Reevaluating Marx At An Unlikely Place

The Article: Was Marx Right? by Umair Haque at the Harvard Business Review blog.

The Text: In case you’ve been on Mars (or even just on vacation), here’s a surprising idea that’s been making the rounds lately: there might have been something to Marx’s critiques of capitalism after all.

Now, before you leap into the intertubes, seize me by the arm, perform a citizens’ arrest, and frog-march me into the nearest FBI office, exclaiming “See this suspicious looking brown guy? He’s a card-carrying communist!!” please note: I’m, well, not. I’m a staunch believer in capitalism (hence, the title of my book.)

Yet, I do think — and after reading the dismal, dreary headlines every day, not to mention checking the value of your 401K, house, job, economy, society, and future lately, I’d bet you do too — that prosperity as we know it might be lazily circling the glowing inner rim of the burbling event horizon of a massive supergalactic black hole. And when it comes to doing much about it (wave hello to your new friend, “double-dip”), well, the status quo’s pretty much out of options, out of ideas, and running out of time (hey, is that a Congressional “super-committee” being stalked by lobbyists I see? Who came up with this brain-melter of an idea?).

Hence, indulge me for a paragraph or two. Now, please note: This is a hugely divisive topic, and by “was Marx right?” I don’t mean “Communism is the glorious future of humankind, my brothers in arms!! (And I am your leader — bow!!)”. For, of course, I think we’ve had plenty of compelling demonstrations that it wasn’t. Rather, I mean: “Was there maybe a tiny mote of insight or two hidden in Marx’s diagnoses of the maladies of industrial age capitalism?”

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Rethinking The Social Democratic Solution

The Article: The Social-Democratic Illusion by Immanuel Wallerstein.

The Text: Social-democracy had its apogee in the period 1945 to the late 1960s. At that time, it represented an ideology and a movement that stood for the use of state resources to ensure some redistribution to the majority of the population in various concrete ways: expansion of educational and health facilities; guarantees of lifelong income levels by programs to support the needs of the non-”wage-employed” groups, particularly children and seniors; and programs to minimize unemployment. Social-democracy promised an ever-better future for future generations, a sort of permanent rising level of national and family incomes. This was called the welfare state. It was an ideology that reflected the view that capitalism could be “reformed” and acquire a more human face.

The Social-Democrats were most powerful in western Europe, Great Britain, Australia and New Zealand, Canada, and the United States (where they were called New Deal Democrats) – in short, in the wealthy countries of the world-system, those that constituted what might be called the pan-European world. They were so successful that their right-of-center opponents also endorsed the concept of the welfare state, trying merely to reduce its costs and extent. In the rest of the world, the states tried to jump onto this bandwagon by projects of national “development.”

Social-democracy was a highly successful program during this period. It was sustained by two realities of the times: the incredible expansion of the world-economy, which created the resources that made the redistribution possible; and United States hegemony in the world-system, which ensured the relative stability of the world-system, and especially the absence of serious violence within this wealthy zone.

This rosy picture did not last. The two realities came to an end. The world-economy stopped expanding and entered into a long stagnation, in which we are still living; and the United States began its long, if slow, decline as a hegemonic power. Both new realities have accelerated considerably in the twenty-first century.

The new era beginning in the 1970s saw the end of the world centrist consensus on the virtues of the welfare state and state-managed “development.” It was replaced by a new, more rightwing ideology, called variously neo-liberalism or the Washington Consensus, which preached the merits of reliance on markets rather than on governments. This program was said to be based on a supposedly new reality of “globalization” to which “there was no alternative.”

Implementing neo-liberal programs seemed to maintain rising levels of “growth” on stock markets but at the same time led to rising worldwide levels of indebtedness, unemployment, and lower real income levels for the vast majority of the world’s populations. Nonetheless, the parties that had been the mainstays of the left-of-center social-democratic programs moved steadily to the right, eschewing or playing down support for the welfare state and accepting that the role of reformist governments had to be reduced considerably.

While the negative effects on the majority of the populations were felt even within the wealthy pan-European world, they were felt even more acutely in the rest of the world. What were their governments to do? They began to take advantage of the relative economic and geopolitical decline of the United States (and more widely of the pan-European world) by focusing on their own national “development.” They used the power of their state apparatuses and their overall lower costs of production to become “emerging” nations. The more “left” their verbiage and even their political commitment, the more they were determined to “develop.”

