Chris Dillow: Financialization as symptom

Chris Dillow writes about Financialization as symptom rather than the cause of the GFC.

In this sense as well, financialization is the result of a crisis in the real capitalist economy; the lack of real investment opportunities meant that cheap money flowed into the financial sector instead. As Ravi Jagannathan has said (pdf), the crisis was a symptom.  

Financialization, then, is not a Bad Thing done by Bad People. It is instead an endogenous response to a longstanding crisis of real capitalism.

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In otherwords, the falling rate of profit means that the return on investment is insufficent to induce Capitalists to invest. Although there are major projects to be addressed (like responses to climate change, and improving living conditions), none of these are suffieciently profitable to generate investments.

As the income of workers is reduced to subsistence levels, the margin for profit also reduces. And with increasing automation, there is less living labour to extract profit from.

Capitalism is nearing the completion of its historic mission to develop the economy with the benefits of industrialisation, managerial organisation, financial engineering, and automation. It is now time for workers to seize the means of production to direct the ecomony to save human society and improve living conditions for everybody.

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Chris Dillow: The dubious logic of commodification

Chris Dillow writes about The dubious logic of commodification.

To understand what’s going on here, we need a Marxian notion — that of commodification. This is the process of turning objects and relationships which are outside the realm of market transactions into commodities which can be exchanged at a profit. It is is one of the major ways in which capitalism expands — by creating, in the words of the Communist Manifesto, “no other nexus between man and man than naked self-interest”, than callous “cash payment”.

…

Much of this state-aided commodification is a response to capitalist stagnation. Much of capitalism is no longer innovative enough to create profitable opportunities endogenously: fund management, in particular, is such a rip-off that it cannot offer people value for money. Capitalism thus needs state help to expand the realm in which profitable activities can take place.

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This is why the liberal project of capturing the state through reform is doomed to failure. Any attempt by the state to divert funds to the workers will be met with an ideological offensive from the Capitalists. Profitability depends on government assistance. The declining rate of return for profit means that there is no leeway to placate the masses as was done in the immediate post-war period.

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Seth Godin: Leadership

Seth Godin writes about Leadership.

Leaders create the conditions where people choose new actions.

The choices are voluntary. They’re made by people who see a new landscape, new opportunities and new options.

You can’t make people change. But you can create an environment where they choose to.

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Godin is being naive if he thinks people can simply choose to change things if the options are available. He neglects to consider the violence inherent in the status quo. This is particularly naive given that the 200th anniversary of the Peterloo Massacre was just observed.

The extreme forms of violence that underpin Capitalism preclude any peaceful changes to the system:

• The Occupation of Palestine
• The blockade of Cuba and Venezuela
• The Syrian intervention
• The attacks on Kurds in Turkey, Syria, Iraq, and Iran
• The civil wars in Yemen, and Sudan
• The collapse of Libya

People who benefit from the existing system are unwilling or unable to see the violence that maintains that system. To acknowledge that violence would challenge their idea that they are good people.

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Chris Dillow: The Peterloo paradox

Chris Dillow writes about The Peterloo paradox.

There’s something else. Peterloo was an assertion of working class agency, a refusal of workers to accept their place. Conservatives, and the ruling class in all its forms, have always been uncomfortable with this. As Corey Robin has said, the main consistent principle of conservatism has been a defence of hierarchy:

When the conservative looks upon a democratic movement from below, this…is what he sees: a terrible disturbance in the private life of power. (The Reactionary Mind, p13)

In this sense, there is a direct line from the cavalry murdering the Peterloo protestors to Arron Banks wishing Greta Thunberg dead.  

Indeed, we can read Brexit as an example of the counter-revolution Corey discusses — a desire to reassert old hierarchies in which British rulers and bosses could exercise power unfettered by interference — real or imagined - from Brussels.

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We can either accept our place or face the charging horsemen. Violence from above is the cornerstone of an oppressive society.

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Renfrey Clarke: Should socialists support a Green New Deal?

Renfrey Clarke asks, “Should socialists support a Green New Deal?”.

Meanwhile, working people are well able to see that the demands the bosses denounce and ridicule are emphatically in the public interest and essential for human survival.

