disciplined mass line. But it seems worse than most, especially given the conditions today. Not sure why it’s significant at all, though it is time to think about tactics and less about theory.

This clarification had a lot of features in common with another comment posted to Reddit regarding the same blog post:

“It is thoroughly reformist. Your whole strategy is to simply fight for shortened work hours, increased hourly wages, etc. Nothing here about the revolutionary overthrow of capitalism by the proletariat… Congratulations, you’ve discovered economism.”

It appears that, in the thinking of these two critics, the reduction of hours of labor isn’t revolutionary because it doesn’t involve the revolutionary overthrow of capitalism by the proletariat, a direct demand for socialism, and a political party dedicated to this demand that practices a method of leadership that seeks to learn from the working class.

And this argument has some validity and much historical accuracy: both the ten hours day and the eight hours day were won without any fundamental alteration in the capitalistic nature of political relations. I am fascinated by this argument because, when all the dogmatic assertions are set aside, it suggests real material changes in the mode of production aren’t real without the right politics.

The problem with this reasoning is that capitalism is the production of surplus value; self-expanding value, etc. In their debates with the anarchists, Marx and Engels were stubbornly insisted on the primacy of economic relations over political relations.

Moreover, Marx almost never discussed capital without reiterating his definition of the mode of production, as he does, for instance, in chapter 15 of volume 3 of Capital:

“The purpose of capitalist production, however, is self-expansion of capital, i.e., appropriation of surplus-labour, production of surplus-value, of profit.”

Now, what has to be grasped is that, this old fart had already spent two fucking volumes of Capital defining and discussing capital yet he wants to emphasize — again — what he means by the term. In other words, after having already spent two volumes of Capital and 15 chapters of a third volume discussing capital, Marx feels the need to again reemphasize exactly what capitalism is!

Since capital is the production of surplus value, and since the production of surplus value varies with the length of the working day, how can the reduction of hours of labor be economism? It really can’t be economism and no amount of micro-sectarian ranting can make it economism. So, what is intended by activists who slap that label on reduction of hours of labor? What is intended by folks who call reduction of hours of labor reformist or economism?

I really think it is meant to draw attention to the fact it doesn’t necessarily involve the dictatorship of the proletariat, the association of laborers. People who make that charge really are trying to say I am neglecting the need for association of producers. I really have no answer to this charge. I just wanted to open my ears and for once understand why folks keep saying it. Implicit in this charge is the view that any measure, no matter how far reaching its implications, is a mere “reform” unless it is linked to the political rule of the working class.

This sort of view may in fact be valid for any measure you can imagine — except reduction of hours of labor. To understand why, simply think of a reduction of hours of labor carried to its extreme limit: hours of labor equal zero. Can capitalism exist on this basis?

Now, the argument might very well be that we can’t get to zero with a capitalist state — but that is a completely different argument. That is an argument that has nothing to do with the measure itself, but with the resistance of the capitalists and their state. Since the folks running the show today have always resisted less work for the producers, I don’t expect them to suddenly have a change of heart. Their resistance, however, has nothing whatsoever to do with reduction of hours of labor itself. They will just as viciously fight against higher wages, basic income or any other measure that appears to threaten the appropriation of surplus labor.

The difference, however, is that no matter how high wages go, they will never create communism; no matter how many food stamps you hand out or how high you raise the minimum wage or how good your health care system is — none of this can lead to communism. Because none of these measure touches on the heart of the problem: Labor itself.

However, reduce hours of labor to zero — and you will have communism before you ever even reach zero. The reduction of hours of labor is not like any other reform because no other reform touches on the critical role labor plays in the mode of production.

You can nationalize private property all day long; replace the existing state with an association of producers; or turn money into worthless labor chits — none of these measures directly touch on labor itself. Reduction of hours of labor alone can do this. The logic of my argument follows directly from Marx’s definition of capital as the “appropriation of surplus-labour, production of surplus-value, of profit.”

This is the problem we face, the conceptual obstacle post-World War II Marxism seems unable to surmount: How can the proletariat work out its own emancipation without turning back to the failures of 20th century political parties? How can the working class continue to focus on the seizure of state power, when the development of the productive forces themselves — expressed both in the form of globalization and its attendant neoliberal ideology — are undermining the very capacity of nation states to implement sovereign management of their own national capitals?

The political parties of the 20th century were based on the concept of what is today called accelerationism by some. This strategy is stated simply in the Communist Manifesto:

“The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.”