Will this work for them as it had once worked for the pan-European world in the post-1945 period? It is far from obvious that it can, despite the remarkable “growth” rates of some of these countries – particularly, the so-called BRICs (Brazil, Russia, India, China) – in the last five to ten years. For there are some serious differences between the current state of the world-system and that of the immediate post-1945 period.

One, the real cost levels of production, despite neoliberal efforts to reduce them, are in fact now considerably higher than they were in the post-1945 period, and threaten the real possibilities of capital accumulation. This makes capitalism as a system less attractive to capitalists, the most perceptive of whom are searching for alternative ways to secure their privileges.

Two, the ability of the emerging nations to increase in the short run their acquisition of wealth has put a great strain on the availability of resources to provide their needs. It therefore has created an ever-growing race for land acquisition, water, food, and energy resources, which is not only leading to fierce struggles but is in turn also reducing the worldwide ability of capitalists to accumulate capital.

Three, the enormous expansion of capitalist production has created at last a serious strain on the world’s ecology, such that the world has entered into a climate crisis, whose consequences threaten the quality of life throughout the world. It has also fostered a movement for reconsidering fundamentally the virtues of “growth” and “development” as economic objectives. This growing demand for a different “civilizational” perspective is what is being called in Latin America the movement for “buen vivir” (a liveable world).

Four, the demands of subordinate groups for a real degree of participation in the decision-making processes of the world has come to be directed not only at “capitalists” but also at the “left” governments that are promoting national “development.”

Fifth, the combination of all these factors, plus the visible decline of the erstwhile hegemonic power, has created a climate of constant and radical fluctuations in both the world-economy and the geopolitical situation, which has had the result of paralyzing both the world’s entrepreneurs and the world’s governments. The degree of uncertainty – not only long-term but also the very short-term – has escalated markedly, and with it the real level of violence.

The social-democratic solution has become an illusion. The question is what will replace it for the vast majority of the world’s populations.

The Bad News On The Egyptian Revolution

The Article: Has Egypt’s revolution become a military coup? by Jon Jensen at the Global Post.

The Text: Egypt’s army, which continues to cement — and flaunt — its grip on power, appears to have hijacked the revolution.

Just days after the departure of former Egyptian president Hosni Mubarak on Feb. 11, the nation’s new, self-appointed military leaders pledged, within six months, a swift transition to civilian rule.

Crowds of the same protesters that demanded Mubarak’s ouster cheered as their army said it would steer the nation toward a “free, democratic system.” Seven months later, however, many Egyptians are finding that little has changed.

As the so-called Supreme Council of the Armed Forces increasingly cements, and in some cases flaunts, its firm grip on power, the revolution that inspired a region is beginning to look more like an old-fashioned military coup.

Military trials of Egyptian civilians persist and the military leadership has expanded and extended the 30-year-old, widely criticized Emergency Law once used by Mubarak to justify his authoritarian tactics.

Egypt’s police chief even announced this month that security would use live ammunition on protesters thought to be illegally entering certain government buildings.

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Profit & Working Conditions In The American Dream

The Article: The Fraying of a Nation’s Decency by Anand Giridharadas in the New York Times.

The Text: Amazon.com, the books-to-diapers-to-machetes Internet superstore, is a perfect snapshot of the American Dream, circa 2011.

It grows by the hour, fueled by a relentless optimism that has made America America. First it sold books. Then it realized that buying printed words in bulk, sorting and shipping them was a transferable skill. It has since applied it to anything you could want.

In 2011, for example, I have bought the following from Amazon: a hard drive, an electric shaver, a Bluetooth headset, a coffee machine and some filters, a multivoltage adapter, four light bulbs, a rubber raft (don’t ask), a chalkboard eraser, an ice cream maker, a flash drive, roller-ball pen replacements, a wireless router, a music speaker, a pair of jeans and a shoe rack — and, oh yeah, some books. (Disclosure: A book and a long-form article I have written are sold on Amazon.)

Buying these things the traditional way would have meant driving around to many different stores and paying as much as twice the price for certain items. What’s more, Amazon knows me. It’s like family. It knows where I live, what I like, my credit card number. (Which, come to think of it, makes it closer than family.)

