Marx's Revenge

Meghnad Desai's book, Marx's Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (Verso, 2004:UK) is mainly about attacking Keynesian Economics not Marxism. I found his ideas on the Law of Value, Imperialism, American Economic Philosophy, The New Deal, Markets, and the survival of Capitalism to be interesting.

Law of Value

On p.57, Desai writes:

Marx had therefore cracked the basic issue of providing a single theory of prices, wages, and profits. The separation of the exchange value and use value of labour-power, and their commensurate quantitative measurement, was central to his breakthrough.

And Desai goes on to completely misinterprets what Marx wrote. Marx's Law of Value simply states that there is no gain through exchange. One value of an item does not increase by being exchanged. This is what Marx called the Exchange Value in order to distinguish that value from its Use Value - how useful the item is to the owner.

The sum of the Use Values may well increase due to the exchange, but the sum of the Exchange Values will not. Furthermore, these two types of value are not comparable. This is where Desai fails - he writes that they are.

Imperialism

On pp.132-3, Desai writes:

By the late twentieth century, the imperialist episode of world history had passed. No one was able to predict that accurately, but the First World War was the last war between European imperial monarchies. Yet this reliance on irrationality as an explanation of imperialism and war did not fit in with the rational spirit of the age. ...

And yet, we are in another period of Imperialist Expansion: China into Tibet, Africa, South America, and Central Asia; Russia into Central Asia; India into Sri Lanka, and Africa; and USA over everywhere. Desai does not see economic control, or military intervention as Imperialism only direct political control as such. Yet these enforce the latter.

American Economic Philosophy

On p.139, Desai writes:

... But eventually, America stayed liberal and capitalist. Its politics continued to be an ideology-free zone, as they do to this day. This is not to say that there are differences among parties, but political theory - Marxist, socialist, fascist - has not had any lasting impact. ...

Except for Milton Freidman and the Chicargo School, and the Berkeley School, there is no economic philosophy. Hah!

The New Deal

On pp.166-7, Desai writes:

... But Roosevelt's interference with free markets was minimal, though it was novel enough to arouse great opposition. Nor - contrary to later impressions - did he deviate from fiscal orthodoxy. He demonstrated American power by taking over the task of fixing the price of gold in his US Treasury. Roosevelt's goals were to save democracy and capitalism by minimal tinkering. He reaffirmed the strength of the liberal order even as he mildly challenged it.

Markets

On p.177, Desai contends that

... the liberal school of thought forgot that the market and capitalism were not the same thing. Markets are ubiquitous in capitalism, but they work in the context of dynamic ever-changing disequilibrium. ...

Markets exists wherever exchanges of items take place. No exchanges, no markets.

Survival of Capitalism

On pp.185-6, Desai writes that

... Capitalism had survived its worst years. For a while, it was rescued by rearmament and war. But Keynes had given it the recipe for peaceful development in a non-totalitarian context. Never again would capitalism face a similar collapse. Never again could capitalism be said to be in terminal crisis. Lenin had lost his battle with capitalism - though few were able to see it in such a light, thanks to Hitler's invasion of Russia in 1941.

Now that we are entering into a period of great economic turmoil, these words ring very hollow. Capitalism may well survive this crisis and the next.

What the capitalists forgot is that surplus labour-power creates value. The capitalists thought that value could sponataneously arise, and they have been proved wrong.

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Did Increased Income Disparity Help Cause the Depression?

Yves Smith ponders whether Did Increased Income Disparity Help Cause the Depression?:

I've been meaning to discuss how increased income disparity is bad for economic growth, because in the end you wind up with insufficient labor income to fund consumption (note that America's high consumption rate has been achieved by lowering its already low savings rate to zero) and too much capital chasing too few investment opportunities (even a sound bet will produce a bad return if you pay too much for it).

It turns out I was beaten to the punch by nearly 50 years, as Robert Reich tells us in his latest post, invoking former Fed chairman Marriner Eccles . Insufficient consumption is one theory of the roots of the Depression (the monetarist version has gained ascendance), but Eccles links the consumption shortfall directly to a shift in wealth towards the top. And some of the other patterns of the Twenties, such as debt-fueled growth, are worryingly familiar.

The capitalists forget that people need to earn money before they spend it (unless some shyster offers them cheap loans). When there is no money, there is no consumption, there is no economic activity, no matter how cheap the goods are.

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Ben Stein is Exxon Mobil

Naked Capitalism contends that Ben Stein is Exxon Mobil when Ben Stein tries to defend Exxon Mobil against an attack by Barak Obama:

No, Stein isn't willing to consider that high profits by Exxon Mobil in an essential product like oil represent a transfer from the have-nots to the haves.

Cut Stein's argument to its core, and it's blatant free market run rampant: we shouldn't interfere with the God-given right of any company to earn a profit because it will hurt the investors. But Stein goes further and claims that the interests of investors are identical with those of the US public. Was he asleep when they talked about class warfare in school?

In fact, a September 2007 Pew Research Center study found that the US population increasingly sees itself divided along class lines. There was an even split among respondents as to whether they agreed or disagreed with the notion that the country was split along economic lines, while in 1988, 71% rejected it. Similarly, only 45% today consider themselves to be among the 'haves.'

Emphasis in original

Interesting.

Unfortunately, recognition that classes exist does not usually extend to any deeper analysis of their origins. The deeply ingrained anti-communism of the US public would prevent any counternance of a Marxist analysis.

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Textbook economics meets the real world

Ross Gittins explains why Textbook economics meets the real world results in workers getting stuffed around:

When one sector is shedding labour at a time when another sector is desperate for more workers, this allows the expanding sector to attract the labour it needs without bidding up wage rates unduly. That is, the process helps limit inflation pressure.

Get it? The squeeze on manufacturing is happening not by accident but by design. All the textbooks will tell you that's the outcome the rise in the exchange rate is intended to bring about (given that the boom is happen in mining rather than manufacturing).

Remember the recent decision to close the Mitsubishi car plant in Adelaide? It's a classic example of textbook economics working in real life. As soon as they heard the news, mining companies from around the nation rushed to Adelaide to try to recruit the skilled workers they so desperately need.

It was fortunate for many of the laid-off car plant workers the mining industry was booming at the time. But it wasn't a happy accident. The same high exchange rate that was the inevitable consequence of the mining boom was what finally did in the car plant.

Of course, there'll still be tears and pain among the laid-off Adelaide workers and their families. Their treatment has been brutal.

The market system is a great way for societies to become prosperous. But no one ever promised that capitalism is gentle. It ain't.

Emphasis Mine

At least, he is honest.

One problem he overlooks is that not all skilled workers are interchangeable. Unskilled workers can be deployed easily from one industry to another because they need a minimum amount of training to be able to do the job. Whereas it may take up to ten (10) years for a skilled worker to be proficient at their skill.

Skills cause a lot of friction in the labour market as workers cannot readily move from one sector to another.

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Economy.com's Zandi on Homeowners with Negative Equity

Tanta compares notes with Economy.com's Zandi on Homeowners with Negative Equity and is a little bit worried:

With a 20% price decline (peak to trough), I calculated 13.6 million homeowners with zero or negative equity; Zandi's updated numbers put that at 13.8 million.

Zandi didn't provide an estimate for a 30% peak to trough price decline, but my 20 million estimate is probably pretty close. Note: I calculated the percent of homeowners with mortgages with no or negative equity; Zandi calculated the percent of the total single-family housing stock.

Emphasis Mine

That is 20,000,000 households, not people.

Scared shitless, yet?

The Great Depression will probably be known as the good old days as the US economy implodes.

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Blogrolling

I decided to indulge in following the Next Blog link and see what pops up.

• Lost in my madness is a Spanish Language Goth blog of photographs and poems. Pity my Spanish is so bad.
• ESPRIT is an English Language blog of interior design, architecture, and viruses. The designs seem tame. The graphics of the virus are interesting.
• hawgblawg is an English Language blog by Prof. Ted Swedenburg from the University of Arkansas. This is mainly about Arab culture in the Mississippi valley.
• NIGORCHA is an English Language blog from India which features photographs of varying quality from quite good to no charge at the film processing place.
• Jewel Style is a Spanish Language blog of women's fashion photography. Looks most photographs are lifted from trade magazines, although the non-trade ones look professional.
• Toko Online Grosir & Eceran. Menyediakan Baju/Busana Muslim, Baju Koko, Jilbab & Mukena pilihan. is an online store blog from Indonesia. There is some quite stylish clothing advertised there.
• The Muffin Man Kipp in an English Language blog of cute child photographs.
• COMITE ORGANIZADOR is a Spanish Language blog that appears to a online record of the meeting of an organising committee.

