Category Archives: Austerity

Discipline Will Remain…or Will It?

Last October, Philip Hammond, the UK Chancellor of the Exchequer, in the annual federal budget speech to the UK Parliament, said this: “Austerity is coming to an end, but discipline will remain.”

Talk about Orwellian doublespeak. The truth about austerity is that it is a means of social control, or as Hammond put it, discipline. Hammond’s recent comment is completely illogical. Austerity is economic discipline. Really, it’s just a way of making the poor suffer more, while continuing to bail out the rich every time they implode the economy.

It’s rare that the titans of finance slip up so well, and so egregiously with their language, but it happens, this being an excellent case study. Now we know, straight from the source, just what economic experts, being mouthpieces of multinational corporations, really want, just as much or even more than “austerity”: discipline! Or, another way of putting it, they want austerity, except we aren’t supposed to realize that we live in austerity anymore…or at least don’t try and resist. These people want a normalization of austerity, until we just accept that this is the way it is.

A cursory look at the upcoming UK budget shows more of the same: billions to update the nuclear weapon systems, continued cuts for many government ministries, cuts to Scotland when considering inflation rates, a cap on total welfare spending, with a few crumbs for their Universal Credit benefits, etc. All of this is happening while homelessness is rising dramatically (up 169% since 2010).

So what kind of discipline is Mr. Hammond really talking about? A writer for VICE (one Simon Childs) succinctly summed it up:

In the end, Spreadsheet Phil went with ‘Austerity is coming to an end but discipline will remain’. So it’s not ‘over’, it’s ‘coming to an end’, at some point. But ‘discipline’ will remain – for which you can read ‘austerity’. So really, that’s, ‘Austerity is coming to an end but austerity will remain.’ If that sounds contradictory, that’s because it is. Austerity is a decade-long ideological project which has seen poor and working class people pay for the financial crash through cutting the supposed largesse of the welfare state. The government is trying to loosen spending up a bit while the effects of that project become even more stark.

As many commentators have pointed out, austerity is not based on any rational sense of finance or macroeconomic forces: it is an ideological mission, a moral argument stemming back to the Puritan/Calvinist and social Darwinist worldview. If you’re poor, it’s your fault, and all one has to do is pull oneself up by your bootstraps. Societal and systemic forces which consistently lead to high unemployment, substandard education, lack of social support structures, and stagnant wages are never addressed. What better way to keep people “disciplined” than to offload public spending onto the citizenry? Thus forcing private citizen, especially the poor and middle class, to pay more for essential services: this has predictably led to an explosion in college and personal debt.

The super-ego always judging itself produces a type of mental enslavement and has now engulfed the globe in late-stage capitalism. We are taught to always blame ourselves because we are not marketable, don’t keep up with technology, aren’t innovating or learning life skills to keep up in a gig/service economy with rising rates of poverty, which also is hollowing out all social forms of purpose and collective belonging.

The US educational system is complicit in this, since this is the first public institution most of us enter — a regimented oppressive nightmare of one-size-fits-all deluges of mostly useless information, where children are always competing and one-upping each other with grades, achievements, etc. As long as we were obedient little drones who raised our hands to ask questions, sat when told to, repeated the pledge of allegiance every day, and in general were (with our parent’s complicity) spoon-fed lies, omissions, and distortions of historical, scientific, and sociological facts, we could one day participate in adult life successfully. Of course, the more obvious sites for adult coercion and brainwashing barely need mention: jails, churches, mental institutions, large corporations, federal bureaucracies, etc.

The history of public education in our country is a history of indoctrination, or something worse, of which the horrors are so great they cannot be put into words, if one examines the African American or Indigenous histories of schooling. Modern schooling is freaking twelve years of boot-camp for the adult world of bio-psycho-social alienated labor. There is no use denying or getting around this fact.

The psycho-somatic beatings endured become embedded in our minds and the trauma is relived and has been passed down, generation to generation. This has created a militaristic society yet also a pacified and slavish one, which submissively bows down before capitalist/imperialist/colonialist systems of hierarchy. We are the “docile bodies” that Foucault spoke of.

We’ve been molded for the purpose of fitting into (increasingly mentally damaging) forms of labor. The stress of daily work in the US has almost completely precluded any serious resistance. I cannot stress this enough: as bodies synchronizing the finely-tuned engine of capital, we are poised to destroy ourselves and the majority of species on the planet if we continue down this path.

Once again, surprise surprise, the language we use has been beaten into us, and is a formidable weapon in the arsenal of capital. There’s a humorous anecdote in this Monthly Review article by Rebecca Stoner, spotlighting John Patrick Leary:

When General Motors laid off more than 6,000 workers days after Thanksgiving, John Patrick Leary, the author of the new book Keywords: The New Language of Capitalism, tweeted out part of GM CEO Mary Barra’s statement: ‘The actions we are taking today continue our transformation to be highly agile, resilient, and profitable, while giving us the flexibility to invest in the future,’ she said. Leary added a line of commentary to Barra’s statement:

‘Language was pronounced dead at the scene.’

As Stoner explains, when it comes to words like “entrepreneur”:

When we talk about “entrepreneurs” with an uncritical acceptance, we implicitly accept [the] view that wealth was created by entrepreneurs via a process of innovation and creative destruction—rather than Marx’s belief that wealth is appropriated to the bourgeois class by exploitation.

This is why I always think of don Miguel Ruiz’s first agreement: “Be impeccable with your word.” So, Phillip Hammond was being perfect with his wording, really: he wants discipline, dammit!

Others take a more, well, mendacious approach to their phraseology. When people say that jail will “rehabilitate” prisoners or that “innovation”, “increased productivity”, and “hard work” will provide the tools to lead a 21st century economy, I am skeptical. Especially with regard our carceral-industrial complex, how obviously and openly corrupt and racist the prison system is in our country, where length of sentences are absurdly long compared to other nations, and rates of jailing are exponentially higher for black and brown peoples, with 10 cent an hour wages metered out for a smoke, snack foods, or a cell phone call while the largest corporations make billions off of what amounts to slave labor, which, mind you, the Chinese have been replicating with the Uyghur population in Xinjiang province. I’d rather those in power tell us how they really feel. In a lecture on Nietzsche (with a nod to Foucault), Rick Roderick put it quite well:

The idea that we would send someone to prison in order to rehabilitate them…now we’re getting to be more honest about that. We’re getting a little more barbaric, and for Nietzsche that’d be better, it’d be a little more honest. We’re sending them to prison because we’re scared of them and we know if they go there really bad things will happen to them and it will ruin their lives and that will make us happy. That’s what we should say when we send one to prison.

That is what it comes down to for today’s centers of power. Kill, jail, torture, or condemn those lower on the totem pole to lives of penury, marginalization, and unpleasant labor. The chthonic chant from Trump’s base is connected to this impulse: “Lock her up!”… “Build the wall!” Whoever you can’t control so easily, ply them with media, drugs, fame, money, power.

This is how the system was designed from the early days of the Enlightenment. As Foucault asks rhetorically in Disciple and Punish: The Birth of the Prison: “Is it surprising that prisons resemble factories, schools, barracks, hospitals, which all resemble prisons?” Architecturally one of the more famous blueprints for constant surveillance, interrogations, examinations, and constant monitoring of the social body came from Bentham’s design of the panopticon. We notice the ones under surveillance, or even those who think they’re being watched, increasingly self-censor and self-monitor themselves to avoid untoward further investigation or physical violence from state authorities, whether inside an institution or outside in the public sphere.

Rather than rehabilitation, the modern notion of discipline is to induce punishment, and goshdarnit, our culture sure does know how to punish those less fortunate. On any given year between 10 and 20 million people worldwide die of starvation, even as silos of food lie full all over the USA and Europe. Preventable childhood diseases kill perhaps another 10 million kids a year. A mobilization of food, medicine, and competent medical professionals along with a logistics network to access hard-to-reach rural areas in the Global South could solve these crises within a short time frame.

Today we see disciplinarian methods used as a general principle, a blunt instrument applied to daily life, where conformism, homogenization, and compliance to authority dictate modern culture in work and the home. Also, people avoid vocalizing their internal critiques of the state, authority, or the economy for fear of social reprisal, becoming an outcast, and basic issues of self-survival (in minority communities under attack from police brutality) in an atmosphere of generalized anxiety, suspicion, and paranoia.

Here we begin to uncover the archaeological, or rather, genealogical evidence and the ideological underpinnings of centers of power. Ideologues, economists, and capitalists do not need to explicitly promote “austerity” (they can just change the name), but they do need a certain type of discipline, and the contrived system of artificial scarcity which keeps the multitude desperate. This destructive economic system which we dub “neoliberal” stymies thought, kills dreams, exploits labor, and reaches into all facets of political and daily life.

In such an authoritarian state, today, just as in ages ago, women and children bear the worst forms of abuse and punishment even as they do most of the work, either unpaid in the home or in professional employment. Women still must deal with performing emotional labor for men in the West that have not self-analyzed, and cannot see how they directly benefit from patriarchal institutions of power that filter down into the workplace, community, home, etc.

The sociological make-up of the middle classes, constantly under threat of falling into penury until European and North American capitalist states underwent a significant shift in the late 19th and 20th centuries. Constant competition, the modern factory, and striving for status and material affluence shifted the previous belief in a “Protestant work ethic” towards one of Social Darwinism, and from there to a consumer-based age of affluence, where the might of economic powers to exploit becomes an inherent right, where monopolistic corporations use advertising to continually encourage consumptive, addictive, and childish behavioral patterns.

Coupled with eugenics and the westward spread of US territories under the ideology of Manifest Destiny, the genocidal policies of Social Darwinism and racist medical practices spread worldwide. The professional classes were fascism’s most slavish disciples: medical doctors joined the Nazi Party at a higher rate (some say 7 times the rate of joining as the average job) than any other profession in Germany.

The harsh, unrelenting regime of discipline inherent in such bourgeois values creates a new form of human behavior and outlook towards society: one which Erich Fromm called the “marketing orientation.” As he wrote:

The mature and productive individual derives his feeling of identity from the experience of himself as the agent who is one with his powers, this feeling of self can be briefly described as meaning ‘I am what I do.’ In the marketing orientation man encounters his own powers as commodities alienated from him. He is not one with them but they are masked from him because what matters is not his self-realization in the process of using them but his success in the process of selling them. Both his powers and what they create become estranged, something different from himself, something for others to judge and to use; thus his feeling of identity becomes as shaky as his self-esteem; it is constituted by the sum total of roles one can play: ‘I am as you desire me.’ It is worth remembering that mainstream economists such as Philip Hammond (or before him, fools such as Milton Friedman or Alan Greenspan in the US) are not basing their budgets or speeches or interest rates or stupid Powerpoint presentations for corrupt elites on any rational model, any shred of common sense, to help working classes or even middle class citizens. These people are PR spokespeople for capitalists, nothing more. They are as the multinational corporations and financial sector desire them.

We are all sort of becoming who the centers of power want us to be. Pliable, obedient, cowed, desperate. Also more hardened, isolated, commodified, and easier to control. The social conditioning is so deep here in the US.

When Philip Hammond says, “discipline will remain”, the capitalist and colonialist policies he and his elite associates pursue have global consequences. The effect of his words may be hidden from many Western eyes, but they are not any different from the direct violence in previous eras of the corrupt town sheriff, the racist prison warden, the sadistic psychiatrist, the violent headmaster of a school, the conquistador, the slave owner, the SS officer.

This is, in fact, exactly what modern day discipline is. Words, ideas, images, stock markets, debt ratios, and the concepts of the ruling classes become material life-threatening issues which undergird our system of artificial scarcity.

The spreading of this dark cloud of Western civilization, with all the concomitant issues of technology worship, reification, and commodification of the human spirit and creativity continues to tell us: be disciplined, be rational, be good citizens, even to be human (in a specific sense passed down by Enlightenment figures). It is unsurprising that many decades ago the first theoretical models for the post-human age were underway: since the beginning of the so-called Anthropocene era, we have seen how the artificial divisions of nature and culture have been exposed. Even today, much postmodern art and critique, which opens up new avenues for research by exploring ideas surrounding intersubjectivity, depthlessness, waning of affect, etc., still indulges in the fantasy of isolated, separate, urban-centered, and rational humans as a given.

