Wednesday, October 29, 2008

Protest Meet against State Terror

As part of a campaign against the increasing state terror, Bharanakuta Bheekarathavirudha Samithi (Committe against State Terror),an alliance of various organisations including Janakeeya Manushyavakasa Prasthanam, PUCL,Porattom, Solidarity, CHRO and Democratic Dalit Movement, convenes a meeting at Palakkad on 2nd November. The meeting to be held at Palakkad Employee's Co operative Society Hall at 10.a.m will be inagurated by noted Tamil writer A.Marx. P.Surendran will deliver the key note address.

Adv.P.A.Pouran, K.P.Sethunath, Sunny M.Kapikad, Adv.John John, Dr.Abdul Salam, M.N.Ravunni, Ajayan Mannur, Dr.P.G.Hari are among those who will speak on the occassion.

Samithi convenor Adv. Thushar Nirmal Sarathi told this blogger that state was branding all those who raise their voice against the wrong policies of governments as terrorists. "The government says that its not their duty to protect human rights. And when others come forward to protect human rights the government brand them as terrorists and torture them." Adv.Thusar said. He welcomed all progressive and democratic forces to the meet. Adv. Thushar may be contacted over the phone number 9495218579

Saturday, October 25, 2008

'The United States Has Essentially a One-Party System'

The linguist and public intellectual Noam Chomsky has long been a critic of American consumerism and imperialism.German magazine SPIEGEL spoke to him about the current crisis of capitalism, Barack Obama's rhetoric and the compliance of the intellectual class.

SPIEGEL: Professor Chomsky, cathedrals of capitalism have collapsed, the conservative government is spending its final weeks in office with nationalization plans. How does that make you feel?

Chomsky: The times are too difficult and the crisis too severe to indulge in schadenfreude. Looking at it in perspective, the fact that there would be a financial crisis was perfectly predictable, its general nature, if not its magnitude. Markets are always inefficient.

SPIEGEL: What exactly did you anticipate?

Chomsky: In the financial industry, as in other industries, there are risks that are left out of the calculation. If you sell me a car, we have perhaps made a good bargain for ourselves. But there are effects of this transaction on others, which we do not take into account. There is more pollution, the price of gas goes up, there is more congestion. Those are the external costs of our transaction. In the case of financial institutions, they are huge.

SPIEGEL: But isn't it the task of a bank to take risks?

Chomsky: Yes, but if it is well managed, like Goldman Sachs, it will cover its own risks and absorb its own losses. But no financial institution can manage systemic risks. Risk is therefore underpriced, and there will be more risk taken than would be prudent for the economy. With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased.

SPIEGEL: But is it correct to only put the blame on Wall Street? Doesn't Main Street, the American middle class, also live on borrowed money which may or may not be paid back?

Chomsky: The debt burden of private households is enormous. But I would not hold the individual responsible. This consumerism is based on the fact that we are a society dominated by business interests. There is massive propaganda for everyone to consume. Consumption is good for profits and consumption is good for the political establishment.

SPIEGEL: How does it benefit politicians when the populace drives a lot, eats a lot and goes shopping a lot?

Chomsky: Consumption distracts people. You cannot control your own population by force, but it can be distracted by consumption. The business press has been quite explicit about this goal.

SPIEGEL: A while ago you called America “the greatest country on earth.” How does that fit together with what you've been saying?

Chomsky: In many respects, the United States is a great country. Freedom of speech is protected more than in any other country. It is also a very free society. In America, the professor talks to the mechanic. They are in the same category.

SPIEGEL: After travelling through the United States 170 years ago, Alexis de Tocqueville reported, "the people reign over the American political world as God rules over the universe." Was he a dreamer?

Chomsky: James Madison’s position at the Constitutional Convention was that state power should be used "to protect the minority of the opulent against the majority." That is why the Senate has only a hundred members who are mostly rich and were given a great deal of power. The House of Representatives, with several hundred members, is more democratic and was given much less power. Even liberals like Walter Lippmann, one of the leading intellectuals of the 20th century, was of the opinion that in a properly functioning democracy, the intelligent minority, who should rule, have to be protected from “the trampling and the roar of the bewildered herd.” Among the conservatives, Vice President Dick Cheney just recently illustrated his understanding of democracy. He was asked why he supports a continuation of the war in Iraq when the population is strongly opposed. His answer was: “So?”

SPIEGEL: “Change” is the slogan of this year’s presidential election. Do you see any chance for an immediate, tangible change in the United States? Or, to use use Obama’s battle cry: Are you "fired up”?

Chomsky: Not in the least. The European reaction to Obama is a European delusion.

SPIEGEL: But he does say things that Europe has long been waiting for. He talks about the trans-Atlantic partnership, the priority of diplomacy and the reconciling of American society.

Chomsky: That is all rhetoric. Who cares about that? This whole election campaign deals with soaring rhetoric, hope, change, all sorts of things, but not with issues.

