This furore about the 'ground zero mosque' - actually a mosque being built in a former business site four blocks away from 'ground zero' - reflects the fact that the Republican right's kulturkampf against 'socialism' has run out of steam as a mobilising tool, and they're now turning back to a trusted technique of whipping up hysteria about Islam. This was the other side of the race-baiting that McCain and Palin engaged in during the 2008 election. As you'll recall, the story had it that Obama was a Muslim terrorist from Kenya, and he was going to give people with brown skin the run of things. Across America, local bigots are organising against mosques, just as they are in the UK and much of Europe (other parts of Europe are prioritising a murderous purge against Roma). The GOP doesn't really give a shit about this, but knows how to throw red meat to its base. Hence, as Jamie points out, Republicans are going all out to capitalise on this, with Rep. Louie Gohmert of Texas fulminating about terrorist babies - a dehumanising trope which, he also points out, has its origins in Department of Defense-Hollywood propaganda:



Not that this is a purely 'red state' phenomenon. A correspondent points out that naked anti-Muslim racism is emerging in liberal redoubts such as Seattle, where local sex columnist Dan Savage has engaged in vitriolic attacks on 'Muslim culture'. Here, traditional American nativism, imperial ideology, and pro-Israel doctrine are fusing into a vicious racist brew that, incubated by the 'war on terror', is now being used to buttress the prospects of the most reactionary class warriors for the rich, as a new recession looms. For this racist hysteria about the 1 or 2% of Americans who are Muslim is, while it has a lot to do with bolstering support for a flagging empire, certainly also a weapon of class struggle. As always when capitalism experiences a crisis, it regurgitates all existing barbarisms into a toxic new formula for bludgeoning the working class. In Arizona, the victim is immigrant labour, elsewhere it's the Muslims.

The big struggle today is no longer over healthcare - that's dead, killed for the second time by the Democrats and their allies in big capital, not least the pharmaceutical and insurance giants. The struggle now is over social security, which the Obama administration is going after: more of that accumulation-by-dispossession. Bush was soundly defeated when he tried this, but Obama is the 'progressive' president. Liberals will defend him to the bitter end. If the Republicans win big in the mid-terms, as they are expected to, they will provide a stronger bulwark of support for cuts to social security than even the most right-wing Democrats would. It will provide him with the alibi he needs - the country is right-wing, we can't risk running liberal programmes any more, we just have to save what we can, etc. So much for hope. So much for the small change you could believe in.

So Cameron relaunched his "Big Society" propaganda campaign today. The Prime Minister did not so much spell out his proposed changes as semaphore them with a series of nauseating platitudes. We are told, for instance, that he wants "communities with oomph", sounding for all the world as if he's a fucking daytime television motivational guru. He also favours widespread "voluntarism" though sadly not so much in the metaphysical sense as in the sense of people doing for free what public sector workers used to do for a wage. And, of course, he has set his canon against "centralised bureaucracy" in the public services. Eric Pickles MP suggests that the basic aim of the "Big Society" is to "get more for less", a telling turn of phrase that I will allow you to parse for yourselves - but only after you've juxtaposed it with David Cameron's claim that it is "not about trying to save money".

The "Big Society" is an emetic name for an emetic project. It is, above all, a class project, a war with labour over the share of the social product. The contest is being launched on multiple fronts simultaneously. On the one hand, there is the project of accumulation-by-dispossession, an attempt to raid the public sector in a very audacious way and turn its assets into highly profitable enterprises at just the point when most sectors of industry are showing very lacklustre returns, and when companies are reluctant to invest elsewhere. On the other, there is the very naked effort to increase the rate of exploitation, and restore profitability in that fashion, which involves weakening the bargaining power of labour through legislative means but also by weakening the still sizeable public sector unions. Thirdly, there is an attempt to still further reverse the political gains made by the working class, rolling back democracy within the state under the rubric of 'empowerment' and similar new-age managerial bollocks. This is not just a project of the capitalist class with respect to the working class.

It also a programme for the continued hegemony of the financial fraction within the ruling class. Whatever regulations and stabilizing measures emerge to (try to) prevent the financial sector from completely sinking the capitalist system with its next crisis, there is every sign that the ConDems want to maintain the authority of the City as the main driver of growth and consumption. The 'free schools' and 'GP-led' NHS trusts will provide the financiers with an excellent source of raw material for further financial 'innovation', since these costly entities will have to borrow private capital, which borrowing can be repeatedly refinanced, and the debt itself sliced, diced, tranched and repackaged into bundles of debt parcels that can be speculated on - a blue chip investment since the schools and hospitals, though administered for private profit, will be owned by the public and finally maintained at public expense. The construction, manufacturing and service industries will also make a mint out of these, just as their profit margins will continue to be bumped up by their financial investments.

