Willfully ignorant vs. aggressively skeptical

Seth Godin analyses the screaming in Willfully ignorant vs. aggressively skeptical when the status quo is challenged:

But there are two ways to do it, and one of them is ineffective, short-sighted and threatens the fabric of the tribe. The other seems to work.

It may appear that demonstrations are just a lot of screaming people with simple slogans. The slogans are the agitation. They are designed to break through the status-quo quickly to people. The screaming is necessary because of the restrictions on amplifiers.

The theory is that agitation leads to propaganda. Unfortunately, the following is too often true:

The screaming is a key part, because screaming is often a tool used to balance out the lazy ignorance of someone parroting opposition to an idea that they don't understand....

The main danger is that activists find:

It's easy to fit in by yelling out, and far more difficult to actually read and consider the facts. Anytime you hear, "I don't have the time to understand this issue, I'm too busy being upset," you know that something is wrong.

The best thing for activists is to be the best informed through readings and discussions. This is what propaganda is about - one-to-one indepth discussions with another person:

If you want to change what your boss believes, or the strategy your company is following, the first step is to figure out how to be the best informed person in the room.

The best way to do that would be subscribe to Green Left Weekly.

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Atticus Finch: a fictional portrayal of real life racist failings

From Crikey, I found the following article about Atticus Finch: a fictional portrayal of real life racist failings at The New Yorker by Malcolm Gladwell. His conclusion is that:

...Atticus Finch is faced with jurors who have one set of standards for white people like the Ewells and another set for black folk like Tom Robinson. His response is to adopt one set of standards for respectable whites like Boo Radley and another for white trash like Bob Ewell. A book that we thought instructed us about the world tells us, instead, about the limitations of Jim Crow liberalism in Maycomb, Alabama.

Gladwell puts Finch in the cross-currents between racism and class warfare. Finch is portrayed by Gladwell as a Southern Liberal such as Alabama Gov. Jim Folsom.

Folsom wanted to treat African-Americans as separate but equal even though he integrated some events such as campaign rallies. Folsom and Finch endured the opprobrium of other whites for their civility to blacks.

Gladwell is of the opinion that only the legal rulings such as Brown vs Board of Education were the only effective way to overcome the racism in the South. He scorns the personal approach of Folsom and Finch as not attacking the legal basis of racism and accomodating the Jim Crow Laws.

However, Gladwell is wrong to suggest that racism only existed as a legal problem. He ignores the economic basis of racism and the consequent neccessity of political and cultural norms to support that economic base.

Without addressing the exploitation inherent in the Capitalist system, Gladwell cannot see the reason as dividing the workers among themselves. Racism adheres the white working class to the exploiters by letting them partake in some part of the exploitation. This portion is through better wages and conditions as the myth of class mobility. White workers agree to this in the belief that competition for betterment is reduced by excluding others such as blacks. This exclusion also extends to migrants, women, homosexuals, etc.

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Argentine Factory Wins Legal Battle

Maria Trigona reports that the workers of an Argentine Factory Wins Legal Battle: FASINPAT Zanon Belongs to the People::

The workers at Argentina's occupied ceramics factory FASINPAT won a major victory this week, the factory now definitively belongs to the people in legal terms. The provincial legislature voted in favor of expropriating the ceramics factory and handing it over to the workers cooperative to manage legally and indefinitely. Since 2001, the workers at Zanon have fought for legal recognition of worker control at Latin America's largest ceramics factory which has created jobs, spearheaded community projects, supported social movements world-wide and shown the world that workers don't need bosses.

The main problem is that of dual power in Argentina. Some factories are controlled by the workers but they are relying on the Capitalist state for legitimacy through the parliamentry system. This deprives the workers' movement of a growth in consciousness in the hope of accomodation within the Capitalist system.

This reliance on the parliamentry system is perilous as shown by the case of the textile factory in Buenos Aires:

While the victory of FASINPAT brings hope to many of the 200 occupied factories currently operated under worker self-management in Argentina, many are still facing legal attacks. Early yesterday morning, just hours after the Zanon victory, a police operative evicted the factory Textil Quilmes, a thread factory occupied in the new wave of factory occupations in 2009. The four workers on night guard were evicted violently. The Buenos Aires provincial government is currently debating an expropriation bill for Textil Quilmes and several other new occupations in the Buenos Aires province. The textile workers are resisting the eviction at the factory's doors, rallying support to re-enter the factory despite police presence. They also had temporary legal protection, following an expropriation bill that was approved unanimously by the lower house in the provincial legislature.

The reactions of the ruling class has been mixed:

Zanon and others from the occupied factory movement have proven that they are capable of doing what bosses aren't interested in doing: creating jobs and work with dignity. This may be why government representatives, industry leaders and factory owners have remained silent and often times reacted with hostility on this issue; they are afraid of these sites multiplying and the example they have set.

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Machine-Sourcing

Mark Thoma posts an summary of an article about Machine-Sourcing:

As the world develops in the long, long run, and as countries move from "developing" to "developed," I still see a chance that the growth in the demand for the services that the unskilled provide will outstrip the growth in the supply. That doesn't mean that the wealth gap won't continue to increase, and that there won't be any problems associated with the growing gap between those at the top and those at the bottom, but I'm not so sure that wages will fall such that absolute living standards will decline as predicted above. ...

The problem is that the productive forces are being developed to such an extent that there will a majority of Department I workers and a minority of Department II ones. Since machines do nor produce surplus labour, the rate of profits in Department II will approach zero. The surplus labour will have to be provided by Department I workers who are not easily replaced by members of the industrial reserve army.

In my own case, my specialist knowledge consists of three (3) parts:

1. Educational knowledge (minimum of five (5) years' university education)
2. Technical knowledge (minimum of ten (10) years' experience in the computer industry
3. Client knowledge (minimum of three (3) years' experience with a client)

The idea that I can be quickly replaced by someone else exists as a fantasy. Being a Department I worker means that there is a considerable investment of knowledge is needed in order to replace me (mainly the three (3) years with a client). This latter knowledge is usually invisible to managers because it is the experience of how the systems actually work as opposed how they are thought to work. And it is undigested knowledge of myth and anecdote that is quickly acquired and filed away as problems are solved.

For a Department I worker to unemployed for a long time means that they will stay unemployable because the technical knowledge needs to be refreshed and tested on a regular basis. The knowledge needed to be viable is changing rapidly. There is a major sfotware release every 18 months to two (2) years. One cannot stay up with the pace unless one is employed.

The downside of this is that I have to predict the future and ensure that my knowledge is current and relevant. I cannot afford to rely on my employer to provide training. This I have to do myself.