Find out how you can reprint this DER SPIEGEL article in your publication. SPIEGEL: Do you prefer the team on the other side: the 72 year old Vietnam veteran McCain and Sarah Palin, former Alaskan beauty queen?

Chomsky: This Sarah Palin phenomenon is very curious. I think somebody watching us from Mars, they would think the country has gone insane.

SPIEGEL: Arch conservatives and religious voters seem to be thrilled.

Chomsky: One must not forget that this country was founded by religious fanatics. Since Jimmy Carter, religious fundamentalists play a major role in elections. He was the first president who made a point of exhibiting himself as a born again Christian. That sparked a little light in the minds of political campaign managers: Pretend to be a religious fanatic and you can pick up a third of the vote right away. Nobody asked whether Lyndon Johnson went to church every day. Bill Clinton is probably about as religious as I am, meaning zero, but his managers made a point of making sure that every Sunday morning he was in the Baptist church singing hymns.

SPIEGEL: Is there nothing about McCain that appeals to you?

Chomsky: In one aspect he is more honest than his opponent. He explicitly states that this election is not about issues but about personalities. The Democrats are not quite as honest even though they see it the same way.

SPIEGEL: So for you, Republicans and Democrats represent just slight variations of the same political platform?

Chomsky: Of course there are differences, but they are not fundamental. Nobody should have any illusions. The United States has essentially a one-party system and the ruling party is the business party.

SPIEGEL: You exaggerate. In almost all vital questions -- from the taxation of the rich to nuclear energy -- there are different positions. At least on the issues of war and peace, the parties differ considerably. The Republicans want to fight in Iraq until victory, even if that takes a 100 years, according to McCain. The Democrats demand a withdrawal plan.

Chomsky: Let us look at the “differences” more closely, and we recognize how limited and cynical they are. The hawks say, if we continue we can win. The doves say, it is costing us too much. But try to find an American politician who says frankly that this aggression is a crime: the issue is not whether we win or not, whether it is expensive or not. Remember the Russian invasion of Afghanistan? Did we have a debate whether the Russians can win the war or whether it is too expensive? This may have been the debate at the Kremlin, or in Pravda. But this is the kind of debate you would expect in a totalitarian society. If General Petraeus could achieve in Iraq what Putin achieved in Chechnya, he would be crowned king. The key question here is whether we apply the same standards to ourselves that we apply to others.

SPIEGEL: Who prevents intellectuals from asking and critically answering these questions? You praised the freedom of speech in the United States.

Chomsky: The intellectual world is deeply conformist. Hans Morgenthau, who was a founder of realist international relations theory, once condemned what he called “the conformist subservience to power” on the part of the intellectuals. George Orwell wrote that nationalists, who are practically the whole intellectual class of a country, not only do not disapprove of the crimes of their own state, but have the remarkable capacity not even to see them. That is correct. We talk a lot about the crimes of others. When it comes to our own crimes, we are nationalists in the Orwellian sense.

SPIEGEL: Was there not, and is there not -- in the United States and worldwide -- loud protest against the Iraq war?

Chomsky: The protest against the war in Iraq is far higher than against the war in Vietnam. When there were 4,000 American deaths in Vietnam and 150,000 troops deployed, nobody cared. When Kennedy invaded Vietnam in 1962, there was just a yawn.

SPIEGEL: To conclude, perhaps you can offer a conciliatory word about the state of the nation?

Chomsky: The American society has become more civilized, largely as a result of the activism of the 1960s. Our society, and also Europe's, became freer, more open, more democratic, and for many quite scary. This generation was condemned for that. But it had an effect.

SPIEGEL: Professor Chomsky, we thank you for this interview.

Interview conducted by Gabor Steingart

Wednesday, October 15, 2008

Global Financial Crisis

As global economy shows signs of a recession proving those who declared the end of history wrong, worldwide people are looking for alternatives. In fact isn't there an alternative? On this historic occassion, i post this article by Raymond Lotta first published in the latest edition of

System Failure and the Need for Revolution

by Raymond Lotta

The most serious financial crisis since the Great Depression shows no sign of letting up. The financial edifice of U.S. imperialism is in danger of crumbling. The U.S. ruling class is confronting what Federal Reserve chairman Ben Bernanke describes as a crisis of “historic proportions”—and is hurriedly cobbling together desperate measures to prevent wholesale collapse. Three of the largest independent investment banks on Wall Street have ceased to exist since April. The government had to assume a major stake in the American International Group (AIG), the world’s largest insurer, to prevent it from collapsing. Now the U.S. Treasury is considering taking ownership positions in major U.S. banks.

This crisis is amplifying internationally. Western Europe is facing large bank failures and governments are engineering their own bailouts. The Russian stock market has intermittently suspended operations. Financial markets in Asia have nose-dived. Mexico’s economy is wobbling, as its exports shrink.

Two things stand out about this crisis. First, there is the ferocity of its global shocks and the speed with which it has spread. Second, unlike the debt and financial crises of the last 30 years, which were largely centered in the Third World, this crisis initially exploded in the U.S., the world’s leading capitalist economy, and is focused in the financial centers of world capitalism.