Despite the push by liberal democracies to spread  a certain type of modern propaganda reminding us of our so-called secular, materialist, cosmopolitan, consumer society, the urge for spirituality, for raising of consciousness, still remains strong in contemporary culture via the rapidly expanding interest in yoga, meditation, mindfulness practices, psychedelics (another term is entheogens) and even paganism in the West. Yet even many of these basic self-exploratory and self-coping mechanisms are increasingly and continually mediated through corporations or at least small businesses and hierarchies, at the expense of cooperative and communal forms of organization.

What I think would be beneficial for people to think about is a return to a notion popular in 60s counterculture- the idea of a new sensibility (or sense-abilities, as it were). Readers may know about the ideas of/fury generated towards its most vocal theoretical promoters: Susan Sontag, Herbert Marcuse, Norman O. Brown. I believe it would be worthwhile to revisit those concepts.

In his speech “Liberation from the Affluent Society”, Marcuse said:

Let us give one illustration of…the need for such a total rupture [which] was present in some of the great social struggles of our period. Walter Benjamin quotes reports that during the Paris Commune, in all corners of the city there were people shooting at clocks on the towers of churches, palaces and so on, thereby consciously of half-consciously expressing the need that somehow time has to be arrested; that at least the prevailing, established time continuum has to be arrested, and that a new time has to begin…

He continues:

This situation presupposes the emergence of new needs, qualitatively different and even opposed to the prevailing aggressive and repressive needs: the emergence of a new type of human, with a vital, biological drive for liberation, and with a consciousness capable of breaking through the material as well as ideological veil of the affluent society…society has invaded even the deepest roots of individual existence, even the unconscious of man…We must get at the roots of society in the individuals themselves…who, because of social engineering, constantly reproduce the continuum of repression…

Further on, he states:

…to give sensitivity and sensibility their own right, is, I think, one of the basic goals of integral socialism…They presuppose…a total trans-valuation of values, a new anthropology…we may say that today qualitative change, liberation, involves organic, instinctual, biological changes at the same time as political and social changes…no longer subject to the dictates of capitalist profitability and of efficiency…socially necessary labor, material production, would and could become increasingly scientific…it means that the creative imagination…would become a productive force applied to the transformation of the social and natural universe…

Quite clearly and perhaps being a tad self-conscious, he later says: “And now I throw in a terrible concept: it would mean an ‘aesthetic’ reality- society as a work of art.” Indeed. Marcuse goes on to cite, in the Western tradition, hippies, Diggers, and Provos as groups (we can think of many more today, especially indigenous cultures) who offered “a new sensibility against efficient and insane reasonableness.”

It is intense “social engineering” and “insane reasonableness” which we are loath to stand up against due to our own relative affluence. Today that affluence is disappearing especially in the developing world as climate change and ecological devastation threatens all. In the West the stores may be open, and the planes may run on time, but late capitalism is running on fumes. The “veil” remains, along with elitist media manipulation which distracts and diverts public attention, but various anti-capitalist forces are arrayed at its edges, preparing to draw in the masses. Discipline has been unmasked for what it really is- a one way ticket to an early grave for the poor; or a lifetime of spiritual turmoil for the ruling class and the collaborating professional/managerial class flunkies and sycophants.

Yet again, the violence of words such as productivity, efficiency, free markets, national sovereignty, etc., all contribute to the intolerable living conditions for large portions of the world’s population. This is the metaphysics of capital, where abstract business concepts have very real, and deadly, consequences. Jason Read writes in Crisis and Critique:

Labor power must be made virtual, and then productive. The foundation of the capitalist relationship is the separation of workers form the means of production, and thus the potential of labor power as a potential. Once this potential is sold, enters into the workplace, it must be actualized, transformed into actual productive acts.

He goes on to cite Pierre Macherey, student of Althusser:

From this point of view, we could say that when the capitalist occupies himself with his workers’ labor-power, which he has acquired the right to employ in exchange for a wage, treating it as a ‘productive power’ whose productivity he intends to increase in order to produce relative surplus value – he practices metaphysics not in a theoretical but in a practical way. He practices this peculiar sort of metaphysics not during his leisure time, as a distraction or mental exercise, as he would a crossword puzzle, but throughout the entire working day dedicated to production. By opening up his company to notions such as ‘power,’ ‘capacity’ and ‘causation,’ he thereby makes them a reality, realizing these fictions, these products of the mind, which he then employs with daunting efficacy. In this way, with payrolls and charts of organizational tasks at hand, he shows, better than a philosopher’s abstract proofs, that the work of metaphysics could not be more material, provided that one knows how to put it to good use in introducing it into the factory. One could, incidentally, derive from this a new and caustic definition of metaphysics: in this rather specific context, it boils down to a mechanism for profit-making, which is no small matter. This means that, amongst other inventions that have changed the course of history, capitalism has found the means, the procedure, the ‘trick’ enabling it to put abstract concepts into practice – the hallmark of its ‘genius.’

More bluntly, the contributors at the website Endnotes put it like this:

The abstract universal — value — whose existence is posited by the exchange abstraction, acquires a real existence vis-à-vis particular concrete labours, which are subsumed under it. The real existence of abstractions, which acquire the ability to subsume the concrete world of production under them — and posit themselves as the truth of this world — is for Marx nothing other than a perverted, enchanted, ontologically inverted reality. The absurdity and violence which Hegel perceives in a relation of subsumption applies not only to Hegel’s system itself, but also to the actual social relations of capitalist society.

As one can see, it takes a very specific sort of discipline to deploy this type of thought — as well as to mouth the PR Double-plus good Newspeak that Philip Hammond and the GM executive spoke of above. As we have seen through history, the consequences are not pretty. This shackling of the human spirit molds workers in a totalitarian way, and becomes the baseline ideology for accessing elite institutions of knowledge and power. Hence, this is why some today speak of “total subsumption.”

In this sense, production via exploitation of labor power only speaks of half of the problem: the flip side is that humans are produced as cogs, or, put another way; the social reproduction of the masses is instilled by the constant reminder under capitalism to be productive, market yourself, speak appropriately in every varied situation, etc. Thus, humans are molded to believe in the need for police, tax collection agencies, borders, and industrial civilization. As usual, the unwaged labor of care work in the home continues to oppress women around the globe, as feminists such as Martha Gimenez, Kathi Weeks, Nancy Fraser, Silvia Federici, and many others have shown.

Words cannot express how far capitalism extends into daily life; or the amount of harmful and hateful behavior it has led to. Humans are valued only insofar as they are productive: productive in a myopic framework designed to narrow consciousness, reduce potentialities, blight the human condition, and destroy and degrade wildlife and ecosystems. People all over the world are simply being “farmed” for their labor power, their creativity, their social media posts, to pay taxes, the various licenses, fees, and insurances needed to secure a bare means of existence. Not only are the elite thriving economically, the 1% are estimated to live 10 years longer than the average of the 99%, as Danny Dorling explains in Inequality and the 1%.

The modern calendar and clock also regiment, divides, and orients our perception around the holy grail of productivity, turning human potentialities for creativity, for organic agriculture, for art, for useful crafts, for efficient renewable energy systems, for basic joy, and destroy those possibilities. Instead, we find abstract notions of labor and value, which are then actualized and concretized into power “paving the way” for progress. Our time system, essentially from the very beginning of Western civilization in Mesopotamia, started with set dates for repaying debts, which eventually morphed into regularly scheduled time frames for starting wars, shackling us all to a five day work week, etc. Our time system is the operating system for Empire, its software; hence the Parisians desire to end it.

Solutions lie in listening to indigenous peoples worldwide who have been living sustainably for millennia, via processes of trust-building, of starting truth and reconciliation for past atrocities and modern day dispossession, of growing communities based on non-profit cooperatives, etc. Tight-knit indigenous livelihoods counter the growth of destructive forms of modern discipline, an unnatural system of time, instrumental reason, capitalism, racism, and patriarchy; through power structures distributed horizontally, with deliberative bodies and direct democratic practices.

Authentic resistance against our system should therefore question and dispel the lies embedded in what the rulers and functionaries of capital call “discipline.” Our interior lives have been colonized, our jobs are alienating and exploitative, and our social media and data are now “harvested” for wealth. The abstractions of capital must be abandoned. Perhaps only by returning to the “integral”, the holistic, something closer to the Earth, by finding something elemental, by reigniting desire, can the vast utopian dreams and potentialities, which for many lie dormant, lead us to find some sort of joy and sustainable methods of living to transform this mad society.

Britain’s Homeless Crisis

Under the suffocating shadow of economic austerity, homelessness in Britain is increasing, poverty and inequality deepening. Since the Conservative party came to power via a coalition government in 2010, then as a minority government in 2015, homelessness has risen exponentially.

Whilst it is impossible to collect precise statistics on homelessness, these widely available figures, which exclude the ‘hidden homeless’, paint a stark picture of the growing crisis: In 2010 1,768 people were recorded as sleeping rough, whilst 48,000 households were living in temporary accommodation. By December 2017, according to A Public Accounts Committee report, there were almost 9,000 rough sleepers, and, The Guardian states, “nearly 76,000 households were living in emergency temporary accommodation such as bed and breakfasts, of which 60,000 were families with children or pregnant mothers” –  an increase of 58% on the 2010 figures.

Whilst someone rough sleeping in a doorway is a loud and painful declaration of homelessness, a person is also regarded as homeless if they are staying with family or friends or ‘sofa surfing’ (the ‘hidden homeless’), as well those living in temporary accommodation provided by a local authority. Councils have a legal duty to house certain people – such as pregnant women, parents with dependent children and people considered vulnerable (single people rarely qualify). If, after investigating a case, the council concludes they do not have a legal duty to provide housing, nothing permanent is offered and the temporary accommodation is withdrawn. The only option then is to find somewhere in the private sector, which is becoming increasingly difficult in many parts of the country, including rural towns as well as London and other major cities. Rents (and deposits) are high and landlords are more and more demanding, refusing to rent to people on state benefits, often asking for a guarantor and only offering Assured Shorthold Tenancies (AST).

The Thatcher government introduced AST’s as part of the Housing Act of 1988, prior to which fair rents (as opposed to market rents) and protected tenancies existed, providing a high level of security of tenure. The Thatcher legislation changed all that; AST’s (usually six months) provide virtually no security to the tenant and, in line with the maxim of the market, set no limit on the level of the rent. Consequentially most landlords charge as much as they can get, many do not properly maintain the property, and are within their rights to raise rents and take possession of the property whenever they feel like it. The ending of an AST is now one of the most common causes of homelessness.

Austerity and Homelessness

Those in receipt of state benefits or on a low income can claim housing benefit (HB), which is paid by local authorities to help with rent payments. In 2010, shocked by the national HB bill, the coalition government initiated reforms to the Local Housing Allowance (LHA) for tenants in ‘the deregulated private rented sector’ – the key word here is deregulated. Within broader public spending cuts the policy changes set a cap on the level of housing benefit that can be paid. LHA levels are fixed well below market rents, which results in shortfalls in rent payments leading to arrears, subsequent evictions and homelessness; according to the homeless charity Crisis, “all available evidence points to Local Housing Allowance reforms as a major driver of [the] association between loss of private tenancies and homelessness”

Instead of taking measures to regulate the private housing market and deal with the extortionate rents charged by greedy landlords, the policy penalized the tenant and set in motion a system which, coupled with benefit freezes and the dire lack of social housing, has caused homelessness to grow at an alarming rate; Another example of government incompetence or social hardship by design? If the HB freeze remains in place until 2020 as planned by the government, the charity, Shelter says that “more than a million households, including 375,000 with at least one person in work, could be forced out of their homes.”

The cap on HB is one aspect of the government’s austere economic programme. Through the implementation of economic austerity the Conservative government is waging a violent assault on the poorest members of British society and ripping the heart out of the community. The justification for such brutality is the need to ‘balance the books’; however, the national debt is greater now than it was in 2010. The Office for National Statistics states that “UK government gross debt as of December 2017 was £1.7 trillion – equivalent to 87.7% of gross domestic product (GDP),” – compared to 60% of GDP in 2010. Austerity is an ideological choice not an economic necessity. Financial cuts have been applied in the most severe manner; budgets to local authorities, schools, the NHS (National Health Service), the Police and to the benefit system, among other areas. The consequences are homelessness and widespread economic hardship.