If capitalists refuse to enact measures needed for humanity to survive, what does this say about capitalism?

The effect of this situation is to redirect popular thinking in ways that abstract political lectures by the left could never do. Whether or not the people leading the Green New Deal campaign have illusions in capitalism is not the point: the demands themselves have a powerful radicalising dynamic, that leads far beyond capitalism’s bounds.

Campaigning around demands such as those of the Green New Deal, contributors to the Adelaide forum explained, can act as a vital bridge allowing workers and their allies to move beyond a general anger and disillusionment, to an understanding of the need to challenge class society itself.

Socialists therefore have to be right in the thick of Green New Deal-style campaigns. They have to push the demands of these campaigns, draw people into broad protest actions, and as the opportunity presents itself, explain their own anti-capitalist perspectives.

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As Rosa Luxemburg wrote in “The Junius Pamphlet”:

Friedrich Engels once said: “Bourgeois society stands at the crossroads, either transition to socialism or regression into barbarism.” What does “regression into barbarism” mean to our lofty European civilization? Until now, we have all probably read and repeated these words thoughtlessly, without suspecting their fearsome seriousness. A look around us at this moment shows what the regression of bourgeois society into barbarism means. This world war is a regression into barbarism. The triumph of imperialism leads to the annihilation of civilization. At first, this happens sporadically for the duration of a modern war, but then when the period of unlimited wars begins it progresses toward its inevitable consequences. Today, we face the choice exactly as Friedrich Engels foresaw it a generation ago: either the triumph of imperialism and the collapse of all civilization as in ancient Rome, depopulation, desolation, degeneration – a great cemetery. Or the victory of socialism, that means the conscious active struggle of the international proletariat against imperialism and its method of war. This is a dilemma of world history, an either/or; the scales are wavering before the decision of the class-conscious proletariat. The future of civilization and humanity depends on whether or not the proletariat resolves manfully to throw its revolutionary broadsword into the scales. In this war imperialism has won. Its bloody sword of genocide has brutally tilted the scale toward the abyss of misery. The only compensation for all the misery and all the shame would be if we learn from the war how the proletariat can seize mastery of its own destiny and escape the role of the lackey to the ruling classes.

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Capitalists will mock us for predicting the collapse of Capitalism in the century since those words were written despite the Great Depression, another world war, several genocides, several famines, the Great Financial Crisis, and now Climate Change. There are Capitalists who say “Better dead than red!” Unfortunately, that is now a distinct possibility.

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Chris Dillow: The Technology Trap: a review

Chris Dillow writes about The Technology Trap: a review.

Instead, [Dillow] suspect[s] Diane Coyle is right to argue that Frey treats technical change as exogenous when in fact it isn’t. For example, the distinction between labour-replacing and labour-enabling technical change, whilst insightful, distracts us from another type – the sort that enables capitalist exploitation such as the power-biased technical change discussed by Skott and Guy. We should ask: if we have greater worker ownership, what sort of technical change would we see? Mightn’t it be more labour-enabling?

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Michael Lebowitz, in The Contradictions of "Real Socialism": The Conductor and the Conducted, writes

In 1975, David Granick argued that the right to a job in the Soviet Union involved far more than full employment at the macro level—it also functioned at the micro level. “It is considered impermissible, except in very rare circumstances,” he indicated, “to dismiss workers on any grounds other than those of gross incompetence or continued violation of factory discipline.” In short, “workers have had virtually complete job security. More than anything else, it is this feature which has given content in the mind of the ordinary worker to the slogan of a workers’ state.”

The “political unacceptability of dismissals” thus gave workers real security; they were “protected, not only against the reality of unemployment, but also against the need to change either occupation or place of work under the threat of unemployment.” This characteristic, which Granick called the “micro-economic full employment” constraint (but which he would later call “job rights”), meant that workers were “virtually immune from pressure to undergo job changes which they personally regard, for whatever reason, as reducing their individual welfare.”