U.S.-led finance, which plays a dominant and shaping role in the global capitalist order, has taken a huge body blow. This will have enormous repercussions, not just for the stability of the world capitalist system but for power shifts and rivalries within it.

Many progressive commentators have put the blame for this crisis on fraud and greed, or on lax regulation. All of which are certainly in play. But these explanations do not get to the essence of what is happening, to the cause of the problem. This crisis is the outcome of the fundamental workings of the capitalist system.

The analysis that follows is framed by these core points:

There is an essential relationship between the vast enlargement of the financial sector in the U.S., and the general phenomenon of financialization, and the deepening globalization of capitalist production of the last 15 years. And central to this dynamic has been the relationship between U.S. imperialism and China.
Through the course of this growth and expansion, severe imbalances have built up between the financial system—and its expectation of future profits—and the accumulation of capital, that is, the structures and actual production and reinvestment of profit based on the exploitation of wage-labor.
A “dirty little secret” of this crisis is the enormous weight of militarization of the U.S. economy.
This crisis is a concentrated expression of the anarchy of capitalist production—the fact that production is not carried out according to any conscious, rational plan at the society-wide level, much less at the international level.
Background to Crisis
In the early 2000s, in the aftermath of the collapse of high-tech stocks, the U.S. Federal Reserve Bank sought to stimulate lending and growth. It lowered interest rates and pumped funds into the banking system. Banks had access to cheap and plentiful credit. And through deceit and aggressive marketing, they pushed mortgages on people. The Federal Reserve continued to inject low-cost funds into the banking system—helping to prop up loans and to fuel a long-term speculative housing bubble.

Banks sold these mortgages to investment banks. The investment banks in turn bundled these loans together with other loans, created complex financial products, and sold them to large investors—in the U.S. and in other parts of the world, especially Western Europe. These mortgage-backed securities, as they are called, circulated in financial markets and became the basis for other loans. The ultimate collateral for this chain of borrowing and lending was the original mortgage loans. So when housing prices fell, and as growing numbers of mortgage holders found themselves unable to pay back housing loans, much of this original collateral became nearly worthless.

This whole process is an obscene example of how under this capitalist system something as basic as human shelter becomes a financial instrument and object of speculation. This has led to a situation today where 1 in 6 U.S. homeowners owe more on a mortgage than their home is worth; where 1 in every 65 households in California is in some phase of foreclosure; and where a disproportionate number of Black and Latino families who have been victimized by predatory lending have experienced incredible losses of what little wealth they had.1

AIG had made enormous profits internationally by selling insurance to investors who held many of these mortgage-backed securities. These investors would be repaid by AIG, in the event that the loans that were bundled into these financial packages they had purchased were defaulted on—could not be paid back. But by mid-September, AIG could neither cover massive loan damage nor borrow sufficient funds on the financial markets to keep itself afloat. AIG was so interconnected with other major financial players that if the company went under, it would likely have taken others down.

In the face of mounting financial crisis, the imperialist state intervened. It acted as the representative of capital and as the guardian of the interests of capital. The U.S. ruling class was faced with a two-fold danger: mounting losses and bankruptcies in the financial sector; and the choking up of lending channels, which could send the economy into a rapid downward spiral.

The government basically took over AIG. And on September 19, the Treasury Secretary Henry Paulson announced a $700 billion bailout. The essence of the rescue package was that the government would buy the troubled mortgage-backed securities sloshing about in the financial system and through this get lending going again. But the announced bailout did not unblock credit markets or calm stock markets. Nor has it restored international confidence in the U.S. economy.

Taking a Step Back
This crisis broke out in the banking system. Its more immediate trigger was the popping of a speculative real estate bubble, cascading losses in the financial sector, and the inability of stricken financial institutions to raise capital and the unwillingness of others to lend capital.

At a deeper level, this crisis is the outcome of a particular trajectory of world capitalist growth.

There has been a massive new wave of globalization. One of the most significant features of world growth and expansion of the last 15 years has been the deepening integration of the world capitalist economy. This is happening both on the level of production and trade—like the parts that go into a computer being manufactured in different parts of the world; and in the case of an iPod being totally manufactured in China. And it is happening on the level of finance—where banks operate globally and are more tightly interlinked with one another through chains of borrowing and lending and even, as in the case of AIG, insuring risks of lending.

This new wave of globalization has involved direct productive and financial investments abroad. It has involved the expansion of outsourcing and subcontracting. And central to all of this has been the fuller integration of export producing countries of the Third World into the world capitalist market—and the forging of a globally-integrated, cheap-labor manufacturing economy.2

40 percent of the imports coming into the U.S. are accounted for by U.S. transnational corporations—and this does not even include the subcontracting done by companies like Walmart. 30 percent of U.S. corporate profits are generated overseas. China, which has evolved into the high-profit workshop/sweatshop for international capitalism, has been at the epicenter of this recent surge of globalization.3

From the standpoint of the needs of profitable globalization, various elements of deregulation—for instance, the lifting of barriers to rapid shifts and transfers of capital—were functional. This is why both Republicans and Democrats have promoted deregulation. Indeed, the Clinton administration in the 1990s played a decisive deregulating role. It negotiated so-called free-trade agreements with Third World countries and helped to loosen strictures on U.S. banking and telecommunications.