Nationwide food-banks run by the Trussell Trust provided 1.3 million food parcels last year, up 13% on 2016 – before the financial crash in 2008/9 the concept of “food banks” was virtually unknown in Britain. Shelter estimates that more than 130,000 homeless children will be living in temporary accommodation over Christmas, almost 10,000 of who will be in hostels or hotels “where in many cases their family will have been put up in a single room, sharing bathrooms and kitchens with other residents. Overall, 50,000 more children in England, Wales and Scotland are homeless compared with five years ago, a rise of 59%.” The government is doing nothing to alleviate the homeless crisis, on the contrary their policies are fuelling it; Labour MP Meg Hillier, who chairs the Public Accounts Committee, says the government’s approach to tackling the problem of homelessness has been an “abject failure”.

The right to a home

Homelessness is one of the most destabilizing and painful experiences anyone can go through. It fuels psychological and physiological insecurity, places a person in situations of physical danger, erodes any positive sense of self and causes physical and mental health illness; Crisis records that 46% of homeless people suffer from a mental health illness compared to 25% of the general public. However, while this figure is itself extremely high, when asked, a staggering 86% of people who are homeless report suffering from one or other mental health illness. Perhaps unsurprisingly, research shows “that as a person’s housing becomes more stable the rate of serious mental illness decreases.”

Rough sleepers and people begging for money are routinely ignored and treated with disdain, police are instructed to move beggars on and so erase images of social hardship from the gentrified streets – it’s bad for the cities image – and hostile architecture makes even rough sleeping difficult. Shelter relates that the three main reasons for becoming homeless are: “parents, friends or relatives unwilling or unable to continue to accommodate them; relationship breakdown, including domestic violence and loss of an Assured Shorthold Tenancy.” These are causes that anyone could be the victim of.  They should not result in homelessness; indeed within a healthy, compassionately organized socio-economic order, homelessness would not exist at all.

Housing, like education and health care, should be safeguarded from the Madness of the Market; limits should be placed on the rents that private landlords can charge, and a nationwide building program of social housing initiated under the stewardship of local councils, not housing associations. At the same time tenancies need to be lengthened, tenants’ rights strengthened, and fair rents re-introduced.

A house or flat is a home, and a home is a basic human right – enshrined as such within that triumph of humanity, the Universal Declaration of Human Rights: it is not and should not be regarded as a financial investment. At the root of the ‘housing crisis’ in Britain and elsewhere is the poison of commodification; whether it be a house or a forest, a school playground, library building or a public park, all are regarded in monetary terms, how much is it ‘worth’ – meaning how much is anyone willing to pay for it. The result is the commercialization of all areas of life including housing, and the promotion of an ugly way of life rooted in material greed and financial profit, no matter the impact on people or the natural environment.

This ideologically rooted approach to life is at the heart of many if not all of our problems, including the most pressing issue of the time, the environmental catastrophe. Government policies consistently add fuel to the fires, politicians lack vision and imagination, but it is the socio-economic ideology that underlies and fashions policy that is the problem; the system and the values it promotes need to be fundamentally changed, and a new order introduced that cultivates social justice, cooperation and tolerance.

The Yellow Vest Insurgency: What’s Next?

Paris, France, April 2017: Macron Unveils Assault on Workers’ Rights.

Paris, France, December 2018: A potential worldwide insurgency of the working class starts in France as Yellow Vests occupy the streets.

Some 75% of the French back the gilets jaunes. And this support has held up despite the violence.1

The French Yellow Vests Insurgency may or may not grow into a major threat to the established order; nobody knows for sure how it will play out.

Nevertheless, the undertone has been obvious for some years. Once the world publicly recognized a division between the 1% and everybody else, the stage was set for flare-ups, like the Yellow Vest Insurgency movement, as tens of thousands of people dressed in bright yellow vests hit the streets.

Why would tens of thousands of people wearing bright yellow vests, similar to roadside workers, hit the streets? Answer: They’re pissed off!

And, where do tens of thousands of the yellow vests come from? In 2008 France passed a law requiring all motorists to have high-visibility vests in vehicles as a safety measure should the driver need to exit a vehicle on a roadside. Therefore, everybody with a vehicle in France has a yellow vest.

It goes without saying that, over the past three decades, neoliberal globalization set the table for dissolution of the middle class as wages around the world collapsed into a SE Asian vortex of slave labor. This is the heart of the matter behind the Yellow Vest movement, albeit sparked by the Macron government’s new fuel taxes. This is also the biggest reason why a worldwide revolution of the working classes may actually happen, inclusive of pretty much everybody below the top 1% plus the upper-upper-middle-class.

So far, repercussions have been potent on a worldwide basis. For example, retail stores in Cairo have been ordered by the police not to sell yellow vests. Egypt’s abusive dictator General Abdel Fattah al Sisi is looking over his shoulder at France where Yellow Vests have established a foothold that’s spreading like a house afire.

Without doubt, governments are panicked over the prospect of radicalization of the international working class. In France, working class demands include social equality, wage increases, a halt of militarism, reinstituting the wealth tax, and the overthrow of unpopular governments, making Macron look an awful lot like a modern-day clone of Louis XVI (beheaded in 1793).

Recently, Macron made some concessions to demands of the Yellow Vests. They’re not impressed!

This time, however, is different. The gilets jaunes emerged from nowhere via social media. They are not the product of organized unions or political parties. Their structureless and leaderless nature makes them potent, volatile, and difficult for the police and government to handle. They do not follow the codified rules of protest. Their diverse demands range from an end to the eco-tax to the resignation of Mr. Macron – and even his replacement with a military general. And the government cannot find leaders willing to attend meetings.2

All of which describes the future of revolutionary activity throughout the world. It is seamlessly simple and frighteningly powerful.

In Algeria, protestors donned yellow vests in response to a failing system, as family after family cannot afford the basics of life.

In Tunisia, a new group called “Red Vests” issued a call for protests of a Tunisian political system that promotes “systematic impoverishment.”

In Belgium, police violently cracked down on angry groups of Yellow Vests with similar demands.

In Basra, Iraq Yellow Vests criticize widespread contamination of drinking water and poor city services and corruption under a NATO-backed neocolonial regime. Meanwhile, 243 miles away in Baghdad Yellow Vests hit the streets in sympathy.

“Yellow Vest” has become a catchall for all of the grievances of working people. Indeed, this is how revolts commence in earnest. And, it is indicative of a world order that is edgy, angry, and ready for conflict with the first spark of ignition.

The precursor for the present insurrection was identification of an elite class, or the 1%. Throughout history, revolutions aspire to confrontation once lines of division have been clearly drawn; e.g., the Boston Tea Party, or the fall of the Bastille, or today’s “One Percent,” which clearly divides the world into “haves” and “have-nots.” Certainly, the One Percent is one of the clearest, easiest targets of all time.

Not only a clear division, but years of pent up anger magnifies when people know they’ve been screwed. Under Macron, for example, French subsidies for part-time jobs were slashed, housing aid for low-income people cut, and pension checks axed, as he repealed France’s wealth tax, meaning more goodies for the rich at the expense of everybody else. It doesn’t take an accountant to figure out that the working class ends up subsidizing the wealth tax cut.

Furthermore, once people voice dissent in the streets, like the fuel tax revolt in France, magnification of many other issues come into sharp focus. For example, in France students have walked out of 200 schools to protest reforms to high-stakes baccalaureate exams and new higher-education admission procedures. And, university students are now protesting recent hikes in tuition.

Four words, “Yellow Vests and One-Percent,” have converged in a firestorm of resentfulness of every inequity propagated by the utter failure of elite capitalistic globalism punctuated by its neoliberal tendencies. It’s as if the world has lost its way, directionless meandering that honors wealth creation but nothing else.

Similar to the Arab Spring of 2010, minor events reverberate into major events, which may or may not explode into a massive revolution in protest of a capitalistic system that shamefully rewards the rich by preying on workers of the world. But, social media fights back.

The discontent is all about austerity efforts; for example, Philip Alston, the UN Special Rapporteur on extreme poverty and human rights described the austerity policies in the UK as “punitive, mean spirited and callous… heading towards an alienated society made of dramatically disconnected groups, those living the high life and the very poor, relying on food banks even if in work.”3

Philip Alston’s study of austerity policies and consequences equally applies to major developed countries throughout the world, as “austerity” has been the order of the day in Turkey, Italy, Greece, France, Portugal, Spain, Ireland in large measure to satisfy the EU and IMF that their loans will be repaid. Oh, please!

Still, revolutions take a long time to play out: The American Revolution, 1775-1783; the French Revolution, 1789-1799; the Chinese Communist Revolution, 1945-1950; the Cuban Revolution, 1953-1959; the Spring of Nations Revolutions of 1848-1852 against monarchies in Germany, France, Italy, and Austria.

Revolutions start with a loss of decency. Today, the world is full of indecencies for the “working poor.” The Yellow Vest insurgency is only possible because of a failure of global capitalism to uplift the working class.

Instead, it puts a boot on their necks.

  1. “La République en Flammes”, The Economist, December 8-14, 2018.
  2. Ibid.
  3. “UN Special Rapporteur Makes damning Criticism of Austerity”, National Survivor User Network, November 2018.

Mexico on the Eve of AMLO: “So Far from God and So Close to the United States”

The full quote by Porfirio Díaz is: “Poor Mexico, so far from God and so close to the United States.” Mexican President Díaz (1876-1880 and 1884-1911) got it at least half right. Mexico has suffered in the shadow of the Colossus of the North, but Mexico is not poor. Mexico is rich in many ways, yet it also has been impoverished. And Mexico has been greatly underappreciated by North Americans.

Mexico is bucking an international right-wing tide, shifting its government from right to left-of-center with the presidential inauguration of Andrés Manuel López Obrador (AMLO) on December 1. Speaking for international capital, The Economist is worried. The other 99% of humanity is hopeful. A cautionary history of this trice conquered land follows.

Pre-Colombian Mexico and the First Conquest

Prior to Europeans “discovering” the New World, Mexico was home to many great civilizations, which thrived for nearly four millennia: Aztec, Huastec, Izapa, Maya, Mixtec, Olmec, Purépecha, Teotihuacan, Toltec, Totonac, and Zapotec. History and Headlines rates the “10 great historical civilizations,” naming the Olmecs and Aztecs alongside the Romans, Persians, and Egyptians.

The popular image of the Aztec depicts savage men in loin clothes and feathers on top of stone pyramids making human sacrifices. But let’s put that into historical context. Historian James Cockcroft tells us that at the same time the barbarians in the New World were assuaging their pagan gods with human blood, more  people met their end  burned at the stake as “witches” by the civilized Europeans in the name of Jesus. Christian femicide is a forgotten legacy.

European contact in 1519 brought Christianity and disease to the then flourishing Mexican civilizations. While the Europeans and the indigenous Americans were roughly on the par technologically, the Europeans were far more adept at war and to them went victory and the spoils.

Geographer Jared Diamond estimates that 90% of the Native American population was obliterated by measles, small pox, flu, and the like for which the Europeans had developed relative immunities. Mexico did not regain its 1519 population until 1940, taking over 400 years to recover.

Although the official language of Mexico is now Spanish and Mexico is the most populous Spanish speaking nation in the world, it is also home to the largest number of actively spoken indigenous languages in North America.

The Second Conquest of Mexico

The first conquest of Mexico was by the Spanish conquistadores. The second was by the Yankees and has received far less acknowledgement.

Mexico won its independence from Spain in the period 1810-21 and with it slavery was abolished, though not entirely until 1829. It wasn’t until 1863, when the Emancipation Proclamation was issued followed by the Thirteenth Amendment two years later, that formal slavery was abolished in the US. However, sharecropping and Jim Crow laws continued to preserve the “peculiar institution” in the “land of the free.”

The Adams–Onís Treaty of 1819 established the border between the former Spanish colonial territories and the former British colony, now the US.

By 1836, the Republic of Texas succeeded from Mexico and was annexed to the US in 1845. The following year, the Mexican-American War was provoked by the US as a war of conquest.

Two years later, Mexico was forced to sign the Treaty of Guadalupe Hidalgo ceding nearly half its national territory. The US gained what would become parts or all of California, Arizona, Nevada, Utah, New Mexico, Wyoming, and Colorado. The Gadsden Purchase of 1853 added southern Arizona and New Mexico to the spoils of war.

