Monday, March 31, 2008
Is Neoliberalism Finished? posted by Richard Seymour
According to Alexander Cockburn, citing the Financial Times' Martin Wolf, "neoliberalism has collapsed". The Telegraph reports that the Federal Reserve is considering Nordic-style nationalisations. Even New Labour is touting "socialism", albeit north of the border. The Wall Street Journal says:
On the Richter scale of government activism, the government's recent actions don't (yet) register at FDR levels. They are shrouded in technicalities and buried in a pile of new acronyms.
But something big just happened. It happened without an explicit vote by Congress. And, though the Treasury hasn't cut any checks for housing or Wall Street rescues, billions of dollars of taxpayer money were put at risk. A Republican administration, not eager to be viewed as the second coming of the Hoover administration, showed it no longer believes the market can sort out the mess.
Are the GOP really getting all Kremlinesque? Leave that to one side for a second. It seems self-evident that the whole mythology has collapsed. Neoliberalism has just not delivered the dynamism that it promised: economic growth, labour productivity and wage growth are all down on the statist-corporatist era of 1945-1970. The 'liberalisation' of financial markets has changed the property structure and increased risks while increasing global turbulence. The growing profile of the financial markets has produced record debt, insane stock market bubbles, and fraud on a massive scale, all adding to the risk in the system. (One market that has benefited dramatically from such turbulence has been securities and post-trade markets, the latter dealing with the clearing and settlement of transactions - one European settlement firm, Euroclear, had an annual turnover of $450 trillion in 2006 alone). Like previous crises such as the 1987 crash that followed swiftly from London's 1986 'Big Bang' of deregulation, there are now widespread calls for tougher regulation. Unlike in previous crises, these could be enduring. Capital and its ideologues are seriously worried.
The US economy is not only tanking, but it is dragging down the dynamic East Asian economy with it. (Although the World Bank expects China and other 'developing' countries to soften the global economic landing). The UK economy is showing worrying signs of turning purple, despite the happy face put on by the Office for National Statistics in its most recent profitability report (pdf). It looks as if the only reason for a slight rise in profit rates recently is that the figures exclude financial corporations from the accounting and include the UK Continental Shelf, which is basically the hydrocarbons producers in the North Sea. High oil prices have dramatically increased profitability in that sector to 49.8% from a mere 25% (approx) in the second quarter of last year. On the other hand, non-UKCS companies have actually experienced a decline. Overall, the combination of high energy profits and lower profits elsewhere has resulted in a slight increase in profitability of 0.1% on the last quarter. That's the happy face. Meanwhile, profits in the financial sector are falling at their fastest rate for five years. The financial services sector could slash 11,000 jobs in response to the credit crunch, the CBI says. Annual house prices are expected to fall for the first time in years, which you could argue is good from the perspective of those who haven't got a lot of money to buy a house - the trouble is that mortgage access is being drastically restricted as well: no more 100% mortgages, not for a long time. The European banking system is being seriously squeezed as the giant Union Bank of Switzerland (UBS) and Deutsche Bank announce huge write-downs of debt.
Given all this, is there any sign that the political classes are making a drastic turnaround? Not really. It is true that central bankers are considering strong interventionist measures to bail out the banking system, but this just means socialising the costs and losses incurred by the system while keeping it in private hands or restoring it to the private sector when it gets profitable again. It is exactly what they have always done. I seem to recall a financial columnist claiming to be a free marketeer during the boom and a socialist when things go bust. That about sums up the attitude of the average investor. No long term transformations of orthodoxy are in evidence. For example, this is the Treasury Department's recommendations for a new regulatory system for US finance (pdf). There is noticeably no break with neoliberal orthodoxy, and in some ways it promotes further deregulation for example by reducing the power of the SEC. It seems to be intended to deal with alleged competitive disadvantages faced by Wall Street. For example, the calls for reform in settlement and clearing are obviously a response to the growing consolidation in European settlement and clearing in which the United States is purchasing a growing interest, especially since the New York Stock Exchange acquired the pan-European stock exchange Euronext. And - I simply assume - these proposals have been written in cooperation and following extensive consultation with 'industry leaders'. It has certainly been welcomed by America's leading capitalists. There is zero probability that the regulatory framework of the Glass-Steagall Act, repealed by the Clinton administration in 1999, will be resuscitated in any form; there is no plan for improved welfare or reversing long term privatisation trends; and Bush's stimulus package was "too little, too late" according to Joseph Stiglitz.
The European Union, for its part, is still pushing the agenda it decided upon in Lisbon in 2000 at the height of the dot.com boom, when it declared that thriving financial markets were the best source of a dynamic knowledge-based economy, the best way to allocate resources efficiently and thus the best way to promote the entrepreneurial spirit. Rapid deregulation was accompanied by reduced labour productivity for several years, but recent improvements are now being cited as the basis for continuing the reforms, even though it isn't evident that these have anything to do with what are temporary gains. The EU's internal competitiveness rules continue to be used to erode workers' protections and welfare systems, and the European Commission under the influence of right-wing Irish Fianna Fail politician and internal markets commissioner Charlie McCreevy - a lover of horses, markets, and all things American - is sticking to a 'non-interventionist' orthodoxy (which means intervening on behalf of investors). McCreevy's response to the Northern Rock disaster was to blame excessive transparency in the banking industry. The commissioner is currently considering a complaint by the postal firm TNT against Germany's minimum wage laws, which the company says violates fair competition rules, and at the same time lodging complaints with six EU states over the lack of competition (ie, efficient public sector monopolies) in postal services. There is of course a cleavage in European finance-capital between those who seek to create a pan-European economy with a Franco-German hub, and those Atlanticists who want to gravitate toward Washington via London. This was given recent expression by the announcement that Deutsche Boerse (the operator of the Frankfurt Stock Exchange, and providor of transaction services) and six other European companies that handle post-trade transactions will be setting up a joint exchange, which will exclude NYSE Euronext and the London Stock Exchange. But they all agree on the need to continue the 'liberalisation' process.
Even if the crisis deepens radically, we will not see any fundamental departures from the orthodoxy unless there is a concomitant rise in class struggle and a rapid revival in the fortunes of the global Left. Those would in principle be likely outcomes. At the moment, however, the big hope for the American liberal-left is a candidate who has done many favours for Wall Street, including voting to limit class action suits against corporations. And the other two candidates are just as bad, and nuts to boot.
Sadr's strange victory. posted by Richard SeymourWhat did he have to do to win? Well, once again, he didn't start or provoke the fight. In fact, he had recently renewed his organisation's ceasefire, so anything short of his being decisively defeated is by default a victory for him. Maliki's stated goal was to disarm the Mahdi Army, and that clearly isn't going to happen. Maliki tried to use the 'Iraqi forces' in order to defeat the Mahdi, but found he couldn't. Some Iraqi police refused to fight, while others took their guns and went to fight for the other side. Basra was decisively in Mahdi control. In short order, Baghdad, Kut, Karbala, Nasiriyah, Hilla and several southern cities and towns were in revolt. Hassan Jumaa of Iraq's main oil union reported that there was a widespread popular revolt, and there is evidence that both the US and Maliki feared the development of a combined national revolt. While Maliki had pleaded with the occupiers to stay out of fighting, lest it be seen as a war of occupation versus resistance (and the Dawa Party will not look good in the upcoming elections if he is seen as the occupiers' puppet), it wasn't long before he had to call them in. Now, it looks like they're having to settle for an Iranian-brokered ceasefire that leaves Sadr's organisation intact and his political standing immensely enhanced. What's more, it seems the negotiations were instigated by Maliki's government: "We asked Iranian officials to help us convince him that we were not cracking down on the Sadr group", said an Iraqi official. From "worse than Al Qaeda" to "pwease lets be fwends" is a big shift. Sadr's order for his militias to get off the streets is a test of his control over the organisation, but it is hardly a white flag.
Consider the position of the occupiers in all this. There is now a story going round that US officials didn't know that the attack on Basra was coming. As Marc Lynch points out, this is hardly credible. It is highly unlikely that Cheney's recent visit to Iraq didn't involve some discussion of the Sadrists. Assuming what appears to be obvious, namely that this attack was ordered by the US, then what is the upshot? If the US is obliged to accept an Iranian-backed peace deal, it isn't because they were militarily defeated. The US was bombing from a great height, and could easily have destroyed Basra and its inhabitants and the Mahdi fighters. The fact that this is not Fallujah is not because of the superior rifle power or military training of Sadr's supporters. It is because of Sadr's currently unmatched political power.