The trajectory of capitalist growth of the last 15 years has also involved heightened financialization. On this platform of more globalized production and exploitation, the financial services sector in the advanced capitalist countries mushroomed.

On a turbo-charged global playing field of ever-more mobile and massive flows of investment capital—where the stakes of winning and losing are enormous—capital requires all kinds of risk management. Investment banks and other financial institutions provide such financial services to “hedge” against interest rate variations, currency fluctuations, and other sources of volatility and loss. At the same time, financial activities became a greater source of short-term and speculative profits. In an intensely competitive atmosphere for financial market share, investment banks were creating ever-more complex and exotic financial products. Global financial assets increased from $12 trillion in 1980 to nearly $200 trillion in 2007, far outstripping the growth of world output or the expansion of trade.4

Growth in the advanced capitalist countries over the last 15 years became increasingly finance-led and credit-driven. The U.S. has been at the epicenter of this process of heightened financialization. By 2005, the manufacturing sector of the U.S. economy had fallen to 12 percent of the U.S. gross domestic product (the production of goods and services), while the financial services sector made up of finance, insurance, and real estate had grown to 20 percent. In 1982, the financial sector’s share of total corporate profits was just over 5 percent; in 2007, the financial share of corporate profits had skyrocketed to 40 percent!5

Contradictions of Development
These interrelated processes of globalization and financialization ultimately led to unsustainable imbalances and instabilities. The dynamics that fueled growth have generated new barriers to profitable accumulation of capital. Strengths have turned into vulnerabilities.

These include:

Bloating of the financial sector relative to the productive base.
Huge run-up of debt and U.S. trade and government deficits in the U.S. necessitating massive and uninterrupted inflows of capital from around the world, with the central banks of Japan and increasingly China holding huge amounts of U.S. Treasury debt.
Billions upon billions of dollars of paper assets that cannot be transformed into real, productive and material, assets.
U.S. consumption and borrowing stimulating China’s growth but China’s breakneck manufacturing growth further fueling U.S. trade deficits and intensifying competitive pressures throughout the world economy.
The expansion of credit spurring growth but heightening global financial fragility.
We are seeing things turn into their opposites. Financial institutions attempted to reduce risk and to profit from risk by dispersing more varied financial instruments over a wider field of investors internationally. But this process has drawn investors, these very institutions, and now governments into a vortex of vulnerability and crisis. The heightened globalization of production and markets, the closer intertwining of economies, has created conditions for faster and even more extensive ripple effects of crisis throughout the world.

A Knot of Contradictions
A strategic concern of the U.S. ruling class is the international strength of the dollar. The dollar is the world’s leading currency for settling transactions, clearing debts, and holding foreign exchange reserves (trade and investment earnings that become part of the reserves of foreign central banks). The dollar has been a linchpin of U.S. global supremacy and of the whole current global economic order.

The dollar is also an investible commodity—major currencies are bought and sold and traded on international currency markets. The value of the dollar rises and falls in relation to other currencies, and in response to international political and economic trends and developments. If foreign central banks and investors were to significantly shift away from dollar holdings, this could set off a global monetary crisis and/or strengthen the position of rival currencies (like the euro) and rival powers.

These are uncharted waters for U.S. policymakers: in the scale and complexity of the crisis…in the magnitude of the rescue operations required to prevent financial breakdown…and in the rapidity with which this crisis is unfolding. A Harvard research economist put it this way: “like the sorcerer’s apprentice, we have created things we do not understand and cannot easily control.”6

U.S. imperialism has limited maneuvering room. The U.S. is already the largest debtor country in the world. It is waging costly wars for greater empire in Iraq and Afghanistan. And both John McCain and Barack Obama are committed to America’s global “war on terror”—the umbrella under which the U.S. is waging these wars for empire.

U.S. imperialism has attempted to parlay its superior military strength into a new world order and to lock in its global supremacy for decades to come. Defense and defense-related spending totaled more than $1 trillion in fiscal 2008.7 And military-related production and research have long been deeply embedded in the U.S. economy. The whole imperialist system rests on the domination of vast swaths of the globe through savage force, with the U.S. military colossus playing a special role. The costs of forcibly preserving and extending the U.S. empire is one of the dirty little secrets of the dynamics of this crisis that scarcely gets talked about.

Here an important dialectic comes into play. “U.S. military dominance,” writes Kenneth Rogoff, former chief economist for the International Monetary Fund, “has been one of the linchpins of the dollar.”8 But this military dominance and the wars the U.S. is waging have increasingly come to depend on the steady inflow of foreign capital into the U.S. (to the tune of $3 billion a day). For this to continue requires that the U.S. economy and dollar remain stable. This is a major contradiction for U.S. imperialism.