In all, 55% of Mexico, over half of her sovereign territory, was taken from Mexico by the ever-expanding Colossus of the North. No wonder our Chicanx compatriots remind us “we did not cross the border, the border crossed us.”

Alta California

Gold had been discovered at Sutter’s Mill just a few days before the treaty was signed, which transferred Alta (upper) California from Mexico to the US. The discovery of gold was unknown to the signatories at the time.

Alta California was to become the Golden State. With a $2.7 trillion economy, the state now boasts the world’s fifth largest economy, larger than Mexico’s $2.4 trillion gross domestic product (GDP). Were Alta California to rejoin Mexico, the new union’s GDP would be surpassed only by the mega-economies of China, US, India, and Japan.

The constitution for Alta California was drafted in both Spanish and English. Despite having a bilingual constitution, the Alta California voters passed the English-only Proposition 227 in 1998. Then in 2016 the voters passed Proposition 57, which repealed the more egregious English-only provisions of the earlier proposition.

The repeal of the English-only proposition reflected an influx of non-English speakers into the state. Alta California is today a truly multi-ethnic state with 43% of its inhabitants speaking a language other than English at home. The largest ethnic group is again Hispanic-Latinx, comprising 39% of the population and outnumbering what the Census Bureau calls “white alone.”

The Mexican Revolution

The bully to the north became revolution-adverse after concluding its own revolution. When Haiti won its independence from France in 1804, the US joined Napoleon’s empire to force the fledgling Haitian nation to pay debilitating reparations for freeing itself from slavery.

Nevertheless, the Mexican Revolution of 1910-20 was able to slip by. In those days the US empire was not as capable at multitasking as it is now and was preoccupied by World War I.

The Mexican Revolution stands in the pantheon of great 20th century revolutions, pioneering the way for Russia (1917), China (1949), Vietnam (1975), and the many Third World liberation struggles of the last century.

As the first of the major 20th century revolutions, the Mexican Revolution guaranteed labor rights, nationalized subsoil rights, secularized the state and curbed the power of the Roman Catholic Church, and gave inalienable land rights to indigenous communities. Women’s rights were advanced, and women fought as soldiers and even commanders in General Emilio Zapata’s revolutionary army. Many of these gains have since been eroded.

The Revolution Institutionalized

After the tumultuous revolutionary period, politics in Mexico became consolidated under the PRI (Institutional Revolutionary Party). This single corporatist party brought together political factions representing the peasantry, labor, and urban professionals. As the revolutionary period receded, the PRI became politically centrist.

The one-party rule of the PRI was finally ended with the successful presidential election in 2000 of Coca Cola executive Vincente Fox of the PAN (National Action Party). The PAN won the subsequent presidential election as well. The PAN is a right-of-center Christian democratic party. It has strong backing among northern Mexican agri-business and international corporations and has a conservative social agenda.

The current Mexican president, Peña Nieto, is a member of the PRI. As the PRI moved to the right, more liberal forces within split in 1986 and formed the PRD (Party of the Democratic Revolution). The main stronghold of the PRD has been Mexico City and among organized labor.

Andrés Manuel López Obrador was the PRD standard bearer in the 2006 and 2012 presidential elections. His losses in both elections are widely believed to be due to fraud.

NAFTA – the Third Conquest of Mexico

The third conquest of Mexico by North American finance capital came in the form of the North American Free Trade Agreement (NAFTA) and similar neoliberal arrangements. Neither free nor restricted to trade (e.g., it includes military cooperation), this stealth conquest facilitated the repatriation of foreign investment profits and the further integration of Mexico into the US economy.

NAFTA was ratified in 1994 among Mexico, the US, and Canada. The agreement remains controversial in the constituent counties. The Zapatistas in southern Mexico specifically chose the initiation date of their on-going rebellion to coincide with the day NAFTA started, presciently predicting the deleterious effects NAFTA would have.

By 2014, as many as a million US workers had lost their jobs due to NAFTA, which also had the effect of depressing wages.

NAFTA ended many Mexican government supports for agriculture, while encouraging entry of US and Canadian agricultural products. Consequently, peasant and most family farm agriculture in Mexico are less economically viable. The result has been a massive internal migration from the countryside into Mexican cities and an external emigration of people forced off the land to the US.

Neoliberalism’s Winners and Losers

A decade or two before the imposition of NAFTA, Mexico had appeared poised to transform from a developing to a developed country. New oil reserves had been discovered and a boom seemed imminent. Then instead of continuing a development model, Mexico bowed to international financial pressure and switched to a neoliberal model of deregulation and privatization.

Rather than lifting Mexico’s economy through its deeper integration with the US economy, as NAFTA’s proponents promised, Mexico has fallen even further behind. After NAFTA and the neoliberal “reforms,” poverty went up in Mexico while per capita economic growth lagged compared to the rest of Latin America.

Instead of wages becoming like those in the US, working wages became competitive with Guatemala. Mexico took its place in the international market economy as an export platform for low-wage maquiladoras, factories owned by foreigners and exporting to a foreign market.

Despite great national wealth, 46% of Mexicans live below the poverty line. The per capita income of Mexico is a third of the US, making the shared border the most income-unequal border in the world.

Neoliberalism has also had its winners. The government telephone monopoly Telmex was privatized in 1990, bought up by Carlos Slim Helú who became the richest man not only in Mexico but in the entire world by 2010. His ranking has now slipped to seventh, though he is still the top tycoon in Mexico owning 40% of the listings on the Mexican stock exchange. His net worth is equivalent to 6% of Mexico’s GDP, which is greater than the entire GDP of neighboring Guatemala and four times that of Nicaragua.

With a new strata of billionaires and deepening poverty, both spawned by neoliberalism, Mexico is among the more income unequal nations, with a Gini Index of 48.2. Carlos Slim and eight other international fat cats now have more wealth than half the world’s population.

Contemporary Mexico

Yet today Mexico as a nation is rich in many ways.

In terms of biodiversity, Mexico is way under-recognized. Mexico ranks fourth or fifth in the world, scoring high for the number of reptiles, birds, mammals, and plants. The much more celebrated Costa Rica in comparison doesn’t make the top ten in any of these categories, although it has a far better public relations apparatus. Mexico encompasses vast rainforests, dry forests, mountains, deserts, and the second largest coral reef in the world.

In terms of conservation, Mexico has been a world leader in the protection of whales. Commercial whaling was banned in 1954. In contrast, the last US whaling station in the San Francisco Bay was closed in 1971, followed the next year by passage of the Mammal Protection Act. The world’s first whale refuge was established in 1972 by the Mexican government. In 2002, Mexico again exercised world leadership in designating all its territorial waters and Economic Exclusion Zones as whale refuges.

Culinarily, Mexico’s cocina is considered among the great cuisines of the world; a lot more than taco trucks and cheap burrito stands. Amongst Mexico’s contributions to the world’s larder are avocado, chocolate, guava, tomato, vanilla, many varieties of beans and chiles, and most notably corn, which is now the world’s most important staple food.

Mexico has the most UNESCO World Heritage Sites in the hemisphere. The three most influential modern muralists are the Mexicans Diego RiveraJosé Clemente Orozco, and David Siqueiros.

With 7.6 billion bbl of proven reserves, Mexico is a major crude oil producer. Ranking 12th in the world, it outproduces Nigeria, Qatar, and Libya.

Mexico’s economy ranks 11th in the world, placing it second in Latin America after Brazil. Mexico’s GDP is greater than that of Italy or Spain and just below France and the UK, making it one of the world’s economic powerhouses.

The 2018 Election

Left-of-center Andrés Manuel López Obrador ran for the Mexican presidency on July 1. Having broken from the PRD, this third run was the charm as he won decisively. Morena, his newly formed party, swept the national and state legislatures.

Mayor-elect of Mexico City, Claudia Sheinbaum Pardo, is also part of the winning coalition. She is the first woman and first Jew to be elected to the post. She is a scientist and was a joint winner of the 2007 Noble Peace Prize as a member of the Intergovernmental Panel on Climate Change.

After decades of right-wing governments in Mexico, López Obrador is being sworn in on December 1. The popular sectors in Mexico are expectant that corruption, inequality, and other long festering economic injustices will be addressed.

Brazil: Bolsonaro Towards a Military Dictatorship

   Jair Bolsonaro                   Fernando Haddad

One week before the second round of voting in Brazil, Jair Bolsonaro, the extreme right-wing candidate from the Social Liberal Party (PSL), against Fernando Haddad from the Worker’s Party (PT), Lula’s Party, for Brazil’s Presidential run-off elections, Bolsonaro leads to polls by double digits, about 58 against 42. And the gap is growing, despite the fact that as recent as end of September 2018, Brazilian women campaigned massively against Bolsonaro with the hashtag #EleNao (Not Him). His misogynist record left him with only 27% of women supporters only a couple of weeks ago. Massive cheat-and lie-propaganda increased that ratio by now to 42%. Does anybody seriously believe that Bolsonaro has changed his racist character and his women-degrading attitude?  It is mind-boggling how people fall for propaganda lies and manipulations.

The usual propaganda of deceit from the right has infiltrated every election in the last 5-10 years, starting with the sophisticated internet and propaganda fraud invented by Oxford Analytica (OA), which is largely believed having brought Trump to the White House, Macri to the Casa Rosada in Buenos Aires, Macron to the Elysée in Paris and Mme. Merkel for the fourth time to the German Federal Chanceller’s office in Berlin – among others. OA is also said having helped the BREXIT supporters. In the meantime, OA’s dirty election manipulation methods have been mainstreamed to the mainstream media – with lots and lots of corporate and banking money.

In fact, the frontrunner Bolsonaro is currently being accused by his opponent Fernando Haddad, of a ‘fraud and fake news’ campaign, and that just a few days before the run-off. The charge is that Bolsonaro is running a multi-million-dollar defamation campaign against Haddad, via Whatsapp and other social media. This means sending out literally millions of tailor-made messages to potential groups of voters. That’s the way of the of OA’s algorithms.

According to RT, Haddad told a media conference in Rio:

We have identified a campaign of slander and defamation via WhatsApp and, given the mass of messages, we know that there was dirty money behind it, because it wasn’t registered with the Supreme Electoral Tribunal.

This, after the Folha de S.Paulo newspaper uncovered a suspected election fraud. The publication alleges that a group of entrepreneurs are backing a multi-million-dollar slander campaign that would use several popular social media apps to reach out to Haddad supporters and smear his name with ‘fake news’.

We can only hope that the discovery of this slander and fraud may not be too late to stop Bolsonaro’s end run and to inform voters. Leading to an indictment of Bolsonaro is hardly a realistic chance, as he is supported by the current corrupt and fascist-type Temer Government and all the high judges who have impeded Lula’s legitimate request for running for Presidency. Only voters’ consciousness may make a difference.

Imagine what happens if Bolsonaro is elected? It is hardly fathomable. Bolsonaro has already declared that if elected he will render full power to the military. “When I’m elected, those who will command are the (military) captains”. His word  in Portuguese.

He is a fascist no doubt. There were other fascist military governments in Brazil, like Getúlio Vargas, who reigned from 1930-1945 as a military dictator mostly by decree. He abrogated the 1891 Constitution and introduced a new one in 1934 which was overturned, when finally, in 1945 Vargas was deposed and a new democratization process began with a new Constitution being introduced in 1946. But that was not all for fascism and military dictatorship in Brazil. There was more to come in the decades preceding Lula.

Another brutal military government came to power in 1964 by a coup d’état by the Armed Forces. It ruled Brazil from 1 April 1964 to 15 March 1985 by President Joao Goulart. It came to an end when José Sarney took office on 15 March 1985. What’s important to know is that both the Vargas coup of 1930, as well as the 1964 military coup were supported by the US Embassy in Brazil and the State Department in Washington. Mr. Bolsonaro has already today – after the first election round – the full support of Washington. He was immediately congratulated by the Trump government after the October 7 election results were known.

If no miracle happens within the coming week, Brazil may be slanted to go back some 90 years, into a fierce military dictatorship. Worse, today with the neoliberal doctrine being the overarching last word on economic policies, also for the military. We are looking at full privatization of everything, of social services, water and health privatization has already begun; basic and profitable infrastructure, natural resources, and the IMF, World Bank, FED-Wall Street indebtment is already well under way and its future programmed, including a devastating austerity program which under unelected Mr. Corrupt Temer has already started.