All of this is evidence that the Sadrists are improving their act. Have a look at these snippets from Moqtada al-Sadr's recent interview on Al Jazeera:
Here, he positions himself as a leader of the resistance struggle and calls upon Arab states to lend the struggle political support. In reports of his wider remarks, he is said to have described the liberation of Iraq as the central strategic goal of the Mahdi, and predicted that the US will fall in Iraq as they did in Vietnam. Well, there's no doubt that this could happen, but for all that the similarities with Vietnam are rightly highlighted, there remains one staggering difference: there is no equivalent to the Viet Minh. There is not an organisation with the authoritative legitimacy, discipline, centralised power and political nous to even come close. The Mahdi cannot be that organisation, and of course Sadr is probably well aware of this, which is why he has been reaching out to Sunni resistance groups. Who could launch a Tet Offensive in Iraq today? That attack, a turning point which guaranteed the shortening of the American war, required a mass peasant army with fearsome self-control and a leadership with a sophisticated analysis of the domestic politics of the US and how the operation would impact on it. The army would not have been there for the fight had the Viet Minh not been able to offer a coherent strategy for national liberation and unite that with the declared goal of emancipating the peasantry. Any end to the American war in Iraq will result from the consolidation of a national federation of resistance groups with a singular political vision that offers something to the dispossessed Iraqi working class. Yet, for all the limits of Sadr's movement, he continues to rack up successes, to take his would-be terminators by surprise, and to consolidate his standing every time someone tries to take him down a peg or two.
Friday, March 28, 2008
American bombers have struck the central city of Hilla, killing sixty people, aside from their bombing raids in Basra and Sadr City. It's worth considering two things in light of this. The first is the ascendancy of the Sadrist movement, described by Patrick Cockburn in his recent book on Sadr, (and with surprising foresight by Juan Cole in 2003), and its likely future direction. Much of Cockburn's book is given over to a discussion of the Sadr family and its prominence in pre-occupation Iraq in resisting Saddam. I've discussed some of this background here, but Cockburn has compiled the best and most accessible account I have yet seen, see I will draw on it. The second is the so-called 'surge', which is actually a collection of separate politico-military strategies, ranging from bribery to suppression, and its supposed 'success'. In connection with the latter, the latest edition of the quarterly US government report Measuring Stability and Security in the New Iraq was published this month. Unsurprisingly, it is cautiously optimistic because the rate of attacks on US troops has remained fairly steady since September 2007, having fallen back to the rates that persisted in 2004. I might mention that no one thought the 2004 rates were ideal, and it was in just that year that people started to realise that the US could lose the whole thing. The declining rate of attacks is an artefact of a lull in the war - they didn't decline while the US was aggressively attacking in the previous period of the 'surge' and in like operations in 2006-7. However, there's quite a bit of spin deployed to heighten the sense of success. While attacks have reduced to their 2004 level, civilian deaths are shown only from early 2006 to February 2008. So, reported civilian deaths have fallen from their extraordinary peaks during the worst of the 'surge', but they remain at roughly the level they were at in January 2006 - which was already stupendously high. The same deal with US military and 'Iraqi forces' deaths - they've declined to slightly below their early 2006 level, which was very high. Similarly, sectarian deaths have fallen back to their January 2006 level, which was already high. The recent US actions have finally reduced the carnage by the exact amount that the surge increased them. As a matter of fact, then, it would seem that the 'surge' operations dramatically increased the level of deaths, and naturally raised the rate of resistance attacks, and only a separate set of political developments taking real effect since mid-2007 has brought the rate of carnage down.
But it is not that simple. One of the main factors responsible for the slow-down in the carnage since mid-2007 was the ceasefire by Sadr's forces, which was announced on 31 August 2007. Previously, Sadr's movement had been responsible for a great number of attacks in Baghdad and southern cities. As Cockburn points out, the fact that the ceasefire was maintained indicated that, for the first time, Sadr was getting some measure of control over his organisation. The ceasefire was declared because, under pressure from the US, Maliki informed Sadr that he was 'obliged' to fight him even though he relied on Sadr's movement in the Council of Representatives. Hundreds were arrested in a night's work, and forces loyal to the US started rampaging through Shia neighbourhoods, shooting up households with the backing of US helicopters. Bush had announced his 'surge' by warning of "Shia extremists" just as hostile to the US as 'Al Qaeda', while foreign policy intellectuals referred to a "Shia crescent" uniting Iran, Iraq and Lebanon, and potentially destabilising Saudi Arabia. With 'Iraqi forces', US army, Kurdish peshmerga and Badr Organisation fighters surrounding the potential kingmaker on all sides, Sadr decided that he would not resist. The story, of course, is that there was going to be a general clampdown on armed militias - but both peshmerga and Badr corps were incorporated into the security services and so didn't have to dissolve themselves. Another part of the story was that Sadr was an Iranian stooge and went into hiding in Iran when 20,000 extra American supermen showed up. Cockburn is very informative on this point. You would be hard-pressed to find any Iraqi nationalist who is not contemptuous of the 'Iranians' (ie, any Iraqi who might be supported by Iran's government), and the Sadrists are explicitly hostile to Iran's influence. Iran has actually been supportive of Sadr's rivals, particularly the Supreme Iraqi Islamic Council (SIIC) people. As for weaponry - well, you figure it out. Have anti-colonial movements never used IEDs before? Does it take an Iranian to know what to do with weedkiller to make an explosive? The argument was nonsensical.
The reason for Sadr's influence in the 'New Iraq' is not to be found in Iranian influence. It is in his background, and that of his family in resistance to Saddam. Its survival in the face of the dictatorship's onslaught against communist and secular opponents, as well as Shi'ite ones, was remarkable. Against more quietist strains in Shia politics, the Sadr family emphasised activism, and that approach has characterised Sadr's response to the occupation and the formation of the grassroots Mahdi Army. This apparently came as quite a surprise to the US government. After Ahmed Chalabi and the INC were unable to account for half of $4m given to them in 2002, the CIA and State Department started to mistrust them and look for allies in the Shi'ite religious movements. You may remember that it was around that time that naifs started to wonder why the wonderful and humane democrats of the INC were being frozen out of war preparations. They negotiated with the Dawa Party and with the SCIRI, and only the former had any real base in Iraq. The Sadr current, which better off Shia saw as a kind of Islamic Bolshevism, had been completely overlooked. Sadr was immediately hostile to the SCIRI current, which he saw as representing Iranian interests rather than those of Iraqis, and which he argued had not helped Iraqis in the 1991 intifada despite al-Bakir calling for an uprising. He opposed the occupation, noting that "The smaller devil has gone but the bigger devil has come". How prescient. The Mahdi Army was being created while the Badr corps already had up to 8,000 armed fighters. It was a volunteer army, made up of amateur enthusiasts from the poorest parts of Iraq, and it graduated its first battalion in Basra on 6 October 2003. This army displayed its strength during the siege of Najaf in 2004, which made the US army wary of taking the Mahdi on in direct combat ever after. Even now, they rely on Iraqi confederates to do the fighting for them. Paul Bremer had been foolish enough to think that by arresting the 'rabble rouser' he so hated and shutting down the Sadrist newspaper, he would end that part of the emerging resistance. No such luck evidently.
Aside from fighting the occupation, part of the allure of Sadr's movement was its puritan zeal. In areas controlled by the Sadrists, prostitution was targeted, dress codes imposed, 'Islamic mores' enforced, and so on. However, it is not clear how much the leadership actually controlled the organisation. Cockburn says that Sadr has been 'riding a tiger', with several areas totally out of control. Though the Mahdi Army was responsible for some of the soaring sectarian violence that was reported in the years 2005-7, it was often indicated in reporting that Sadr himself did not condone this. This is confirmed in Cockburn's account, which shows that Sadr thought of his movement as being penetrated by spies and criminal networks. In fact, Sadr had stressed the nationalist aspect of his programme and took the opportunity supplied by the Sunni resistance split with the small but deadly 'Al Qaeda' auxiliary to re-emphasise this. Opposition to 'outsiders' was congruent with hostility to the occupiers. But it was not until the clashes with SIIC militias were brought to an end with the ceasefire in late August 2007 that deaths from sectarian clashes declined - suggesting that a great deal of the sectarian warfare was intra-Shiite as well as intra-Sunni.