The layer of management has nearly become irrelevant to my ordinary day. I deal directly with other experts to solve problems. Managers are mainly concerned with bugets and hiring. I am part of a self-managing team: we set our own priorities and tasks. These still have to be relevant to the client. This means that we have to maintain an overall view how our function contributes to the success of the business.

This widening of exposure to the business means that we are moving slowly towards a worker managed business. Narrowly-focussed task workers are inadequately prepared to take over a business. It is the workers who have an end-to-end understanding that are to able to form the backbone of a socialist enterprise.

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Rachel Corrie's Birthday

Jonathan Schwarz celebrated Rachel Corrie's Birthday on 10 April.

As weird old Mr. Lincoln said: "It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us."

And allows Nell Lancaster to remember Rachel Corrie: Unfinished Work

Rachel Corrie's parents are asking those who want to honor Rachel Corrie's memory and continue the work she was doing to support Code Pink's upcoming delegations to Gaza, focused on children there.

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Peak Oil and Peak Capitalism - Professor Richard Wolff

Nate Hagens posts and comments on Peak Oil and Peak Capitalism - Professor Richard Wolff as well as pointing to a video lecture called Capitalism Hits the Fan also by Professor Richard Wolff.

Prof. Wolff concludes:

Might we consider a mutually beneficial alliance between critics of abusing our energy resources and critics of abusing our productive capabilities? How about an alliance focused on a radical, democratic, and therefore anti-capitalist reorganization of production? The point would be to make citizens and workers – those who must live with the results of what enterprises do – conjoint decision-makers focused on meeting collective needs, both productive and environmental.

Emphasis Mine

Hagen was impressed by Wolff's graph of real wages vs productivity for manufacturing in which the peak in real wages coincided with the peak in US oil production, dropping of the gold standard. Hagen concludes:

This is all linked. More and more I am thinking the largest aspect of upcoming energy resource constraints is going to be the social inequality that results. The 'free market' will not work if 80-90% of people are broke, and unable to afford the price that energy and other natural resources companies require to make a profit. I suspect that the next round of GINI coefficient and wealth disparity calculations will show a moonshot towards the right tail. How to keep social stability in this environment will be a herculean task, and likely require new institutions, though I personally see some socialistic safety nets, I don't find Prof Wolffs suggestion ultimately plausible.

Emphasis Mine

The highlighted quote points to one of the critical roles of the proletariat in the Capitalist system: that of ultimate consumer.

In the discussion thread that follows, there is no mention of class. That no-one sees the class war at all is a testament to effectiveness of US Corporate propaganda. People know that devil exists, but class divisions do not exist in the mind of these commentators. Satan is unable to compete with the US Capitalists.

I get the impression that the commentators at The Oil Drumm see themselves as the vanguard of the peak oil movement. Some of the sins of vanguardism are starting to appear: elitism, intellectual snobbery, hopelessness. However, there are commentators who are struggling against these sins by relating the movement back to the lives of ordinary people. This has always been a problem for Communist parties and the remedy is the same.

Although many commentators seemed to dismiss the idea of worker-controlled economy, Jason Bradford pointed to Jack Stack's success at International Harvester.

From Critical Numbers: With Jack Stack, I found the story of The Turnaround.

You've got to get people involved

Emphasis Mine

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The difference between PR and publicity

Seth Godin explains The difference between PR and publicity:

In my experience, a few people have a publicity problem, but almost everyone has a PR problem. You need to solve that one first. And you probably won't accomplish that if you hire a publicity firm and don't even give them the freedom and access they need to work with you on your story.

In the Communist Parties, we have the same problem. We can get great publicity through demonstrations, pickets, actions, etc. But are we working on the PR problem?

Seth says that:

PR is the strategic crafting of your story. It's the focused examination of your interactions and tactics and products and pricing that, when combined, determine what and how people talk about you.

For us Communists, it is about turning working people into leaders of a revolution. It is about expanding democracy into every nook and cranny of society that we can. It is about integrating people's experiences into the story of the Australian revolution.

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The Price of Bad Tactics

William Lind lambasts the US military for The Price of Bad Tactics, and asks why the US keeps killing civilians with airstrikes?

The answer is, because American infantry tactics are bad. They amount to little more than bumping into the enemy and calling for fire. The easiest way to provide the overwhelming firepower our bad infantry tactics depend on is with airstrikes. So to win tactically, we have to lose strategically. At least from the Vietnam War onward, that equation has come to define the American way of war. It is the price of bad tactics.

Emphasis Mine

In the theory of Fourth generation warfare,

... William Lind, believes that the reason for the British being successful in that conflict [Northern Ireland] was that the British Army did not use heavy weapons in that period and that the British Government forces attempted to get to know the areas involved in the conflict. Also according to Lind the British did not engage in collective punishment and desired to keep civilian casualties to a minimum. In other words they won over the population by reducing the risk of damage to civilians and their property and by getting to know the local area.

Lind postulates three (3) reasons for the US military's reliance on bad tactics that alienate the occupied population:

There are three basic reasons why the U.S. military continues to employ bad infantry tactics when superior alternatives lie ready to hand. The first is the unfortunate combination of hubris and intellectual sloth which characterizes most of the American officer corps – and infantry officers in particular. ...

This ignorance is buttressed by hubris, false pride. The American military spends a great deal of time and effort telling itself how wonderful it is. ...

The second reason we persist with bad infantry tactics is bad training. Almost all American training is focused on procedures and techniques, taught by rote in canned, scripted exercises where the enemy is a tethered goat. ...

The third reason American tactics are bad is a bad personnel system. American infantry units are allowed to maintain personnel stability only for short periods, and sometimes not at all. They are always receiving new, largely untrained troops, who have to be taught "the basics," which is assumed to mean procedures and techniques. ...

Emphasis Mine

Lind just expounds a description of the three (3) main characteristics that contribute to the problem of bad tactics. He does not attempt to explain why this characteristics are important, nor how they arose in the first place. Without understanding their origins, Lind cannot offer a proscription other than that of "stop doing that, or you will go blind."

Could these characteristics be related to the dominant economic system of the USA? My contention is that they are. This follows from my thesis in Arabs at War: Military Effectiveness, 1948-1992 that military effectives follows the economic organisation of society. I map these characteristics onto the following traits of American Capitalism:

1. Politically reliable managerial class who are uncurious about other ways of organising the economy. Indeed, great efforts are expended in the unceasing propaganda of how great Capitalism is.
2. The proletarisation of work into easily reproducible tasks that can be performed without comprehension or even intellectual effort. Think of MacDonald's and how a complex art of cooking is reduced to mechanical actions.
3. Labour market flexibility is a great favourite of Capitalist theorists. Here workers are easily replaced when the situation needs it. Rapid turn-over of employees is encouraged and expected.