And there ended my blogrolling as there was no link out.

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Still Pretending

Jim Kunstler writes that Americans are Still Pretending that they live in the greatest nation in the world:

Once the US gets into serious difficulties with our oil supplies. every other sector of the economy wobbles, including especially the food-growing sector, which cannot function without copious amounts of diesel fuel and hydrocarbon-based soil 'inputs.' Americans will go hungry, and not just the 'underclasses.'

Along in this process somewhere, there is huge potential for armed conflict with other nations. If the unraveling gets traction while George W. Bush remains in charge, the US may answer bellicosity from oil-exporting nations, or energy-hungry rivals, with truculence of our own. Things can get out of control very fast in such a situation. Nations that were happily selling us salad shooters six months earlier may be targeting our naval vessels with a different sort of shooter, say a Sunburn missile. In any case, we will be acting with a bankrupt, exhausted, and over-extended military, and the best case outcome would leave us merely isolated and marooned geopolitically on our own continent, with dwindling energy and mineral resources and an angry, demoralized population.

This time around we have more to fear than fear itself. The banking executives, government officials, and candidates for president are not doing the nation a service by concealing and ignoring our losses. Finance, as the driver of an economy, is finished, but the deployment of capital is still an indispensable arm of a real economy. Sooner or later we'll get back to money that stands for something and banks that function as credible repositories of wealth. But we haven't even started down the path to that place, and the longer we pretend that we don't have to go there, the worse the journey will be.

Emphasis Mine

Jim Kunstler has consistently pointed out that the USA is in no position to absorb the effects of peak oil. The policies pursued by the US government have only exacerbated the problem of running an economy on less oil.

I think the appearance of hunger among the US middle class would lead to an emigration of talent (mainly liberals) to other countries, and a growth in the radical right.

Would Fascism grow out of a US depression? The signs are there in the proto-Fascist movements that already exist. With the emigration of liberals, the politics would drift further to the right.

The world could face the prospect of a nuclear armed Fascist power with a very big chip on its shoulder. Interesting times indeed!

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CAPITALISM'S MYSTERIOUS TRIUMPH

Paul Krugman tries to explain CAPITALISM'S MYSTERIOUS TRIUMPH as Communism failed because of an inability to provide a sustaining reason for existance; only under crisis could it work.

But neither technological change nor globalization can explain the fact that socialist economies did not merely lag the West: they actually went into decline, and then collapse. Why couldn't they at least hold on to what they had?

I don't think anyone really knows the answer, but let me make a conjecture: the basic problem was not technical, but moral. Communism failed as an economic system because people stopped believing in it, not the other way around.

...

We see this kind of thing all the time, in microcosm. The market does not require people to believe in it; but the centrally planned economies that live inside a market economy, known as corporations, do. Everybody knows that financial incentives alone are not enough to make a company succeed; it must also build morale, a sense of mission, which makes people work at least somewhat for the good of the company rather than think only of what is good for them. Luckily, under capitalism an individual company can fail without taking the whole society down with it - or it can be reformed without a bloody revolution.

Why did people stop believing in socialism? Part of the answer is simply the passage of time: you can't expect revolutionary fervor to last for 70 years. But perhaps also the unexpected resurgence of capitalism played a role. By the 1980s Russia's elite was all too aware that the country, instead of overtaking the capitalist nations, was slipping behind - that Russia was failing to take advantage of new technology, that if anyone was challenging the West it was the rising nations of Asia. Communism lost any claim to the mandate of history well before it actually fell apart, and perhaps that is why it fell apart.

In the end, then, capitalism triumphed because it is a system that is robust to cynicism, that assumes that each man is out for himself. For much of the past century and a half men have dreamed of something better, of an economy that drew on man's better nature. But dreams, it turns out, can't keep a system going over the long term; selfishness can.

Emphasis Mine

This is now a common justification for Capitalism. We cannot rise above our selfish nature. We must learn to embrace it.

Jesus believed otherwise and was prepared to die for it. Love one another as I have loved you. That is not a surrender to selfishness but an appeal to our better nature (dreams if you will).

Capitalists would surrender in the struggle against our vices, but Communists should never despair that we are capable of improving ourselves and consciously choose virtue over vice.

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The Support Economy

In The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism, the authors appear to confused about the nature of Capitalism. However, the book has a good discussion about misogny in advertising.

The authors confuse Capitalism with the existence of enterprises. They appear to confuse the effect of organisation in Capitalism with organisational narcissism. They do not recognise that organisations exist to reproduce Capital.

They condemn organisations for being based around the transaction. They do not recognise that the transaction is the basis for all economic activity. You cannot wish away the transaction without wishing away the economy.

They are correct about the increasing automation of the workplace.

They want to replace the transaction with advocacy.

They advocate a customer orientated organisation similar to the ideas of Tom Peters and Seth Godin.

They explained the long recognisation of women as the consumers (over a century), and how this led to misogny in advertsing.

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Bank of America Asks Congress for a $739 Billion Bank Bailout

Mish roundly condemns those "summer capitalists" as they want a socialist solution to a capitalist fuck-up as Bank of America Asks Congress for a $739 Billion Bank Bailout:

Supporters contend that a government rescue could be the fastest and cleanest way to force banks and investors to book their losses from bad mortgages — a painful but essential first step toward stabilizing the housing market.

My comment: Those supporters are socialist fools.

Mish's prescription is to let the market set the true value of the houses and let the financial institutions take the losses. This is to avoid the moral hazard of propping bad lending practices.

What is overlooked here is the question of whether housing is a social good available to everybody, or a commodity to be traded. Until we decide what housing is, we cannot decide on a solution.

This ambiguity about housing gives rise to crises like the current one.

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Not eating to pay the rent

Australia is facing a crisis as people are Not eating to pay the rent:

THOUSANDS of people across the country are skipping meals to pay rising rents, a housing affordability conference in Sydney heard yesterday.

And housing experts warn the home affordability crisis threatens to destabilise the economy and drive the country into recession.

Experts told the housing conference yesterday that Australia faced great social unrest and human suffering as well as chronic labour shortages without affordable housing.

And people thought that things were going great under Howard. Now, the flimsiness of that economic miracle is being exposed.

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Financial Setbacks

The Daily Reckoning discusses Financial Setbacks:

The period 1980-2007 has seen more economic growth than any other period ever. More cars, more televisions, more highways, more hotels, more concrete, more Internet connections…just about more of everything was produced than in any similar 27-year period in history. In other terms, more money was invested and earned than ever before. And more people added more to their wealth than ever too.

The condition precedent for this explosion of wealth was that the world turned away from political change…towards market change. To the largest nation in the world, Deng Tsou Ping announced, 'to get rich was glorious.' All of a sudden, a billion people were bussing, humping, and schlepping - not to build a proletariat paradise, but to make money. To the north, the Soviet Union was never defeated…it simply fell apart, crushed by the weight of its own central planning. By the end of the '80s, it too pronounced itself in favor of making money. And by the early 2000s, Moscow was the most expensive city in the world…with so many millionaires its politicians couldn't shake them down fast enough.

Meanwhile, in Britain and America there were soft revolutions too. Maggie Thatcher and Ronald Reagan ushered in a new era where money and market solutions were said to be the cure for almost every problem. Regulations were eased or scrapped altogether. Marginal tax rates were cut. The 'spirit of enterprise,' as Reagan quoted writer George Gilder, would make us all rich. Those who could innovate would create new wealth. Those whom the spirit of enterprise did not touch directly could buy mutual funds. The market was the source of wealth. All you had to do was to be 'in the market' and you would get rich.

And yet we are on the descent into an economic depression. We have forgotten that wealth is created through human labour, nothing else. This will be a hard lesson to learn. There is no other way to wealth.

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Fear, hope and love: the three marketing levers

Seth Godin discusses Fear, hope and love: the three marketing levers.

He concludes:

I don't think love is often a one way street, either. Brands that are loved usually start the process by loving their customers in advance.

The easiest way to build a brand is to sell fear. The best way, though, may be to deliver on hope while aiming for love...

One of the problems for Communists is that Anti-Communism has been built on fear: fear of the gulags; fear of property confiscation; fear of being subject to the collective. And this campaign of fear is still remarkably effective.

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Origin of the Specious

In an attempt to show up the motivations behind the current wave of religious funamentalism, Reason Magazine discovers Origin of the Specious:

Political scientist Shadia Drury, a passionate critic of Strauss, puts it this way: 'For Strauss, the ills of modernity have their source in the foolish belief that there are no harmless truths, and that belief in God and in rewards and punishments is not necessary for political order....[H]e is convinced that religion is necessary for the well-being of society. But to state publicly that religion is a necessary fiction would destroy any salutary effect it might have. The latter depends on its being believed to be true....If the vulgar discovered, as the philosophers have always known, that God is dead, they might behave as if all is permitted.'