In fact, economic disaster in terms of dependence on IMF, WB and the FED, may also loom under Haddad, who has already said he would work with the financial fiefdom of Washington. As Luiz Inacio Lula did, when he was elected in 2002. He was the “golden example boy” for the IMF, following strictly the rules he was taught would bring progress to his country.  Later he realized what was actually going on within the financial sector of Brazil. He corrected some of the aberrations, but many stayed in place throughout Dilma Rousseff’s Presidency.

Brazil could become South America’s Greece – just multiplied by a factor of 100.

Just imagine the political and economic impact this would have on the Latin American region. Brazil is by far the largest economy of Latin America with a GDP of about 2.1 trillion US-dollars in 2017, a population of 210 million and a landmass 8.516 million km2 – and with the world’s largest known fresh water reserves. Trade without Brazil is unthinkable for Latin America and the world. Plus, a Bolsonaro regime would have full ideological and military support from Washington. In fact, Brazil may soon become the second South American NATO country after Colombia.

How would Venezuela feel, surrounded by two fierce militarized NATO countries? Washington could just smile and watch, while Colombia and Brazil – and their NATO command – would do the rest. Or would they?  Venezuela is on the best way to detach herself from the dollar hegemony and ally with the East. And that is not only in trade, but also in huge investments from China and Russia. Invading Venezuela would not be easy, despite NATO from the east and from the west and with the empire just across the Caribbean.

Back to Bolsonaro. It will not be as easy to thrash this fascist military doctrine, of a President, hitherto hardly known to the outside world, down the average Brazilians’ throats. Their vote and mind may be manipulated, but once they wake up – the election may be past, and the Temer policies implemented by factors of ten – social suffering will increase, à la Greece – people may simply not take it.

They will realize that this entire propaganda farce serves only a few Brazilian oligarchs, but mostly the transnational corporations and banks. Will they take to the streets? Demand another government, fight for their rights? Brazilians are not (yet) the kind to double up and shut up, as the Greeks had to do, weakened by a Government of treason, by an absence of medical and other social services and by a low-low morale that is reflected in an exponentially rising suicide rate, according to the British Lancet. Brazilians may have learned a lesson.

Brazil and the BRICS. Already under Temer, Brazil’s role in the BRICS was merely anecdotal. It was clear that politically Brazil would and could no longer adhere to the principles that was behind the BRICS association, namely, economic independence from the debt masters IMF, World Bank and FED. What with Bolsonaro? It would behoove the BRICS expulsing Brazil; sending Brazilians a warning now, before the run-off elections, that no fascist government could be admitted within the ranks of the BRICS. Fascism is the absolute antidote to the new alliances of SCO, BRICS, EEU, and newly the Caspian Sea Alliance (Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan).

But – and this is highly important – let’s not let it get out of hand. Let not Bolsonaro be elected this coming Sunday. Make the right choice now. Regardless what you are being manipulated to believe. Stand up Brazilians, Women and men – say #NAO Bolsonaro!

Sharing is Key to a New Economic and Democratic Order

In order to meet the colossal challenges of the time, fundamental change to the socio-economic order is needed. The environmental catastrophe is the major issue, together with armed conflict, potentially nuclear. Both threaten the survival of humanity and the planet, and both are widely ignored by the men and women of power, whose short-term approach, obsession with ‘the economy’, and a nationalistic introspective view of the world is leading us to the precipice of disaster.

If humanity is to survive these interconnected crises and overcome other crucial challenges, including poverty, social injustice and the displacement of people, a totally new vision of the way society functions is required. At the root of much, if not all, of the chaos is the socio-economic model combined with inadequate, artificial forms of democratic governance. State and private institutions are interdependent monopolies of power that require radical democratization; deep-rooted systemic deficiencies must be addressed and altogether different values to those that are currently encouraged, inculcated.

Totalitarian Structures

Neo-Liberalism has infiltrated all areas of society and permeated life in virtually every corner of the world; it is a dysfunctional system that instead of serving human need is designed to provide wealth ‘beyond the dreams of Avarice for a privileged few,’ as Noam Chomsky puts it. Its very existence denies the manifestation of real democracy.

Flowing from this paradigm of injustice is extreme inequality leading to a wide range of social ills, high levels of unemployment – particularly among the young in many parts of the world – low investment in public services and, as the political/economic scientist C. J. Polychroniou, says, “rapidly declining standards of living, dangerously high levels of both public and corporate debt, a financial system that remains out of whack, and ecological collapse.” It is a decrepit global system propped up by the guardians of the status-quo, who are intellectually bankrupt, have no answers to the issues of the day but, desperate to cling on to power, use all their tools of control to resist change.

Within the existing forms political influence is concentrated in the hands of a tiny group of people and institutions — they run the corporate organizations and stock the governing executive, these are the wealthy and powerful — the ruling elite; corporations and their masters dominate this entitled ensemble; huge tyrannical institutions, unaccountable bodies with enormous power. As Noam Chomsky states, corporations are “one of the most tyrannical systems human beings have ever devised”. Control is concentrated at the top from where policy is made and orders are issued, managers pass on instructions and workers are expected to obey, conform, and be thankful to the beneficent company for buying their labor, albeit for a pittance compared to the pay checks of the boardroom. This is little more than wage slavery.

The raison d’être of the corporate world is to maximize market share and generate profits, irrespective of the impact on people or the environment. To do this they need the population to behave in ways consistent with their ideological approach to life, namely consumerism. Their persuasive message of pleasure and competition is spread to a weary populous via the communications industry, which they happen to own: the media, entertainment sector and advertising companies. These bodies color the social atmosphere, are responsible for setting the public agenda, facilitating collective discussion, and, together with education and (organized) religion are the principle outlets for mass conditioning, or what Walter Lippmann in Public Opinion (published 1922) called the ‘manufacture of consent’.

Corporate institutions actively work to curtail democracy and deny the establishment of a just economic system; they have tremendous influence over government policy and consistently obstruct environmental legislation. They operate in secret, have been granted extraordinary rights and access, and, as Chomsky says, have “complicated strategic alliances among alleged competitors” forming what some economists have called “Alliance capitalism big networks of tyrannical institutions basically running the world,” institutions which “have no right to exist any more than any other tyrannical systems,” and should be dismantled.

Over the last 30 years or so a worldwide protest movement has developed, huge numbers of people have united demanding socio-economic and democratic change, to be listened to by remote arrogant politicians and for a meaningful global response to the environmental crisis. In scale and scope the movement is unprecedented. People of all ages have come together expressing collective frustrations, demanding a new approach to living. The Arab Spring and the Occupy Movement were prominent expressions of the same underlying current for change, and, it could be argued, so were Brexit and the election of Donald Trump, albeit in a distorted, reactionary form.

Despite setbacks, an irresistible current of change is sweeping the world that will not be extinguished. The old forms must give way to the emerging ways of the time, the economic, political, social and in due time, religious forms that have crystallized and are incapable of responding to the needs of the many.

The 2008 financial crisis revealed some of the inherent flaws in the economic model, since when politics has become more polarized and reactionary, wages have been frozen, austerity has been enforced, punishing the poorest in society, and the financial system has been allowed to continue much the same. The lack of genuine change means that a second crash is a real possibility, indeed perhaps that’s what it will take to bring about the lasting systemic change that so many yearn for. As stated in the introductory literature for New Thinking for the British Economy, “the evident failings of our present economic system, and the growing political mobilization for change, suggest that we may be on the cusp of another major shift in economic thinking and policy.” A shift away from oligarchic systems of governance, and an unjust, unsustainable, environmentally abusive economic model, to a sustainable, participatory and just way of living.

The Age of Sharing

The same essential element in harmonious living and justice is absent from both the economic world and the political sphere: the principle of sharing. Placing sharing at the heart of a new economic paradigm would do more than any other single factor to bring about real change. It would completely alter the collective social atmosphere and allow for a range of other positive democratic ideals, such as social justice, tolerance and compassion, to manifest. Sharing of resources (including food, water and land), wealth/income, knowledge, skills, ideas, etc., sharing in the management of the institutions (state and private) that dominate society, and the bodies that one happens to work in or study at, and crucially sharing in the decisions and ideas that shape our lives; i.e., real participation.

In corporate democracies the right to vote and run civil society may exist, there may even be an independent judiciary, the observation of human rights (more or less) and unfettered (albeit monitored) access to information, but without social justice and meaningful participation it is not really democracy. It is an inadequate ideological construct, the nature and structure of which is set by those sitting within gilded offices of power, who limit its scope and control its expression; it is democracy owned by the corporate world entwined with the methodology of the market. As such its exponents are complicit in perpetuating injustice, maintaining concentrations of power, facilitating division and encouraging wage slavery. Participation is at best limited, competition, greed and personal gain over collective well-being are promoted and lived. Material success is held up as the aim of life, selfish tendencies are encouraged, feeding intolerance and division – all of which work to deny true democracy and stifle the good in humanity.

Real Democracy is meaningful participation in all socio-political/economic and business institutions. When this takes place positive aspects of human nature will begin to flourish and the structures that perpetuate the existing injustices will crumble under the weight of the good. Group participation, social responsibility and unity are essential elements in bringing about such a change and are key principles of the time, at the heart of which, and from which all else flows must be sharing, and for a range of reasons: sharing breaks down divisions and engenders trust, kindness grows and humanities inherent goodness can flower. Sharing is an expression and acknowledgement of our common humanity, cooperation takes place when we share, and as people cooperate they build relationships, form groups, exchange ideas.

Without sharing the corrosive patterns of the present will continue, as Chomsky puts it, “if we were to move towards [real] democracy we would say that there should be no maldistribution of power in determining what’s produced what’s distributed what’s invested and so on, rather that’s a problem for the entire community. In fact my own personal view is unless we move in that direction human society probably isn’t going to survive.”

This is a view shared by many; however, if one looks beyond the ugly theatrics of nationalism and fear an alternative vision of the future can be seen. A coalition of change is forming throughout the world and a shift in consciousness in underway. Perhaps unsurprisingly it is young people who are leading the way, they are less conditioned by the old order, have a powerful sense of social justice and freedom and care deeply about the natural environment.

We are at the beginning of the Age of Sharing, but it will not be gifted to us. Like movements of change throughout history it will be brought about by consistent coordinated action, by demanding change, by recognizing that we are all responsible for this world, and if we want a new and just society we have to build it.

A Global People’s Bailout for the Coming Crash

When the global financial crisis resurfaces, we the people will have to fill the vacuum in political leadership. It will call for a monumental mobilisation of citizens from below, focused on a single and unifying demand for a people’s bailout across the world.

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A full decade since the great crash of 2008, many progressive thinkers have recently reflected on the consequences of that fateful day when the investment bank Lehman Brothers collapsed, foreshadowing the worst international financial crisis of the post-war period. What seems obvious to everyone is that lessons have not been learnt, the financial sector is now larger and more dominant than ever, and an even greater crisis is set to happen anytime soon. But the real question is when it strikes, what are the chances of achieving a bailout for ordinary people and the planet this time?

In the aftermath of the last global financial meltdown, there was a constant stream of analysis about its proximate causes. This centred on the bursting of the US housing bubble, fuelled in large part by reckless sub-prime lending and an under-regulated shadow banking system. Media commentaries fixated on the implosion of collateralised debt obligations, credit default swaps and other financial innovations—all evidence of the speculative greed and lax government oversight which led to the housing and credit booms.

The term ‘financialisation’ has become a buzzword to explain the factors which precipitated these events, referring to the vastly expanded role of financial markets in the operation of domestic and global economies. It is not only about the growth of big banks and hedge funds, but the radical transformation of our entire society that has taken place as a result of the increasing dominance of the financial sector with its short-termist, profitmaking logic.

The origins of the problem are rooted in the early 1970s, when the US government decided to end the fixed convertibility of dollars into gold, formally ending the Bretton Woods monetary system. It marked the beginning of a new regime of floating exchange rates, free trade in goods and the free movement of capital across borders. The sweeping reforms brought in under the Thatcher and Reagan governments accelerated a wave of deregulation and privatisation, with minimum protective barriers against the ‘self-regulating market’.