As the military personnel are drawn from the wider society, their expectations and experiences are shaped by the economic organisation of society. If the managers are seen as the fount of all knowledge and the giver of unreasonable orders, so will be the officer corps. If one is promoted by reciting the party line, so will the military officers. If the workers are expected to perform rote tasks without thinking, so will the enlisted personnel.

Since Lind is a Capitalist, he cannot see that Capitalism is the source of problems with the military.

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Repurposed Prose on the End of Times

The end-times are truly upon us!. Paul Kedrosky writes some Repurposed Prose on the End of Times

With respect to some of the more apocalyptic views out there, certainly anything is possible. That said, organizing my life around a return to barter and barbarism represents a financial variant of Pascal’s wager that I'm not currently willing to take -- in part because I can be financially and personally prudent without going all the way to hoarding gold, buying agricultural property, or stocking up on weaponry and canned goods.

Kedrosky had earlier quoted Niall Ferguson: "There Will Be Blood" in an interview with Heather Scoffield of Globe and Mail:

Heather Scoffield: Is a violent resolution to this crisis inevitable?

Niall Ferguson: “There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable. The question is whether the general destabilization, the return of, if you like, political risk, ultimately leads to something really big in the realm of geopolitics. That seems a less certain outcome…

…It's just that I don't see it producing anything comparable with 1914 or 1939. It's kind of hard to envisage a world war. Even when most pessimistic, I struggle to see how that would work, because the U.S., for all its difficulties in the financial world, is so overwhelmingly dominant in the military world.”

Meanwhile at Tomgram: Michael Klare, A Pandemic of Economic Violence.

As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants, and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a "lost decade," the result could be a global landscape filled with economically-fueled upheavals.

Humans facing huge population cull if global temperatures rise 4C in next 100 years.

Climate experts told New Scientist they were optimistic that humans would survive but would have to adapt.

Vast numbers would have to migrate away from the equator and towards the poles.

National borders would have to be knocked down and humans would become mostly vegetarian with most animals being eaten to extinction.

Fish numbers would drop dramatically as acid levels rose in oceans.

And of course, Jim Kunstler has stared into the abyss so long that the The Abyss Stares Back

The public perception of the ongoing fiasco in governance has moved from sheer, mute incomprehension to goggle-eyed panic as the scrims of unreality peel away revealing something like a national death-watch scene in history's intensive care unit. Is the USA in recession, depression, or collapse? People are at least beginning to ask. Nature's way of hinting that something truly creepy may be up is when both Paul Volcker and George Soros both declare on the same day that the economic landscape is looking darker than the Great Depression.

Kunstler concludes with

It's not too late for President Obama to start uttering these truths so that we can avoid a turn to fascism and get on with the real business of America's next phase of history -- living locally, working hard at things that matter, and preserving civilized culture. What a lot of us can see now staring out of the abyss is a new dark age. I don't think it's necessarily our destiny to end up that way, but these days we're not doing much to avoid it.

We have several converging crises over the next several decades:

1. Economic collapse
2. Climate change
3. Water
4. Oil
5. Food
6. Political instability

I did not include population in that list because the number of people that can be supported depends on the technology and economic system in place. These factors are geographical facts: oil and water exist in certain places and not others. Whereas water is a renewable resource, oil is not (at rates needed for current economic activity - we have burnt through 150 million years' worth of oil in 150 years).

And the comments are about the green conspiracy! Our whole fucking world is collapsing around us, and people want to carry on as normal. Ferguson, Kedrosky, and others believe that economic recovery is possible in a few years and things will be back to normal. The oil is still running out, the climate is still getting warmer, the distribution of fresh water is changing, farmland is disappearing in one place and appearing in others. People will have to move if they want to survive.

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Food Not Bombs Battles City Government - and Wins

Gonzalo Vizcardo reports that Food Not Bombs Battles City Government - and Wins (subscription required) aftre the West Palm Beach City Commission (Florida, USA) decided to repeal the ordinance that banned the giving of free food to homeless people in front of the Central Library on Wednesday nights (by a Christain group) and Saturday afternoons (by the Anarchists). A similar ordinance was struck down in another city after the judge ruled that it violated the freedom of speech and the freedom of religion.

In September 2007 the city commission of West Palm Beach, Florida passed an ordinance prohibiting the distribution of free food in Centennial Park in front of the public library. The ordinance directly targeted Food Not Bombs (FNB), which serves vegetarian meals every Saturday afternoon, and Art and Compassion, a religious group which also serves free food and preaches to the homeless every Wednesday night. The reason? Like other ordinances and laws targeting homeless advocates across the nation, business owners and affluent residents want the homeless out of sight, even if that means banning public feedings in public places. The city's motivation for the ordinance is evident from Mayor Lois Frankel's recent statement that the groups "decided it's their right to destroy West Palm Beach's downtown commerce."

Emphasis Mine

The Capitalists do want the outcasts from the system hanging around. They could induce compassion in the oppressed masses and have them ask questions like:

"When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a Communist."

Hélder Câmara

The Food Not Bombs Movement:

...is an international movement made up of autonomous all-volunteer collectives that was started in the early 1980s in Cambridge, Massachusetts by anti-nuclear activists protesting the Seabrook nuclear power plant. FNB operates under the idea that food is a right, not a privilege, and that the fact that there is so much hunger amid so much wealth is testament to our society's misallocation of resources and inequality. Currently, there are over 400 active chapters, half of which are outside of the United States. Groups collect food that would otherwise go to waste and serve vegetarian meals in public places.

Emphasis Mine

Unfortunately, in a Capitalist society, food is a commodity produced for profit. Only those with money can eat. The penniless starve because money is needed to realise profit.

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The New N Word: Nationalization

Barry Ritholtz wonders what all the fuss is about with The New N Word: Nationalization:

No matter. We now have a new N word today, and its Nationalization. Why the word is so fearful and loaded is beyond my comprehension. As Bloomberg’s David Reilly writes, “The nationalization debate is a smoke screen. We’ve already nationalized the big banks. Let’s just accept it and move on” — and I could not agree more.

Italics in Original

Unlike Paul Kedrosky who sees a Bank Nationalization and the Otto Problem in that people are stupid, Ritholtz sees no problem at all.

Maybe the red-baiting tirades from the likes of Miranda Devine are invisible to the intellegentisa. The propaganda is so pervasive and effective that no one needs to comment on it at all.