Thus, to preserve society, wise people must publicly support the traditions and myths that sustain the political order and that encourage ordinary people to obey the laws and live justly. People will do so only if they believe that moral rules are divinely decreed or were set up by men who were inspired by the Divine.

Kristol restated this insight nearly five decades ago in an essay in Commentary dealing with Freud: 'If God does not exist, and if religion is an illusion that the majority of men cannot live without...let men believe in the lies of religion since they cannot do without them, and let then a handful of sages, who know the truth and can live with it, keep it among themselves. Men are then divided into the wise and the foolish, the philosophers and the common men, and atheism becomes a guarded, esoteric doctrine--for if the illusions of religion were to be discredited, there is no telling with what madness men would be seized, with what uncontrollable anguish.'

Emphasis Mine

Here, the emphasis is on religion as a tool of social control, not as personal choice. This utility alone makes it desirable to the Capitalists as they enjoin us to defer our satisfaction to the after-life.

Marx expressed a contrary idea that:

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

Karl Marx: Introduction to A Contribution to the Critique of Hegel’s Philosophy of Right, in: Deutsch-Französische Jahrbücher, February, 1844

Here, we have a clash of two contrary ideas in how to approach religion: social control; or acknowledgement of suffering. The rulers want the social control without acknowledging the suffering.

Marxists today should approach religion as a personal choice not as a tool of social control. We should not seek to obliterate religion but as to acknowledge a person's fundamental right to religious expression.

Atheism should not be seen as a sign of intellectual superiority either to be hidden from the sea of believers, or to be flaunted in front of them to condemn their ignorance.

For me, I choose to remain a Catholic in spite of the Church's official persecution of Communists. Although, I have been treated with benign indifference by the local Catholic community. This counts as tolerance.

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Is the Tipping Point Toast?

The Tipping Point purported to show that a few key individuals could literally change the world by starting trends that rapidly spread throughout the population. However, Duncan Watts thinks this case is overstated. He asks if Is the Tipping Point Toast?:

In their hunt for a practical way to create maximum exposure for any given ad, Watts and Peretti developed a way to marry the benefits of old-school mass marketing with clever six-degrees effects. Their first test case came when the Brady Campaign, the gun-control group, asked for help with an online petition.

Watts and Peretti set up a regular mass-market ad buy, running banner ads on several prominent blogs and news sites. Like many ads these days, they added a button on the ad that allows people to forward the ad to a friend--a way of collecting eyeballs for free. Typically, people ignore this 'share with your friends' pitch. But Watts and Peretti included technology called ForwardTrack, which displays the route the ad travels once you've forwarded it. This turned ad forwarding into a piece of social cartography. People would pass the ad specifically to those friends most likely to keep it moving. It became a Facebook-like contest to sign up the most friends.

The technique marries Watts's two main epiphanies: Cascades require word-of-mouth effects, so you need to build a six-degrees effect into an ad campaign; but since you can never know which person is going to spark the fire, you should aim the ad at as broad a market as possible--and not waste money chasing 'important' people. And it worked. The pass-around effect doubled the number of people who saw the Brady Campaign's ad. They paid for 22,582 hits and received an additional 31,590 for free. Another campaign they ran for the Oxygen network quadrupled the audience size, adding 23,544 hits to the initial 7,064.

Neither was, technically, a viral hit. Neither passed the disease threshold, where the meme spreads exponentially and engulfs the mainstream. "But you can double your impact, which is still pretty good," Watts says.

The ultimate irony of Watts's research is that, if you really buy it, the most effective way to pitch your idea is ... mass marketing. And that is precisely what the wizards of Madison Avenue, presiding over our zillion-channel microniche market, have rejected as obsolete. "But that's the thing about magic," says Watts. "If it sounds too good to be true, it probably is."

Emphasis Mine

For us Communists, the message is that the mass-marketing of selling the party newspaper and mass rallies is still important.

There are no short-cuts: no magic viral marketing campaign waiting to be unleashed once get to the right people. The tipping point is just an anarchist pipe-dream of an influential event that triggers a magical transformation of society. People can be panicked for a time but then revert to old habits.

As the evangelists keep pointing out, change starts from the heart and moves outward into the world.

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Bad Judgement

Seth Godin discusses what appears to be Bad Judgement but is a fair judgement based on a different set of beliefs.

Once we realize that it's not a matter of judgment, but a matter of belief, everything changes.

That's because marketers are charged with changing what people believe.

If I can help change what you believe, I bet I can change your actions as well. And respecting your judgment is a great place to start.

As Communists, we should strive to understand and respect the beliefs of those who are not. In reality, I am marketing Communism to Capitalists and their supporters.

We tend to do this in the abstract in our model of the objective and subjective influencing each other.

We do want to change how people relate to each other: no longer as either Owner or Employee, but as a Worker-Owner.

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Gates calls for "creative capitalism"

Gates calls for "creative capitalism" in an effort to improve the distribution of wealth among people. Is the world's richest man going soft?

'We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well,' he told the annual meeting of the World Economic Forum. 'I like to call this idea creative capitalism.'

The speech to top businessmen and politicians in Davos reflects Mr Gates's growing focus on philanthropy. Mr Gates built Microsoft into a formidable and sometimes controversial money machine, which has been accused in the past of abusing its market position.

...

Mr Gates said the self-interest behind capitalism had driven multiple innovations but to harness it to the benefit of all required the system be refined.

Greater focus on recognition for improving the lives of others could provide a spur for companies to focus more on making money out of providing valuable products at affordable prices to the world's poor."

Emphasis Mine

Mr. Gates sees the main problem of Capitalism as being the distribution of wealth. He does not see that the main engine of the growth of inequality has been the Capitalist system itself. This is his blind spot.

His pious hope that Capitalism can be tweaked to fix the problems that it creates is just a salve to a troubled conscience.

Unless we are prepared to understand the true workings of Capitalism, any suggestions like this are just passing day-dreams.

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Bad loans have come home to roost

Peter Hartcher writes that Bad loans have come home to roost for the Americans while conveniently ignoring the same thing happened in Australia, Ireland, England, Spain, etc.

Yet even this does not explain the real force of this financial fright. Its greatest multiplier effect stems from the fact that it comes at the end of a five-year speculative bubble in US house prices.

The Federal Reserve dug the economy out of the 2001 recession by cutting interest rates to record lows. The key official rate went from 6 per cent to a record low of 1 per cent, and stayed there for a year.

This unleashed a great gusher of liquidity, and it gushed straight into real estate prices. Prices boomed and speculation flourished. Individuals, builders, building supply firms, property developers, banks and financiers all behaved as if house prices could only go up. Debt soared.

The bust in the junk mortgage market acquires its great power from the fact that it is the pin that pricks the housing bubble. 'This is very much an American problem,' Hale says. 'It reflects the very reckless behaviour in the American economy built on the assumption of ever-rising house prices.' One result is that the US is suffering its first national fall in house prices since the Great Depression.

Emphasis Mine

This is another don't panic article about how well the economy is performing. Just ahead of the market drop on Monday, Tuesday, Wednesday, ...

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No need to panic, says RBA

Reserve Bank governor Glenn Stevens says No need to panic.

My ignorant opinion is that we are heading for a depression.

The article says:

While Australia was weathering the turmoil in financial markets since August 2007, local investors and borrowers had not escaped completely unscathed.

'Firms whose business models relied on short term debt funding have been tested - a couple have, for practical purposes, left the scene,' he noted.

'Yet these events have been absorbed thus far with little disruption in the broader economy.

'The availability of credit to sound borrowers has not been impaired.'

Mr Stevens said the direct financial effects of the global turmoil on Australia were likely to be confined mainly to the impact on borrowing costs, which have risen in recent months.

'Taking into account the strength of demand, this increase in borrowing costs does not seem likely to pose a particular problem for the economy as a whole,' he said.

'There is no evidence, moreover, of a 'credit crunch' in the domestic financial sector.'"

Emphasis Mine

There are several structural problems in the Australian economy:

• Inflated housing prices;
• High consumer debt;
• High corporate profits;
• Low infrastructure investment

This indicates to me that the individual would have a high exposure to a collapse in the perception of their own wealth. In other words, falling house prices and rising interest rates will lead people to consider themselves much poorer. Without an increase in real wages, debt servicing will become problematic.

People will see others lose their jobs, then their houses, and, possibly, even their lives through suicide. This would lead to an overcorrection in people's spending patterns (they would save far more than is healthy for the economy). In other words, consumers would withdraw cash from the economy thereby impairing its operation.