The agenda was pushed aggressively by most national governments in the Global North, while being imposed on many Southern countries through the International Monetary Fund and World Bank’s infamous ‘structural adjustment programmes’. A legion of books have examined the disastrous consequences of this market-led approach to monetary and fiscal policy, derisorily labelled the neoliberal Washington Consensus. As governments increasingly focused on maintaining low inflation and removing regulations on capital and corporations, the world of finance boomed—and the foundations were laid for a dramatic dénouement in 2008.

Missed opportunities

What’s extraordinary to recall about the immediate aftermath of the great crash is the temporary reversal of those policies that had dominated the previous two decades. At the G20 summit in April 2009 hosted by British Prime Minister Gordon Brown, heads of state envisaged a return to Keynesian macroeconomic prescriptions, including a large-scale fiscal stimulus in both developed and developing countries. It appeared that the Washington Consensus had suddenly lost all legitimacy. The liberalised global financial system had clearly failed to provide for a net transfer of resources to the developing world, or prevent instability and recurrent crisis without effective state regulation and democratic public oversight.

Many civil society organisations saw the moment to call for fundamental reform of the Bretton Woods institutions, as well as a complete rethink of the role of the state in the economy. There was even talk of negotiating a new Bretton Woods agreement that re-regulates international capital flows, and supports policy diversity and multilateralism as a core principle (in direct contrast to the IMF’s discredited approach).

The United Nations played a staunch role in upholding such demands, particularly through a commission set up by the then-President of the UN General Assembly, Miguel d’Escoto Brockmann. Led by Nobel laureate Joseph Stiglitz, the ‘UN Conference on the World Financial and Economic Crisis and its Impact on Development’ proposed a number of sensible measures to protect the least privileged citizens from the effects of the crisis, while giving developing countries greater influence in reforming the global economy.

Around the same time, the UN Secretary-General endorsed a Global Green New Deal that could stimulate an economic recovery, combat poverty and avert dangerous climate change simultaneously. It envisioned a massive programme of direct public investments and other internationally-coordinated interventions, arguing that the time had come to transform the global economy for the greater benefit of people everywhere, including the millions living in poverty in developing and emerging industrial economies.

This wasn’t the first time that nations were called upon to enact a full-scale reordering of global priorities in response to financial turmoil. At the onset of the ‘third world’ debt crisis in 1980, an Independent Commission on International Development Issues convened by the former West German Chancellor, Willy Brandt, also proposed far-reaching emergency measures to reform the global economic system and effectively bail out the world’s poor.

Yet the Brandt Commission proposals were widely ignored by Western governments at the time, which marked the rise of the neoliberal counterrevolution in macroeconomic policy—and all the conditions that led to financial breakdown three decades later. Then once again, governments responded in precisely the opposite direction for bringing about a sustainable economic recovery based on principles of equity, justice, sharing and human rights.

A world falling apart

We are all familiar with the course of action taken from 2008-9: colossal bank bailouts enacted (without public consultation) that favoured creditors, not debtors, despite using taxpayer money. Quantitative easing (QE) programmes that have pumped trillions of dollars into the global financial system, unleashing a fresh wave of speculative investment and further widening income and wealth gaps. And the perceived blame for the crisis deflected towards excessive public spending, leading to fiscal austerity measures being rolled out across most countries—a ‘decade of adjustment’ that is projected to affect nearly 80 percent of the global population by 2020.

To be sure, the ensuing policy responses across Europe were often compared to structural adjustment programmes imposed on developing countries in the 1980s and 1990s, when repayments to creditors of commercial banks similarly took precedence over measures to ensure social and economic recovery. The same pattern has repeated in every crisis-hit region, where the poorest in society pay the price through extreme austerity and the privatisation of public assets and services, despite being the least to blame for causing the crisis in the first place.

After ten years of these policies a new billionaire is created every second day, banks are still paying out billions of dollars in bonuses each year, and the top 1% of the world population are far wealthier than before the crisis happened. At the same time, global income inequality has returned to 1820 levels, and indicators suggest progress is now reversing on the prevention of extreme poverty and multiple forms of malnutrition.

Indeed the United Nations continues to face the worst humanitarian situation since the second world war, in large part due to conflict-driven crises that are rooted in the economic fallout of the 2008 crash—most dramatically in Syria, Libya, and Yemen. Countries of both the Global North and South remain in the grip of a record upsurge of forced human displacement, to which governments are predictably failing to respond to in the direction of cooperative burden sharing through agreements and institutions at the international level.

Not to mention the rise of fascism and divisive populism that is escalating in almost every society, often as a misguided response to pervasive inequality and a widespread sense of unfairness among ordinary workers. It is surely reasonable to suggest that all these trends would not be deteriorating if the community of nations had seized the opportunity a decade ago, and acted in accordance with calls for a just transition to a more equitable world order.

The worst is yet to come

We now live in a strange era of political limbo. Neoclassical economics may have failed to predict the great crash or provide answers for a sustained recovery, yet it still retains its hold on conventional academic thought. Neoliberalism may also be discredited as the dominant political and economic paradigm, yet mainstream institutions like the IMF and OECD still embrace the fundamentals of free market orthodoxy and countenance no meaningful alternative. Consequently, the new regulatory initiatives agreed at the global level are largely voluntary and inadequate, and governments have done little to counter the power of oligopolistic banks or prevent reckless speculative behaviour.

Banks may be relatively safer and possess a bigger crisis toolkit, but the risk has moved to the largely unregulated shadow banking system which has massively increased in size, growing from $28 trillion in 2010 to $45 trillion in 2018. Even major banks like JP Morgan are forewarning an imminent crisis, which may be caused by a digital ‘flash crash’ in which high frequency investments (measuring trades in millionths of a second) lead to a sudden downfall of global stock markets.

Another probable cause is the precipitous rise in global debt, which has soared from $142 to $250 trillion since 2008, three times the combined income of every nation. Global markets are running on easy money and credit, leading to a debt build-up which economists from across the political spectrum agree cannot last indefinitely without catastrophic results. The problem is most acute in emerging and developing economies, where short-term capital flowed in response to low interest rates and QE policies in the West. As the US and other rich countries begin to steadily raise interest rates again, there is a risk of a mass exodus of capital from emerging markets that could trigger a renewed debt crisis in the world’s poorest countries.

Of most concern is China, however, whose credit-fuelled expansion in the post-crash years has led to massive over-investment and national debt. With an overheating real-estate sector, volatile stock market and uncontrolled shadow banking system, it is a prime candidate to be the site for the next financial implosion.

However it originates, all the evidence suggests that an economic collapse could be far worse this time around. The ‘too-big-to-fail’ problem remains critical, with the biggest US banks owning more deposits, assets and cash than ever before. And with interest rates at historic lows for many G-10 central banks while the QE taps are still turned on, both developed and developing countries have less policy and fiscal space to respond to another shock.

Above all, China and the US are not in a position to take the same decisive central bank action that helped avert a world depression in 2008. And then there are all the contemporary political factors that mitigate against a coordinated international response—the retreat from multilateralism, the disintegration of established geopolitical structures and relationships, the fragmentation and polarisation of political systems throughout the world.

After two years of a US presidency that recklessly scraps global agreements and instigates trade wars, it is hard to imagine a repeat of the G20 gathering in 2009 when assembled leaders pledged never to go down the road of protectionist tariff policies again, fearing a return to the dire economic conditions that led to a world war in the 1930s. The domestic policies of the Trump administration are also especially perturbing, considering its current push for greater deregulation of the financial sector—rolling back the Dodd-Frank and consumer protection acts, increasing the speed of the revolving door between Wall Street and Washington, D.C., and more.

Mobilising from below

None of this is a reason to despair or lose hope. The great crash has opened up a new awareness and energy for a better society that brings finance under popular control, as a servant to the public and no longer its master. Many different movements and campaigns have sprung up in the post-crash years that focus on addressing the problems wrought by financialisation, which more and more people realise is the underlying source of most of the world’s interlinking crises. All of these developments are hugely important, although the true test of this rising political consciousness will come when the next crash happens.

After the worldwide bank bailouts of 2008-9—estimated in excess of $29 trillion by the US Federal Reserve alone—it is no longer possible to argue that governments cannot afford to provide for the basic necessities of everyone. Just a fraction of that sum would be enough to end income poverty for the 10% of the global population who live on less than $1.90 a day. Not to mention the trillions of dollars, euros, pounds and yen that have been directly pumped into financial markets by central banks of the major developed economies, constituting a regressive form of distribution in favour of the already wealthy that could have been converted into some form of ‘quantitative easing for the people’.

A reversal of government priorities on this scale is clearly not going to be led by the political class. They have already missed the opportunity, and are largely beholden to vested interests that are unduly concerned with short-term profit maximisation, not the rebuilding of the public realm or the universal provision of essential goods and services. The great crash and its aftermath was a global phenomenon that called for a cooperative global response, yet the necessary vision from within the ranks of our governments was woefully lacking. If the financial crisis resurfaces in a different and severer manifestation, we the people will have to fill the vacuum in political leadership. It will call for a monumental mobilisation of citizens from below, focused on a single and unifying demand for a people’s bailout across the world.

Much inspiration can be drawn from the popular uprisings throughout 2011 and 2012, although the Arab Spring and Occupy movements were unable to sustain the momentum for change without a clear agenda that is truly international in scope, and attentive to the needs of the world’s majority poor. That is why we should coalesce our voices around Article 25 of the Universal Declaration of Human Rights, which proclaims the right of everyone to the minimal requirements for a dignified life—adequate food, housing, medical care, access to social services and financial security.

Through ceaseless demonstrations in all countries that continue day and night, a united call for implementing Article 25 worldwide may finally impel governments to cooperate at the highest level, and rewrite the rules of the international economic system on the basis of shared mutual interests. In the wake of a breakdown of the entire international financial and economic order, such a grassroots mobilisation of numberless people may be the last chance we have of resurrecting long-forgotten proposals in the UN archives, as notably embodied in the aforementioned Brandt Report or Stiglitz Commission.

The case of Iceland is widely remembered as an example of how a people’s bailout can be achieved, following the ‘Pots and Pans Revolution’ that swept the country in 2009—the largest protests in the country’s history to date. As a result of the public’s demands, a new coalition government was able to buck all trends by avoiding austerity measures, actively intervening in capital markets and strengthening social programs for the less privileged. The results were remarkable for Iceland’s economic recovery, which was achieved without forcing society as a whole to pay for the blunders of corrupt banks. But it still wasn’t enough to prevent the old establishment political parties from eventually returning to power, and resuming their support for the same neoliberal policies that generated the crisis.

So what must happen if another systemic banking collapse occurs of even greater magnitude, not only in Iceland but in every country of the world? That is the moment when we’ll need a global Pots and Pans Revolution that is replicated by citizens of all nationalities and political persuasions, on and on until the entire planet is engulfed in a wave of peaceful demonstrations with a common cause. It will require a huge resurgence of the goodwill and staying power that once animated Occupy encampments, although this time focused on a more inclusive and universal demand for implementing Article 25 and sharing the world’s resources.

It may seem far-fetched to presume such an unprecedented awakening of a disillusioned populace, as if we can expect a visionary leader of Christ-like stature to point out the path towards resurrecting the UN’s founding ideals of “better standards of life for everyone in the world”. Unfortunately, nothing less may suffice in this age of economic chaos and confusion, so let us all be prepared for the climactic events about to take place.

“Living above our means”: Macri, the IMF, and Other Victims of Austerity

Argentinian president Mauricio Macri speaking on September 3rd, 2018 (Youtube screenshot).

After a hectic weekend with speculation aplenty, Argentina woke up on September 3rd waiting for the announcements of president Mauricio Macri. After accomplishing the feat of being late in delivering a recorded video, the message of more than 20 minutes was finally broadcast, with Macri announcing new austerity measures to try and get an earlier disbursement of the funds contemplated in the agreement with the IMF that was signed in May.

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Argentina’s current context is one of economic contraction, inflation, an increase in interest rates and a strong devaluation of the currency, which has lost 50% of its value with respect to the US dollar so far in 2018. For all these woes the Argentinian president found the solution in resorting to the IMF. But he did manage to find a multitude of parties responsible for the current situation: the rise of oil prices, drought, the commercial “war” between the United States and China, troubles in Turkey and Brazil, and above all the corruption and bad policies of previous governments.