The vision Marx and Engels evoked in this passage is that of a political power held in the hands of this class who basically would do what capital has itself done over the last 170 years: create the material conditions for communism. Going back to the political parties of the 20th century is not only impossible, it is unnecessary.

If Marxist writers like Postone, Kurz, Hudis, Harman, Kidron, Mohun, Sheikh, Tonak, etc. are correct, capitalism has already converted the largest portion of the labor day into superfluous labor time. At this point the proletariat need only to complete the process: convert the superfluous labor time into free disposable time for themselves. Marxists often assert that capitalism, even if it generates its own collapse,  is incapable of creating a communist society; yet, they have never once been able to describe what this latter act of creation consists of.

What is it that only the proletariat can accomplish? It certainly is not creating the material condition for communism — according to Marx in Capital, volume 3, capital itself does this without any assistance from proletarian political rule.

“Development of the productive forces of social labour is the historical task and justification of capital. This is just the way in which it unconsciously creates the material requirements of a higher mode of production.”

So, what can the proletariat do that the bourgeoisie cannot? Since of all classes in modern society, the proletariat alone gains nothing by expenditures of unnecessary hours of labor, it can convert the surplus labor time of society into free disposable time for all.

Memo to Tsipras: SYRIZA will have all the tools necessary to fix Greece’s crisis

icfNWXWz7v28If the polls hold up, it looks as if SYRIZA has emerged as the most likely party to form the next government in Greece and this is a good thing.

If the party can get its shit together, it has all the tools it needs to address the prolonged crisis imposed on Greece by the troika — the European Union, European Central Bank and International Monetary Fund — and chart a different path forward for all of Europe.

My optimism might seem utopian, since by all accounts SYRIZA will be dependent on the European Central Bank for much of policy required to extract Europe from its crisis. Essentially, it would appear the Left is dependent on the very people who created the crisis to fix it.

I will show in this post why this is not true.

The crisis and the crisis of fiscal policy

The policy problem SYRIZA will face once it has formed a government is often framed the way it is in a recent article by Blyth and Lonergan, “Why Central Banks Should Give Money Directly to the People”. The article, which appeared in, of all places, Foreign Affairs magazine, the propaganda organ of the Council on Foreign Relations, purports to explain how a central bank might facilitate the creation of a basic income scheme.

Like Billy Mitchell’s recent piece on his misconceived job guarantee apparently it never dawned on Blyth and Lonergan that having a central bank just hand out money to the citizens of a country implies that enormous political power has become concentrated in the hands of an unelected financial oligarchy.

If we assume for the sake of argument the respective plans suggested by the Mitchell and by Blyth and Lonergan are technically feasible, we still have to explain how this sort of political power has become so concentrated in the hands of private, unelected, banking cartels? Moreover, we have to ask ourselves what impact this concentration economic power will have on political relations if both the general management of economic cycles and ‘social entitlements’ like a jobs guarantee and a basic income scheme now appears within the purview of unelected financial oligarchy?

If these programs can work technically why can’t the central banks simply print up currency and fund education? NATO? Social Security? Infrastructure ‘investment’? In fact, why can’t we just turn all of the economic management functions of the state over to the banking cartel to manage it for us?

Ignore, for a moment, that the roots of Blyth and Lonergan’s basic income scheme are anchored deeply in the writings of some of the most notorious post-war fascists, like Friedman and Hayek, why is the Left so willing to overlook the enormous shift in political power into the hands of a financial oligarchy that their plan implies? Bill Mitchell, who touts himself as a Leftist, never appears to even notice that the European Central Bank is not an elected public authority. The central banks are private cartels that have been handed control of monetary policy in much the same way many other state military and police functions have been outsourced to Blackwater and G4S. Functions of the state have been outsourced piecemeal by Washington and other national governments to private interests in one after another sphere.

Blyth and Lonergan admit that government can boost spending through both its fiscal and monetary policies. However the writers explain fiscal power in the United States — the power of the state to tax and spend — has been crippled by party squabbles and lack of consensus. Meanwhile government has outsourced its monetary authority to a private cartel of banks. Thus, with fiscal policy tied up in knots, elected officials have come to rely almost exclusively on the monetary policy conducted by central banks:

“The shift has occurred for a number of reasons. Particularly in the United States, partisan divides over fiscal policy have grown too wide to bridge, as the left and the right have waged bitter fights over whether to increase government spending or cut tax rates. More generally, tax rebates and stimulus packages tend to face greater political hurdles than monetary policy shifts. Presidents and prime ministers need approval from their legislatures to pass a budget; that takes time, and the resulting tax breaks and government investments often benefit powerful constituencies rather than the economy as a whole.”