U.S. imperialism is facing new competitive challenges and the emergence of potential rival constellations of imperial and big powers—vying for market shares, control over energy resources, and geopolitical position.

Emergency Capitalism
People are losing their homes. Retirement savings plans since the middle of 2007 have lost 20 percent of their value with the stock market sinking. Funding for vitally needed social programs and services at state and local levels is being pinched by the financial crisis and economic slowdown. In much of the Third World, food prices soared over the last year, this is partly related to financial speculation, and hunger has spread.9

While the futures of millions are in jeopardy, what is the paramount concern of those at the top of the pyramid of economic and political power? It is the protection of a financial system that sits atop a global system of exploitation; it is the rescue of the owners and investor beneficiaries of that system.

This is not “socialism for the rich” or a bailout for the people. It’s emergency capitalism for the capitalist class: injections of funds and guarantees, government takeovers, cost-cutting, selective liquidations, restructuring of regulations; and it’s more brutal capitalism for everyone else: austerity, more intense international exploitation, and more misery for people throughout the world.

The official story line is that this crisis issues from particular flaws and malpractices that can be corrected: “excessive greed,” “Wall Street irresponsibility,” “outdated” or “ unenforced regulations.”

The truth is that this crisis has deep structural causes in the very nature of the system—in the quest for profit, not the satisfaction of human need, and in the anarchic workings of world capitalism.

We are seeing how the means through which capitalism expands and “innovates” have led to new barriers and to gales of “creative destruction”—with trillions of dollars of asset values destroyed in the market turmoil. Through these convulsions, the imperialists seek to wrench new freedom, promoting further consolidation and monopolization. Bank of America absorbs the giant investment bank Merrill Lynch. Lehman Brothers is forced into liquidation.

Whoever wins the presidential election will be inheriting a battered financial system and huge government deficits. This will not be an era of expanded social spending, but one of more direct government intervention in financial markets and cutbacks in social spending.

A Status Report
This rolling and intensifying financial crisis serves as a profile and status report on capitalism in the 21st century:

A once-thriving subprime mortgage market…had been linked to the ability of U.S. financial institutions to market securities to European banks and of the U.S. Treasury to draw in export earnings from China…earnings generated in sweatshops…tied into subcontracting networks of Western corporations….

Real estate markets tank…. The “smart money” looks for “safe places” to shift its capital…. Some of it heads for commodity futures like rice…. So food prices spiral upward in response to the investment stratagems of people who know and care nothing about food needs and food production…. In countries like Haiti, women who can no longer afford basic staples are feeding their children mud-cakes….

A French bank, with its assets plunging in value, and the chain of global capitalist finance snapping all over, now finds itself with “non-performing loans”…. It must “improve its balance sheet” and faces pressures to reduce or eliminate trade credits to a country in Africa that depends on imports for food, and where people already spend 50 percent of their incomes for food.

Despite staggering advances in technology and human knowledge, despite the fact that the development of human society has brought humanity to a historic threshold where it is now possible not only to overcome scarcity and exploitation but also to forge social arrangements where human beings can truly flourish—despite all of this potential, social and economic life are under painful duress and the ecosystems of the planet gravely threatened. It is not for lack of resources or knowledge.

All of what has been described in this article is the result of the relations and domination of capital, the result of the workings of a system driven by vicious competition and the blind accumulation of profit based on exploitation—and backed by massive military force.

In the heartland of capitalism, there is financial meltdown. In the Third World, millions are already suffering the ravages of a global food crisis. This system is a horror and a failure. Is it necessary for humanity to live this way?

The October 10 edition of The Washington Post carried an article with the title and question “The End to American Capitalism?” In forums and in the media, leading bourgeois policymakers and analysts have discussed whether this crisis, careening beyond control and threatening greater economic calamity, suggests that there is something fundamentally amiss about capitalism. And the emphatic answer given is the same: “the system may not be working optimally, but there is no alternative, only gradations and variations of capitalism.”

But there is another way. It is possible to take hold of the productive resources of society and to develop and deploy them in a rational, planned, and society-wide way to meet human need and to safeguard the planet. It is possible to establish a radically different kind of state power and to create a society and institutions that unleash people’s creativity and that promote initiative and diversity in an atmosphere that brings out human community.

The question of socialism, of communism, of revolution could not be more relevant…and more urgent.

To be clear, revolution is not a catchword for lots of new things or lots of change. Revolution has very specific meaning: the people getting rid of the system; depriving the old ruling class of their political-economic-military power; and creating a new power with new aims and objectives and the means to enforce those aims and objectives.

As serious as this crisis is, with all the havoc it is wreaking, the system will not automatically collapse of its own weight and disorder. Absent revolution, capitalism will put itself back together—in its own image and at unimaginable social cost.

