Friday, February 28, 2014

laissez-faire capitalism = the short road to socialism?

One place where I fundamentally disagree with most free-market advocates and laissez-faire economists is the assumption that state intervention is bad/obstructive from the point of view of capitalism proper. "Oh no, inflation! Taxes! Deficits! Devalued currency!" But while state intervention can lead to inflation, higher taxes, budget deficits, and a rapidly expanding, devalued money supply, from the standpoint of labour theory, state intervention, particularly on the part of Washington due to the dollar's role as global reserve currency, is not only 'good,' but needed to keep capitalism from experiencing a falling rate of profit-induced depression.

As the blogger Jehu argues (correctly, in my opinion) via Twitter, "Fascist state deficit spending is drawn from the mass of superfluous capital loaned to it from both within the US and abroad [here fascism = the assumption by the state of the functions of the capitalist class]. Most of the discussion concerning this deficit spending focuses on the ability of the US to fund its deficits, but this is not the problem. So long as the excess capital accumulates within the world market, this capital must find its way into US treasuries. The alternative is that it sits idle and will sooner or later suffer massive nominal devaluation. This excess capital cannot be employed as capital and would, in the absence of Washington's debts, simply fall out of circulation. In such a case there would be a crisis of overaccumulation along the lines described by Marx in Capital, Volume 3, chapter 15."

In other words, the state intervenes because it must, not because of any ideological considerations. The latter may influence or shape said intervention, but it's not the primary cause of it—the contradictions inherent within the capitalist mode of production are. Otherwise, "Side by side with the mass of excess capital, there would also appear a massive population of unemployed workers, who are utterly cut off from productive employment. Assuming the more conservative figures of unproductive labor time provided by Borsch-Supan are correct, this amounts to anywhere from 10% to 30% of the working class. Using the most conservative numbers offered by labor theorists, unemployment could easily reach 50%."

Socially, this level of unemployment would lead to a situation similar to that of the Great Depression worldwide, with all the social unrest and subsequent labour militancy. But as Jehu argues, this unemployment is only the tip of the 'cliche iceberg': "Absent US deficits, overaccumulation would produce a classical depression of the falling rate of profit. Fifty percent of nominal economic activity would evaporate; in turn, competition would erupt among capital to avoid losses; the financial sector would implode; prices would collapse; industrial activity would halt; and the credit system would shut down. The effects would not simply be limited to the US, but would spread throughout the world market; in first place because the depression would severely restrict US imports from the rest of the world market. The largest trading partners of the US would suffer knock-on effects of the collapse of US demands for their output. Moreover, since the crisis in the US forcibly devalues commodity prices there, these commodities will become competitive against former US competitors, adding the deflationary pressures in those countries."

He concludes that, "With the fall off in US trade deficits with its partners, less capital (dollars reserves of the countries) will flow back into the US seeking some minimum return in the form of interest on fascist state treasuries. Thus if the fascist state did not borrow the excess capital within the world market, the capital would immediately be devalued. The problem is not that Washington accumulates debt by borrowing the excess capital; the real calamity sets in once Washington stop borrowing it."

The internal logic of capitalism contains within it a number of contradictions that give rise to imbalances and crises which ripple throughout the system, affecting the bottom line of capitalists and the social life of producers alike. And when both the mass of superfluous (i.e., unproductive) capital and labour increase in conjunction with efficiencies in production due to these contradictions, they cause the rate of profit to fall and a shrinkage in the absolute mass of profit created (essentially halting the circulation of capital), compelling capitalists to find ways to overcome this, whether through encouraging debt spending, the opening of new markets, the 'creative destruction' of superfluous capital (mostly through state consumption), or creating ways to increase the mass of profit that via evolutions (i.e., innovations) in the means of production and finance that, in turn, set up the conditions for further overaccumulation and crises.

Another reason state intervention (particular in the form of deficit spending) is needed is that a drastic drop in the total hours of labour via unemployment, reduced hours, etc. drastically reduces the time available to capitalists for production of surplus value, which is another material force pushing capital to not only accept and even welcome intervention, but making it a necessity for capitalism to continue to function. Thus intervention not only helps to keep unemployment low and extend the total hours of labour, but it consumes unproductive capital that would otherwise stall the system, which is why Jehu argues that, "The capital that is lent to Washington must be lent to it, because it cannot be employed productively and can only accrue profit in the form of interest payments on fictitious state debts" and "Even as deficit spending increases, austerity and longer hours of labor must be imposed on the working class."