This panic would then lead to a depression.

This global depression may lead to a decoupling of the US economy from the world economy. The USA would no longer be the economic powership of the world economy. This loss of status would make the USA very dangerous indeed.

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Use of airstrikes boosted in Iraq

The Use of airstrikes boosted in Iraq as a means of counter-insurgency. Of course, the US military is perfext and there are no mistakes. These magic bombs only kill insurgents. If they are dead, then they were insurgents.

Gen. Petraeus has violated his own counter-insurgency strategy by increasing the use of air-strikes. When will the US military ever learn that they have lost in Iraq?

'The core reason why we see the increase in strikes is the offensive strategy taken by General [David H.] Petraeus,' said Air Force Col. Gary Crowder, commander of the 609th Combined Air Operations Center in Southwest Asia. Because the United States has sent more troops into areas rife with insurgent activity, he said, 'we integrated more airstrikes into those operations.'

The greater reliance on air power has raised concerns from human rights groups, which say that 500-pound and 2,000-pound munitions threaten civilians, especially when dropped in residential neighborhoods where insurgents mix with the population. The military assures that the precision attacks are designed to minimize civilian casualties -- particularly as Petraeus's counterinsurgency strategy emphasizes moving more troops into local communities and winning over the Iraqi population -- but rights groups say bombings carry an especially high risk.

'The Iraqi population remains at risk of harm during these operations,' said Eliane Nabaa, a spokeswoman for the U.N. Assistance Mission for Iraq. 'The presence of individual combatants among a great number of civilians does not alter the civilian character of an area.'

Emphasis Mine

POTUS should just declare victory and get the troops home. They are going to be needed to keep order when the US economy collapses in a depression.

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The Black Swan: The Impact of the Highly Improbable

The Black Swan: The Impact of the Highly Improbable is a very interesting book. Although I disagreed with some of the author's contentions, I found the book quite worthwhile to read.

The author makes a very convincing case for considering the silence of the graveyard in which the reasons for failure cannot be known because the participents had died in the attempt. This is particularly revelant for revolutions as the key players on the losing side are usually killed. And, as such, no comparison to successful revolutions can be made.

The author also stressed the importance of recognizing the limits of models. In Communist theory, the Bolshevik revolution of 1917 is held up as a model of success. But, we should also recognize the historical context because that revolution eventually failed whereas the revolutions continue in Vietnam, Laos, and Cuba. China has reverted to Capitalism, and North Korea is just waiting to unify with the South.

I think the author failed to distinguish sufficiently between human and natural systems. I got the impression that he treated them the same.

The author made no reference to Kuhn's work The Structure of Scientific Revolutions which covered similar ground. This I found intriguing.

The author quite correctly points out that the skewed distribution of wealth leads to extreme events. But I do not think he goes far enough to attribute the increasing instability of the Capitalist system to the increasing concentration of wealth and decision-making in the hands of fewer and fewer people. Witness the similarity of outlook of the WEF at Davos. Among such a small group of people, a really bad decision can go unchallenged, whereas a larger group may have enough dissendents to challenge it.

I am at odds with his ludic fallacy because I am convinced that we can understand the rules of human interactions in politics and economics. And I bristle at the idea that anyone would appear to surrender to unreason. Capitalism is built upon reason not unreason. It is arrogant enough to think that the universe is understandable and therefore can be controlled. This is one of the driving forces of Capitalism. Take that away and you are left with a cargo cult.

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Beyond Microsoft Millionaires and Rich Googlers: Workers as Owners

Harvard Business Online's Bill Taylor discusses an example of a worker-oned company which is one of the top small workplaces in the US.

Business has been good. The company has annual sales of $100 million, up substantially over the last few years, with major facilities in Connecticut and Rochester, New York, as well as 14 locations outside the United States. How has Reflexite held its own against giant rivals such as 3M, with deep pockets and a vast global reach? By encouraging employees at all levels to be personally invested in the success of the company—literally.

Reflexite, it turns out, is owned in large part by the people who work there—500 employees who attend Town Hall meetings to discuss strategic issues, get monthly updates on finances and operating results, and are steeped in the company’s strategy and practices. Over the years, based on the performance of their business unit or location, workers received shares in the Employee Stock Ownership Plan (ESOP) worth 6 to 18 percent of their salary— including 60 workers in a factory in the former East Germany, and, starting this year, 110 workers in China.

...

Cecil Ursprung, the company’s long-time CEO, who now serves as a director, thinks deeply about the impact of a company whose people think like owners. “People are at their best when they’re in a constant state of mild dissatisfaction, when they’re always looking to make things a little better,” Mr. Ursprung said. “That’s what ownership does. It’s remarkable what gets unleashed when people share in the wealth they help create.”

Emphasis Mine

Here we have an example of how a worker controlled enterprise is superior to other forms. Ownership overcomes the alienation of labour.

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Look out Below!

The Big Picture says Look out Below! and growls at those summer capitalists:

My opinion: those people who only believe in free market so long as they are going higher aren't capitalists, they are socialists.

The real reason is that most people want to privatise profits and socialise losses.

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An old Chinese myth

There is An old Chinese myth that 40% of the GDP of the PRC is driven by exports. However, the real figure is probably closer to 10%

MOST people suppose that China's economic success depends on exporting cheap goods to the rich world. If so, its growth would be seriously dented by a stuttering American economy. Headline figures show that China's exports surged from 20% of GDP in 2001 to almost 40% in 2007, which seems to suggest not only that exports are the main driver of growth, but also that China's economy would be hit much harder by an American downturn than it was during the previous recession in 2001. If exports are measured correctly, however, they account for a surprisingly modest share of China's economic growth.

The conclusion of the article is:

An American downturn will cause China's economy to slow. But the likely impact is hugely exaggerated by the headline figures of exports as a share of GDP. Dragonomics forecasts that in 2008 the contribution of net exports to China's growth will shrink by half. If the impact on investment is also included, GDP growth will slow to about 10% from 11.5% in 2007. This is hardly catastrophic. Indeed, given Beijing's worries about the economy overheating, it would be welcome.

The American government frequently accuses China of relying excessively on exports. But David Carbon, an economist at DBS, a Singaporean bank, suggests that America is starting to look like the pot that called the kettle black. In the year to September, net exports accounted for more than 30% of America's total GDP growth in 2007. Another popular belief looks ripe for reappraisal: it seems that domestic demand is a bigger driver of China's growth than it is of America's.

Emphasis Mine

This is relatively good news for Australia in the light of the impending economic slow-down in the US.

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My Life

In Fidel Castro's autobiography, My Life with Ignacio Ramonet (2007, Penguin Group, Australia), several things caught my notice:

• Castro realises the importance of price signals in a mixed economy,
• Ethics as a primary economic driver instead of seeking riches, and
• Che's impatience with building a revolution.

Castro realises the importance of price signals in a mixed economy

On p. 601, Castro discusses the effects of subsidies in d encouraging wasteful use of resources. He gave an example of a home restaurant being subsidised to the tune of USD1,000 per month in electricity costs alone. Castro is then asked about these subsidies, is he going to do away with them:

No, but we've raised electricity rates for people who use the most. To discourage excess usage among those who waste it, whatever their current financial status. Abd also, little by little, we've got to let go of these subsidies, which may be acting as a brake [on the economy] today.

Which is why, from now on, only essential, vital things will be subsidized or free. We won't be charging for medical [or health] services, or educational services, or things like that. But we are going to have to charge rent. We'll see how much. There may be some subsidy, but what a person pays in rent over a number of years has to be close to the cost of the house or apartment. Everything is within our reach, everything belongs to the people; the only thing that's not permissable is wasting or squandering riches selfishly and irresponsibly. Zero waste.

We are also gradually creating the conditions that will make possible the disappearance of the coupon [i.e., rationing] book. We are gradually creating the conditions that will take that coupon book, which was essential under given conditions, and which now just gets in the way, and change it. Without commiting abuses, without starving anybody to death; just on the basis of the simplest principles: the coupon book has to disappear. On the other hand, some salaries and pensions, the lowest ones, have been raised. People who work and produce will be getting more, they'll be buying more goods and services; people who worked for decades [i.e., retirees] will be getting more and having more things. Many abuses will be ended. Little by little, the culture medium [as in a Petri dish] will be removed, the conditions that allowed many past inequalities will be done away with. Once nobody has to be susbidized, we'll have made considerable progress in our march towards a just and decent society.

Emphasis Mine

What is true in Capitalism is now being recognised as true in Socialism: efficient allocation of resources requires realistic prices to reflect the true cost of the resources being used. And rationing cannot be subsituted for consumer decision making.