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The Contradictions of "Real Socialism": The Conductor and the Conducted
Michael Lebowitz
Kindle Location: 929

To reconcile Dillow's and Lebowitz's points, I would see workers having advanced their conciousness from work as being a source of income to being contribution to society. Under Capitalism, an ordinary person needs to work in order to get money for sustenance. Under Communism, an ordinary person contributes to society through their work.

Would seeing work as contribution enable workers to embrace productivity improvements through technical change? I would hope so.

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Juan Cole: Israeli Snipers and other Forces have killed 16 Palestinian children since start of 2019

writes that Middle East Monitor says Israeli Snipers and other Forces have killed 16 Palestinian children since start of 2019.

Israeli occupation forces have killed 16 Palestinian children in the occupied West Bank and besieged Gaza Strip since the start of 2019, Defence for Children International-Palestine (DCIP) said yesterday.

In a report, the rights group said 12 children were killed in Gaza and four in the occupied West Bank.

It accused the Israeli occupation forces of “using excessive force and explosive live ammunition against children aiming to kill or permanently maim them.”

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Thus, the Middle East Monitor will be accused of being antisemitic for reporting this. The Israeli supporters will probably say that Israelis are defending themselves. Any nation that justifies killing children does not deserve to exist.

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Chris Dillow: Centrists' failure

Chris Dillow writes about Centrists' failure.

Corbyn is popular – insofar as he is – not because he is a political genius (he’s not) nor because many of us have become antisemites or have lost our minds. His popularity – especially with young graduates – rests upon material economic conditions. The degradation of professional occupations and huge gap between the top 1% and others have radicalized young people in erstwhile middle-class jobs; financialization has made housing unaffordable for youngsters; and a decade of stagnant real wages – the product of inequality and the financial crisis - has increased demands for change.

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Dillow recognises that the Marxist credo that politics follow material conditions. He also says that such material conditions do not always lead to a leftward shift in political thinking.

You might also object that politics is about more than economics, and that the battleground now is about culture and identity rather than a few quid here or there. This misses the point. The great virtue of economic growth, as Ben Friedman showed, is that it creates a climate in which toleration and openness can thrive. Stagnation, by contrast, gives us closed minds, intolerance and fanaticism. If centrists are sincere in wanting a more civilized and tolerant politics, they must create the material conditions for these. In fact, in office they did the opposite.

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Abundance gives us tolerance; scarcity gives us intolerance. The economic insecurity makes people fearful of the others taking money and benefits away, and this fear allows politicians to play the protector by keeping the others away.

The very people who created the harsh economic conditions that give rise to intolerance are the ones who use intolerance to keep power. These people have no incentive to change the system that keeps them in power.

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Stan Grant: Ken Wyatt, a man in the crosshairs of history

Stan Grant writes about Ken Wyatt, a man in the crosshairs of history.

Ken Wyatt is invoking the spirit of ’67, but he also knows its lesson: it was a victory of fairness over difference. Australians are wary of difference, suspicious of questions of rights. Australia has no bill of rights; our constitution is a rule book, not a rights manifesto. Australia is a triumph of liberalism where people are not defined by their race, religion, ethnicity or culture. Australia is a place where migrants are encouraged to leave their histories and old enmities behind. Nationally we are more comfortable mythologising our own history than probing its darkest corners.

Indigenous people live with their history; they carry its scars; it defines them. In a country founded on terra nullius — empty land — where the rights of the First Peoples were extinguished, where no treaties have been signed, this — as the Uluru Statement says — is the torment of their powerlessness.

When it comes to Indigenous recognition — symbolism or substance — black and white Australia speak with a very different voice.

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Grant is invoking a version of Australia that never was: it was born of racism. Australia existed to keep the Chinese and others out. For over 70 years, the White Australia Policy keep them out.

Grant has to hope that non-Aboriginal Australians will revive the spirit of 1967. I am doubtful as the NT Intervention continues, the off-shore detention of refugees continues, and the rates of Indigneous incaration remains high.

Australia is still a very racist country. And both major political parties have to be mindful of that to get political power. When racism keeps a political party in power, that party has no incentive to reduce racism.

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John Riddell: On the democratic character of socialist revolution

John Riddell writes On the democratic character of socialist revolution.