A suspiciously convenient explanation

There is something suspiciously convenient about this alleged explanation that bears closer examination. Permit me to argue that it is not the lack of consensus on fiscal policy; rather, the situation is the opposite: there is a consensus for a concerted effort to prevent fiscal policy from operating. Fiscal policy is not crippled because of party squabbles, but because national governments have no desire to use fiscal policy.

This fact is most clearly demonstrated by looking at the European Union.

As Mitchell has pointed out, the European Union was deliberately created without any facility for countercyclical fiscal policy. While in Washington or Tokyo the political conflict among elected officials over fiscal policy appears to  result from a lack of consensus, no such explanation can account for how the EU works. We have to account for the fact that the EU somehow was created without any facility for fiscal countercyclical policy.

Now, how was that possible? How did some of the best minds of Europe just forget crises happen? Clearly, no one just forgot to include the capacity to conduct countercyclical fiscal policy in the EU’s structure. A fiscal countercyclical mechanism was left out intentionally, so that all countercyclical policy would be conducted through an unelected monetary authority — the ECB.

When you look at the EU’s structure, the apparent political impasse over fiscal policy in the US and Japan becomes easier to understand. This is because there is no legacy institutional explanation for the lack of countercyclical fiscal policy in the EU in the present crisis. The EU, from its inception, was created without the capacity to implement countercyclical fiscal policy. Monetary policy was placed in the hands of the unelected European Central bank, which is characterized as “politically independent” — that is, not subject to democratic will — and able to implement policy, “with a single conference call”.

In the EU, there is no facility for fiscal policy, while monetary policy has been removed from democratic control altogether and placed in the hands of an unelected financial oligarchy.

Fiscal policy has been deliberately crippled

When Bill Mitchell and Blyth and Lonergan advocate for their pet projects — a jobs guarantee for Mitchell, basic income for Blyth and Lonergan — each bases their proposal on the explicit assumption governments have, for whatever reason, no capacity to implement any fiscal policy, while an unelected central bank controls monetary policy. But, leaving the eurozone aside, it is not as if the writers are unaware of the fiscal power of national governments, rather they simply assume this power is effectively dysfunctional and unable to be employed for their policy purposes.

However, the experience of the EU suggests something else is at work: a deliberate effort to constrain or prevent national governments from conducting fiscal policy. And this is set against the backdrop of the outsourcing of monetary policy — inconvertible state issued fiat — to a private cartel. First, monetary policy was outsourced, then fiscal policy was crippled.

Okay, so now I am beginning to sound like a gold bug conspiracy theorist, right? Well, that is not likely to convince anyone, so let’s broaden the discussion beyond the outsourcing of monetary policy and the crippling of fiscal policy to another, broader, conflict at the heart of state economic policy.

No one in power want to end unemployment and poverty

Why was fiscal policy crippled? Why was monetary policy outsourced? According to the writers, fiscal policy was crippled because of the lack of political consensus. And, again, according to the writers, monetary policy was outsourced to insulate monetary policy from (democratic) political pressure. In both cases the conduct of fiscal and monetary policy has been influenced by a consistent political aim: to prevent economic policy from reflecting democratic will.

The problem is not that government cannot conduct its own fiscal and monetary policy; rather it seems that no one in Washington wants this. Yes, the Fed could, in theory, print up some fiat and hand it out in the form of a basic income, but so could the elected government in Washington. Since the Fed has been delegated the power to conduct monetary policy by elected officials in Washington, it has no power not that is not already in the hands of the elected officials.

Thus, if the aim of the elected officials was to eliminate unemployment and poverty, the officials could do this directly and get all the credit. In the next election, they could run on their accomplishments: Yay! We ended poverty and unemployment! Re-elect us!”

Which is to say, the Left needs to consider the possibility that monetary policy didn’t end up as the function of a private cartel to fix poverty and unemployment; it ended up there in order to NOT fix them. And fiscal policy was crippled in order to NOT fix them as well. If you don’t want to fix unemployment and poverty, you cripple fiscal policy and outsource monetary policy to a private cartel. You try, in other words, to insulate policy tools from democratic political pressure to address unemployment and poverty.

Further, fiscal and monetary policy only exist to avoid directly tackling the problems of unemployment and poverty in the first place. There is, for instance, nothing that prevents Washington, Tokyo or Athens from tackling unemployment and poverty — all they have to do is reduce labor time until no one is unemployed and raising the minimum wage until no one who is working is in poverty.