Ethics as a primary economic driver instead of seeking riches

On p.599, Castro has been describing the corruption that has been thriving in Cuba:

...

So things like that are going on. And, generally speaking, we know about it, although a lot of people are thinking, 'The Revolution can't fix this; no, there's no way in the world anybody can fix this. There's just no fixing it.' Well they're wrong - the people themselves are going to fix it, the Revolution is going to fix it.

Emphasis Mine

This is usually given as a specious argument for the continuance of Capitalism: people have always been greedy, so why not go with the flow?

When Castro is asked how is going to be achieved? (pp.599-600), he says:

First of all, it's a question of ethics. I've thought a lot about the role of ethics. What is a revolutionary's ethics? All revolutionary thought begins with a little ethics. But it is also a question of life-or-death economics. This is one of the most wasteful, spendthrift countries in the world when it comes to fuel. Nobody here knows what petrol costs, nobody knows what electricity costs, nobody knows the market price of it. Why, even houses - we wind up giving peop;e houses for free. Can Cuba solve its housing problem by giving away houses? Some people used to buy them. They were the owners, they'd paid fifty pesos a mont, eighty pesos - which, if you sent it off to Miami, would be worth like three dollars! After years passed, they'd paid less than $500, and some then sold them for $15,000, $20,000... And who brought those houses? Was it the proletariat? The poor? Many poor people got their houses free and then sold them to one of the nouveaux riches. Is that Socialism?

Emphasis Mine

Here Castro confronts the basic economic question of price signals in a market that allows buying and selling. His response is that people should choose the ethical path over getting rich. However, the Capitalist's argument about people's nature would hold firm.

Che's impatience with building a revolution.

On p.297, Castro is asked:

Did Che tell you, explain to you what his plans were with regard to Bolivia and Argentia? Did he share that with you?

He was impatient. What he proposed to do was very difficult. So then, because of our own experience, I told Che that better conditions could be created. We suggested that he needed more time, not to get impatient. What we wanted was for other groups, less well known than he was, to take the initial steps, create better conditions for what he wanted to do. He knew what life as a guerilla was like; he knew you needed tremendous physical stamina, physical strength, you needed to be a certain age, and although he overcame all his own shortcomings and had a will of iron, he knew if he waited much longer he wouldn't be in the best condition.

...

Emphasis Mine

This is probably an implied criticism that Che put his ego before revolutionary ideals. Instead of doing the hard slog of getting other people to develop their revolutionary consciousness, Che wanted to accelerate it by his personal intervention.

Earlier on p.296, Castro said that he had pointed to Che that:

Look, there are factors of a subjective nature that change history. Sometimes objective conditions exist for revolutionary change but the subjective conditions aren't there. It was the factors of a subjective nature that prevented the revolution, at that time, from really spreading. ...

Emphasis Mine

This ego problem is manifest in the idea of a vanguard party in which the members come to consider themselves better than anyone else because they a better revolutionary consciousness.

Instead of realising that a revolutionary consists of the leading members of the workers, they consider the party members to be leading the workers. The practical difference is that the party seeks out leaders and learns from their experiences in order to develop their own leadership skills. The other way tends to rely on obliterating competing leaders within the workers' movement.

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I am Legend

In the movie, I am Legend, I see a validation of the American exceptionalism in which the US tries to rectify mistakes it has made, but the rest of the world is just a pack of inarticulate beasts who seek nothing the destruction of the US. There is also a question about science versus faith.

Towards the end of the end of the movie, there is the racist dog-whistle:

The answer is in the blood.

The good doctor is portrayed as a heroic individual struggling against the tsunami of darkness and savagery. He is the only one to walk in the light. He has sacrificed everything for the cause: wife; child; companionship. He works relentlessly but methodically.

He has no ethical concerns about experimenting with animals and infected humans. However, he does keep a gallery of the faces of the humans he had failed to cure. This would make him a serial killer, but he would claim a higher cause to justify this slaughter.

He is blind to the intelligent adaptation of the infected humans:

• The ability to survive three (3) winters in New York;
• The ability to live in harmonious communities;
• The ability to domesticate animals (especially infected dogs);
• The ability to plan ahead;
• Scat and garbage management to conceal locations of the hives;
• Concept of modesty (all of them are clothed);
• Ability to make clothing;
• Ability to execute a complex plan (invasion of the doctor's house) at short notice (less than a day);
• Ability to innovate quickly in the battle at the wharf;
• Ability to set an effective trap for the doctor.

My alternate theory about why the others wanted to kill the doctor is that they saw him as a predator, and it was in their interests to kill him in order to save themselves.

Of course, the doctor does see it that way because he is only doing good in order to return them to normality. He wants to cure them of their inabilty to be a normal human.

He sees himself as a rational individual but is unable accommodate deviations from expected behaviours by the infected humans. He is unable to overcome the blind faith of the normal woman sees the hand of God in everything. Yet it she who survives and arrives at the gates of paradise.

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The Moral Equality of Combatants

Carl Ceulemans investigates the The Moral Equality of Combatants in PARAMETERS, US Army War College Quarterly - Winter 2007-08 (pp. 99-109). I think his main conclusion is to justify continuing the war in Iraq and Afghanistan even though going to war (ad bellum) may have been injust, continuing action in the war (in bellum) is just. There is no fruit of the poisoned tree logic here. He just says the ordinary participants are only morally culpable in bellum.

The question of moral equality is whether all participants in a war equally culpable without regard to their own conduct. In any war, one side must be engaged in an unjust war. The question posed here is whether all participants of that side are morally culpable. Participants from the other side become morally culpable if their conduct is. The justness of the cause does not exculpate them.

His conclusion is:

Can combatants ever be blamed for unjust wars in which they participate? This question reflects the complexity of the moral duality of war. Philosophers such as Walzer and Christopher argue that soldiers can never be held responsible for the justice of the war. The war in which they participate is not their war, but is, as Jean-Jacques Rousseau remarked, a relationship between the political entities to which they belong.¹⁹ Combatants are, in this view, moral equals. Others will argue against this traditional position. For those like McMahan, combatants cannot escape the moral consequences of their participation in an unjust war. His view is straightforward: Those who fight in a just war are just combatants, while those who fight in a war that is unjust are unjust combatants.²⁰ For that reason alone they cannot be moral equals.

This article did not go quite that far in determining a combatant’s responsibility. It was argued that soldiers only become unjust combatants when they are aware of their involvement in the illegitimate activity associated with an unjust war. There is little doubt when dealing with regimes that blatantly lack any form of political legitimacy as to the justice of the war. The fact is that all such regime’s wars are unjust, and those who willingly participate cannot escape responsibility. However, blaming soldiers who fight in an unjust war that was initiated by a legitimate government raises a number of issues. Except for those who may have knowledge of the ad bellum decisionmaking process, it is not reasonable to assume an ad bellum responsibility for the military members conducting the conflict. It may well be argued that the principle of the moral equality of combatants is presumptively correct. In other words, the moral equality of combatants is not an absolute but rather a prima facie position. Based on this line of reasoning, questioning the moral equality of the soldier on the ground is much harder than alluding to the complicity of senior leaders.

pp. 108-109

Emphasis Mine

This conclusion is just a cop-out: individuals are responsible for their actions. we cannot devolve responsibility to others unless there are extenuating circumstances.

War involves the commission of an evil act: killing human beings. The commission of this evil comes at a cost for the victim, the perpetrators, and bystanders. The survivors are morally degraded because they cannot repudiate the act and punish the offenders.

The only counter to this moral degradation is the compensation gained moral enhancement: a greater good has been achieved. This evil was done so that good can prevail, and there was no other way to achieve this.

Just War theory seeks to assure the participants that they are doing a morally repugnant act for ethical reasons. Thus, all participants are not morally equal. I am in agreement with McMahan in this.

Earlier in the article, the author considers the scenario where the military is completely isolated from the rest of society:

In reality such a scenario is not very likely. No unjust regime is so powerful or inventive that it can hide its true nature all of the time. Of course, there will inevitably be citizens who will turn a blind eye when confronted with a regime’s immoral policies. These individuals pretend not to notice or care. There are several explanations for this attitude of denial. There is the fear of becoming one of the regime’s victims, the anxiety associated with losing certain advantages (power, wealth, opportunities, and positions). There is no reason to believe that members of the military would be immune to this kind of logic. It goes without saying that those who are unable to invoke invincible ignorance cannot escape their military ad bellum responsibility. We have already examined the case of military members acting under severe duress. Those who turn a blind eye out of fear of losing their privileges also revert to the status of unjust combatants. They knowingly—although they may pretend otherwise—contribute to the continuing existence of an immoral regime by their participation in its unjust war.

pp. 104-105

Emphasis Mine

I would think that many citizens of both Australia and USA fall into this category. They are showing wilful ignorance because it is their material advantage to do.