There are grave risks associated with this "Big Society" project, about which more in a later post. Suffice to say, however: the capitalist class is not stupid, and neither are the Tories. They are not merely engaged in an unintelligent or rigidly doctrinal ploy. This is unlikely to restore dynamism to capitalist industry, but there will be rewards from successfully pulling off this project even if it doesn't restore growth, and there is little else coming down the pipeline. The ruling class is not stupid - it is desperate.

Consider this. There is a staggering amount of spare capacity in the economy. Existing productive resources lie unused, while social needs are unmet, because there is no profitable means by which such resources might be used. Companies are not investing, and are not hiring. The banks are still not lending, preferring to hoard funds against future shocks, because their managers do not believe there are sufficient profitable investment opportunities in the economy. This situation is actually absurd. We have, collectively, all the means we require to house, feed, educate and employ the population, but we may not dispose of those means because there is no profit in doing so.

The approach of governments in response to this has first been to defend the financial sector at all costs - or rather at the cost of a trillion dollars in bailouts and stimulus, and $5 trillion in quantitative easing programmes. This has been branded 'socialism', but it is a staple of neoliberal ideology that the banking system is so central to the system's ability to reproduce itself that the state must spare no means in protecting it. It is no surprise either - the financial sector has been the single biggest source of corporate profits in both the US and UK economies in recent years. In 2006, Wall Street accounted for 40% of all corporate profits in the US economy. Obama has therefore faithfully cleaved to neoliberal doctrine, not just with TARP and its sequels, but by orchestrating a system of lending to the banks that actually results in the additional expropriation of the treasury to the tune of $33bn per year. The result is a massive transfer of wealth from the majority to the major owners of shares and assets.

The left-Keynesian solution to such absurdities is to socialise that spare capacity, use deficit-financing to fund jobs, boost incomes and stimulate demand, and boost the bargaining power of labour so that consumption is supported by reasonable wages rather than debt - all of which would be a good start. However, to the extent that governments have engaged in job creation, income-boosting and stimulus, they have been timid and reverential as regards existing property arrangements. Even moderate moves to cap bonuses are being resisted by the UK government at G20, and they have sternly chastised the FSA head Adair Turner for calling the banks bloated and socially useless, and advocating a Tobin Tax. (Bear in mind that Turner is a former head of the CBI, not a radical reformer). This refusal to socialise assets and make meaningful efforts to redistribute wealth is one reason why employment continues to fall, and why demand remains weak - and this is in turn a large part of the reason for Nouriel Roubini's cheerlessness as regards the 'recovery'. The effects of the stimulus will exhaust themselves by next year at this rate, but private sector demand is unlikely to have recovered by that point.

Another reason for cheerlessness is what David Harvey has called the "capital surplus absorption problem". In the best of times, he has pointed out, the system is always going to come up against limits to its ability to find profitable investment opportunities for trillions of dollars - he pointed out that about $1.5tn of new investments need to be found every year just to maintain the average growth rate of approx. 3%. A healthy growth rate has to be maintained because otherwise capitalism isn't doing what it's supposed to do. It is an inherently expansionist system, and if it isn't expanding that means that capitalists aren't competing for market share, aren't investing, and aren't obeying the basic imperative of capital accumulation: they aren't being capitalists, in other words. Finding such investment opportunities becomes more and more of a daunting prospect, though - notwithstanding the ecological catastrophe that awaits us if we can't find a new paradigm of economic well-being, the fact is that the total sum of new investment required rises each year, and by 2029, the sum needed will be double what it is now. Capital's ability to overcome these limits depends upon usurious capital, or what would now be called finance capital. However, one result of financialisation is a long-term problem of surplus liquidity: this is when the banking system is so loaded with money that it will throw dough at any project that a capitalist can dream up. This is what is usually referred to as 'venture capitalism'. New financial devices of slicing and tranching debts and assets have to be invented. That's called innovation. New bubbles emerge, whether in the dot.conomy or in the housing market. That's called a bull market. This is usually resolved, temporarily, through a financial crash. In 2001, the system lost $7tn in stock market value. Last year, $55tn of asset values were wiped out, which is equivalent to the total GDP for the whole planet - one year's work by several billion people, completely obliterated. (You know that feeling when you build a tower out of playing cards, and just as you add the last storey the whole thing collapses? Well, this is 55 trillion times worse.) By means of such mass destruction, the system reboots itself, but the basic problem of finding profitable avenues for speculation etc. remains.