Despite romantic, liberal notions to the contrary, the state is first and foremost the material expression of capitalist class interests, and from the perspective of labour theory, I think this, plus the material conditions mentioned above, tend to affect and ultimately direct both domestic and foreign economic policies (including the actions of the FED) far more than political ideologies despite how these issues are often framed by the media or politicians. And this, in my opinion, goes a long way towards explaining, among other things, Washington's growing role as national capitalist a la Friedrich Engels in Socialism: Utopian and Scientific—and here I'm thinking specifically about Jehu's analysis of Washington's increasing role as manager of the national capital/surplus absorber on a global scale.

Furthermore, if his analysis is correct, as I believe it is, the greater the reduction of government spending, the greater the potential calamity since "the issue of treasuries is not in the least determined by their 'value,' but by the mass of excess capital that must find any available outlet to expand itself. Even if Washington should want to reduce its deficits, it could do this only by bringing down the entire mode of production. The issue of treasuries is not determined by the needs or spending priorities of the fascist state but by the need of the mode of production. As the MMT school is fond of pointing out, the excess surplus value of capital must take the form of state debt on pain of catastrophe. The biggest myth in the debt ceiling debate from last year is the idea Washington has control over its debt and can determine its expansion."

There's a silver lining to all of this, however. If we except the arguments of Engels and Jehu, then Washington's ever-growing role in managing the productive forces of society signals that the productive forces of society are developed enough, and the social nature of production pervasive enough, for the socialized character of the means of production to be given "complete freedom to work itself out," meaning a possible end to wage labour and the beginning of a new historical epoch. So while free-market advocates and laissez-faire economists continue to argue against the evils of state intervention, what they may ironically be arguing for is the acceleration of capitalism's demise.

Tuesday, February 25, 2014

your ancestors, your fate or social-darwinism is the scientific equivalent to the myth of the american dream

From the New York Times:

Your Ancestors, Your Fate

One the one hand, I think this it's an interesting study of social mobility that counters the myth of the easily obtainable 'American Dream.' In my opinion, the ideology of social mobility inherent in the myth of the American Dream is something that's been used to pacify those experiencing socio-economic inequality and vindicate those on the opposite end of the spectrum, by framing the narrative of social and economic inequality in terms of personal failings, i.e., the idea that, if you're not successful, it's because you didn't try hard enough, you didn't work hard enough, you didn't work smart enough, etc. because we all have an equal chance of becoming successful in a capitalist society. The most salient paragraph is:

To a striking extent, your overall life chances can be predicted not just from your parents’ status but also from your great-great-great-grandparents’. The recent study suggests that 10 percent of variation in income can be predicted based on your parents’ earnings. In contrast, my colleagues and I estimate that 50 to 60 percent of variation in overall status is determined by your lineage. The fortunes of high-status families inexorably fall, and those of low-status families rise, toward the average — what social scientists call “regression to the mean” — but the process can take 10 to 15 generations (300 to 450 years), much longer than most social scientists have estimated in the past.


That said, I strongly disagree with the Social-Darwinian conclusion of Gregory Clark that, "In modern meritocratic societies, success still depends on individual effort. Our findings suggest, however, that the compulsion to strive, the talent to prosper and the ability to overcome failure are strongly inherited. We can’t know for certain what the mechanism of that inheritance is, though we know that genetics plays a surprisingly strong role."

For one, I think that it ignores the incestousness of the ruling class in any society. Even when things like heredity aristocracy are no longer vogue, ruling elites tend to remain a social class brought together (albeit loosely) by their material class interests, which mainly revolve around the ownership of property and material wealth that directly or indirectly gives them access to political power. And while Clark tries to suggest that's not really a factor in determining the statistical success of children born within that class, I think he fails to do so conclusively. The reality is that there are a number of fairly well-documented socio-economic advantages for those of more privileged backgrounds, as well as barriers for those at the bottom of the social ladder.