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If you don't like the rules, start your own church

Miranda Devine rails againsts the Socialist take-over of the Catholic Church, and says that If you don't like the rules, start your own church:

The Socialist Alliance posters outside St Mary's Catholic Church in Brisbane said it all. "Dump Intolerance, not Father Kennedy." "Who would Jesus sack?" The father in question is Peter Kennedy, the 70-year-old Catholic priest who is being forced out of the church he has turned into a green-leftist New Age drop-in centre.

Devine is worried about the Communist Fifth-Columnists:

"I take my authority from the people," Kennedy told reporters. Not God? No wonder the Socialist Alliance loves him. Socialism regards religion as a "spiritual oppressor", in the words of Lenin, who also said "Atheism is a natural and inseparable part of Marxism".

It doesn't matter which dupes the left uses to destroy organised religion, or how they commandeer the social justice work of well-meaning church people, the aim is never to foster religious practice or nourish a love of God.

Emphasis Mine

This is rather revealing: no mention of love thy neighbour. Just practice and a focus on heavenly things. The last thing Capitalists want are people who are concerned about their neighbours here on Earth.

Devine's concern is discipline and orthodoxy:

While you can feel pity for Bathersby, the mess is his own making. Having tolerated Kennedy's antics for years, and having presided over the transformation of Brisbane into the most progressive and least disciplined archdiocese in the country, he can hardly be surprised by the result.

Emphasis Mine

Devine concludes by appealing to popularity (not of Fr.Kennedy but of Pope John Paul II):

Good luck to him. No one is forced to be a Catholic, and the church - as it has been for 2000 years - is thriving the world over, wherever it has remained true to its teachings. The thousands of young people who spontaneously went to Rome for the funeral of the very orthodox Pope John Paul II were not activists trying to dismantle the church. They are the future, not Kennedy's outdated mumbo jumbo socialism.

Emphasis Mine

Instead, the Catholic Church has the problem of youth leaving it for other churchs: She played Mary during World Youth Day. Now she's defected to Hillsong:

SHE was a poster girl for World Youth Day, when more than 400,000 pilgrims gathered in Sydney to celebrate their Catholic faith.

We come to the problem of legitimacy: is the institution legitimate by its existence, or do the members grant legitimacy to the institution?

As for the Opium of the People, the real quote is:

Religion is, indeed, the self-consciousness and self-esteem of man who has either not yet won through to himself, or has already lost himself again. But man is no abstract being squatting outside the world. Man is the world of man—state, society. This state and this society produce religion, which is an inverted consciousness of the world, because they are an inverted world. Religion is the general theory of this world, its encyclopedic compendium, its logic in popular form, its spiritual point d'honneur, its enthusiasm, its moral sanction, its solemn complement, and its universal basis of consolation and justification. It is the fantastic realization of the human essence since the human essence has not acquired any true reality. The struggle against religion is, therefore, indirectly the struggle against that world whose spiritual aroma is religion. Religious suffering is, at one and the same time, the expression of real suffering and a protest against real suffering. Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people. The abolition of religion as the illusory happiness of the people is the demand for their real happiness. To call on them to give up their illusions about their condition is to call on them to give up a condition that requires illusions. The criticism of religion is, therefore, in embryo, the criticism of that vale of tears of which religion is the halo.

Emphasis Mine

The Capitalists, like Devine, would prefer us to keep our illusions, accept the discipline of our betters, and conform to the existing society. In other words, thinking for ourselves is dangerous.

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The Anti-Economy: How the Pursuit of Private Fortunes is Destroying Community Wealth

RogerK wants the The Anti-Economy: How the Pursuit of Private Fortunes is Destroying Community Wealth without being called a Communist.

... Personally I think that we need to develop a system of public or community investment, the purpose of which is to insure that economic outputs vital to the community continue to be produced as needed, rather than trying to increase the purchasing power of private investors. I see no reason why such a system of community investment must imply state factories in the Soviet sense or must imply the complete death of private enterprise.

Emphasis Mine

The highlighted phase is a very good definition of Communism. The community directs investment not individual capitalists.

RogerK's position is that...

... However, it is not my intention in this essay to try to prove that these optimistic assessments about the extendability of the economic status quo are false. I am simply going assume that a complete decoupling of economic growth from resource consumption is impossible, so that, sooner or later we must stop expanding our total economic output.

Emphasis Mine

In other words, RogerK is going to assume a constant economic efficiency. The quantity and quality of commodities produced is assumed to be directly related to the quantity of resources consumed. The labour component in commodity production is ignored.

Another problem with this assumption is that the current level of resource is probably unsubstainable. And, in order to reach a substainable economic system, the standard of living will have to drop.

RogerK then goes onto expound his economic theory:

Many people have claimed (I am one of them) that our current economic system requires constant growth for healthy functioning. This growth orientation of the economy is oftentimes blamed solely on our financial/monetary system. Granting unearned purchasing power to businesses and/or individuals in exchange for a larger amount of purchasing power in the future requires growth in the net production of use value. The excess purchasing power owed to the financier has to come from somewhere. Either purchasing power is taken away from someone else, or the net production of use value must increase. Since finance as means of robbery cannot be a politically stable institution, the desire for real growth in the production and sales of use value predominates.

Emphasis Mine

What RogerK is skirting around here is the issue of profit. I think he considers profit for the capitalist to be earned while profit for the financiers to be unearned. Whereas for Communists, all profit is unearned.

Here, the phrase, net production of use value, shows a confusion Use Value with Exchange Value. Profit is realised as the difference in exchange value of the inputs and outputs.

The second highlighted sentence comes close to the reason for the instability of the Capitalist system. All commodities must be purchased by a consumer for profit to be realised. In a fully developed Capitalist society, the only consumers are the proletariat. Thus, the total purchasing power of the local economy is the sum of the wages earned by the proletariat. But the wages of the proletariat are included in the cost of the commodities produced. Hence, the effect of profit is to reduce purchasing power unless the profit is invested (which is really the purchasing of machinery and raw materials).

This current economic crisis is a result of a higher rate of profit and a lower rate of investment. The economy will spiral down until purcahsing power is restored to the proletariat.

RogerK does not understand that credit increases the rate of turnover of capital by advancing to the producer a discounted exchange value for the commodities produced. Instead of the producer waiting for the commodities to be sold to the ultimate consumer because the profit is realised, the producer receives a lesser amount quicker and is, thus, able to begin the production cycle earlier thereby increasing the rate of economic activity. Unfortunately, the increasing rate of economic activity means that the crisis in consumption is reached sooner unless other avenues of consumption are opened up.