Sadr's movement is currently able to handle the 'Iraqi forces', evidently. That is why the occupiers are probably going to have to 'surge' again, and probably bring the British troops into the fight. But the US army shows no sign of being willing to take on the Mahdi Army in direct combat at the moment. Only the strategy of Blitzkrieg avails itself. But at the same time, the Sadrists have not been able to form alliances with Sunni movements. Only if the Sunnis currently working alongside the occupiers to take out 'Al Qaeda' do go on the general strike that they are threatening is there a possibility of this. In addition, the sectarian actions often participated in by Mahdi fighters are hard to reverse, especially the ethnic cleansing of Sunnis from homes in Shi'ite areas. The burdens of surival as Iraqi society collapses, as professionals in health and education and vital infrastructural areas flee, as key services degenerate and vital social safety nets disappear, tends towards increasing viciousness, clientelism, patrimonialism and sectarian competition as much as it does toward nationalism and liberation. Sadr's revolt is crucial, and its outcome will tell us a great deal about Iraq's future.
Thursday, March 27, 2008
As the seige of Basra creates a humanitarian crisis, with 51 killed in the fighting, thousands of protestors have protested the seige in Baghdad. The Sadrists are now, according to Patrick Cockburn, the biggest political movement in Iraq. Missing Links cites Kuwaiti news agency reports that Iraqi soldiers are refusing to fight, suggesting there's no enthusiasm among the 'Iraqi forces' for this battle, and the Times confirms that there are widespread reports of defections from the police to the militias and ... clear signs that the operation could backfire badly. But then, I suspect the 'Iraqi forces' know the whole system is a farce and most of them are trying to get something out of it for their families. Agence-France Press says the revolt is spreading. All of which suggests that Maliki and his backers have drastically miscalculated.
Wednesday, March 26, 2008
The American Dream posted by Richard Seymour
As recycled through endless Hollywood dreamworks and newspaper circle-jerks, the American ideology. Any candidate who doesn't know this and get it is out of the loop.
Thirdly, despite the emphasis on the internet as a tool for online activism, most people use the internet in a very different way. Over 90% of people who attend the demonstrations actually use the internet, which is higher than the corresponding figure for the reference population (see Oxford University's most recent figures), but most people don't rely on the internet to hear about protests (those who do tend to be older and are better able to find useful information on the net, which dispels the myth about young people being especially technophilic). Those who take part in online activism tend to be those who are very active offline. Most people who do use the internet find it useful for sharing information, but not as an independent activism tool in itself. I might mention that this tallies with my own experience, and it is hardly to be sniffed at: I remember when something big happened and you had hardly any sources of reliable information, especially if there was a bit of military censorship going on. Now you've got news filter sites, blogs, radical newspapers with regularly updated online systems, handy search tools and so on. You don't have to read the newspapers and watch television bulletins in disgust - that can be quite demoralising and demobilising. However, a surprisingly large number of people, approximately a third, are put off using the internet for activism because they don't like the way others communicate online: on this point, I suppose the main issue is trolls and jerks, but there's also spam, sectarian lunacy, diversionary nonsense, competitiveness, high-handed rhetoric, any of the many ways in which people can just waste time. From personal experience, I would say that you hardly get this sort of thing at all on exclusive activists lists, where seriousness of purpose overrides the temptation to get into spats.
Such research has obvious limitations, being focused as it is on the most visible signs of organisation, which are not always the most important forms. They have a media impact, which is sometimes exactly what is called for, and they reflect sudden upsurges of anger and outrage, such as during the Lebanon war in 2006. But, as the research actually indicates, there is a lot that goes on beneath the radar. There are meetings, leafletings, posters, street stalls, film events, fundraisers, anti-recruitment campaigns, union activism (the NUT has recently voted to oppose military recruitment and propaganda activities in schools, for example), local protests, lobbies of the local MP, media-focused campaigns, all the stuff that actually keeps the arguments and facts in people's minds, and keeps the pressure on those who would otherwise get too comfortable and start thinking about - I don't know - maybe bombing somewhere else or sending troops back into Basra. There are two recent news items that I think reflects where we are. On the one hand, the Tories are opportunistically calling for an inquiry into the war, clearly hoping to capitalise on antiwar opinion even though they have been overwhelmingly supportive of the 'war on terror' in all of its dimensions. The neoconservative ascendancy in the Tory party is presumably okay with this. On the other, the MoD has embarked on a wide-ranging PR campaign to overcome the damage done to the military's image and sell the virtues of 'humanitarian' war. Expect a lot more pro-military news angles. (Perhaps the most glorious PR initiative of all is that, after the scandals over Saudi arms deals, the red-faced former CBI windbag and current trade minister, Lord Digby Jones, has announced his intention of implementing an ethical arms-dealing policy.) Some want to co-opt us, others want to neutralise us - and neither has been successful so far.
Tuesday, March 25, 2008
The Battle of Basra posted by Richard Seymour
The BBC and The Guardian report gun battles in the streets of Basra. There is a template for reporting on this is already fairly well developed: the 'Iraqi forces' are cracking down on intra-sectarian warfare, trying to bring peace to the streets of Iraq's southernmost region, the Basra Governate. This warfare is between three players - the Al-Fadhila party (an offshoot of Sadrism), the Mahdi Army, and the Supreme Islamic Iraqi Council (SIIC). The latter, of course, currently occupies the Interior Ministry on behalf of the invading armies, so the implication that the 'Iraqi forces' are taking a neutral role in this struggle is palpably absurd. It is also the main party to the coalition government with the Dawa Party, which also hopes to co-dominate the southern regions. Reporters know perfectly well that this is not a neutral crackdown on some sectarian rivalry that is simply getting out of hand, and perhaps by the time you read this that pretense will have been given up.
So what is this apparently 'regional' struggle about? A few things, I think. Sadr's movement has recently broken its ceasefire and launched a series of attacks against the occupying forces, including - so it is believed - rocket attacks into the Green Zone. (General Petraeus is saying that Iran is behind these attacks, but then he would). They have been organising cross-sectarian meetings demanding the end of the occupation. The occupiers will probably be encouraging its most avid collaborators to crack down on this tendency, especially given that the Mahdi ceasefire has been one of the most important bases for the recently declared success. If the 'Iraqi forces' can't do the job, look out for a redeployment of British troops, over 4,000 of whom are currently bunkered down in Basra airport. Secondly, in the past few days Sadrists have accused the Dawa Party and its government allies of waging a war of liquidation against the Sadrist movement in the central and southern regions, in anticipation of the implementation of the federalism laws written by the US and pushed through in 2006, and the upcoming provincial elections which the Sadrists could very well win. The SIIC has recently made a bid to consolidate its control of the Basra Governate by getting a motion of no confidence passed against Mohammed al-Waili, the governor of the province and a prominent Al-Fadhila member, which explains why the latter are fighting their corner. Thirdly, the Sadrists are threatening a no-confidence vote in Maliki's government and a campaign of civil disobedience against the occupation forces. Maliki doesn't have to put up with a vote of no-confidence so long as the confidence of the occupiers, and the occupiers don't put up with anything so long as they still rule.
Finally, and most importantly, the new provincial powers will help overcome long-running obstacles to a new oil law [pdf draft], just as Chevron are getting in on the act (any access to new oil fields "would require passage of the long-stalled oil law"). Essentially, the oil benchmark they seek would allow two thirds of Iraq's oil fields to be owned by US corporations. It would place executive decision-making power in a body, the Iraqi Federal Oil and Gas Council, which could include foreign oil companies. Iraqis overwhelmingly oppose these plans, and the Council of Representatives has consistently obstructed them on the grounds that they are too extreme. The US has used every manner of bribery and threat to try and get the law passed [pdf]. They need it to be passed now, and for Production Sharing Agreements to be developed across the board in order for the US to have long-term leverage over the oil. Even if the US permitted the oil to be developed and sold by non-US firms, their access would be dependent on the political authority of the US, and its ability to wield effective violence. The trouble is, even the occupiers' Iraqi allies can't be trusted with strong central power, as they demonstrated by inviting Ahmadinejad. Breaking up the power structure along sectarian lines while maintaing a nominal central government with weak legitimacy, depending on US troops for its self-defence and encased in a Xanadu-like unreality next to a mammoth US embassy is the best remedy for that. Now there is a Provincial Powers Law in preparation, which will define the relationship between the central government and the provinces. It has to be supported by the Council of Representatives and backed by the Presidency Committee (led by US ally Jalal Talabani) and so far it has not been. As Missing Links points out, these powers are the subject of extensive horse trading and are seen by the US authorities as a key means of gaining acquiescence among key allies for the oil law.