It also ignores that the aid given to the poor isn't comparable to the wealth and other material advantages of elites. Clark argues, for example, that, "The societies that invest the most in helping disadvantaged children, like the Nordic countries, have produced absolute, commendable benefits for these children, but they have not changed their relative social position." But this is a vulgar and superficial comparison, in my opinion, that disregards a host of other factors that go into social status and relations in capitalist society (and all the countries mentioned are capitalistic in some shape or form).

I think a more compelling comparison in this instance would be between poorer children in countries who receive the most help and those in countries who receive little to none, rather than between poorer children get food stamps and possibly a decent education if they're lucky and wealthy children who general start out with more and have to do less to get the same opportunities. Is it really all that surprising that a poor kid on food stamps living in a poor neighborhood with likely higher crime rates and shittier schools won't statistically do as well as a kid from a wealthier family, who probably lives in a nicer neighborhood and goes to a better and less crowded school? It's mainly just a genetic thing?

Another thing that troubles me is that Clark notes a "number of studies of adopted children in the United States and Nordic countries show convincingly that their life chances are more strongly predicted from their biological parents than their adoptive families," but he doesn't put those statistics into any kind of context, i.e., there's no evidence supporting that this statistic in and of itself points to predominately genetic factors rather than a complex array of genetic, cultural, socio-economic, etc. factors. It assumes all things being equal when in fact they're not, or at least aren't shown to be.

Here, I think a comparison of children from 'higher-status' families raised by 'lower-status' families and vice-versa is needed to help rule out the influence other socio-economic factors before we can comfortable conclude that it's all in the genes. Do children adopted by higher-status families perform worse than biological children of higher-status families, for example? Do children adopted by lower-status families perform better than biological children of lower-status families? The data's most likely available, but I'm skeptical that it'd show a statistically significant difference (which could possibly be why Clark ignores it).

While I think the study of social mobility is interesting, I think Clark draws incredibly broad conclusions from cherry-picked and 'noisy' data, especially after noting the difficulties of quantitatively studying the issue. In my opinion, the advantages of familial socio-economic resources (including early childhood nutrition, which is important for brain development), social networks, etc., not to mention other environmental factors like what neighborhood one grows up in and the kinds of peers one grows up with, etc., are basically written off by Clark, and genetics given centre stage for what I suspect to be more ideological reasons rather than purely scientific ones. It's the scientific equivalent of the myth of the American Dream.

Wednesday, February 19, 2014

it's ok to like whomever you like

From the BBC:

The evolutionary puzzle of homosexuality

While I agree that genetics and biology have a role in shaping human sexuality, I'm of the opinion that human sexuality is ultimately a fluid thing, with a certain genetically-predisposed baseline and a possible spectrum of sexual diversity that's part nature, part nurture, and part conscious choice flowing from that. So while one may be primarily attracted to the same sex or the opposite based upon some biological factor, one isn't limited to just that.

As a species, we have to capacity to enjoy a rich spectrum of emotional and sexual relations. Part of the reason I think this isn't more obvious is that we've been conditioned by social, religious, and cultural norms to identify with a single 'orientation' and, more importantly, to find only one specifically orientation socially, morally, and culturally acceptable.

We're just now reaching a point where it's becoming acceptable to be open about being attracted to the same sex and to be in a same-sex relationship, which is good. Unfortunately, we're still trapped culturally into identifying as one or the other (gay, straight, etc.). And scientifically, we're trapped by an ideology of genetic sexual determinism to do the same thing. So it's going to take a bit longer for people to fully realize the possible diversity in human sexuality and that it's not only possible to be attracted to people for who they are regardless of sex or gender, but that it's OK to be attracted to someone for who they are regardless of sex or gender.

As my friend Matt put it, "We have to fight against this idea that no reasonable or rational person would choose same-sex attraction." But the idea that same-sex attraction isn't something we can choose because of biology simply reinforces rigid sexual barriers. There are plenty of perfectly good, rational reasons why they might apart from genetics, like they have a great personality or they're cute. And what universal law says that love and human sexuality have to be entirely rational in the first place?