Later on, RogerK makes an interesting point:

By voluntary simplicity I do not mean that we all should live like 18'th century rural small holders. I mean that we need to reach a socially agreed upon conception of 'enough' in the realm of material wealth. Individuals need to reach economic maturity in the same way that their bodies reach physical maturity. If the individual desires increasing wealth without boundary then so will the larger economy. No matter how creative and productive an individual may be their income should not exceed the socially agreed up definition of sufficiency.

Emphasis Mine

RogerK comes to the point that humanity needs to survive as a society not as an accidental collection of individuals. This is a major departure from Capitalist philosophy in which the uncoordinated activities of selfish individuals somehow leads to a functioning society. This is really a major development in the consciousness of RogerK.

RogerK stresses the point further in:

Mutual support is the other foundation stone of an economy which is not rushing to destroy the commons in the name of private material security. I have already pointed out that real physical savings consist of the built up infrastructure of society, including the knowledge and skill of its constituent citizens. Since mutual support is an objective physical reality, why don't we stop seeking a delusory financial 'independence' and implement a system of universal social security? We need to create a social environment in which people who put their shoulder to the wheel and help to create and maintain the economic infrastructure of society, even in a humble capacity, can have confidence that that infrastructure will be used to support them in their years of declining productivity.

Emphasis Mine

So, RogerK accepts that common ownership and economic cooperation are needed for a substainable economy. He later on counters the argument about the extreme individualism prevents such a society coming into being. He rather would not get into that argument. He hopes that people would see sense.

RogerK presents his own version of Socialism or Barbarism forecast to force people to see sense:

I have absolutely no doubt that, in the face of a productivity decline, real understanding of the nature of our situation and realistic proposals for alleviating the associated suffering will be hard to come by. However, if the unique and unvarying response to this situation, for all time to come, is a vain attempt to restore the 'normality' of exponential economic growth, then it is hard to see how the decline of industrial civilization can stop anywhere short of neolithic villages. I prefer to assume that the case is not so desperate and talk to other human beings about our common dilemma as if I thought that intelligent cooperation were possible.

Emphasis Mine

In summary, RogerK's economic and political theories are nascent. He can see some points clearly, but the distinction between use value and exchange value is impeding development there. The role of credit follows from understanding of the capitalist production cycle. He hopes that a capitalist society can change somehow into a socialist one without evening seeing the political forces that maintain the current society.

A good start, but a lot more work is needed.

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Global Counter-Insurgency

Anonymous posted two references to the shift in rhetoric about the long war.

Sen. John Kerry says Pakistan aid bill to be passed shortly , and that:

He opposed the use of term war on terror.

"What we are doing is conducting global counterinsurgency. And a counterinsurgency by definition needs to win hearts and minds of people it has to bring people on your side not push them away. So , I think we have to do a better job of implementing [o]ur strategy."

Once again, a member of the US government does question the US strategy at all. The only problem he sees is that the strategy has not been implemented correctly.

In Obama and the counter-insurgency era, Anthony Fenton concludes that

Since the Obama administration campaigned on the continuity of counter-insurgency and irregular war as key elements of US power projection under his administration, it is likely that these policies will attain a level of popular support not experienced by the Bush administration, and will see little critical scrutiny by the media. The challenge will be to shed light on and critically examine these policies as they manifest in any number of settings around the world in the days to come.

I think that Fenton forgets that the War on Terror was very popular in 2001 and 2002 both in the USA and here in Australia. I would say that the general population was thirsty for revenge over the attacks on 11 September 2001.

Pres. Bush could have called it the War on XYZZY and the people would have understood it to be a war on Islam. Such was the racism that underlay the response at the time.

The War on Terror has the effect of casting the US government as the good guys and the defenders of that is good and pure. It was a term for the time. Now that the war is dragging on and the timetable for the conquest of the Middle East is falling behind every day, a change in semantics is needed to maintain support.

It is interesting to note that both of these articles stress the continuity with the Bush administration. This is a way of saying that the strategy is correct and the US government is resolute in this matter. Only a few adjustments need to be made: "Smart Power" instead of "Hard Power" or "Soft Power".

But even the term, "Global Counter-Insurgency", is a mistake. The only thing that unites all of these resistence groups is the hatred of US military and economic incursions. The danger is that the US strategy make create the monster that it seeks to destroy.

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Global Counterinsurgency: Strategic Clarity for the Long War

Roper (2009:106) concludes that a change in the lexicon is an important weapon in the War on Terror:

The United States needs to refocus its efforts and resources to more effectively deal with the current global threat. Clear thinking supported by clear language will assist in this endeavor. American policy should focus more on denying support for those organizations with political goals inimical to US interests, rather than emphasizing the apprehension of individual terrorists. Removing the “war on terrorism” from the official lexicon and replacing it with more precise and descriptive terms such as “war on global hirabahist insurgency” or “global counterinsurgency” would be an important step in identifying the real nature of the enemy, the security challenges posed, and the array of techniques the enemy may employ. More importantly, the change in descriptor will help focus the intellectual framework required to develop a successful US strategy for dealing with this complex and lethal problem.

Emphasis Mine

Roper's main points are that terrorism is a tactic, and that insurgency and terrorism may overlap but are not the same thing. "Understanding terrorism as an activity subsumed under a wide variety of activities employed by an insurgent movement provides the intellectual clarity required to identify the real enemy and formulate effective countermeasures. It is, therefore, inaccurate to semantically equate terrorism and insurgency." (Roper:2009,97)

Roper (2009:94-95) gives several definitions of terrorism but they all have the same assumption: violence by governments is legitimate while violence by non-government forces is not. Indeed, government terrorism is often described as an "... overreaction ... from target governments" (Roper:2009,p.97).

Roper (2009:98) contend that counter-insurgency strategies designed to suppress Communists is inappropiate for this new type of insurgency.

Classic counterinsurgency theory tends to assume a binary struggle between insurgent and counterinsurgent, yet insurgencies today may incorporate many diffuse, competing insurgent movements. In contrast to revolutionary war theory, these conflicts often lack a “united front.” Likewise, classic insurgency theory typically regards insurgency as between an internal nonstate actor and a single government. Today, however, there is real-time informal cooperation and cross-pollination between insurgents in many countries, often accomplished without a central controlling authority. The National Security Strategy of the United States describes terrorist networks as being more decentralized than traditional terrorist organizations; less dependent upon a central command structure; and more reliant upon inspiration from a common ideology. Although parallels—such as the need for contextually specific solutions—exist with the ideologically motivated Communist insurgencies of the mid- to late twentieth century, the franchise-like character of modern transnational insurgencies fueled by religious fanaticism is new.

Emphasis Mine

In this, Roper is wrong. A counter-example is the Irish resistance to the English occupation. The resistance was world-wide from support in the USA, Australia, Argentina, Canada, France, etc. A notable action against English tyranny took place at Vinegar Hill in 1804. A driving force of the international resistance was religion, and this has been going for 500 years.