So, this is the dilemma that capital presents us with. There is spare capacity, there is abundant labour, and there is money ready to enter into circulation as capital. And there are real, pressing social needs that these resources could theoretically be put to work to meet. But there are few profitable investment opportunities in any of that. Furthermore, unless a key source of our current miserable condition is renewed and protected (the financial system) there will not even be enough profit in the system to maintain below-par growth rates. One way out of this is what Harvey has termed 'accumulation by dispossession' (see The New Imperialism, Oxford University Press, 2003, pp 152-169 for detail). This is an elaboration on Marx's account of the 'primitive accumulation of capital', which referred to a violent process of expropriation and enclosure that was necessary to establish capitalist property relations between a new capitalist owning class, and a new propertyless (largely rural) proletariat. Harvey maintains, following Luxemburg, that such a manner of accumulation continues to be central today. Capitalism must always "have something 'outside of itself'", as Harvey says (p 140), in order to stabilise itself. This exterior can take the form of the public sector, the commons, the hitherto uncommodified, wherever it exists.

The enclosure of certain public assets is obviously on the agenda, and a transfer of public wealth is already occurring de facto, as indicated above. Social Security is certainly a prized item for finance capital, and Obama might have more success in delivering that to private capital than in delivering meaningful healthcare reform. However, the real opportunities for such divestment may lie overseas. The lack of domestic investment opportunity is fuels authoritarian imperialism and is arguably what - more than anything else - drove the adventurism and extremism of the Bush era. If US capitalism cannot be successfully reproduced and expanded on the basis of current relations, then a new wave of violent expansionism - perhaps smarter under Obama, but still very brutal - is a realistic scenario.

Oh, I know, this is so last week. It's over already. The twittering has stopped, the protesters have been beaten into retreat, the Youtube videos aren't being uploaded at the same frequency. This week is all about celebrities turned zombie. Still, indulge me for a moment. This image of Ahmadi the pious populist, I think, arises in part from a certain spectacle positioning. After all, the corporate media find it difficult to construe someone as an enemy without also implying that they are some kind of 'commie', one of those heretics who rejects the sacred wisdom of property rights, free markets etc. The election commentary, with its condescending subtexts about Ahmadinejad's ability to win over the ignorant poor by tossing sacks of potatoes their way, surely reflected this. And anyway, it is not within the media's repertoire to explain the underlying divisions in Iran's ruling bloc, or to give anything but a crayola account of the class politics of elections. Partly, I suspect, such crude plot devices is what drove Juan Cole to dismiss the issue of class in his own analysis. Some belated analysis worth paying attention to, then, includes this discussion of labour under Ahmadinejad; this discussion of privatization and accumulation in Iran; and this useful discussion of the elections from the Middle East Research and Information Project.

The main point that arises, I think, is that the division that has been posited between a kind of socially conservative resource populism on the one hand, and a socially liberal austerity programme on the other, is not adequate. The more that comes out about the elections, the more it is clear that they exposed a raging war in the ruling class over political ascendancy and property, with relatively minor differences on other matters exaggerated. The second point is that the right-wing bloc behind Ahmadinejad has tended to use anti-imperialist rhetoric to justify the most naked transfer of wealth from the public sphere to capital, particularly to more influential players in the bazaari class and state-affiliated capitalists. They shake their fists at Washington just as they're about to go further toward neoliberalism than even the IMF proposed. And they justify it by referring to the need to break the sanctions imposed by Washington. This policy is obviously designed not to enrich the poor or sustain them in the long term, or strengthen their bargaining power as workers, but specifically to reduce their long-term wealth and purchasing power by redirecting a larger portion of socially produced wealth to a specific sector of the capitalist class. Ehsani et al are far too soft on Mousavi in their discussion (Ehsani called Mousavi's programme 'social democratic' on a mailing list, which I think is about as credible as Hamid Dabashi's claim that the man was a hardline socialist). This appears to stem from their assessment that the faction backing Ahmadinejad are uniquely dangerous and authoritarian, posing far greater dangers to democracy and labour than even the crooked neoliberals supported by Rafsanjani. Their tone may be unduly alarmist, and their approach to the elections is not one I share, but it is hard to argue with the overall analysis.