Now, here's the trouble. If the anti-federalist forces win the elections, succeed in generating a national civil disobedience campaign against the occupation, and form alliances to break down the sectarian partition including its geographical expressions - those walls that have cut through Baghdad regions against the will of the local populations - then the US will be facing a crisis just at the time when a domestic election could decisively shape the future direction of the war. The regional-sectarian war is thus a struggle over how the most important property forms in the 'New Iraq' will be elaborated and under whose political control. Bear in mind that oil has historically been the number one source of revenue in Iraq, reaching 90% of total revenues at one point, and will the basis upon which necessary imports are purchased and the regeneration and development of Iraq after two especially miserable decades is carried out.
Sadr is calling for 'civil revolt'. Although his forces have been opportunistic at times, brutal at others, the Sadrist movement is perhaps the only major Shi'ite political formation capable of overcoming the sectarian drift of Iraqi politics. Sadr has been one of the few Shi'ite leaders to try and make alliances with Sunni resistance groups and one of the few to oppose the sectarian partition of Iraq. But now the US wants British troops to launch a 'surge' across the south to destroy its enemies. Since Sadr can mobilise a serious revolt, and since the Iraqi army and police are probably not well placed to crush it, even with the Badr corps auxiliaries and the Special Police Commandos working away, British troops might well end up doing as the US is asking. However, bear in mind also that these 'Awakening Councils' are threatening to fall apart - they are threatening a 'strike' if the US doesn't pay up its debts, and the whole thing has always been based on money and convenience. That being the case, the US might not really need a major conflagration might now.
Monday, March 24, 2008
US Declares War on Iran posted by YoshieWashington is now making the most ruthless use of its dollar hegemony against Iran. It just declared war on the entirety of Iran's banking system and will blackmail China, Europe, Japan, et al. to cut off Iran financially.
(1) the March 20 advisory [of the Financial Crimes Enforcement Network, a unit within the US Treasury Department] represents a US declaration of war by sanctions on Iran and a sanctions threat to the international banking community, (2) the US has various unilateral financial sanctions measures at its command in the form of executive orders and Patriot Act Section 311 and (3) the BDA-North Korea sanctions were, at least in retrospect, a test run for Iran.
If the US succeeds, an international quarantine on Iran's banks would disrupt Iran's financial linkages with the world by blocking its ability to process cross-border payments for goods and services exported and imported. Without those linkages Iran is unlikely to be able to engage in global trade and commerce. As 30% of Iran's GDP in 2005 was imports of goods and services and 20% was non-oil exports (World Bank and other data), a large chunk of Iran's economy would shrivel up. The repercussions will be painful and extend well beyond lost business and profits. For example, treating curable illnesses will become difficult. According to an Iranian health ministry official, Iran produces 95% of its own medicines but most pharmaceutical-related raw materials are imported. (John McGlynn, "The March 20, 2008 US Declaration of War on Iran," MRZine, 24 March 2008)
Make no mistake: this economic war is a strategy pursued by both Democrats and Republicans, realists and adventurists alike: Daniel Dombey, "Senators Urge Formal Sanctions," Financial Times, 6 March 2008.
The dollar hegemony is declining (cf. Jeffrey Frankel, "The Euro Could Surpass the Dollar within Ten Years," Vox, 18 March 2008; Wolfgang Münchau, "This Crisis Could Bring the Euro Centre-stage," Financial Times, 23 March 2008), but will it decline fast enough for the Iranians?
The ruling clerics of Iran are able leaders who have run their country with a surer hand than leftists would have, but this presents them with the greatest challenge since Saddam Hussein, backed by the West, invaded Iran -- perhaps even a greater challenge, since at least the richest third of Iranians are not made of the same stuff as those who made the revolution and defended Iran's sovereignty in the eight-year-long war.
Body Politic posted by Richard Seymour
Amid the ongoing ideological resuscitation of eugenics and genetic determinism, evidence accrues daily of the way in which class penetrates and restructures biology. The New York Times has published the results of extensive research on behalf of the US government which found growing inequality in life expectancy across the US, arranged by class and race. They attempt to offset this with reference to rightist think-tanks such as the Heritage Foundation and the American Enterprise Institute, who assure readers that the poor are dying younger not because they are poor but because they are ignorant. However, the overwhelming evidence is that differences in opportunity, income, diet, and access to health facilities is the cause of the problem. Stephen Soldz points out that there is a PBS documentary series planned on precisely this topic, based on the "mounting evidence that demonstrates how work, wealth, neighborhood conditions and lack of access to power and resources can actually get under the skin and disrupt human biology as surely as germs and viruses."
Of course, it is perfectly obvious that capitalism structures biological processes, and not only by way of its ideological representations of the ideal human type from the eugenics models to Barbie, and the denial that it does so is increasingly untenable. A study by Inas Rashad, 'Height, health, and income in the US, 1984–2005', in the latest edition of the scholarly journal Economics and Biology scrutinises biological outcomes and their relationship, and finds that heights and body mass are closely correlated to economic performance: the taller you are, the higher your income is likely to be, and of course this is correlated to a number of other health factors such as high cholesterol, and diabetes. Perhaps the most dramatic example of the way class structures biology is the fate of human bodies in the former Soviet Union and Eastern Europe during the turbulent and callous 'transition' period between 1991 and 1994. A study for the same journal in 2006 summarised the overwhelming evidence that the 'reform' process, particularly during the worst years until 1994, had led to vastly increased mortality, especially through increased alcohol poisoning, suicide, and violent death. It produced an increase in 'stunted' and 'wasted' children (children who are too short, or too thin), reduced overall caloric intake, and reduced iron intake, thus leading to haemoglobin failure and higher morbidity. Naturally, these effects were stratified by class, so that there is a strong correlation between child stature and household socioeconomic status.
These are just a couple of examples - examples, I might add, of well-known phenomena, not at all controversial or mysterious. Of course, the idea that biological processes are partially at the mercy of sociological processes has some disadvantages. It disrupts the heroic ideologies of capitalism, which seem to oscillate between the master race doctrines in which a small number of human beings are hardwired for supremacy and the protean doctrines in which one can with sufficient will endlessly remake oneself, boundlessly improve oneself, exuberantly adapting to the dynamic conditions of the market place through sheer strength of will. You get a lot of the latter in quasi-scientific business doctrines such as Neuro-Linguistic Programming. For them, as much as for a certain specious version of 'postmodernism', the body is a discursive fiction, not in the sense that our conception of the body is itself textual, but in the sense that one can just override bodily limitations through exhortation. Thus, one can work twelve hour shifts, eating miniature sub-standard meals at one's desk, without suffering a nervous breakdown or a heart attack or ageing ten years in one month, because of one's positive attitude to work and achievement. Kapital, in its endless mysticism, just demands this much irrational belief to sustain its reproduction.
Sunday, March 23, 2008
The colonisation of Spain is of particular importance to this story, because it is the prelude to World War II. The success of Franco combined with Anschluss (the annexation of Austria to form Großdeutschland) to provide Hitler with the basis for further aggression to the East. The war also provided the means by which Italy was subordinated to German foreign policy priorities - it was in exchange for Italian hegemony in the Mediterranean that Italy accepted German rule in Austria. Every pressure pushing toward war in Europe was channelled through Spain during Franco's war of conquest. I thought about writing this after reading Andy Durgan's brilliant, concise book about the history and historiography of the Spanish Civil War. It barely touches upon the colonial backdrop, never references it as an explanatory factor (so far as I can tell) and at several points refers to certain atrocities against civilians such as the terrorist bombing of Guernica as novel. Paul Preston's account of the Civil War is better in this regard, and there have been numerous smaller studies and monographs that admit this as an important factor, but I might mention that Sebastian Balfour's Deadly Embrace: Morocco and the Road to the Spanish Civil War is the best account yet. Replete with original research and sharp insights, I cannot recommend it highly enough (supposing you can afford the high cover price). I draw on it liberally in what follows, as well as a volume of essays co-edited by Balfour and Preston, Spain and the Great Powers in the Twentieth Century.