Roper (2009:101-102) posits that the correct strategy is to:

The US strategic goal in the Long War is to preserve and promote the way of life of free and open societies based on the rule of law, defeat terrorist extremism, and create a global environment inhospitable to extremists. American strategy to achieve this goal is based on an international effort to deny terrorists resources. This strategy is comprised of three elements: protect the homeland; disrupt and attack terrorist networks; and counter ideological support for terrorism. Protecting the homeland is the defensive aspect of the strategy, but defense in and of itself is not enough. A successful strategy requires attacking the terrorists and their ability to operate, to include their leadership, funding, and communications. The most important component of the strategy is countering ideological support for terrorism—the “decisive effort.” It should be self-evident that countering ideological support for those who commit terrorist acts is as much a social, societal, and psychological issue as it is a physical one.

Emphasis Mine

The fundamental problem is that the American Government is a terrorist organisation itself. Everything it does is in furtherence of grabbing resources of the third world for its own benefit. Even its vaunted "Shock and Awe" campaign of 2003 was a classic case of terrorism - sheer brutality to achieve political acquiesence. It supports a terrorist government: Israel.

The gulf between the words of the US government and its actions are an abyss into which the US Army has cast itself. Every action by the US Military in Iraq and Afghanistan is terrorism against the local people. The US Military has become the biggest recruiter for the resistence. How can the US Army defeat itself?

Another underlying assumption of the article is that legimate governments are those who serve the interests of the USA. There is no self-determination in the US's view of the world. Everyone exists to serve the USA.

The very success of the USA economy means that the USA must be an empire that rules through terror. And this terror begets terror. In order to win the long war, the USA must destroy itself. Therein lies the danger for the rest of us.

References

Roper, Daniel S. (2009), "Global Counterinsurgency: Strategic Clarity for the Long War", Parameters, Autumn 2008, pp. 92-108 (Viewed 22 February 2009)

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Two billion more bourgeois

The Economist, in Two billion more bourgeois, admits that Karl Marx was right:

... But Marx thought “the bourgeoisie…has played a most revolutionary part” in history. And although The Economist rarely sees eye to eye with the father of communism, on this Marx was right.

The definition of the middle class in this article is that it ...consists of people with about a third of their income left for discretionary spending after providing basic food and shelter. Whereas the Marxist definition of the bourgeois is by property relations. The bourgeois own the means of production: factories, farms, mines, etc.

This is a classic case of the Capitalist economists dividing society up by income, whereas the true class divisions are by how people derive that income. The interests of the worker are different from that of the shareholder, bondholder, rentier, farmer, small business owner, etc.

The article goes onto make an important point:

As people emerge into the middle class, they do not merely create a new market. They think and behave differently. They are more open-minded, more concerned about their children’s future, more influenced by abstract values than traditional mores. In the words of David Riesman, an American sociologist, their minds work like radar, taking in signals from near and far, not like a gyroscope, pivoting on a point. Ideologically they lean towards free markets and democracy, which tend to be better than other systems at balancing out varied and conflicting interests. A poll we commissioned for our special report on the middle class in the developing world finds that such people are happier, more optimistic and more supportive of democracy than are the poor.

Emphasis Mine

The bourgeois have a different view of the world by virtue of their property relationships. They own things that make them money. They want to keep those things for themselves and make enough money to survive.

Here democracy is another one of those fluid terms that means different things to different classes. The bourgeois want to make decisions for their own benefit. Since they are a minority, they are not in favour of majority rule. So they continually devise means to keep the rabble under control, and behaving in a manner conducive to the bourgeois making money.

For the rabble (aka the poor), democracy means majority rule to defend their rights against the predations of the bourgeois.

Guess which version of democracy is more acceptable to The Economist?

The article contends that the growth of the bourgeois is a result of the global economic boom, and is rightly worried about the fate of the new members of this class:

Those at the bottom of the ladder do not have far to fall. But what happens if you have clambered up a few rungs, joined the new middle class and now face the prospect of slipping back into poverty? History suggests middle-class people can behave in radically different ways. The rising middle class of 19th-century Britain agitated peacefully for the vote; in Latin America in the 1990s the same sorts of people backed democracy. Yet the middle class also supported fascist governments in Europe in the 1930s and initially backed military juntas in Latin America in the 1980s.

Emphasis Mine

This article suggests that the improvishment of the bourgeois only occurs during economic downturns. Not so! The rate of improvishment merely increases in these times. The bourgeois have their property taken all the time by banks when their businesses fail. This is all part of Capitalism's ruthless efficiency.

How the bourgeois reacts depends on how they see their interests are best served. The petite bourgeois can swing either way: left or right. Despite what The Economist wants us to believe, the Capitalist Revolution in Great Britain was just as violent as elsewhere: the English Civil War, Peterloo, the Highland Clearances, the Irish Occupation, etc. It only appears peaceful in contrast to the energies unleashed by the French Revolution.

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An Engaged Workforce

Ruth Smith ponders whether An Engaged Workforce is ... an unrealistic ideal in the current business climate?

... Polling 23,600 directors, managers, and employees, they found that employee engagement is seen as one of the top three factors that drive an organisation's success (it ranks higher than strategy) and 75% of board members believe that it improves bottom-line performance. In these times, when the news is full of redundancies (layoffs), re-organisations, and failing businesses, I’m not sure if employee engagement is high on the business agenda.

Emphasis Mine

Later on, she muses:

In my work I have seen pockets of excellence where employee engagement seems to be occurring, and many places where it is obviously not! I have been asking questions about what is happening where engagement is prevalent. A pattern appears to be taking shape in the responses I get; engagement is more likely to occur when mangers purposefully include, and share power with, people within the organisation, co-creating a way of working together with their teams. There is a sense that the diverse range of people within the workplace community (not just the managers and leaders) are involved in, and feel accountable for, finding the solutions that are right for them, the business, and the future

Emphasis Mine

Power-sharing does not address the fundamental tenet of Capitalism: the owners of capital make the investment decisions. Power-sharing in this context is merely consultation before a decision is made.

The only thing we can hope for from this evolution in management thinking is the workers may gain in consciousness about their true power in the productive process, especially as other avenues are closed off (strikes, etc).

A truly engaged workforce is one that runs the workplace and employs capital as it sees fit.

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Cactus says' why don't we try a bit of captalism in these times'

Cactus says' why don't we try a bit of captalism in these times'? Catcus gives an example in which certain companies make the wrong technological decisions.

And if these companies go bankrupt, its not the end of the aerospace industry. The parts of these companies that are functional would be scooped up by other companies, provided they were deemed to serve some useful function going forward.