Monday, February 17, 2014

r.i.p., uaw

The UAW lost the vote in Chattanooga, TN. The fear of capital flight and the capitalization of that fear by people like Sen. Corker is one reason the UAW lost the vote. Competition between workers competing for jobs in a global labour market characterized by unprecedented capital mobility makes them anxious and even hostile towards anything that may threaten their livelihood.

Yet another is the UAW's growing irrelevance, partially stemming from its top-down, employer-friendly approach, which alienates rank-and-file workers and defeats the purpose of a union as a way of bringing individual workers together into a single collective unit, giving them more power and input than they'd have individually. The UAW (and arguably most labour unions these days) is increasingly becoming little more than an unnecessary mediator between capital and labour.

In the long run, I think both unions and rank-and-file workers need to start thinking outside of national borders because the 'working class' is global and can only fight against capitalism globally. Worker solidarity and unions need to be truly international, not just in name. Neoliberalism has made things like protectionism and the UAW of the 60s and 70s a thing of the past.

In the short-term, however, I agree with Nicole Aschoff that the UAW needs to examine its 'fighting roots,' remember where power comes from (rank-and-file workers), and start working to help organize the thousands of autoworkers in the supplier sector working long hours for lousy wages and no benefits. At least then, the UAW might have a fighting chance to save itself from becoming redundant.

Sunday, February 16, 2014

florida's stand your ground law = it's ok to murder black teens

From the New York Times:

Florida Self-Defense Law Complicated Jury’s Job in Michael Dunn Trial

Yet another non-conviction for murder involving the shooting death of an unarmed black teen. So I'm guessing Florida's Stand Your Ground law says it's legal to shoot unarmed black kids to death, because WTF? Ironically, Dunn was convicted for shooting at the people he didn't kill, not for the one he actually did. If he'd have just stopped shooting after killing the unarmed Davis, or else killed everyone in the car and also portrayed them as threats with non-existent guns, there's a good chance he'd probably be a totally free man.

And just like Zimmerman, he's abusive and threatened his ex with a gun. Surprise, surprise.

Saturday, February 15, 2014

in a perfect world, apple would socialize that shit

For about 6 months now, the notorious corporate raider and billionaire Carl C. Icahn has been badgering Apple to buy back $50 billion worth of shares by September. Apple itself has implemented a plan to return $100 billion to shareholders through increased dividends and a $60 billion buyback program by 2015.

Much of that wealth is, in the final analysis, the surplus value produced via the production process and realized via market exchange that's appropriated by Apple. (To the owner, the spoils.) The money hasn't been reinvested most likely because it can't be done so profitably. It's excess (superfluous) capital in a period of overproduction (of primarily capital) that's up to now simply been hoarded and burning a hole in Apple's proverbial pocket.

Icahn is of the opinion that Apple is depriving shareholders by holding onto all that excess capital. A buyback will put much of that wealth into the pockets of shareholders and help improve Apple's earnings per share (even if profits remain the same, the earnings per share increase due to the reduction of publicly traded shares). In essence, it's a way for capital to redistribute surplus value and maximize profit without actually producing anything new.

Instead of redistributing all the surplus wealth to its shareholders, though, Apple could just as easily redistribute it to the ones producing that wealth, giving $1,245,300 to each of its 80,000 full-time employees worldwide or $166,666 to each of the 600,000 workers working jobs created or supported by Apple. In a perfect world, right?

Friday, February 14, 2014

happy valentine's day

Protectionism in the context of global capitalism is a dead end. While the idea has merit on the surface, keeping jobs home or bringing them back, it runs into a number of problems, the biggest one being the social relationship between capital and labour and the boundaries that constrain the latter.

Capital is adept at dissolving boundaries for itself. What most likely began as a movement to make it easier for finance capital to move freely across national borders has translated into a movement to make it easier for commodities to move just as freely. Workers, on the other hand, have national borders and strict immigration policies to contend with, not to mention the cost of relocation.

Capital already has the upper hand when it comes to its social relationship with labour. And in the age of global capitalism, capital can pretty much go where it pleases, while workers in one city, state, or even country are forced to compete with workers across the globe, making solidarity among workers and strong bargaining positions that much harder to achieve. Workers aren't just forced to compete with workers in the same locality, they're competing with a global proletariat making national labour movements increasingly impotent.