Spanish power in Morocco was initially the result of military penetration, on the one hand, and 'peaceful penetration', the injection of capital and particularly of mining capital in the north, on the other. Arising ten years after the defeat of Spain by the United States in Cuba and the Philippines in 1898, known then as the 'Disaster', and in the context of the 'Scramble for Africa', Spain's bid for a resumption of some world power status was frustrated by the manouevring of its imperial rivals, England and France in particular, and by the growth of a militant working class and an anti-military culture. Essentially, in negotiations with France in 1909, Spain was permitted a small 'sphere of influence' in the north of Morocco, dominated by the Rif, while France controlled the remainder. Later in 1912, they and the 'international community' agreed that the spheres should become Protectorates, and they awarded themselves the right to intervene militarily. On the face of it, they were committed to defending the rule of the Sultanate - it was pro-sovereignty imperialism - but in reality, the arrival of European troops and commerce both disrupted the delicate balance of tribal society and weakened the already limited grip of political elites. Although the commitment of troops to Morocco stirred mass public opposition, and even led to an anti-war strike in Barcelona when indigenous resistance against mining interests led to a military occupation to pacify the country, it encouraged conservative Catholic constituencies for whom the Reconquest against the Moorish infidel was still a worthy political goal. And, ironically, military disaster seemed to temporarily overcome public scepticism - both in 1909 and in 1921, when resistance inflicted harsh defeats on the Spanish troops, a temporary upsurge in militarism resulted. The political elite, mainly guided by 19th Century Liberalism, oscillated between the 'peaceful penetration' of the neo-colonial business lobby and the strident racialism and conquest policies of the colonial military, tending more and more toward the latter as the situation became more difficult.
It was during the 1909 conflict that the Army of Africa first hit upon the idea of using an army of collaborators, known as the Regulares, often drawn from some tribal elites opposed to the insurgent tribes. They also found that they could negotiate with local rulers, such as the leader of the Beni Aros tribe, the sharif Muley Ahmed el Raisuni, who proved to be the most extraordinarily untrustworthy native of the lot. Like the Krim family, which was initially pro-Spanish, he sided with Spain wherever he did so for pragmatic reasons, not because he was particularly happy with colonialism. Unlike Mohammed Abdel Krim, who would become famous simply as Abdel Krim, even his resistance was opportunistic and subject to change at a moment's notice. And unlike the Krim family, he was never particularly interested in modernisation. The Krims, while religious traditionalists, were modernisers in other respects who had hoped that Spanish capital would bring schools, hospitals and trade, and the eventual rebellion of Abdel Krim was in part due to the fact that this had proven to be a pipe dream - all the Spanish brought was repression. Abdel Krim began his rebellious career by aligning with the Central Powers in the Great War, and later took up arms himself. Raisuni was, by contrast, a thief and a vicious tormentor of his subjects, and his sole claim to legitimacy was during his periodic jihads against the Christian crusaders. He was also a brilliant diplomat who succeeded in conning the commander-in-chief of the armed forces Lt Col Manuel Fernandez Silvestre into believing that he was a loyal Spanish servant, not once but several times.
It was during this war also that a new colonial identity was formed that was increasingly opposed to the metropolis, especially among younger officers whose career advancement depended upon military action. The right-wing militarists were contemptuous of metropolitan business interests and the back-door deals that often excluded the chain of command, but neither were they content with a religious motivation for their war: for them it was a paternalistic civilising mission, a charitable attempt to break the will of an infantile race of Moroccans and subject them to Spanish education. In this, they had the enthusiastic support of King Alfonso XIII, who insisted on breaking lines of communication to discuss matters directly with officers. The resistance in the Rif steadily acquired the contours of a classical twentieth century anti-colonial movement. It was clearly familiar with, though no one elaborated, the guerilla military doctrine later to be espoused by the Viet Minh - if the enemy masses his forces he loses ground, and if he scatters he loses strength. Such was persistently a problem for the Spanish high command. In order to demoralise the resistance, General Alfau added to the usual run of scorched earth destruction of homes and cattle the decapitation of prisoners - a photograph of Legionnaires holding heads aloft was ironically later used by the Falange to claim that the communist International Brigades were beheading 'patriots'.
In the aftermath of World War I, the Spanish took the opportunity to try to take full control of their Protectorate. This initiative included the foundation of a Foreign Legion, proposed by Franco's comrade, Col. Jose Millan Astray, which would takeover most of the donkey work from ordinary Spanish soldiers. To the indigenous Regulares, it added impoverished recruits from across the capitals of Europe. And they also dispensed a great deal of bribery to get tribal chieftains on their side - this latter proved a serious weakness, for while bribery could temporarily keep elites on side, there was nothing enduring about it and nothing that could stimulate popular support. Therefore, any widespread uprising would inevitably pressure chiefs to reject the latest bribe and take up arms. And, of course, it was at this point that Abdel Krim started to form his army of jihad against the occupiers. It was precisely the money built up by the Krim family through mining contracts with Spanish firms that enabled Abdel Krim to bring about tribal unity, acquire some sophisticated armaments, and make the first step toward realising his goal of establishing an independent Rif republic. It was Krim's army that inflicted the most humiliating defeat the Spanish army ever experienced, the series of events from 22 July to 9 August 1921 known as the 'Disaster of Anual'. Following a series of extraordinary military victories, Krim was able to set up a professional police force and a government, administering justice on the basis of Quranic law. It was in this battle that the young Francisco Franco first demonstrated his zeal, but it was to no avail - Krim controlled most of the Spanish zone and was expanding into the French zone. It bears mentioning that Krim's troops were quick to reflect the brutality of the colonisers with the Spanish prisoners they took, many of whom were tortured to death in grotesquely savage ways. It was a heroic war, theirs, a genuine war of liberation, but even such wars have rarely been free of this kind of atrocity.
At any rate, the Spanish counter-offensive (which managed to recruit Raisuni) had the backing of an inflamed chauvanistic reaction domestically, and a growing consensus among the political elite that extreme measures were needed. These extreme measures included total war, chemical warfare, bombardment intended to kill everyone in sight, genocidal violence in short. When in 1923 the multiparty government didn't seem to be able to stem domestic discontent or support the colonial venture fully enough, a coup backed to a large extent by the colonial officer corps put General Miguel Primo de Rivera in charge. He was no fascist, however, and was incapable of keeping the support of the colonials because he regarded the Protectorate as itself a danger to Spain. His advocacy of chemical warfare was coupled with a policy of retreat that was unacceptable to the military elite. He came under escalating criticism from the officer corps, especially from Francisco Franco, who was nurturing superiors and even acquiring the sympathy of King Alfonso. When Rivera visited the Legion's headquarters, Franco gave the customary speech proposing a toast to a new visitor, and used it to attack Rivera's policy of retreat. There were supposedly a number of plots to depose Rivera, one of which Franco was implicated in, but Rivera would survive until he lost the support of the King in January 1930. In the meantime, the Spanish air force, using chemical weapons manufactured in contracts with German industrialised, pounded huge areas of the Moroccan land mass, slaughtering people and animals, destroying plant-life, reducing towns to rubble. Balfour has done some good work in exposing this, because it has until recently been submerged in various fragmentary reports, due to an intentional effort at obfuscation by the Spanish military. Although devised with the specific aim of extermination, this did not stop some arguing that the intent was 'humanitarian' - the aim was not to punish the natives, but to frighten them into their own senses, so that they would submit themselves to 'the educational work of Spain'. I would just point out that this is only one particularly egregious example - in colonial practise, the worst barbarisms were always justified as 'humanitarian', and they were indeed 'humanitarian' provided one accepts the viciously racist purview of the conquerors, just as slavery was 'humanitarian' and concentration camps were 'humanitarian'. Rather than put people through endless misery with progressively slender chance of reward, Krim surrendered at Targuist on 27 May 1926 - to the French, in fact, not the Spanish. The French colonists, as harsh as they were, seemed to have some regard for him and some distaste for the counterproductive repressiveness of the Spanish fightback. But actually, anyone who has read of the French repression against Abd-el-Kader and his supporters in Algeria, or indeed just a fragment of the British repression in India (to wit the imprisonment of 80,000 Indians in a prison in the Andaman islands between 1858 and 1939, all of whom were tortured or used for medical experiments), knows that Spain was no more severe than its colonial rivals.