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My locals are really bunging it on

Mr. Warren Heggarty complains that My locals are really bunging it on. The bombing campaign by the local louts has raised his hackles. He fears that Totalitarianism may be the only answer.

He concludes

There are very good ethical reasons why one should live by an ethical code, even if it is essentially unenforceable. But the recent popularity of explosives during a period of government-induced paranoia tells me that humans do not care about these reasons.

I fear that Thomas Hobbes was right: if left to their own devices, people will choose to drive too fast, copulate randomly, take drugs and eat. Any time left would be devoted to letting off explosives.

Hobbes's solution was to raise over the people an all-powerful Totalitarian Authority to coerce them into more socially responsible behaviour. The fact that random breath testing halved the road death toll suggests that his theory is on the money.

Still, it would be sad indeed if our free society had to be scrapped in favour of a New Totalitarianism simply because no one gives a rat-a-tat-tat about anyone but themselves.

Emphasis Mine

I think that the lure of Fascism is that discipline is imposed on others and decisions are made by others. As the author says, this is an attractive option.

This is reflected in people's work in which they are given tightly written scripts to follow with very little chance of individual initiative. And even in education, the students are given the answers to regurgitate at examinations. There is no need to think at all - just follow the process. Don't question - only obey.

The author does prefer the ethical approach to discipline. But this requires one to take responsibility for educating oneself in ethics and practising it daily. This is not easy in an economic system that rewards monetary profit over correct action.

And this is a major reason that Communism is so difficult to obtain. The whole society must continually strive to be more ethical and responsible.

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Arabs at War: Military Effectiveness, 1948-1991

I have just finished reading Arabs at War: Military Effectiveness, 1948-1991 (2002, University of Nebraska) By Kenneth M. Pollack. His conclusions were that the competence of the lower ranks of the officer corps, and the technical abilities of the troops were the deciding factors in determining the effectiveness of the Arab armies.

The author concludes:

The history of the Arabs in combat since 1945 also provides some interesting lessons regarding the importance of good generalship as opposed to proficient tactical forces. No one can dispute the influence of generalship on war. The performances of Napoleon, Frederick, Hannibal, and countless other "great captains” attest to what military genius can accomplish. However, tactical proficiency is also an important consideration in a nation's military fortunes. The German Wehrmacht demonstrated throughout the Second World War that superb tactical formations can mitigate the damage wrought by strategic mistakes and at times even allow an army to prevail despite bad generalship. By contrast, the history of the modern Arab armed forces demonstrates that even superb strategic moves may amount to nothing if the nation's tactical formations are incapable of executing them. The Arabs assembled at least two highly competent command staffs: the Egyptian General Staff and senior generals of 1967—73 and the Iraqi General Staff and senior generals of 1986—91. Nevertheless, the achievements of both groups of generals was ultimately very modest in military terms (although quite far reaching in political terms) because of the severely limited capabilities of the tactical formations at their command. One can only wonder what Egypt's Isma'il 'Ali or Iraq's Husayn Rashid—or at lower levels of command, the Jordanian Rakan al-Jazi or the Syrian Hasan at-Turkmani—might have been able to accomplish had they commanded forces with the proficiency of the Wehrmacht or the IDF.

Thus, the history of the Arab armies puts the lie to the contentions of some that there exist strategies so brilliant that they transcend all other liabilities and put the enemy at such a disadvantage that victory is assured. The incompetence of Arab tactical leadership, their severe problems managing information, and the inability of their personnel to properly employ and maintain their military hardware left the Arab states highly vulnerable to most potential adversaries. These extreme limitations of tactical capabilities greatly curtailed the options available to their strategic leadership and badly limited the ability of these nations to employ military force in pursuit of political objectives. Generals of adequate competence had little prospect of successfully achieving any political goal, and even exceptionally competent Arab strategic leaders were able to achieve only the most modest results. Indeed, what is so intriguing about the two greatest Arab triumphs of the last fifty years—Egypt's crossing of the Suez in the October War and the Iraqi victory at the end of the Iran-Iraq War—are the circumstances that allowed Egypt and Iraq to reap such sweeping political gains from such modest military achievements.

pp. 581-582

Emphasis Mine

I have two (2) reactions to this: the myth of the CEO; and the importance of the economic and political development of the individual.

By the myth of the CEO, I mean the idea that a CEO with the right strategy can turn an organisation around. The author is of the opinion that this cannot be done without the competence and leadership at the lower levels. I agree.

With regards to the economic and political development of the individual, I mean the confidence of an individual that they are able to make and decisions in line with the general direction of an economic plan, and a political policy. The more an individual is able to indentify with the economic and plotical system, the more able they are to make competent and timely decisions.

Indeed, the development of Israeli society has been far superior than Arab ones because the Israeli economic development has been a combination of Capitalism and Socialism, and the political development has been that of a Democracy.

Whereas the Arab economic development has been a combination of a Feudal and Command economy, and their political development has been either Dictatorship or Absolute Monarchies.

Once again, a superior political and economic system will beat the crap out of an inferior one.

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Angry city has a very troubled heart

Christopher Bantick concludes his description about an Angry city has a very troubled heart with the observation that:

What kind of society is it that produces that kind of anger, visited on people going about their business?

What kind of society is it where anger management courses are burgeoning in suburban recreation halls?

Road rage, spouse rage, train rage, age rage against the elderly, trolley rage in supermarkets and bread rage in a bakery, says something about the level of intolerance prompting anger.

The philosophy is simple: we matter, others don't. It's mindless selfishness.

There is a worrying angry ugliness in Melbourne's troubled heart.

No longer are mean, shadowy streets just in the city. They run between manicured suburban nature strips.

Bullies leave school, then drive cars, travel in packs on trains, hang out in hotel car parks and visit bakeries.

Emphasis Mine

In another angry city, we see two people casually walking away from someone who was Punched and robbed for his mobile telephone.

Meanwhile, James Howard Kunstler is ever cheerful for his Forecast for 2008:

In any case, whoever ends up in the oval office will preside over one king-hell of a clusterfuck. In the immortal words of TV's erstwhile "Mr. T," I pity da fool who gets elected into this mess. There will be a whole continent full of bankrupt, re-poed, and idle former WalMart shoppers, many of them with half of their skin tattooed and many of that bunch all revved up to "roll heavy and gun up" against the folks who screwed them.

I would suggest that practising non-violence is going to have to be a survival tactic.

I have been on buses where youths have tried to knife each other. I have been on trains where people almost came to blows.

The immediate cause is some fatuous remark which the "innocent" victim was too proud to apologise for. People would rather die than admit that they were wrong.

Some people think they can treat others as dirt and expect to escape unharmed.

I sense the anger and frustration every time I take public transport. I well understand why the train station keeps getting burnt down.

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Masters Mastered

I have finally satisfied the requirements for attainment of my Master's degree. Four (4) years of being bored out of my brain by lecturers who get paid piece rate for every student they keep until the census date. University is just a factory for producing bits of paper with fancy writing on it.

There were lecturers who still cared about the students enough to push them to be their best. These were members of the NTEU. I suppose if you cared enough to join a union, you cared enough about the quality of your work, and work to inspire others to care.

At the university I went to, there was one class that when I turned up, one of the students asked me if I was the lecturer because I was the only white person there. The rest of the class were either Chinese or Indians. And white Australians wonder why IT jobs are going overseas: because that is where the qualified people are!

And do I regret doing the degree? Yes and No. Yes because it tended to be a TAFE course geared to practical experience of computing. No because there were the hold-outs for a true university education.

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Start Now - Hurry!

In Seth Godin's book, Small is the new big, there is an essay called Start Now - Hurry! (pp.225-230). I found a very interesting definition of Communism. Now, Seth is an extroverted Capitalist. But when I read the conclusion to his essay, I found myself nodding in agreement as he wrote about starting your own business:

The best part of this exercise [starting your own business] comes when you realize you are smart enough, motivated enough, and focused enough to actually do this. Once you decide that you could actually run the place, you'll realize that no other option is satisfying.

...

Here's the crux of the matter: Organizations where the people doing the work are the very same people who are making the decisions are more likely to succeed in the long run. Just about all the sins of American business (from environmental despoilation to accounting fraud can be pinned on the anonymous bureaucracy. Entrepreneurs can't be anonymous - it's your decision, your policy, your work, your business - and so you're fast and honest, or you're out. There's nowhere else to pass the buck.