And for all the agony that crisis inflicts, this will not automatically and spontaneously translate into progressive, radical, and revolutionary sentiment and consciousness. Other forces are in the field doing ideological and political work: reactionary populists like Lou Dobbs (“blame the foreigners and illegal immigrants”) and Sarah Palin whipping up a social base for religio-fascism. The Obama candidacy is channeling disenchantment and the thirst for change right back into the political system’s suffocating embrace (“change we can believe in” is nothing other than change acceptable to the powers that be).

This is a highly fraught situation. Things can change very quickly. The system is revealing much about its basic nature. Bigger jolts may come and outrage may suddenly grow and give rise to resistance from all kinds of quarters. We have to grasp the potential of the situation. We have to be out there bringing forward understanding and bringing forward a vision of a liberatory world. We have to rise to new political and ideological challenges in the belly of the beast.


1. Data from James R. Hagerty and Ruth Simon, “Housing Pain Gauge: Nearly 1 in 6 Owners ‘Under Water,’” Wall Street Journal, October 8, 2008; RealtyTrac, “Foreclosure Activity Up 14 Percent in Second Quarter,”, July 25, 2008. A study published earlier this year estimates the total loss of wealth suffered by Black, Latino, and other minority households on account of bank subprime-lending of the last eight years to be the greatest loss of wealth for people of color in modern U.S. history (United for a Fair Economy, Foreclosed: State of the Dream 2008).

2. Among informative studies of the origins and development of a globally integrated cheap labor manufacturing economy, see Michel Chossudovsky, The Globalization of Poverty and the New World Order (Quebec: Center for Research on Globalization, 2003); and on globalized manufacturing in relation to financialization, see William Millberg, “Shifting Sources and Uses of Profits: Sustaining US Financialization with Global Value Chains,” Economy and Society, Vol. 37, No. 3 (August 2008), pp. 420-451.

3. Data from Milberg, “Shifting Value Chains…”

4. Jeffrey Garten, “We Need a New Global Monetary Authority,” Financial Times, September 25, 2008. On financialization as a means also to contain financial disorder and to impose profit maximizing discipline on capital, see Christopher Rude, “The Role of Financial Discipline in Imperial Strategy,” in Leo Panitch and Colin Leys, eds., Socialist Register 2005: The Empire Reloaded, London: Merlin Press, 2004.

5. Kevin Phillips, Bad Money (New York: Viking, 2008), p. 5; Robert Wade, “The First-World Debt Crisis of 2007-2010 in Global Perspective,” Challenge: The Magazine of Economic Affairs, July-August 2008, p. 33.

6. David Dapice, “Bad Spell on Wall Street,”, January 24, 2008.

7. Leaving out the wars in Iraq and Afghanistan, defense spending has doubled since the mid-1990s. See Chalmers Johnson, “Why the US has really gone broke,” (English edition), February 5, 2008.

8. Kenneth Rogoff, “America Will Need a $1,000bn Bail-Out,” Financial Times, September 17, 2008.

9. On the global food crisis, see “The Global Food Crisis and the Ravenous System of Capitalism,” Revolution #128, May 1, 2008.

Monday, October 6, 2008

The Return of Marx

With the signs of a sunset becoming more visible in the Empire, the talks about an alternative to capitalism is once again hotting up across the world. And quite naturally the intellectuals are looking back to Karl Marx. The conversation between Eric Hobsbawm and Marcello Musto held on the occassion of 15o years of Grundrisse also points to the contemporary relevance of Marx.

The importance of Marx, 150 years after the Grundrisse

M. M. Professor Hobsbawm, two decades after 1989, when he was too hastily consigned to oblivion, Karl Marx has returned to the limelight. Freed from the role of instrumentum regni to which he was assigned in the Soviet Union, and from the shackles of ``Marxism-Leninism'', he has in the last few years not only received intellectual attention through new publication of his work, but also been the focus of more widespread interest. Indeed in 2003, the French magazine Nouvel Observateur dedicated a special issue to Karl Marx -- le penseur du troisième millénaire? (Karl Marx -- the thinker of the third millennium?). A year later, in Germany, in an opinion poll sponsored by the television company ZDF to establish who were the most important Germans of all time, more than 500,000 viewers voted for Marx; he came third in the general classification and first in the ``current relevance'' category. Then, in 2005, the weekly Der Spiegel portrayed him on the cover under the title ``Ein Gespenst kehrt zurück'' (A spectre is back), while listeners to the BBC Radio 4 program In Our Time voted for Marx as their ``greatest philosopher''

In a recent public conversation with Jacques Attalì, you said that paradoxically "it is the capitalists more than others who have been rediscovering Marx", and you talked of your astonishment when the businessman and liberal politician George Soros said to you "I've just been reading Marx and there is an awful lot in what he says." Although weak and rather vague, what are the reasons for this revival? Is his work likely to be of interest only to specialists and intellectuals, being presented in university courses as a great classic of modern thought that should never be forgotten? Or could a new "demand for Marx" come in the future from the political side as well?