The victory had some interesting repercussions. Having galvanised a colonial army, it left them with little to do but engage in corruption. It also left them alienated from a Metropolitan political and business class that was trying and failing to modernise. When the Left drove out General Damasco Berenguer and then won municipal elections in 1931, King Alfonso went into exile, and the short-lived Spanish Republic came into existence. Berenguer, who had tolerated the PSOE on account of its moderation (its leader Julian Besteiro was an admirer of the Labour Party), was caught by surprise by the party's participation in a rebellion against him - Besteiro had opposed the revolt, though he later benefited from it. The army, though it might have every reason to be hostile to a Republic, had made no attempt to defend Berenguer, and was sufficiently disenchanted to allow the Republic to exist. The ruling class was hopeful at any rate that the reformers would improve Spain's hitherto lamentable economic performance, even in the context of a global economic crisis. However, the PSOE in alliance with the left Republicans and the Radicals (middle class opportunists with a shifty leader), proved no more adept at modernising the economy than the previous elite had. In truth, they faced a great deal resistance from precisely the class that was supposed to benefit. They tried to rationalise the army, improve conditions for workers (especially rural workers), improve the condition of women, and build schools - only the latter didn't offend some constituency or other. Every improvement in the condition of workers was resisted locally; the army was not at all happy with the downsizing of its bloated officer corps (in fact, the PSOE had attempted to democratise the military by introducing conscription, but had crucially stopped short at extending these reforms to the colonial army); and women had plenty of enemies, not least the PSOE leaders who feared they would elect whoever the Church told them to if given the vote. In 1932, General Sanjurjo - a veteran of the Moroccan campaign - attempted a coup, and the following year, a right-wing coalition was brought to power, with its core constituent, the CEDA, aping the rhetoric of the fascist movements that were rising across Europe (they were going to 'save Spain from Marxists, Freemasons and Jews'). As reforming legislation was rolled back, and employers went on the offensive, the Left went into disarray. The one attempt at resistance was a general strike by the PSOE, which reflected not so much its radicalism but its determination to contain the grassroots with ill-conceived gestures. The strike was defeated rapidly in all but one region, the Asturias, where miners held out for two weeks against the army. It was the intervention of the Army of Africa under Franco's command, which used the Regulares to crush the insurgency, that finished the Asturias. Over a thousand died. As Balfour points out, the use of indigenous Moroccans would have seemed odd, but the workers' rebellion was seen as a Soviet-inspired foreign intrigue, and therefore the hardy natives under good Christian Spanish guidance could be of service.
Similarly, when the Left won the 1936 elections, with a much more radicalised activist population, it was the colonial base that provided the ground from which the conspirators - almost all 'heroes' of the Rif campaign - launched their coup. It was the earliest and easiest part of the campaign. I don't need to tell you that the response of the elected government was pathetic. Essentially, the task of resistance fell in the short-term to extra-parliamentary forces. On the other hand, had it not been for the rapid intervention of Mussolini and Hitler, the fascist army would have got nowhere - the lower orders obstructed the transmission of arms and troops from Morocco to Spain, and it fell to the two fascist powers to supply air lifts. Similarly, while the 'democracies' abandoned Republican Spain to its fate (notwithstanding some occasional efforts by Leon Blum), the fascist powers happily larded the Nationalists with troops and advanced weaponry. Germany's Condor Legion arrived in Spain 19,000 strong, while throughout the war Mussolini supplied a total of 80,000 men. They helped direct crucial aerial bombardment missions, and were more than a match for the International Brigades, who were increasingly subject to de-emphasis because they could be depicted as Moscow stooges. The Soviet Union's aid to the Republic, I might add, was brief and opportunistic. The evidence is plentiful that Stalin's relationship with republican Spain was manipulative rather than cooperative. He expected it to be bourgeois and nationalistic rather than revolutionary, and the PCE (Spanish Communist Party) helped promulgate that policy, with the calculated destruction of any revolutionary upsurge - since it was this spirit which had provided the backbone of the early defense of the Republic, it is unsurprising that the breaking of it destroyed the resistance. The Republic's gold (which was offered in lieu of cash payment for weapons) was underpaid for, and all aid was gradually shut off during 1937, by which time it had become clear that Stalin was considering a rapprochement with the Nazi elite out of fears for its own borders. Despite a couple of border openings from France through 1938, there was nothing coming the way of the loyalists. Franco had decided that he wasn't prepared to opt for a quick victory: his aim was a slow-burning success that would annihilate the Republic and all of its vestiges. In other words, he didn't simply opt for a military strategy, but for a long-term political strategy in which the basis for an alternative social order would be wiped out. He also tried out the Nazis strategy of Blitzkrieg which had already been attempted in Morocco - after all, this was the basis on which chemical warfare had been waged. He relied especially on the Regulares and Legionnaires, who always received at least 50% more pay than the regular Nationalist soldiers. The Spanish army undertook a stern enlistment drive among Moroccoans, but while the Nationalists made a careful pitch to the Moroccans, no such effort was made by the Republicans - who might have been expected to liberate the colonies in order to undercut Franco's base. They were so busy trying to put the French and British governments at ease that they could not possibly conceive of stimulating an anti-colonial revolt in the north of Africa. Instead, the Republicans used their airforce to drop shells indiscriminately on Moroccan towns. It should be said that the fascists had no intention of trying to recruit from the anti-colonial rebels, since they knew their chances were slim. The fascist General Mola instead ordered that anyone who had partaken in that rebellion should be arrested. The fascists recruited Moroccans on the basis that they should wage a Holy War for one of the world's great religions against atheists, Jews and Communists who were inherently anti-Muslim. Had the Republicans been anti-colonialists, this would have been exposed as a mirage: but they were not. In fact, the Regulares were used much as they had been in Morocco - to carry out the most dangerous, onerous work, while the Spanish commanders frequently watched from afar. The colonial methods of mass bombardment, repression, summary execution, torture and pacificatory 'total war' had been learned in Morocco and exported to Spain. And the Army of Africa, which would prove crucial in sustaining the war effort, was valuable for its elite experience in counterinsurgency, and would dominate in the iconography of the post-Civil War fascist regime. It is now known that the Spanish and Italian military compared notes on chemical warfare, that Italian troops trained in such warfare were despatched to Spain, and that tonnes of mustard gas and diphosgene were imported from Germany. Due in part to the overwhelming international scrutiny of the war, these weapons were not used. 350,000 Spaniards, of a population of 25 million, died in the war. Laws were promulgated effectively permitting the arrest of anyone who had ever been involved in any resistance, going all the way back to those who had been involved in the disturbances of 1909. Those captured were detained in concentration camps, with up to 270,000 in the camps by the time the war had finished. Just as in Morocco, prisoners who were not executed were kept barely alive and worked close to death. Slave labour fulfilled an economic function for the new fascist oligarchy. Women were thrown back into their pre-Republican status, and Catholic-inspired legislation ensured that girls would be educated separately to prepare them for domestic servitude. Women who were imprisoned suffered abuse and had their children taken from them, so that the young ones could benefit from Spanish education by being sent to Catholic-run orphanages. Workers conditions were degraded immediately, with the reimposition of low wages, long hours and severe discipline. In the prevailing conditions, people died 'like flies', particularly those whose Republican sympathies ensured that they had their property sequestered. The only way to survive was to have ties to one element of the ruling coalition, or to blindly submit to the new work regime. In all, 200,000 people died immediately following the war due to the disease and starvation that the new conditions unleashed. That was the colonial legacy.
By early 1939, the Republic was lost. There remained some rebel fighters, but the International Brigades were sent home, and the Republic surrendered. The British ruling class, who had always hoped for a Franco victory, recognised the new government founded by the fascists without missing a step. It is worth recalling that there was no real sense in which Britain's war against Nazi Germany was anti-fascist. Hitler had been encouraged against the communists and, as Paul Hehn shows, sicced on them several times. When Britain did eventually turn against Hitler, it tried to have Franco and Mussolini on its side, not Republicans and democrats. Hitler, whom the British had tried to give a free hand in the East, was now about to build his own India. He would annihilate the Jews, annihilate half the Russians and enslave the other half, get rid of the communists and homosexuals and mentally ill others who did not exalt the racial ideal. On behalf of an alien elite, which called itself Aryan on the basis of racial theory developed during to the British subjugation of India, Hitler would try to found a new empire. How much he admired England; how much he would have Germany be like it. Italy had hoped to turn Spain into an economic colony, but in fact it had become an offshore colony of the Army of Africa, the ruthless military dictatorship of northern Morocco.
Consider camouflage. Just as in Nazi Germany, the indigenous Spanish reverted to subterfuge and disguise. Anti-Nazis in Germany wore the regalia and signals of Nazi resurgence, pretending to be pro-Nazi. They were waiting, and holding on, hoping for something better, hoping their pretense didn't transmute into a reality. The Nazi regime was well aware that this was so, and even after almost a decade of state propaganda, they had to rely on extensive welfare systems in Germany, funded by the plunder of the colonies (see Gotz Aly, Hitler's Beneficiaries). The intensive indoctrination programmes could only go so far. In a like manner, socialists in Spain abandoned the militias for safety of work, home and fatherland. They adopted the outward signs of deference. Perhaps they would even make some money in the short-term, and eventually find the means to build an independent republic. The regime was an alien one, a colonial one, with no legitimacy. It was unfair, but it seemed to have won for the time being. Spain, like Morocco, had been subject to Reconquest.