But while the Argentinian president did his best to assign blame to his enemies, near and far, the explanation for the crisis – the failure of neoliberalism – was right in the middle of the screen, since nobody embodies noeliberalism better than Mauricio Macri himself.

Finance minister Nicolás Dujovne later presented more details of the measures that the government wishes to implement, before departing to meet the IMF in order to secure an early release of funds. These measures include a tax on exports and a promise to reduce the 2019 deficit to 0. In the agreement with the IMF the goal was 1.3%, so this reduction will hinge on bigger cuts to public spending and hikes in energy and transportation prices.

It should be stressed that these measures do not represent a shift, but rather a doubling-down on the policies that have been implemented since the Cambiemos coalition took power. The past two years have seen brutal increases in electricity and gas prices, a pension reform, massive layoffs in the public sector, major cuts in areas such as science, education or healthcare, attacks against labour rights, etc., with disastrous consequences for the population.

The Argentinian government, who was represented by Dujovne in the US, hopes that this latest round of sacrifices to the almighty markets will slow down the currency devaluation and secure the blessing of the high priests of the IMF and Wall Street. Nevertheless, prophecies about market uncertainties do have a tendency to self-fulfil. Not only that, the Argentinian executive, now slashed in less than half, is a team of businessmen that will know which interests to protect when push comes to shove.1

Macri and Dujovne meeting with IMF Managing Director Christine Lagarde on March 16, 2018 (Photo: Casa Rosada)

Discursive platitudes

Macri’s speech was littered with elements that would have sounded extremely familiar to anyone who followed the austerity programmes that were implemented since 2010 in countries like Portugal or Greece. When the Argentinian president said that “we have been living above our means”, any Portuguese person could have recalled listening to their own president in 2011 – Cavaco Silva – say exactly the same thing.

Along the same lines, this was also the verdict reached by the Greek prime minister – Georgios Papandreou – who signed the first bailout agreement, and the all-powerful German finance minister – Wolfgang Schäuble – has always harped on this string to justify the austerity imposed on Greece. In truth the sanctimonious discourse of “living within our means” is no modern invention, but rather something that has always closely followed the neoliberal doctrine, even going back to Thatcher.

Another common element was the admission, with dishonest concern, that these measures will result in increased poverty. In 2011, the Portuguese prime minister went even further, saying that only by getting poorer would the crisis be overcome. In exchange, there is always a pledge that “the most vulnerable will be looked after”, and that those with more resources will be called upon to make bigger sacrifices, when it is well known that, almost by definition, the purpose is quite the opposite.

The cases of Greece and Portugal

Keeping in mind the distances between the examples we discuss, the similarities in the official discourse demand that we at least examine what took place in Greece and Portugal. In these cases the IMF was not the only creditor institution: it was joined by the European Central Bank and the European Union to form the fearsome “troika”. These were perhaps the most extreme cases of the austerity that was imposed throughout the continent in response to the crisis that broke out in 2008.

Greek GDP contracted by more than 40% since 2008. After the implementation of the memoranda of agreement with the troika, unemployment has consistently topped 20%, and youth unemployment has been around 40%. More than that, 4 out of 10 children are at risk of poverty. These are but a few indicators, among many others, that showcase the devastation that was unleashed upon the Greek people, while billions of euros of bailout money ended up directly in the hands of foreign banks.

As for the stated goal of the austerity packages, Greek public debt grew from 146% of GDP at the time of the first “structural reform” programme (2010) to 180% of GDP in 2018. Although officially Greece has exited the bailout programmes, the debt remains absolutely unpayable, and the idea that Greece can go on for decades balancing budgets under this weight is an illusion.

The Portuguese case is slightly less tragic. The 2015 elections resulted in a defeat for the right-wing coalition – which had implemented the deal signed with the troika in 2011 – and the emergence of a new government solution, which from afar might seem like it is on the left. The new government put an end to austerity and managed to revert the economic tendency and register economic growth once more.

The mere action of putting an end to austerity, while slowly reverting salaries and pensions to their 2011 levels, was a demonstration that the path of harsh budget cuts and tax increases was not the only choice. However, Portuguese public debt remains unpayable and an obstacle, among others, which will have to be confronted sooner or later.

Carlos Latuff depicts austerity in Greece

Where austerity leads to

This small transatlantic detour is useful to illustrate that, despite some declaring them as successful, the bailout plans did not manage to bring debt under control in Europe’s peripheral countries. But that goal, as well as the sacred budgetary targets, are simply argumentative artefacts.

Austerity packages, which are often more eloquently branded as “structural reforms”, are nothing but mechanisms to transfer wealth from labour to capital, with an underlying logic that profits are private and losses are socialised. When salaries and pensions are cut, when healthcare and education budgets are shrunk, when public services are dismantled, when thousands of workers are laid off, in order to pay back creditors, the people are being sacrificed to safeguard the interests of a handful of shareholders, be they national or foreign.

This transfer of wealth also occurs under the form of privatisations. These can be blatant or hidden under the pretext of the inefficiency of public management, but bailouts and structural adjustment plans have always been tremendous opportunities for capitalists. In the Greek case, important state assets, such as airports or the port of Piraeus, one of the biggest in the Mediterranean, ended up in private hands.

In truth, the Macri government has already made its position quite clear on the issue of privatizations; for example, in the energy sector, where the state is looking to sell its stake in several projects. In addition, the Argentinian company that produced satellites, ARSAT, was sold to an American company. The agreement with the IMF, and especially the version on steroids that will allow for an early release of funds, is sure to bring a new wave of privatisations, much to the delight of investors, and reviving ghosts of a not-so-distant past in Argentina.2

But it is not just through privatisation that room is opened up for private companies, especially multinational corporations, to flourish. The mere reduction of the reach of the state and public services leaves an open space to be filled by the whims of the market. In this context, the suppression of the health ministry, now reduced to a secretariat in the new ministry for health and social development, is quite symbolic. That this happened at a time when the implementation of the Universal Healthcare Coverage (CUS), a programme with a mercantile view of healthcare, is being discussed, is not a good omen for public healthcare in Argentina.

At this point we should go back to the issue of “living within our means”. The evolution of capitalism, even in times of crisis, has seen an ever growing concentration of wealth. It is estimated that 8 men own about as much wealth as the poorest half of the planet’s population. Therefore there are people living above what should be their means. But these are not pensioners, or public workers, or trade unionists, etc., as some would have us believe.

Resistance and repression

The Cambiemos government offensive, which will be intensified in the coming months, has been met with resistance from the Argentinian people in the streets. For example, a faculty strike in the university system, in protest against cutbacks in higher education and reforms in the pension system, was joined in August by a strong student mobilization in support, with several universities throughout the country temporarily occupied.

Trade unions, contradictions notwithstanding, also look to resist, and have called a general strike which is taking place on September 24-25. And perhaps there has been nothing more surprising and inspiring than the mobilisation of several hundred thousand people to defend the legalisation of abortion. Despite the goal not having been achieved for now, the awakening of consciences and the scale of the street mobilisations are building blocks for the upcoming struggles. The challenge is to turn all these struggles into attractor poles of a single, unified battle front.

Demonstration in Buenos Aires during a National Day of Protest, September 12 (Photo: Resumen Latinoamericano)

While it is fair to say that the rapid development of the crisis has caught the Argentinian government by surprise, the fact is that preparations to contain and repress any resistance to austerity had long been on the march. The decree which allows the armed forces to intervene in internal security matters, something which had not happened since end of the dictatorship, is particularly significant, not to mention the installation of US military bases in Argentinian territory.

The government and its talking heads have put forward a fallacious argument; namely, that with a tremendous sense of duty, those in charge are doing what needs to be done with no concern for upcoming elections. In reality what they are doing is ensuring that the interests of capitalists are shielded for decades, way beyond next year’s elections. It is the purest defence of class interests. Because at the end of the day power is not confined to the presidential palace or to legislative chambers.

An important difference with respect to cases such as Portugal or Greece is that in Argentina, thanks to the hegemony of media conglomerates such as the Clarín group, a scapegoat to which attention can be diverted has been put in place. This is the (alleged) corruption of Cristina Fernández de Kirchner and members of her government, which is presented as the root of all evils that befall Argentina. Similarly to what has happened in cases such as Lula’s in Brazil, the goal is to have the trial in the media for short-term political gain.3

The cases of Portugal and Greece, alongside many other recent examples of “rescue plans”, give an idea of what is to come. Under the excuse of “having lived above our means”, different mechanisms to transfer wealth to capital, brazen or hidden, will be implemented. And faced with the difficulty of meeting unrealistic budgetary targets that are imposed from the outside there will be no solution other than imposing more and more sacrifices on the majority of the people.

After its failure and exhaustion as a political project, neoliberalism resurfaced in Latin America essentially leaning on the media and on the (politicisation of the) judicial system. It now looks to contain any alternative, in the case of Argentina, by mortgaging the country’s future and reactivating repression mechanisms. All of this places Argentina in the front line of a battle that is not just about next year’s presidential elections. The task ahead is to resist, every day and in every way, against this renewed offensive, and at the same time to construct a true, and radical, alternative.

• Thanks to Luciana Daffra for her comments and corrections.

• First published in Investig’Action

  1. On September 17 Dujovne presented the 2019 budget before the Argentinian Congress. It is, in his words, an “austere budget”, with a 7% cut on public spending, a prediction of economic contraction of 2.4%, and a zero deficit goal.
  2. It is worth recalling that this is no pure ideological matter for Macri, since the Macri Group is one of the largest business conglomerates in Argentina, with activities over a range of sectors, and having directly benefited from privatisation of state assets in the past.
  3. Our goal is not to vouch for anyone’s innocence, rather to point out the clear manipulation of justice for political ends and the double standards (or lack of standards) of the media. In Argentina, for example, a large circus has been set up surrounding the famous “notebooks” which detail the corruption of a former official during the Kirchner governments. The notebooks came from a remorseful driver, but up until now only photocopies of the smoking gun have been presented. In exchange, Macri featuring in the Panama Papers did not seem to merit the same level of scrutiny from the media, and the same can be said about the “fake contributions” and money laundering in the campaign of Maria Eugenia Vidal, governor of the province of Buenos Aires and one of the main figures of Cambiemos.

The Working Class Strikes Back

Reading the daily headlines, it’s easy to forget that the corollary of a civilization in precipitous decline is a world of creative ferment, a new world struggling to be born. If you could have a God’s-eye view of all the creative resistance rending the fabric of political oppression from the U.S. to Indonesia to Colombia, you would surely be persuaded that all hope is not lost. This conclusion is borne out in detail by a book published earlier this year, The Class Strikes Back: Self-Organised Workers’ Struggles in the Twenty-First Century, edited by Dario Azzellini and Michael G. Kraft. The chapters, each dedicated to a different case-study, survey inspiring democratic activism in thirteen countries across five continents. The reader is left with the impression that the global working class, while facing an uphill battle in its fight against imperialism, business and state repression, and conservative union bureaucracy, may yet triumph in the end, if only because of its remarkable perseverance generation after generation. Its overwhelming numerical strength, too, bodes well.

In their introduction, the editors concisely state the book’s purpose: “This volume aims to examine how new, anti-bureaucratic forms of syndicalist, neo-syndicalist and autonomous workers’ organisation emerge in response to changing work and production relations in the twenty-first century.” Traditional unions, which they observe have been “part of the institutional setting to maintain capitalism” (my italics), have deteriorated on a global scale. In their place have sprung up more radical and democratic forms of resistance, such as blockades, strikes, and workplace occupations and recuperations. Workers’ actions have even made decisive contributions to the toppling of governments, as in Egypt in 2011.

In this article I’ll summarize several of the most compelling case-studies. Unfortunately I’ll have to pass over many interesting chapters, including ones on the workers’ movement in Colombia, the solidarity economy and radical unionism in Indonesia, the sit-ins and ultimately the worker cooperative at a window factory in Chicago (about which I’ve written here), and the South African miners who were attacked by police and massacred in August 2012. The book is too rich to do justice to.