Cactus concludes with

And the solution to the whole financial mess is the same as the solution in my little fable: let the companies that made bad decisions fail, and end the subsidies the industry receives. In other words, let the bad banks die, let their counterparties die as they made equally bad decisions (its not like companies in just about any industry aren't able to figure out in many cases who their riskiest counterparties are, regardless of the industry they're in, as per this piece by Yves Smith), and end the banking industry's monopoly access to the Fed. A lot of banks will go bankrupt - after all, being a middleman is relatively easy work. But a) its unfair and b) inefficient.

Following this approach would lead to some term pain - a lot of it in fact, but that pain is going to be there no matter what approach we take, and that goes doubly so for the silly and counterproductive plan pursued first by the Bush and now Obama administrations. But in the long run, bringing the banking system into some semblance of capitalism will make everyone better off... except the grifters.

Emphasis Mine

The fundamental flaw in Cactus' argument is that the efficient operation of Capitalism leads to a concentration of capital. Cactus assumes in the example given that other firms will enter the market as others go bankrupt. The assumption is one of homeostasis in the Capitalist system.

The reality of Capitalism is different. The efficient operation of Capitalism leads to a monopoly in a technological niche by efficiently removing less able firms and raising the barriers to entry at each iteration of the development of technology. Monopolies are only overthrown when their technological edge becomes obsolete.

We are in this economic depression precisely because of the efficient operation of Capitalism - not the opposite. We need to change the social relations to change the outcomes.

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What’s the Cross-Functional Team, and Why should I have one?

Steve Johnson asks, "What’s the Cross-Functional Team, and Why should I have one?"

First of all, the definition is given as:

The cross-functional team is a group of people who collectively represent the entire organization's interests in a specific product or product family. This team provides benefits for the individuals on the team, the product and its customers, and the organization at large.

This is a counter trend to the proletarization of work, in which work is broken down into rote tasks that are easily learnt. This method of work decomposition allows for the mechanisation of tasks, easy replacement of workers, and downward pressure on wages as less skill is needed to replace a skilled worker.

The cost of this proletarisation has been the alienation of workers from their work. This is now seen as a huge cost in the production of goods.

Instead of having micro-managed workers doing highly defined tasks without reference to what anyone else is doing, the cross-functional team encourages workers to a higher view of the productive process.

A healthy team improves organizational alignment. Members are kept "in the know" regarding product status, including market research, customer feedback, product development progress, product-related financials, and promotional plans and events. Each member is held responsible for bringing that information back to their own department or team. In addition, they feed the team their own department or team's feedback. The cross-functional team allows us to get one representative group aligned; in turn, they exponentially increase organizational awareness and alignment.

What is left unsaid in this article is that Department II workers are being replaced by Department I workers. The latter have to be mananged differently in order to extract value from their labour.

The organisation of work cannot be done by the managers anymore. The work is too fluid to be precisely defined. If it is done so, the job definition is very likely to be obsolete.

The balance of power within the workplace is tipping in favour of the less politically reliable workforce.

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Decisions, decisions

The Economist posits What people can learn from how social animals make collective decisions in Decisions, decisions.

DICTATORS and authoritarians will disagree, but democracies work better. It has long been held that decisions made collectively by large groups of people are more likely to turn out to be accurate than decisions made by individuals. The idea goes back to the “jury theorem” of Nicolas de Condorcet, an 18th-century French philosopher who was one of the first to apply mathematics to the social sciences. Now it is becoming clear that group decisions are also extremely valuable for the success of social animals, such as ants, bees, birds and dolphins. And those animals may have a thing or two to teach people about collective decision-making.

The article goes on to describe the two types of decisions:

Animals that live in groups make two sorts of choices: consensus decisions in which the group makes a single collective choice, as when house-hunting rock ants decide where to settle; and combined decisions, such as the allocation of jobs among worker bees.

Emphasis Mine

The first type of decision would be called democratic centralism in which everyone abides by the majority decision. This is used to set goals.

The second type of decision is used to implement those goals.

For the consensus decisions, it would appear that bees use an iterative decision making process in which ideas are shared with everybody and independently evaluating that information.

... To find out, Dr List and his colleagues made a computer model of the decision-making process. By tinkering around with it they found that computerised bees that were very good at finding nesting sites but did not share their information dramatically slowed down the migration, leaving the swarm homeless and vulnerable. Conversely, computerised bees that blindly followed the waggle dances of others without first checking whether the site was, in fact, as advertised, led to a swift but mistaken decision. The researchers concluded that the ability of bees to identify quickly the best site depends on the interplay of bees’ interdependence in communicating the whereabouts of the best site and their independence in confirming this information.

Emphasis Mine

In other words, a robust democracy depends on the free flow of information and the critical analysis of the participants. Everyone needs to be involved in the decision-making process through receiving and evaluating the information.

And there is the importance of cadre development:

Dr Franks and his colleagues identified a type of behaviour called “reverse tandem runs” that makes the process more efficient. During the carrying phase of migration, the scouts lead other scouts back along the quickest route to the old nest so that more scouts become familiar with the route. Thus the dynamics of collective decision-making are closely entwined with the implementation of these decisions. How this might pertain to choices that people might make is, as yet, unclear. But it does indicate the importance of recruiting active leaders to a cause because, as the ants and bees have discovered, the most important thing about collective decision-making is to get others to follow.

Emphasis Mine

So, we have the intellectual flagship of Capitalism describing Leninist party building theory. The success of this depends on:

• Free flow of information
• Critical analysis of this information
• Participation of everybody in the decision-making
• Development of leaders to implement the decisions of the group

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Cognitive Hierarchy Theory

Mark Thoma posts an excerpt about "Cognitive Hierarchy Theory" from Making a game of economic theory, EurekAlert which quotes Prof. Colin Camerer that instead of:

... "Almost all the analysis, however, assumes people plan ahead and carefully figure out what others will do, which often results in mathematical claims that are highly unrealistic cognitively."

In reality, Camerer says, a key part of strategizing about what other people--or corporations, or countries--will do involves thinking about what they think you will do. "You can also think about what others think you think. . . . It can go on and on."

This multiple steps in thinking ahead is called cognitive hierarchy theory. Camerer goes on to explain that not all people follow the same number of steps:

"The cognitive hierarchy theory finds that people only do a few steps of this kind of iterated thinking," he explains. "Usually, it's just one step: I act as if others are unpredictable. But sometimes it's two steps: I act as if others think *I* am unpredictable. You can think of the number of steps a person takes as their strategic IQ. A higher strategic IQ means you are outthinking a lot of other people."