To take one concrete example, workers at Volkswagen AG's Chattanooga plant are voting on whether to be represented by the UAW. But anti-union workers and even a state senator are arguing that new VW investments may be diverted to Mexico if the vote passes, pitting workers in Chattanooga, TN, with workers in Puebla, Mexico, and undermining the vote.

According to a story in Reuters, Sen. Corker said he's "been 'assured' that if workers at the factory reject the UAW, the company would reward the plant with a new product to build." And one of the anti-union employees at the plant agrees, saying, "We are in a battle with Mexico on where this new product goes and it stands to reason that the union will add costs. We need to keep costs down to fight for that new product." In order to be competitive, workers in Chattanooga have to compete with Mexican wages and working conditions.

Of course, VW claims that the vote will have no bearing on their decision whether the new product in question will be made in Chattanooga or in Puebla. But conveniently enough, the meeting to decide will be held after the UAW vote, giving VW quite a bit of leverage by pitting local workers (e.g., fighting against unionization and higher wages, etc.) and governments (e.g., giving out favourable tax incentives/subsidies, implementing anti-union measures, etc.) against one another for the additional capital and jobs.

Let's face it, neoliberalism has made things like protectionism a thing of the past. We need to start thinking outside of national borders because the 'working class' is global and can only fight against capitalism globally. Just like the IWW motto, we need One Big Union of all workers the world over.

Happy Valentine's Day to all my fellow proles the world over. ♥

Wednesday, February 12, 2014

what's the point if we can't have fun?

From The Baffler, an interesting piece by anthropologist David Graeber:

What's the Point If We Can’t Have Fun?

While I think the end falls a bit flat, what I really like about this is how Graeber points towards the narrowing ideological view of material reality that reduces animals to calculating economic actors trying to maximize some sort of self-interest, and which minimizes the role of cooperation, play, and sociability in evolution.

For one, it leads towards the conclusion that we're little more than just robots, and leaves many of life's mysteries as, well, mysteries. It also illustrates how the way we frame things can ideologically exclude different possibilities, and has the effect of acting as theoretical blinders that themselves can make us see what we want to see, or else what we're conditioned by the ruling ideology to see.

So when it comes to science, for example, we have boxed ourselves "into a world where to be scientific means to offer an explanation of behaviour in rational terms" (following the model of vulgar economists and materialists), and where things like play ("the existence of action carried out for the sheer pleasure of acting, the exertion of powers for the sheer pleasure of exerting them") and freedom (non-determined, non-rational action) strike us as mysterious aberrations that need to be explained away rather than qualities that may vary well be present in some form in nature all the way down to the subatomic level (e.g., Epicurus' atomic 'swerve,' electron probability, etc. = play/freedom).

It may not just be animals, then, that have the ability to 'think' and have 'fun.'

Wednesday, February 5, 2014

2014 farm bill: austerity for poor families; business as usual for agribusiness

From the New York Times:

Senate Passes Long-Stalled Farm Bill, With Clear Winners and Losers

On the plus side, the new farm bill encourages farmers who receive federal subsidies to implement new soil conservation practices and offers more assistance to farmers markets.

On the downside, it cuts over $8 billion in food assistance for needy families. Michigan Senator Debbie Stabenow (D), chairwoman of the Senate Agriculture Committee and the bill's author, argued that the cut to food stamps simply closes a loophole that states use to increase benefits for food stamp recipients, as if poor families receiving food assistance are living high on the hog.

At the same time, the bill leaves federal subsidies for the federal crop insurance program (which largely benefits large farms and agribusinesses and the 18 companies that are paid $1.4 billion a year to sell policies to farmers) untouched while barring the Agriculture Department from renegotiating lesser payments to crop insurers over the 5-year life of the bill, potentially giving private insurance companies more public money since Stabenow et al. apparently don't think they're receiving too much of it (unlike all those poor, greedy families struggling to feed themselves).

The bill was also passed without an initial requirement that lawmakers must publicly disclose if they or their immediate family members receive crop insurance subsidies, which would have made things a little more transparent, as well as a provision limiting premium subsidies for the wealthiest farmers.

Some say that Congress, flush with millionaires, is out of touch with their constituents; but I say they're perfectly in touch with who they really serve, it just ain't us.