In a moment rife with talk of American decline, my Amazon experiences provide fleeting mood boosts. They remind me that, for now at least, this remains the most innovative society on earth.

And then my bubble burst.

Thanks to a methodical and haunting piece of journalism in The Morning Call, a newspaper published in Allentown, Pennsylvania, I now know why the boxes reach me so fast and the prices are so low. And what the story revealed about Amazon could be said of the country, too: that on the road to high and glorious things, it somehow let go of decency.

The newspaper interviewed 20 people who worked in an Amazon warehouse in the Lehigh Valley in Pennsylvania. They described, and the newspaper verified, temperatures of more than 100 degrees Fahrenheit, or 37 degrees Celsius, in the warehouse, causing several employees to faint and fall ill and the company to maintain ambulances outside. Employees were hounded to “make rate,” meaning to pick or pack 120, 125, 150 pieces an hour, the rates rising with tenure. Tenure, though, wasn’t long, because the work force was largely temps from an agency. Permanent jobs were a mirage that seldom came. And so workers toiled even when injured to avoid being fired. A woman who left to have breast cancer surgery returned a week later to find that her job had been “terminated.”

The image of one man stuck with me. He was a temp in his 50s, one of the older “pickers” in his group, charged with fishing items out of storage bins and delivering them to the packers who box shipments. He walked at least 13 miles, or 20 kilometers, a day across the warehouse floor, by his estimate.

His assigned rate was 120 items an hour, or one item every 30 seconds. But it was hard to move fast enough between one row and the next, and hard for him to read the titles on certain items in the lowest bins. The man would get on his hands and knees to rummage through the lowest bins, and sometimes found it easier to crawl across the warehouse to the next bin rather than stand and dip again. He estimated plunging onto his hands and knees 250 to 300 times a day. After seven months, he, too, was terminated.

In a statement this week, Amazon acknowledged the complaints and said that it was working to address them, including by installing air-conditioners.

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Why Greece Must Leave The Eurozone

The Article: Greece must default and quit the euro. The real debate is how by Costas Lapavitsas in the Guardian.

The Text: Greece is facing an economic and social disaster, the result of its so-called rescue by the “troika” of the EU, the International Monetary Fund and the European Central Bank. Greece must change course to avoid a grim future for its people: it must default on its debt and exit the eurozone.

Consider first the scale of the crisis. After contracting in 2009 and 2010, GDP fell by a further 7.3% in the second quarter of 2011. Unemployment is approaching 900,000 and is projected to exceed 1.2 million, in a population of 11 million. These are figures reminiscent of the Great Depression of the 1930s.

The causes clearly lie with the programme of the troika. In early 2010 Greece was effectively bankrupt. In its wisdom, the troika imposed policies of severe austerity and deregulation consistent with the neoliberal ideology of the EU. Quite predictably, demand collapsed and banking credit became scarce, with the result that the core of the Greek economy was crushed.

The social implications have been catastrophic. Entire communities have been devastated by unemployment, losing the means to live as well as the norms, customs and respect of regular work. Barter has appeared among the poor and the not so poor. Medical services in working-class areas are running low on basic provisions. Schools and transport are disintegrating. People are abandoning cities to return to agriculture, a sure sign of social retrogression.

As the recession deepened, the programme failed to meet even its own targets. The budget deficit for 2011 is on course for 10% of GDP, when the target was slightly above 7%. The debt-to-GDP ratio could reach 200% in 2013, up from 115% in 2009. But the troika has refused to acknowledge failure and in early September blackmailed Greece: take further austerity measures or there will be no more lending. The government has buckled, introducing the equivalent of a heavy poll tax on property. A further meeting with the troika was scheduled for today, following which there would be mass layoffs of civil servants, further wage and pension cuts, still higher indirect taxes, and so on.

These measures are also likely to fail: they will intensify the recession and be opposed politically. George Papandreou’s government is isolated, and the ruling party has lost any ability to generate grassroots support. The official opposition, New Democracy, has been critical of troika policies, hoping to make electoral gains. The parties of the left have already called for open defiance and non-payment.

In practice Greece is on the brink of defaulting and abandoning the euro. This is the harsh reality, though none of the major parties is prepared to acknowledge it. The tragedy is that Greece now has a far weaker economy than in 2010. It is likely, therefore, that there will be major economic and social upheaval with unpredictable outcomes.

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