This theory is a percularity of the Capitalist system in which all individuals have to compete for limited resources. Those who are able to think further ahead will gain more. It is really a justification for elitism: those who think more are rewarded more.

In a Communist economy, the emphasis would be on co-operation and theories like this will no longer be needed.

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Bank Nationalization and the Otto Problem

Paul Kedrosky opines about Bank Nationalization and the Otto Problem:

For all sorts of reasons, some knee-jerk, some nonsensical, and some entirely rational, the word "nationalization" has roughly the same effect on the average American as does the word "stupid" on Otto in the movie A Fish Called Wanda. The typical American could be dangling by a finger from a hot-air balloon and yet at the sound of the word nationalization they'll go off in a red-eyed rage about evil socialists and the end of America.

Emphasis in original

The problem is that the anti-Communist propaganda has been so effective that the American public can only react as it does. Kedrosky decries this as stupidity, but it is not. The brain-washing has been thorough and extremely effective that extreme measures to save the American Capitalist system are imperilled.

Kedrosky has a further problem:

The frustrating thing is that, if it were explained properly, most Americans would likely be demanding nationalization/pre-privatization. ...

Emphasis in original

The unstated reason for this is that people would understand it is in their best interests to nationalise the banks. You cannot have the people deciding what is best for them! Otherwise, there would be no need for the elite to make decisions for people!

And so, Kedrosky is left to fume at the injustice of it all:

So, is nationalization wonderful? Of course not. It's awful and wildly maddening in a capitalist economy. But is it better than the never-ending bailout? Yes. And liking it doesn't mean anyone's being called stupid or a socialist.

Once more, it's Socialism for the Rich while the poor should still think that Socialism is a very, very bad thing.

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Capitalism 3.0

Mark Thoma points to a new, improved version of Capitalism: "Capitalism 3.0":

Dani Rodrik says capitalism must be reinvented to build "a better balance between markets and their supporting institutions at the global level"

This is just an old version of Capitalism with some tweaks to the trimings. The fundamental problem of Capitalism is not addressed nor mentioned.

Dani Rodrik crows that:

Those who predict capitalism’s demise have to contend with one important historical fact: capitalism has an almost unlimited capacity to reinvent itself. Indeed, its malleability is the reason it has overcome periodic crises over the centuries and outlived critics from Karl Marx on. ...

Rodrik goes to write that increasing government intervention helped to stabilise the Capitalist system:

... The new balance that it established between state and market set the stage for an unprecedented period of social cohesion, stability and prosperity in the advanced economies that lasted until the mid-1970s.

This model became frayed from the 1980s on, and now appears to have broken down. The reason can be expressed in one word: globalization.

The postwar mixed economy was built for and operated at the level of nation-states, and required keeping the international economy at bay. ...

Here Rodrik forgets that the current manifestation of Globalisation is not the first one in history. The previous manifestation died at the start of World War I. That one was a more encompassing one in that direct military and political control was imposed by the imperial powers through their empires.

Following World War II, neo-colonialism became the norm in which local elites managed the process on behalf of foreign interests. This meant the system was not as efficient as before but more stable as it required less direct intervention.

However, the increasing confidence and power of these local elites has caused the imperial powers to revert to direct military and political control as seen in the cases of Serbia, Iraq, Chad, Panama, Chechyna, Tibet, Sierra Leone, Solomon Islands, etc.

Under Capitalism, the nation state exists as a protected market for the local Capitalists. Access to this market is of great interest to other Capitalists seeking to offset crises in their own markets.

Rodrik concludes that:

The lesson is not that capitalism is dead. It is that we need to reinvent it for a new century in which the forces of economic globalization are much more powerful than before. ... This means imagining a better balance between markets and their supporting institutions at the global level. Sometimes, this will require ... strengthening global governance. At other times, it will mean preventing markets from expanding beyond the reach of institutions that must remain national. The right approach will differ across country groupings and among issue areas.

Designing the next capitalism will not be easy. But we do have history on our side: capitalism’s saving grace is that it is almost infinitely malleable.

Once again, Rodrik hopes that, by having greater span of government control, the Capitalist crises can be contained. Rodrik wants a supra-national government to manage Capitalism for the Capitalists. In other words, the One World Government is being put forward as the salvation of the Capitalist system. This will not go down well with the petite Bourgeious who passionately believe that government is the cause of their problems.

The central problem of Capitalism is that profit both drives the system and causes it to collapse by reducing consumption. If goods cannot be consumed because of lack of money, then goods cannot be sold. Therefore, unsold goods represent unvalorised capital. Capital that cannot be valorised cannot be turned into profit. No expectation of profit means no investment in either machinery, raw materials, or labour. Thus, the amount of money available for the purchase of goods to be consumed is reduced. And so, the cycle continues.

I suppose Rodrik wants a Keynesian world government to keep consumption up during economic downturns. Government spending requires taxation. And taxation without representation has been the cause of a few revolutions.

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Rudd races off the Marx to jump hurdles of capitalism

Peter Hartcher watches as Rudd races off the Marx to jump hurdles of capitalism as the vultures circle:

"MARX was right," crowed the banner unfurled outside Parliament House yesterday by a group called Socialist Alternative. "Capitalism doesn't work."

Hartcher disagrees with this assessment, and concludes that being a temporary Socialist is a good thing:

A distinguishing characteristic of the Government's plans is that the state is filling the growth gap only until the private sector recovers.

Commendably, Rudd yesterday set out a doctrine for retracting the size of the Government's role in the economy once the crisis has passed. This sets Rudd apart from Whitlam. Indeed Rudd, like many leaders around the world at present, is saving capitalism from itself.

Crisis is inherent to financial capitalism. As one authority on crises, the late Charles Kindleberger, observed, there is nothing more ordinary in the four century history of financial capitalism than a crisis.

Where Marx went wrong was that he predicted the collapse of capitalism through the crises brought on by its "internal contradictions".

But where the state can sensibly manage its flaws and repair its crises, capitalism will recover and endure.

Emphasis Mine

In essence, Hartcher argues that Capitalism cannot operate without crises and that Marx was wrong to conclude that Capitalism will fail because of crises because Capitalism has survived crisis before and will do so again.

Hartcher asked not really answered the question: where do crisis come from? He relies on a descriptive answer - crises occur in Capitalism. His intellectual curiousity does not extend beyond that. It is like arguing that elephants have trunks because they would not be elephants without a trunk.

The classic Marxist answer to this question is that profits are increased at the expense of reducing income for the workers, and thereby reducing consumption. It is this reduced consumption that triggers these crises.

Keynesian economics is simply substaining consumption to reduce the inventories of goods so that profits can be realised.

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