...

pp.229-230
small is the new big,
by Seth Godin
Penguin Books (2006)

Emphasis Mine

The essential definition of Communism is that the two (2) classes of Capitalism, owners and workers, have merged into one (1) class - worker-owners. That is it.

This also why a Communist society can only emerge out of a Capitalist one. The two (2) classes have to emerge from a lower economic system and develop. Once the development proceeds far enough, these two (2) classes have to make a conscious decision to merge. There is no automatic process.

The real question is how much development of the two (2) classes is enough before the amalgamation can proceed? I don't know but Mr. Godin is probably saying that workers should be considering starting their own businesses. I would say that workers should start planning to take over the businesses instead. The same development of the worker is required.

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Blank Books

I made the following comment about Blank Books at Ted Rall's blog:

Arthur Silber would like to nominate Andrew Meyer as an American hero for he did Break the Goddamned Rules. For that, Andrew Meyer was broken. He may never resist again, but he did resist once.

I think we all should realise that we live in occupied countries (USA, Australia, UK, etc). The occupation forces are the rich elite (aka Capitalists aka International Bankers). The forces of occupation are the police and the right-wing thugs. The collaborators include the MSM, the Democrats, the GOP, and all those who want to play safe.

We must learn to think and live as insurgents. There is no other way to keep one's honour in these times. The ways of resisting will change from day to day, and even hour to hour.

I don't think I will be very proud of what I have to do to survive these times. There will be many acts of cowardice and silence for every act of courage. I will be broken once, or even twice. Can I go on? I don't know.

One advantage of a blank book is that anyone write in it. The smallest mark is noticed.

The problem is that we all know something is wrong but we have been trained to let someone else fix the problems.

We have to learn to be responsible adults. There is no one else.

In the movie "Zulu", the following exchange takes place:

Pte. Thomas Cole:

Why is it us? Why us?

Colour Sergeant Bourne:

Because we're here, lad.

These are our times. We are responsible for this part of history. Our predecessors may have stuffed up. We cannot change how we got here. There is no point wishing otherwise.

We could dodge our responsibility and pass the buck to our successors. Could we live with ourselves if we did so?

As Seth Godin says in Thrill Seekers, Now, of course, safe is risky. Apologies to Seth as this quote is taken of context but is entirely appropriate for my point.

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Limousine Liberal

I made the following comment to Ted Rall's post about Limousine Liberal:

Thank you for calling Commies-R-Us. All of our revolutionaries are currently busy or in prison.

We at Commies-R-Us do not believe in outsourcing revolution. You can be assured that we use only indigenous revolutionaries although we do use the experience of others throughout the world.

For those of you who insist on waiting for someone to answer your call, may we suggest reading Can American Workers Make a Socialist Revolution? By George Novack?

Have a nice revolution.

And now for something completely different.

According to The CIA World Fact Book, the average GDP per person is USD10,200 (2006 est.). So we have a disparity between the $8.50 derived by dividing up someone's wealth and the average GDP.

I think people tend to obscure the difference between the wealth created by people working and the wealth that is stolen from them by the Capitalists.

Some of that wealth the Limousine Liberal was gained by his own effort but the rest was gained by the exploitation of others. So, in dividing it up is one way of returning but it is still a more part.

A better idea would be to do without the Capitalists. Cut out the middle men.

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An Examination of Bush Fascism

Tj Templeton does An Examination of Bush Fascism (picked up via Diogenesian Discourse: Is HoWARd easing us into fascism? at) which is a continuation of the check-list political analysis I ranted against in Fascism Anyone? Tj Templeton writes that:

The expansion of democracy in the nineteenth and twentieth centuries intensified the antidemocratic reaction of conservative authoritarianism. Starting first in Italy as an antidemocratic and antisocialist movement after WWI, fascism is in essence the twentieth century version of age old tendencies in politics. Like democracy, it is a universal phenomenon, and it appeared in different forms and varieties in accordance with national traditions and circumstances.

Fascism is a postdemocratic political system and cannot be understood except as a reaction to democracy. Fascism is not possible in countries with no democratic experience at all: in such countries dictatorship may be based on the army, bureaucracy, and church, but it will lack the element of mass enthusiasm and participation characteristic of fascism. Fascism learned from democracy the value of popular support for national policies, and it sought to manufacture popular support by propaganda and fear. ...

Emphasis Mine

What Tj Templeton refers to as Democracy is to be interpreted as the Capitalist political system. Fascism is not a reaction to Capitalism but rather its defense against the workers.

Fascism is a mass movement of the petite bourgeoisie and their adherents. That mass movement reflects the interests of that class. Thus, Fascism can only arise in a Capitalist or Socialist economy where the mass of the petite bourgeoisie is sufficient to be able to take power in its own right.

Historically, the petite bourgeoisie exists as a class in Feudal, Capitalist and Socialist systems. Not all revolutions staged by the petite bourgeoisie are retrogressive. When the petite bourgeoisie revolted in a Feudal economy, this class was advancing the progressive agenda of Capitalism.

Within the Capitalist system, a revolt of the petite bourgeoisie can either be progressive (if it involves the workers) or retrogressive (if it is against the workers).

Since the composition and consciousness of the petite bourgeoisie class varies for country to country and over time, the lists of characteristics of Fascism will display the same variation.

After the lists of characteristics, Tj Templeton continues:

The hallmark of fascism is a merging of state and corporate power coupled with the transfer of power from the individual to the government and corporate elite. It is for this reason that liberals as a whole must be purged or at the very least, marginalized. Taking a look at the liberal achievements of the past century reveals a common theme. The civil rights movement, equal rights movement, free speech movement, environmental movement, the labor movement, and others all have one thing in common: They put power in the hands of the individual. This is incompatible with the fascist ideal of the transfer of power to the state elite and the individual serving as the raw material for the state machine to function on. Most often, fascist propaganda places the lump sum of the blame for a nations troubles on the shoulders of the liberals. It's worth noting that in Nazi Germany the communists, labor organizers, and liberals were purged before the gays, Jews, gypsies, and homosexuals.

Emphasis Mine

This is not Fascism - this is the normal growth of Capitalism. The State exists to protect the interests of the ruling class (i.e. the Capitalists aka corporate elite). What is described above is the struggle between the classes (Capitalist and Proletariat) for their interests. The ruling class does not grant concession because they are nice, they grant concessions because they want to survive.

Tj Templeton concludes:

The United States is not a fascist nation nor is the republican party a fascist party. The conclusion drawn here is that a small cadre of corporate elite have formed a fascist organization which has usurped the United States government through a questionable election and sympathetic court, installed their members in the top levels of the executive, diplomatic, and military offices, and have hijacked the nations policy to fit their fascist agenda. If actions are not taken to end and reverse this trend, the United States will meet the inevitable collapse met by all fascist regimes.

Emphasis Mine

While the first sentence is true, the second is nonsense. Because the Bush presidency is part of the Capitalist class, they are not members of the petite bourgeoisie and thus members of a Fascist cabal.

My opinion on this is in Proto-Fascism in USA where the petite bourgeoisie are mobilising but not moving against the establishment. As long as the GOP continues to deliver, the petite bourgeoisie will rumble but not revolt.

The situation is the same in Australia. We are not in danger unless the ruling class is unable to perform.

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Fascism Anyone?

Crooks and Liars' post about The Colbert Report: Naomi Wolf on Fascism in America had a reference to Laurence W. Britt's article about Fascism Anyone?. Mr. Britt's analysis is:

Beyond the visual, even a cursory study of these fascist and protofascist regimes reveals the absolutely striking convergence of their modus operandi. This, of course, is not a revelation to the informed political observer, but it is sometimes useful in the interests of perspective to restate obvious facts and in so doing shed needed light on current circumstances.

For the purpose of this perspective, I will consider the following regimes: Nazi Germany, Fascist Italy, Franco’s Spain, Salazar’s Portugal, Papadopoulos’s Greece, Pinochet’s Chile, and Suharto’s Indonesia. To be sure, they constitute a mixed bag of national identities, cultures, developmental levels, and history. But they all followed the fascist or protofascist model in obtaining, expanding, and maintaining power. Further, all these regimes have been overthrown, so a more or less complete picture of their basic characteristics and abuses is possible.

Analysis of these seven regimes reveals fourteen common threads that link them in recognizable patterns of national behavior and abuse of power. These basic characteristics are more prevalent and intense in some regimes than in others, but they all share at least some level of similarity.

Emphasis Mine

What follows is a list of characteristics without any explanation of why these characteristics define Fascism. This is really a case of check-list political analysis (If it quacks like a duck and it walks like a duck, then it must be a duck).