E. H. There is an undoubted revival of public interest in Marx in the capitalist world, though probably not as yet in the new East European members of the European Union. It was probably accelerated by the fact that the 150th anniversary of the publication of the Manifesto of the Communist Party coincided with a particularly dramatic international economic crisis in the midst of a period of ultra-rapid free market globalisation.

Marx had predicted the nature of the early 21st century world economy a hundred and fifty years earlier, on the basis of his analysis of "bourgeois society". It is not surprising that intelligent capitalists, especially in the globalised financial sector, were impressed by Marx, since they were necessarily more aware than others of the nature and instabilities of the capitalist economy in which they operated. Most of the intellectual left no longer knew what to do with Marx. It had been demoralised by the collapse of the social-democratic project in most North Atlantic states in the 1980s and the mass conversion of national governments to free market ideology, as well as by the collapse of the political and economic systems that claimed to be inspired by Marx and Lenin. The so-called "new social movements" like feminism either had no logical connection with anti-capitalism (though as individuals their members might be aligned with it) or they challenged the belief in endless progress in human control over nature, which both capitalism and traditional socialism had shared. At the same time the "proletariat", divided and diminished, ceased to be credible as Marx's historical agent of social transformation. It is also the case that since 1968 the most prominent radical movements have preferred direct action not necessarily based on much reading and theoretical analysis.

Of course this does not mean that Marx will cease to be regarded as a great and classical thinker, although for political reasons, especially in countries like France and Italy with once powerful Communist parties, there has been a passionate intellectual offensive against Marx and Marxist analyses, which was probably at its height in the 1980s and 1990s. There are signs that it has now run its course.

M. M. Throughout his life Marx was a shrewd and tireless researcher, who sensed and analysed better than anyone else in his time the development of capitalism on a world scale. He understood that the birth of a globalised international economy was inherent in the capitalist mode of production and predicted that this process would generate not only the growth and prosperity flaunted by liberal theorists and politicians but also violent conflicts, economic crises and widespread social injustice. In the last decade we have seen the East Asian financial crisis, which started in the summer of 1997, the Argentinian economic crisis of 1999-2002 and, above all, the subprime mortgage crisis, which started in the United States in 2006 and has now become the biggest post-war financial crisis. Is it right to say, therefore, that the return of interest in Marx is also based on the crisis of capitalist society and on his enduring capacity to explain the profound contradictions of today's world?

E. H. Whether the future politics of the left will once again be inspired by Marx's analysis, as the old socialist and communist movements were, will depend on what happens to world capitalism. But this applies not only to Marx but to the left as a coherent political ideology and project. Since, as you say correctly, the return of interest in Marx is largely -- I would say mainly -- based on the current crisis of capitalist society, the outlook is more promising than it was in the 1990s.

The present world financial crisis, which may well become a major economic depression in the USA, dramatises the failure of the theology of the uncontrolled global free market, and forces even the US government to consider taking public actions forgotten since the 1930s. Political pressures are already weakening the commitment of economic neoliberal governments to uncontrolled, unlimited and unregulated globalisation. In some cases (China) the vast inequalities and injustices caused by a wholesale transition to a free market economy already raise major problems for social stability and raise doubts even at the higher levels of government.

It is clear that any "return to Marx" will be essentially a return to Marx's analysis of capitalism and its place in the historical evolution of humanity -- including, above all, his analysis of the central instability of capitalist development, which proceeds through self-generated periodic economic crises, with political and social dimensions. No Marxist could believe for a moment that, as neoliberal ideologists argued in 1989, liberal capitalism had established itself forever, that history had come to an end, or indeed that any system of human relations could ever be final and definitive.

M. M. Do you not think that if the political and intellectual forces of the international left, who are questioning themselves with regard to socialism in the new century, were to foreswear the ideas of Marx, they would lose a fundamental guide for the examination and transformation of today's reality?

E. H. No socialist can foreswear the ideas of Marx, since his belief that capitalism must be succeeded by another form of society is based not on hope or will but on a serious analysis of historical development, particularly in the capitalist era. His actual prediction that capitalism would be replaced by a socially managed or planned system still seems reasonable, though he certainly underestimated the market elements which would survive in any post-capitalist system(s).

Since he deliberately abstained from speculation about the future, he cannot be made responsible for the specific ways in which "socialist" economies were organised under "really existing socialism". As to the objectives of socialism, Marx was not the only thinker who wanted a society without exploitation and alienation, in which all human beings could fully realise their potentialities, but he expressed this aspiration more powerfully than anyone else, and his words retain the power to inspire.

However, Marx will not return as a political inspiration to the left until it is understood that his writings should not be treated as political programs, authoritative or otherwise, nor as descriptions of the actual situation of world capitalism today, but rather as guides to his way of understanding the nature of capitalist development. Nor can or should we forget that he did not achieve a coherent and fully thought out presentation of his ideas, in spite of attempts by Engels and others to construct a volume II and III of Capital out of Marx's manuscripts. As the Grundrisse show, even a completed Capital would have formed only part of Marx's own, perhaps excessively ambitious, original plan.