Friday, March 21, 2008
The long Good Friday posted by Richard SeymourCrucifixion humour:
And now for something completely different:
Thursday, March 20, 2008
Schadenfreude posted by Richard Seymour
Some people are determined to be chipper. Perhaps there is reason to be so. After all, the British government announced a fall in unemployment yesterday, albeit at a much slower rate than in recent months. And consumer spending was up in February (the Bank of England could use this as an excuse to keep interest rates at their present level which, while bad the the 'high street' and for manufacturing, is good for the City). Average earnings are steady. Public sector employment, having fallen for eight consecutive quarters, has suddenly risen. Manufacturing actually experienced some healthy growth in March. And there's still a budget surplus. If the cheermongers are right, then the self-evident distress of the US economy may be ring-fenced, and it may indeed be supported through this difficult period by continued growth in Asian markets and Europe. But who can believe this? First of all, the unemployment drop is based on the claimant count - no one takes this measure seriously. Secondly, earnings increases outside the public sector have actually slowed down. Thirdly, public sector employment increase could be seen as a counter-cyclical move, but it is no testament to the strength of the underlying economy. Of course, the government can plough money into it - and they should - but it will wipe out that budget surplus in a jiffy. Manufacturing growth depends on exports, which depends on a globally sound economy - hardly a guaranteed prospect at the present time. Further, it is likely that this was brought about by the recent low value of the pound, which made exports cheaper. That isn't a sustainable situation, and it is not one that the City will accept (hence, they will demand higher interest rates). Finally, consumer spending was reported as rising in the United States as late as last August. There is a lag between the emergence of an underlying crisis and its impact in spending and prices. Consumer signals are not very reliable when things are changing fast. Growth is predicted to slow to the lowest level since 1992.
I do so wish the Good News bible-thumpers were right because, as this article makes clear, the United States social safety net, such as it is, is likely to fail, and the labour movement and the Left is not in a position to make an assertive defense of working class interests. I daresay we in the United Kingdom not in a very much better position. The one exciting pole on the Left has recently been through a horrible split, and we are still dealing with the consequences. (If Londoners want something other than pandering to the City, they should vote for Respect's Left List in the upcoming assembly and mayoral elections, by the way). Realistically, we are staring disaster in the face, and the only chance we have is if the labour movement mounts a serious fightback against the government on pay and conditions, because this will redound to the benefit of all of us. Mark Serwotka has the right idea.
Wednesday, March 19, 2008
A tale of two pastors. posted by Richard SeymourI am not, as you know, an Obama enthusiast. But we have to thank Obama's campaign for making the Rev. Jeremiah Wright famous - and what better fame could he ask for than statements like these?:
• "The government gives them [African Americans] the drugs, builds bigger prisons, passes a three-strike law and then wants us to sing 'God Bless America.' No, no, no, God damn America, that's in the Bible for killing innocent people. God damn America for treating our citizens as less than human. God damn America for as long as she acts like she is God and she is supreme."
• After September 11, 2001: "We have supported state terrorism against the Palestinians and black South Africans and now we are indignant because the stuff we have done overseas is now brought right back into our own front yards. America's chickens are coming home to roost."
• "It just came to me within the past few weeks, y'all, why so many folks are hating on Barack Obama. He doesn't fit the model. He ain't white, he ain't rich, and he ain't privileged. Hillary fits the mold. Europeans fit the mold, Giuliani fits the mold. Rich white men fit the mold. Hillary never had a cab whiz past her and not pick her up because her skin was the wrong colour. Hillary never had to worry about being pulled over in her car as a black man driving in the wrong… I am sick of Negroes who just do not get it. Hillary was not a black boy raised in a single parent home, Barack was. Barack knows what it means to be a black man living in a country and a culture that is controlled by rich white people. Hillary can never know that. Hillary ain't never been called a nigger. Hillary has never had her people defined as non-persons."
A lot of Americans have an exaggerated sensitivity to this kind of thing, especially that 40% of them that would like to see Muslims have to bear special ID. Barack Obama took a risk in using Wright as part of his campaign, presumably to reach out to more radical grassroots voters, but nevertheless kept him safely in the background. The other campaign teams were bound to hit on this one, and the media were never going to let it go in a million years, especially since Obama is Osama's main man. The result is that Obama's huge lead over Hillary Clinton has almost evaporated, and both Democratic candidates would on present showing lose to McCain. That's right - the crazy old cracker looks like he could win for the first time because of this right-wing onslaught. He'll be singing 'Bomb Iran' down the White House telephone, and Americans will be asking themselves how they managed to fuck themselves in the ear again.
Do I even need to apprise you of the punchline? One of McCain's favourite backers, whose support he publicly welcomed, is Pastor John Hagee. Hagee is a Christian Zionist, televangelist, antisemite, Islamophobe, homophobe and racist. Here is a list of his statements:
• "It was the disobedience and rebellion of the Jews, God's chosen people, to their covenantal responsibility to serve only the one true God, Jehovah, that gave rise to the opposition and persecution that they experienced beginning in Canaan and continuing to this very day... Their own rebellion had birthed the seed of anti-Semitism that would arise and bring destruction to them for centuries to come.... it rises from the judgment of God upon his rebellious chosen people."
• "All Muslims are programmed to kill and we can thus never negotiate with any of them".
• "I believe that New Orleans had a level of sin that was offensive to God, and they were recipients of the judgment of God for that"
• "Do you know the difference between a woman with PMS and a snarling Doberman pinscher? The answer is lipstick. Do you know the difference between a terrorist and a woman with PMS? You can negotiate with a terrorist."
• "Hagee, pastor of the 16,000-member Cornerstone Church, last week had announced a 'slave sale' to raise funds for high school seniors in his church bulletin, 'The Cluster.'
"The item was introduced with the sentence 'Slavery in America is returning to Cornerstone" and ended with "Make plans to come and go home with a slave.
A charming man, and actually a rather popular one. AIPAC loves him. Senator Lieberman thinks he is Moses and Joshua. McCain is proud to have his support. The San Antonio B'nai B'rith council called him "Humanitarian of the Year". He has become wealthy and powerful by stirring America's filthiest prejudices, by getting in with the Republican Right, by getting on television, and by allying with the most opportunistic, cynically racist Zionist groups. Little phoney commentariat outrage over this chap. If this were just about Obama, then it would hardly be worth pointing out. He has never really sought to challenge racism in any way - quite the contrary, his sole message seems to be that it's time to 'move on'. He has been quite happy to pander to warmongering and is as much a child of the establishment as the other candidates. But clearly this isn't about Obama. It is about a rightist witch hunt, tapping into the deadly combination of racism and sanctimony in American political discourse. It is about the fact that a relatively small-time preacher is catching hell for comments that were largely indisputable statements of fact, while a religious right scumbag with millions is pretty well left alone by some and encouraged by others, because his bigotry is directed against people who have no clout, and because it serves the interests of the political class for it to be that way.
Auguring Armageddon posted by Richard Seymour
By now, the panic quotes are flying in thick and fast. You can see a sample of them here. Big investors, and big capital, are saying that this could be the big one, a collapse of a kind we haven't seen since - well, take your pick between World War II, or 1929. The federal reserve has slashed interest rates as it always does when recession starts to bite, and organised a huge bailout operation to save Bear Sterns, but no one is kidding themselves that this is going to solve the problem. There is talk about the financial crisis spilling over into the 'real economy', as if this was a problem that started with some bad loans. Will Hutton told Observer readers on Sunday that American industry was doing perfectly swell, thanks in part to something he chose to call 'free trade' (doesn't exist, never will), and was being put at risk by a greedy and arrogant financial class. It's a tempting idea, and it's an analysis that I suspect much of the soft Labour left and many union leaders support, since the upshot is that we should rein in finance capital and invest heavily in manufacturing: quite the opposite of the strategy adopted by Brown and Darling, who have based their recent bland budget and broader economic strategy on the most benign possible forecast. In fact, their only recent intervention of any kind was the horribly belated nationalisation of Northern Rock, and they are now taking the opportunity to shed jobs rather than protect them, so that it can be returned to the private sector on profitable terms. That's a measure of the cravenness of our government's pursuit of neoliberalism: at all costs, the City must be appeased, because it is Gordon Brown's most cherished source of growth. Of course it is right that the running down of manufacturing and the financialisation of the economy has done us no favours, producing some of the lowest growth in post-war history. And it has certainly weakened the bargaining power of labour, while bringing immense rewards to the ascendant rentiers, not just in Britain but globally - Fortune's recent ecstatic fawning over the accomplishments of a tiny billionaire class making the point. However, bad loans are an artefact of deeper structural problems in the global economy, and the problem isn't reducible to the 'subprime' market either.