All experience shows that the electoral process under capitalism is constrained by the surrounding institutions of the capitalist state and economy, which prevent elected governments, under most conditions, from initiating radical social change.

Movements for social change usually run far ahead of the electoral process or bypass it entirely. For example, the great mass movement in the U.S. for Afro-American human rights in the 1950s and 1960s gained ground through a campaign of non-violent mass action that defied existing segregationist laws and endured fierce and brutal police repression and rightist violence. Dozens of activists for Black freedom were murdered before their movement won significant legislative support.

In a similar way, the movement for abortion rights in Canada mobilized in the streets in the face of a campaign of widespread rightist violence that killed ten supporters of abortion rights in the U.S. and attacked many others in Canada. The movement in Canada openly defied existing prohibitions, winning mass support to the degree that the reactionary law against on a woman’s right to choose became unenforceable. Only at that point did parliament take action, repealing the reactionary law.

Great social movements redefine legality and human rights, setting in motion a process of change that becomes irresistible. Socialists utilize electoral opportunities while recognizing that they are far from the whole story.

A workers’ government committed to socialism will probably be achieved as the democratic ratification of a program that has already gained majority support through discussion and mobilization among the population at large.

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Riddell contends that too many Socialists are enamoured of the insurrectionist nature of the Bolshevik revolution. This has enabled the security services to persecute Socialists in preventing the overthrow of the State.

Riddell argues correctly that Socialists should work for the expansion of democratic rights with the view to transition to a Socialist state through democratic means. In 1917, this path was blocked by the provisional government as it flirted with a military dictatorship in order to suppress the Workers' Soviets. Then the insurrection became self-defense.

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IPA and Race Provisions in Constitution

In Pauline Hanson unleashes on airlines over mid-flight Welcome to Country speeches, the IPA is quoted in such a way to give the impression that it is ignorant of the Australian Constitution.

The right-wing think tank the Institute for Public Affairs said any Indigenous voice to parliament was “a divisive ideology based on race” and that “race has no place in the Australian Constitution”.

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This quote would lead the reader to believe that the IPA is ignorant of the race-based provsions in the Australian Constitution. This is not so as the full IPA news release shows:

“Reports that Prime Minister Scott Morrison would veto a divisive indigenous-only ‘voice to parliament’ represents a win for the principle that all Australians are equal,” said Daniel Wild, Director of Research at the free market think tank the Institute of Public Affairs.

“This position affirms the democratic values on which Australia was founded. The Australian Constitution should treat all Australian citizens as individuals, with equal rights and equal responsibilities.”

“This represents a repudiation of a divisive ideology based on race. Race has no place in the Australian Constitution.”

“If the government chooses to pursue any changes to the constitution it should remove the provisions that currently refer to race — section 25, and section 51 (xxvi),” said Mr Wild.

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The quoted sections are:

25 Provision as to races disqualified from voting

For the purposes of the last section, if by the law of any State all persons of any race are disqualified from voting at elections for the more numerous House of the Parliament of the State, then, in reckoning the number of the people of the State or of the Commonwealth, persons of that race resident in that State shall not be counted.

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51 Legislative powers of the Parliament

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:

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(xxvi) the people of any race, other than the aboriginal race in any State, for whom it is deemed necessary to make special laws;

There is a contradiction in the IPA statement—Australia was founded as a racist state. This is shown by the two (2) parts of the constitution.

The repeal of section 51 (xxvi) would imperil all or part of the Racial Discrimination Act 1975 because that act relies on that section among others for its authority:

AND WHEREAS it is desirable, in pursuance of all relevant powers of the Parliament, including, but not limited to, its power to make laws with respect to external affairs, with respect to the people of any race for whom it is deemed necessary to make special laws and with respect to immigration, to make the provisions contained in this Act for the prohibition of racial discrimination and certain other forms of discrimination and, in particular, to make provision for giving effect to the Convention:

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Section 51 (xxvi) is problematic as it can be either used to persecute a race or to redress past wrongs done to a race. The section's very nature is discriminatory, but that should not be used to remove the section from the constitution.

A recent example was the Northern Territory National Emergency Response Act 2007 which was directed at aboriginal people in the Northern Territory.

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