On the other hand, Marx will not return to the left until the current tendency among radical activists to turn anti-capitalism into anti-globalism is abandoned. Globalisation exists, and, short of a collapse of human society, is irreversible. Indeed, Marx recognised it as a fact and, as an internationalist, welcomed it, in principle. What he criticised, and what we must criticise, was the kind of globalisation produced by capitalism.

M. M. One of Marx's writings which has provoked the greatest interest amongst new readers and commentators is the Grundrisse. Written between 1857 and 1858, the Grundrisse is the first draft of Marx's critique of political economy and, thus, also the initial preparatory work on Capital; it contains numerous reflections on matters that Marx did not develop elsewhere in his incomplete oeuvre. Why, in your opinion, are these manuscripts one of Marx's writings which continue to provoke more debate than any other, in spite of the fact that he wrote them only to summarise the foundations of his critique of political economy? What is the reason for their persistent appeal?

E. H. In my view the Grundrisse have made so large an international impact on the Marxian intellectual scene for two connected reasons. They were virtually unpublished before the 1950s, and, as you say, contained a mass of reflections on matters that Marx did not develop elsewhere. They were not part of the largely dogmatised corpus of orthodox Marxism in the world of Soviet socialism, yet Soviet socialism could not simply dismiss them. They could therefore be used by Marxists who wanted to criticise orthodoxy or widen the scope of Marxist analysis by an appeal to a text which could not be accused of being heretical or anti-Marxist.

Hence the editions of the 1970s and 1980s (well before the fall of the Berlin Wall) continued to provoke debate largely because in these manuscripts Marx raised important problems which were not considered in Capital, for instance, the questions raised in my preface to the volume of essays you collected [Karl Marx's Grundrisse. Foundations of the Critique of Political Economy 150 Years Later, edited by M. Musto, London—New York: Routledge 2008;].

M. M. In the preface to this book, written by various international experts to mark the 150th anniversary of its composition, you have written: "Perhaps this is the right moment to return to a study of the Grundrisse less constricted by the temporary considerations of leftwing politics between Nikita Khrushchev's denunciation of Stalin and the fall of Mikhail Gorbachev". Moreover, to underline the enormous value of this text, you stated that the Grundrisse "contains analyses and insights, for instance about technology, that take Marx's treatment of capitalism far beyond the nineteenth century, into the era of a society where production no longer requires mass labour, of automation, the potential of leisure, and the transformations of alienation in such circumstances. It is the only text that goes some way beyond Marx's own hints of the communist future in the German Ideology. In a few words, it has been rightly described as Marx's thought at its richest." Therefore, what might be the result of re-reading the Grundrisse today?

E. H. There are probably not more than a handful of editors and translators who have full knowledge of this large and notoriously difficult mass of texts. But a re-rereading, or rather reading, of them today could help us to rethink Marx: to distinguish what is general in Marx's analysis of capitalism from what was specific to the situation of mid-nineteenth-century "bourgeois society". We cannot predict what conclusions from this analysis are possible and likely, only that they will certainly not command unanimous agreement.

M. M. To finish, one final question. Why is it important today to read Marx?

E. H. To anyone interested in ideas, whether a university student or not, it is patently clear that Marx is and will remain one of the great philosophical minds and economic analysts of the nineteenth century and, at his best, a master of passionate prose. It is also important to read Marx because the world in which we live today cannot be understood without the influence that the writings of this man had on the twentieth century. And finally, he should be read because, as he himself wrote, the world cannot be effectively changed unless it is understood -- and Marx remains a superb guide to understanding the world and the problems we must confront.

Eric Hobsbawm is considered one of the greatest living historians. He is president of Birkbeck College, London, and professor emeritus at the New School for Social Research. Among his many writings are the trilogy about the "the long 19th century": The Age of Revolution: Europe 1789-1848 (1962); The Age of Capital: 1848-1874 (1975); The Age of Empire: 1875-1914 (1987), and the book The Age of Extremes: The Short Twentieth Century, 1914-1991 (1994). Marcello Musto is editor of Karl Marx's Grundrisse: Foundations of the Critique of Political Economy, London-New York: Routledge 2008.
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Saturday, October 4, 2008

campaign against state terror

In the backdrop of Porattom general convenor M.N.Ravunni's arrest the other day here in Kerala, Janakeeya Manushyavakasa Prasthanam (People's Human Rights Organisation)has decided to launch a statewide campaign against the increasing police excesses and state terror in general. Adv.Tushar Nirmal Sarathy, convenor of the organisation said that as part of the campaign, a meeting will be held on Tuesday at 2.p.m (07-10-08) at PWD Rest House in Palakkad. He asked individauls and representatives of various organisations to attend the meeting , which is aimed at developing a unity among democratic forces in the fight for human rights.He also asked those who coudln't make it to the meeting to send him mail showing their opinion on being a memebr of the joint campaign committe. Adv.Tushar's e mail ID is . He may also be contacted over the fone number 9495218579