Take a sojourn, if you will, in that mad, hedonistic, irresponsible decade known as the 1990s, in that mad, hedonistic, irresponsible, incontinent continent known as North America. How louche we all were, how flush with cash and ebullient with it. Well, not all of us. Not the majority who actually weren't flush with cash and netting big rewards on the stock market. Not those whose incomes froze for most of the period laughably known as the 'new economic paradigm' or just the 'New Economy' (a marketing gimmick as sickly sweet as New Coke, and every bit as durable). Not those for whom benefit cuts and welfare-to-work programmes left them poorer and more exploited than ever before. And not those who had to work three or four jobs to keep the family eating. But if the 1980s saw Wall Street assume a commanding position in the US economy, by the 1990s it was a major cultural fetish as well. Everybody who was anybody came to know the thrill of combining technophilia with the bull market swagger: you could not only buy shares, but do so online. In fact, approximately 80% of the increase in financial net worth was accounted for by the top 20% of the population. Most who tried dabbling in shares lost money, but they weren't the ones on the news or selling books. Dude, made a cool two mil: easy bucks, money coming from nowhere, now I got a botox smile and rims. Anyone can do it. It was as if God had blessed America (by the way, I'm surprised that Obama doesn't see the virtues of a slogan like "God damn America"). The Clinton administration, having abandoned its reformist programme, was bigging up the bond market. With wages low, and labour conditions deteriorating, some profitability was restored to capital. The stock market was flooded with cash, and IPOs (in which investors plough money into an upstart entity in exchange for a share of future profits) were bankrolling a wave of flimsy new ventures that would mostly go under by the turn of the millenium. Take a look at Doug Henwood's The New Economy - the ratio of financial assets to GDP shot up in the mid-1990s to close to 950%. The Bubba bubble was only briefly interrupted by the threat of the South-East Asian financial crisis spreading, but with the bailout of Long Term Capital Management, the survival of the US economy compounded the consensus: the American model was working, while the old corporatist dinosaurs of Asia and the Rhineland were floundering.
However, one consequence of basing a boom on low wage growth and poor productivity growth is that consumption had to be supported by debt. So, by 2000, households' outstanding debt as a proportion of personal disposable income reached 97%: an all-time high, and higher than the 80% during the second half of the 1980s (see Brenner's The Boom and the Bubble). By 2000, over 40% of new-home mortgages were financed with down payments of less than 10% of the value of the home, while it was estimated that a quarter of new mortgages were being issued to people who were broke. (Robert Brenner's The Economics of Global Turbulence). Household savings also declined drastically in the US during the 1980s and the 1990s. From 1950-1980, household savings were at a ratio of 8-9%. In the 1990s, they averaged 5.2%, and in the years 2000-3, 1.9%. People have been spending more and more of their available income, and without this change, it is estimated that household consumption would have grown 1% slower in the years 1992-2000. In other words, to even get the modest rates of growth attained through the 1990s, which averaged 3.4% per year, the American economy had to be systematically leveraged so that the effects of upswings and downswings were magnified. (Henwood's After the New Economy; Andrew Glyn's Capitalism Unleashed).
Corporate debt also soared, so that interest payments actually wiped out a great deal of the profits that were being made: between 1997 and 2001, the ratio of manufacturing net interest to manufacturing net profits rose to 40.5%, a postwar record (Brenner's The Economics of Global Turbulence). Even after a slump in 2000-1, the credit bubble continued to swell. More intricate forms of structured credit were devised to spin out more value from less 'real' input. Investors sought to maximise returns through high-risk derivatives, the credit default swap market (in which more secure institutions such as hedge funds are paid to guarantee a creditor against losses in the event that the debtor defaults), total return swaps (in which investors accept the costs of holding an asset, such as depreciation, but gets the full return from it), and collateralised debt obligations (a form of mortgage securitisation). With techniques of labyrinthine complexity, they sliced, diced and tranched debts, distributing risks and rewards across portfolios, with the effect of increasing the chances of both gains and losses given any credit event. When the market booms, all seems to be going splendidly. Debts seem to be being paid - and if individuals or companies lack the funds to make the payments, they can always borrow more money to keep up the payments in the existing debt, on the assumption that future growth will sustain them. Amazingly, it did not. Manufacturing died on its arse, wages froze, job growth was slow, and eventually both individuals and corporations were defaulting on their debts. The underlying structural imbalances in the US economy brought this about. The crisis of profitability that struck all advanced capitalist countries in the 1970s was managed in the US by financial liberalisation, which gave the US ruling class wider opportunities for extraction across the world, but which also led to slower growth rates; busted labour unions, which reduced labour costs for employers, but also led to higher borrowing, with the savings and loans crisis prefiguring the current credit crunch; reduced taxes for corporations and profits, which meant both a transfer of the tax burden to the poorest, and also a reduction in welfare as a supporter of consumption. The financialisation policy put a premium on shareholder value, adding pressure to the drive for short-term profits rather than sustainable growth. It also exaggerated the value of executives who could deliver such profits, so executive pay soared, especially in the form of stock options in which executives were encouraged to share in the value created under their management. This partially accounts for the wave of corporate scandals - fictitious accounting, rigging information, concealing operating expenses. It wasn't just a boon for executives: companies that succeeded in inflating their value could acquire competitors and run them into the ground. (Glyn, Capitalism Unleashed). Huge costs are incurred, of course, but mainly by employees and customers. The criminal justice system doesn't take corporate crime very seriously, and well-placed executives and owners can usually protect themselves from the worst effects of a crisis. Concurrent with all this is the growing centralisation and concentration of capital. Mergers and acquisitions followed by rationalisation and downsizing has meant that most Americans are employed not by the biggest owners, but by small employers who are themselves highly leveraged and exposed to the deep insecurity built into a neoliberal economy.
In short, it will not do to speak of a small class of arrogant financiers causing all these problems. If it really was as simple as that, then the rest of the capitalist class would be beating down the doors of power to demand reform, and plead for restraints to be applied to the ostentatious upstarts. And they would get it.
Coda: One of the major global banks to have suffered least so far from this collapse has been HSBC, one of Britain's 'big five'. It did have substantial exposure in the 'subprime' market. It did experience considerable losses. Yet, its profits increased quite substantially on last year: know why? Because they had shifted a huge amount of their investment from the United States to Asia, particularly China. After recent losses, they seem to have cut investments in the US drastically. Although those economies are hardly insulated from any crash in the US, consumer spending has been rising for years in China, and the country is about to open up its financial sector even further. Further, it looks set to invest more overseas. So far Chinese growth has been a huge boost to US capitalism, but it seems clear that any major crisis in the US will redound to the benefit of China in particular. China is the fourth largest economy in the world by nominal GDP, just above the United Kingdom. It is the second largest economy in the world by the arguably more accurate measure of purchasing power parity, just below the United States, and not very far below either (see the IMF's figures). China is one of the few countries in the world, alongside India, to have experienced a higher growth in capital accumulation during the 1990s than in previous decades - almost everywhere else, capital accumulation was much slower, including in the United States. (Glyn, Capitalism Unleashed). Of course, what China doesn't have, and can't possibly compete in, is an empire. To be sure, it does occupy Tibet - as we see, in a quite repressive fashion - and Taiwan would like its independence. Yet, compared to America's awesome global dominion, this is a handful of beans. Parenthetically, one has always hoped for a more radical Tibetan liberation movement to emerge, something with enough blood in it to put Richard Gere off his soy beans. Yet, one can't help but marvel at the hypocrisy of liberal critics such as Steven Spielberg and Mia Farrow banging on about the fucking 'genocide Olympics', as if they didn't live in a country that was not merely investing in another country whose elite is waging a vicious counterinsurgency war but actually prosecuting a far more vicious one in several countries that they don't even own yet. The main point I would make, however, is that while policymakers will attempt various means including protectionist ones to defend the economy, this whole situation is likely to make the US ruling class far more reliant on its military power. The grab for Iraq was a crucial part of the intense competition with China, and winning that competition - frustrating the rise of a major geopolitical rival, as the PNACers insist - is probably going to involve more assertiveness in South Asia. They'll need to control Pakistan as well as Afghanistan. They'll want their military bases back in Uzbekistan. They'll want to control as much of the oil and gas reserves near the Caspian sea as they can keep out of Russia's hands. And they'll have to do something about Latin America, where growing moves toward independence are undermining US capitalist interests and letting China in on the action. A crisis doesn't just mean economic turmoil; it means a more deadly and fraught world system.