If people are unemployed, you just cut hours until no one is unemployed; if people are in poverty, you just raise the minimum wage until no one working full time is in poverty. Between these two policies, everyone has a job and no one is in poverty. It does not require any fiscal or monetary policy tools to accomplish this.

Which means, politicans rely on fiscal and monetary tools only because they DON’T want to eliminate unemployment and poverty.

Fiscal and monetary policy began in order to relieve pressure for reduction of hours of labor in the 1930s — that was the sole purpose. After the depression of the 1970s, fiscal policy itself was discarded in order to relieve pressure for increase spending to employ people.

This was the whole purpose, for instance, behind the 1978 Humphrey–Hawkins Full Employment Act. The purpose of that act was to make “full employment” completely dependent on Federal Reserve monetary policy, i.e., to insulate the management of the economy from democratic political pressure. The 1978 act did not just insulate monetary policy from political pressure; more important, it insulated employment and wages from political pressure.

The fiscal and monetary policy debate is a distraction

The monetary power of the central bank is a distraction, since every government already has the power to address unemployment directly. What remains to be explained is why the Left has not made use of this capacity in the hands of the state in its agitation since the 1930s. Why does the Left not only ignore this capacity, but repeatedly dismisses it whenever they are confronted with the idea of reducing hours of labor?

This, I believe, cannot be explained by stupidity — although I often use this excuse. There is something deeper and more sinister at work on the Left than mere stupidity. It comes to the surface here in a particular way — evidence of a basic despotism on the Left — that the aim of emancipation is not to free society from labor but to regulate its activity.

SYRIZA has the opportunity to break with this despotic tendency on the Left and redirect the Left’s energy in the direction of a genuine social emancipation of society from labor. The tool will be in their hand, but will they use it?

Fuck MMT: The Left had better start looking for an exit from capitalism

Bill Mitchell, an Australian blogger associated with the modern money (MMT) school, thinks the Eurozone has failed, but he is not clear whether the failure results from ignorance, stupidity or malice. And I feel his pain, since I go back and Photo0637-1forth on this one myself. It is difficult to figure out whether the European Union (EU) was designed to be ineffective in a crisis or if these people are just too stupid to be managing one of the world market’s most important regional institutions.

Mitchell takes exception with the idea that the European economic mechanism has been crippled by the crisis. According to him, this idea only makes sense if you assume the European Central Bank (ECB) has no role to play in facilitating the fiscal intervention necessary to fight the crisis — an assumption he doesn’t accept:

“The ECB boss [Mario Draghi] felt it his purpose at the gathering, which you can guarantee is plush in all respects (catering, wines, etc), to urge politicians to introduce more “growth-friendly policies”. He claimed in his speech – Unemployment in the euro area – that the so-called “sovereign debt crisis” had disabled “in part the tools of macroeconomic stabilisation”. Which is only true if one accepts that a central bank should play no role in supporting fiscal policy and that fiscal policy should be constrained by innane rules that deliberately prevent it from having sufficient latitude to meet foreseeable crises.”

If you think the ECB can support fiscal policy, then fascist management hasn’t failed — it is just being incompetently managed. But, Mitchell adds, ECB action is constrained by rules that appear to deliberately prevent it from meeting what should have been a foreseeable crisis. If the crisis was foreseeable, but the ECB was hedged in by rules to prevent it responding, this might imply the ECB is working just the way it was designed to work.

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Response to the critics of the term “fascist state”

I have received a large amount of criticism from Marxists regarding my insistence that the present state is fully fascist in every sense of the term. The most recent comes in the form of criticism that I am somehow being dishonest in my employment of the term fascist state and designation of Keynesian economic policies as essentially fascist:

People need to stop villainising Keynes. There’s an entire branch of economics that merges Keynes with Marx. The workers were hardly the most screwed by Keynesian policy: the petite bourgeoisie, with their vast savings, were far worse off (relative to what they had been before). Post-war Europe was one of the better times to be a worker in capitalism, far better than modern neoclassical neoliberalism.

Also, stop calling modern governments “fascist”. It’s just intellectually dishonest.

presidents1The resistance of the Left to the term fascism is understandable for reason I will show. However, I insist my use of the term fully conforms with historical materialism, no matter how grating it may be for “progressives” and other Leftists. I base my assessment of the present state wholly on the argument made by Marx and Engels throughout their entire careers. In particular, I base it on the explicit argument made by Engels in Socialism, Utopian and Scientific. I offer my take in hope it will spark a discussion on the subject of the nature of the present state and the impossibility the state can in any way serve as a path to communism.

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