The main problem with this sort of analysis is that you had no idea of how to fight Fascism. Which points are most important? What if thirteen out of fourteen points are achieved, does stopping one (1) point alone defeat Fascism?

At least in this respect, Dr. Fernandes' analysis is deeper. See Fascism: are we there yet? Although Dr. Fernandes listed caharacteristics, he attempted to form some narrative around them, and came close to establishing the class basis of Fascism.

And how does Mr. Britt conclude his analysis?

Does any of this ring alarm bells? Of course not. After all, this is America, officially a democracy with the rule of law, a constitution, a free press, honest elections, and a well-informed public constantly being put on guard against evils. Historical comparisons like these are just exercises in verbal gymnastics. Maybe, maybe not.

So he has no fucking idea on what to do! This is more importatnt than playing a game of Spot the Fascist

Trotsky's analysis in "Fascism: What it is and how to fight it" describes the class nature and trajectory of Fascism. With this understanding, one can predict the growth of Fascism and determine how to fight it.

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APEC: Neo-Nazis

There is a good article about APEC: Neo-Nazis.

I only saw about ten (10) Neo-Nazis by the time the end of the march reached the corner of Park and George Street. So, I agree with the estimates given in the article. I found the article interesting because it gave an Anarchist's perspective on Neo-Nazis pretending to be Anarchists, and a commentary on the Neo-Nazis' review of their experience at APEC.

I agree with the author's contention that the Neo-Nazis do not have coherent or mature politics.

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Two Messages for America

Frank Gaffney wonders which of the Two Messages for America will be heard. He is particularly worried that:

Or will it be that we must surrender Iraq to such enemies?  Of course, the latter choice will be dressed up as a "strategic redeployment," clearing the way for what is promised to be a more determined and successful effort to go after al Qaeda elsewhere, notably in Afghanistan and perhaps in Pakistan.

Whatever Democrats (and a few Republicans) may call it, however, the second choice is the one favored by Osama bin Laden.  It would be, as he has called it, a defeat for the United States.  Far from it being the end of the fight with Islamofascists like him and his enablers, such a choice would simply embolden them and result in an accelerated, global metastasizing of the struggle against their ilk.

Emphasis Mine

Already, Mr. Gaffney has conceded the strategic initiative to Osama Bin Laden. OBL is now dictating US policy by boasting about what he could do! No longer is the USA is shaping the events in the Middle East; they are reacting to videos from some guy in hiding.

Yet people, like Mr. Gaffney, do not see it that way. They think the US will have lost if their enemy says that the US has lost.

If people, like Mr. Gaffney, no longer believes the US can shape events at the strategic level, then the US ruling class is beginning to lose control. Why should anyone consider the US to be important if the US ruling class does not think so?

What Mr. Gaffney tried to do in his article was shame Americans into supporting the long occupation of Iraq by making the Americans think that everyone would laugh at them if the US left Iraq. Is the US so weak, that laughter can frighten them?

Even though I write about the eventual decline of the US, the US is stil a powerful nation, but only if it concentrates on its strengths and repairs its weaknesses. Unfortunately, the US ruling class considers military might alone to be America's sole strength without realising that the ideological strengths it still has in people like Michael Moore and Google. What other society could produce icons like these? Both of these came from nothing into world-wide dominance in their own fields.

Yet once again, the US ruling class demonstrates that it does understand the source of its own power, prefering to believe its own bullshit.

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Understanding the "Victory Disease"

Major Timothy Karcher, US Army wrote Understanding the “Victory Disease,” From the Little Bighorn to Mogadishu and Beyond in 2004. He warns against using past success as a predictor of future success especially as it leads to the three (3) deadly conditions of "Victory Disease":

1. Arrogance
2. Complacency
3. Using Established Patterns

What is interesting about this book is how relevant the philosophy is to the non-military realm. This is especially so in regards to the "Design Patterns" and "Agile" movements within computing.

If there is ever a way of dulling the intellect, then these two (2) movements are it. For more ranting, see Lefties and Conservatives.

The remedy Maj. Karcher is reading of history and always questioning assumptions. But, as Maj.Gen. J.F.C.Fuller says in Generalship: Its Diseases and their Cure - A Study of the Personal Factor in Command:

The first of these two problems depends upon a remodelling of our system of discipline, which is still largely eighteenth - century. In war, as in peace, individuality Is far more important than uniformity; personality than congruity, and originality than conventionality. 'War', writes Clausewitz, 'is the province of chance. In no sphere of human activity is such a margin to be left for this intruder.'1 As this is largely true, no regulations and no rules can cover the art of generalship. Like the great artist the general should possess genius, and if he does not, then no effort should be spared to develop his natural abilities, in place of suppressing them. Our existing system is, so I think, based on suppression, suppression to a large extent of an unconscious order. The old are often suspicious of the young and do not welcome criticism, yet without criticism, both destructive and constructive, there can be no progress. As I have already mentioned, the easiest course to adopt is to lay down rules and regulations which must be implicitly obeyed; yet chance knows no compulsion, and such rules and regulations are apt to cramp intelligence and originality. This is seen clearly from the frequent use with which 'Bolshevik' is applied to anyone who dares to think independently; yet if this 'vice' will teach us how to rely upon our common sense and how to speak frankly and without fear, what matters a name if common sense and self-reliance will help us win the next war. In place, so it seems to me, our present system of discipline, which is so truly Prussian and so untruly English, is responsible for creating what I will call the 'Cringe-viki', those knock-kneed persuasive tact-ticians who gut an army not with a knife but with a honeyed word.

Emphasis Mine

How true is this of anything under Capitalism - the sin of thinking marks one as a revolutionary!

How long can an economic and political system survive when original and non-conformist thought and action is suppressed? Not very long as the fall of the USSR shows!

The problem then becomes how we manage the transition to either Socialism or Barbarism. We have to choose the future - not let the future be chosen for us.

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Protesters no match as police rule streets

Danielle Teutsch and Daniel Dasey crow that Protesters no match as police rule streets but admit

Despite fears the protesters would resort to violence, the main show of force came from heavily armed police who dragged a number of banned protesters out of the rally and into waiting vans.

The NSW Police says that there were Seventeen arrested in protest activity. Of particular concern is the following:

Two police officers were injured during today’s protests with one officer sustaining a head wound after being hit with an iron bar, the other sustaining a head injury after being hit with a dart.

I was at the protest from about 09:30 until 14:30. During that time, five (5) people were arrested before the rally reached Hyde Park. The protest was quiet until about 14:00 when the police made their first incursion into the crowd to arrest a prohibited person near the Cafe above St James Station. Then came another quick two (2) arrests: one man and a TV reporter. Another man was thrown to the ground by the police. The people then pushed us further back into Hyde Park. The action then moved further south towards Park Street.

There were eight (8) arrests that I know of before I left. The other nine (9) must have happened after I left or just before.

That only one (1) person out of 6,000 (or 10,000) hit a police officer is good on average (0.01%) but very bad in practice because it could mark the beginings of individual terrorism.

There was one group handing out leaflets saying that protest actions were no longer effective:

But after eight years of such demonstrations—starting in Seattle in 1999 and reaching a high point in the global demonstrations against the Iraq war in February 2003—it is time to draw a political balance sheet. International experience has revealed that, to the extent that protests are dominated by the conception that the political establishment can be pressured to change course, no matter how large they are, or how sincere their participants’ motivations, they cannot resolve the problems of war, repression and social reaction.

This group concludes by saying:

The urgent task faced by students and working people in Australia and around the world is the building of a mass international political movement of the working class guided by the program of socialist internationalism. This is the perspective of the International Committee of the Fourth International and its Australian section, the Socialist Equality Party, developed every day on the World Socialist Web Site.

Here, we have the conundrum of this stage in the struggle: the mass actions are becoming difficult and less effective while the oppression is increasing. This is what the title of the original article. We used to be able to say "Whose Streets? Our Streets!", but no longer.

This underlines the stupidity of the ruling class: they are now relying more and more on naked force to maintain their power, and yet they are destroying the foundation of that power in the Iraqi insurgency as the US Army disintegrates.

The Iraq War is the Battle of the Bulge for US Imperialism: the last grasp offensive to secure vital oil supplies to maintain its war machine and deny those oil supplies to its enemies. There can be no retreat! There is only victory or death. Either the USA will prevail or it will be destroyed.

It is time to start building a world without the USA. We should consider them already dead. This will give up time to try out solutions to the economic and military balances of power.

At this time of history, we will still have a Capitalist world system dominated by PRC and EU. The Russian Federation realises this and is trying to exploit its strategic position between two (2) powers and its proximity to the last remaining major oil fields in Central Asia.

The Communists can only scurry like mammals while the dinosaurs fight it out over access to resources.

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