Greece

The crisis in Greece that followed the economic crash of 2008 and 2009 saw a savage regime of austerity imposed on the population, which resulted in a “diffuse precariousness” across the labor force. Conventional unionism and national collective bargaining have been among the victims of this neoliberal regime. And yet the general strikes that the trade union bureaucracy was compelled to declare early on, particularly between 2010 and 2012, were the most massive and combative of the past forty years. “Long battles with the police, crowds which refused to dissolve and regrouped again and again, the besieging for hours of the house of parliament, self-organisation and solidarity in order to cope with tear gas and take care of the wounded—all have become part of the normal image of demonstrations during strikes, replacing the nerveless parades of the past.”

Outside the framework of conventional unionism there have arisen exciting new forms of struggle. Since early 2013, the Vio.Me factory has operated under worker self-management, after its initial owners abandoned the site. Aside from the lack of hierarchy, the job rotations, and the directly democratic structure of the business, one innovative practice has been to run the factory in cooperation with the local community and, indeed, the whole society. After taking over the factory the workers consulted their community about what they should produce; they were asked to stop making poisonous building chemicals and instead to manufacture biological, eco-friendly cleaning products. A “wide network of militants and local assemblies” around the country has supported the effort from the start, which has enabled even the distribution of the firm’s products to be done in a completely new way, “through an informal network of social spaces, solidarity structures, markets without intermediaries and cooperative groceries.”

In general, labor struggles in Greece have become more intertwined with social movements. Early in the crisis, structures of mutual aid sprang up everywhere:

Throughout the country collectives have established community kitchens and peer-to-peer solidarity initiatives for the distribution of food, reconnected electricity that was cut down to low-income households, organised “without middlemen” the distribution of agricultural produce, established self-organised pharmacies, healthcare clinics and tutoring programmes and organised networks of direct action against house foreclosures.

Later on, grassroots initiatives became more political, in an effort to create institutions that would be long-lasting and relatively independent of capital and the government. The Greek squares movement of 2011 spread to almost every city and village in the country, leaving behind a legacy of local assemblies and social centers. It also “unleashed social forces which boosted the social and solidarity economy and the movements for the defence and the promotion of the commons.”

All this flowering of alternative institutions has not occurred without significant problems and defeats. There has been little success in establishing solid organizations of the unemployed, and grassroots labor struggles have failed to form durable structures that can challenge institutionalized unionism. Certain victories, nevertheless, have been impressive. Social movements were able to prevent the government’s privatization of public water corporations in 2014. Even more remarkably, after the government closed down the influential public broadcaster ERT in 2013, ERT employees, together with citizens and activists, took over the production of television and radio programs by occupying premises and infrastructure. For almost two years the self-managed ERT transmitted thousands of hours of broadcasting on the anti-austerity struggle, serving as an important resource for the resistance. When Syriza came to power in 2015, it reestablished the public broadcaster.

Worker and consumer cooperatives exist all over the country. Cooperative coffee shops and bookshops, for example, exist in most neighborhoods of Athens and Salonica, functioning “as the cells of the horizontal movements in urban space and the carriers of alternative values and culture.” Broadly speaking, labor identities are becoming more socialized, “because more embedded in local communities and grassroots struggles.”

The Greek experience is of particular interest in that other Western countries, including the U.S., are likely to replicate important features of it in the coming years and decades, as economic crisis intensifies. We ought to study how Greek workers and communities have adapted and resisted, to learn from their failures and successes.

Egypt

The mass movement that felled Mubarak’s regime in 2011 received sympathetic coverage from the establishment media in the West, but the key role of workers’ collective action was, predictably, effaced. Strike waves after 2006 not only destabilized the regime but also gave rise to the April 6th Movement in 2008, which would go on to catalyze the 2011 rebellions. Even after the fall of Mubarak, the flood of labor actions didn’t let up.

As everywhere around the world, neoliberalism meant decades of pent-up grievances against working conditions, privatizations, low wages, and economic insecurity. Finally in December 2006, 24,000 textile workers went on strike at Misr Spinning. Within a few weeks, “similar strikes were spreading between public and private sector textile producers, and from there to civil servants, teachers, municipal refuse workers and transport workers.” In the next couple of years, many more strikes occurred, frequently taking the form of mass occupations of workplaces.

Workers even managed to form the first independent unions in more than fifty years, beginning with the Real Estate Tax Authority Union (RETAU), established in December 2008. The conservative and bureaucratic Egyptian Trade Union Federation was unable to cope with all the sit-ins, strikes, and waves of democratic organizing, and saw its influence over the labor movement wane. RETAU’s consolidation “accelerated the development of other independent unions and proto-union networks among teachers, public transport workers, postal workers and health technicians,” raising their expectations of what could be achieved through collective action.

After the steadily rising wave of worker and popular resistance crested with the resignation of Mubarak in early February 2011, labor actions didn’t cease. In fact, Mubarak’s fall was followed by “a new tidal wave of strikes and workplace occupations, with nearly 500 separate episodes of collective action by workers recorded in the month of February 2011 alone.” Strike waves ebbed and flowed over the following two years, and did much to undermine the military and Islamist governments that succeeded each other before the crisis of the summer of 2013, when, after Mohammed Morsi fell, a successful counterrevolutionary offensive was launched by the Armed Forces, the Ministry of the Interior, the judiciary, and the media.

After the fall of Mubarak, a ferment of self-organization resulted in the founding of many new independent unions, which often engaged in intense battles for tathir, or the “cleansing” from management positions of the ruling party’s cronies. This was especially the case in public institutions. Public hospitals in Cairo, for example, “were the scene of attempts to assert workers’ control over management to a much greater degree than had been possible before the revolution.” These experiments weren’t always successful, but in a number of cases they did at least force the resignation of old directors and were able to establish, temporarily, democratic councils to oversee work.

In the end, the workers’ movement was unable to impose its demands on the agenda of national politics. Its leaders “did not score victories at that level on the question of raising the national minimum wage, or forcing a lasting retreat from privatization, or even of securing full legal recognition for the independent unions themselves.” Still, the authors comment that the nationwide revival of self-organization was an astonishing feat. “Factory and office workers created thousands of workplace organisations, despite conditions of acute repression and the lack of material resources. There have been few examples on this scale of a revival of popular organisation in the Arab world for decades.” Memories of these uprisings will not be erased easily, and will inspire the next generation of activists.

Venezuela

Venezuela differs from the other cases in that its Bolivarian revolution has entailed a commitment to elevating the position and the power of workers. So how successful has this process been? In recent years, of course, Venezuela’s severe economic crisis has undermined the Bolivarian process, with increases in poverty and less money going to social programs. But the achievements have not all been destroyed. The account in the book goes up to early 2016, well into the crisis years.

Until 2006, the Chavez government focused on promoting cooperatives (in addition to nationalizing the oil industry and expropriating large landowners). In nationalized medium-sized companies, for example, workers became co-owners with the state. Whereas Venezuela had had only 800 registered cooperatives in 1998, by mid-2010 it had 274,000, though only about a third were determined to be “operative.” It had been hoped that these businesses would produce for the satisfaction of social needs rather than profit-maximization, but the mixed-ownership model, according to which the state and private entrepreneurs could be co-owners with workers, vitiated these hopes.

By 2006 a new model was spreading, which was more communally based. Its political context was that “communal councils” began to be recognized as a fundamental structure of local self-government: in urban areas they encompassed 150 to 400 families, while in rural areas they included a minimum of 20 families. “The councils constitute a non-representational structure of direct participation, which exists alongside the elected representative bodies of constituted power. Several communal councils can come together to form a commune. By the end of 2015, over 40,000 communal councils and more than 1,200 communes existed.” Councils and communes can receive state funding for their projects, which now began to include community-controlled companies instead of cooperatives. “In these new communal companies, the workers come from the local communities; these communities are the ones who, through the structures of self-government…decide on what kind of companies are needed, what organisational form they will have and who should work in them.”

In 2008 a new model for these companies emerged, the Communal Social Property Company (EPSC). “While different kinds of EPSCs can be found in the communities today, their principal areas of activity correspond with the most pressing needs of the barrios and rural communities: the production of food and construction materials, and the provision of transport services. Textile and agricultural production companies, bakeries and shoemakers, are also common.” Under the initiative of workers, even some state enterprises are partly under community control, at least regarding their distribution networks.

Despite Chavez’s commitment to workers’ control, it has not been easy to shift the orientation of a state and a private sector deeply hostile to workers. Workers’ councils and struggles for worker participation can be found in almost all state enterprises and many private ones—and workers have taken over hundreds of private businesses, sometimes after the state’s expropriation of the original owners—but even in the chavista state bureaucrats were apt to undermine the Bolivarian process. Whether through corruption, mismanagement, obstruction of financing to state companies with worker-presidents, or other means, ministerial bureaucracies and even corrupt unions impede workers’ control. In many state enterprises the situation is ambiguous: workers don’t control the company or even participate in management, but “they control parts of the production process, they decide on their own to whom they will give access to the plant, [and] they are in a full-scale conflict with the management.”

Despite all the advances made under Chavez, the fact is that the economy’s social relations of production have not really changed and capitalist exploitation remains the norm. Private interests are still too powerful and have too much influence over the government, promoting mismanagement and corruption. It is still a rentier economy. But a revolutionary process has begun and is being carried forward by communities and workers across the country. The transformation of a society from authoritarian to democratic does not happen overnight.

Bosnia-Herzegovina

Like the rest of the post-Soviet world, Bosnia-Herzegovina has suffered terribly from the privatizations, asset-stripping, marketization, and rampant corruption that have attended its transition to capitalism since the mid-1990s. Unemployment and economic insecurity are at epidemic proportions. In 2014, workers in Tuzla, Bosnia’s third largest city, organized a massive mobilization against their deteriorating conditions, the first since the 1992–95 conflict. While the movement didn’t last, its legacy may inspire further mobilizations in the future.

The 2014 demonstrations were a response to the wretched situation of workers in a laundry detergent factory, DITA, which at one time had provided 1,400 jobs. After its privatization in 2005, things started to go downhill. The company paid them minimal wages, issued meal vouchers only in bonds rather than cash, and eventually stopped paying them pension funds and health insurance. In 2011 they began a long strike, but in December 2012 the firm closed, having ignored all their demands.

Picketing the factory and filing lawsuits didn’t secure justice for the workers, so in February 2014 they teamed up with their counterparts from four other nearby factories to stage demonstrations in front of Tuzla’s canton court. All five work forces had similar demands: investigation of the questionable privatization processes that had destroyed their livelihoods; compensation for unpaid wages, health insurance, and pensions; and the restarting of production. Their demands didn’t get a very sympathetic hearing: during one of the demonstrations, riot police secured the entrance of the canton building and fired teargas and rubber bullets. This brutality only further inflamed the workers, who kept up their resistance the following couple of days. The number of demonstrators rose to 10,000 as students and other citizens joined the protests, finally setting the government buildings on fire.

Chiara Milan’s summary of the ensuing events is worth quoting:

The action [of burning government buildings] resonated throughout the country. Within days, rallies in solidarity with Tuzla’s workers took place across Bosnia-Herzegovina. Increasing discontent among the social groups suffering under government policies led tens of thousands to join in the main cities of BiH [i.e., Bosnia-Herzegovina]. Like a domino effect, the rage spread and the revolt escalated. On 7 February the government buildings of the cities of Mostar, Sarajevo, and Zenica were set ablaze by seething protesters. While politicians tried to hide the plummeting economic conditions of the country by constantly playing the ethnic card, the workers of Tuzla triggered wider social protests, arguing that rage and hunger do not recognise ethnic differences. The protests spawned a mass movement of solidarity that overcame the ethno-national divisions inside the country, travelling across the post-Yugoslav space. Rallies in support of the workers were reported in nearby Croatia, Montenegro, Serbia and Macedonia…

Soon, directly democratic assemblies called plenums were set up across the country. “The citizens gathered in leaderless, consensus-based assemblies where everybody had the right to one vote and nobody could speak on behalf of other people.” Each plenum had working groups addressing such issues as media, education and culture, and social problems. “Demands that arose during the plenums were collected and delivered to [these] working groups, in charge of reformulating them in a coherent way. Once reformulated, the demands typically returned to the plenum for a final vote [after which they were submitted to the cantonal government]. All the plenums were coordinated through an organisational body called interplenum…”

A new labor union was also formed in the wake of the protests, called Solidarnost, which quickly reached 4,000 members from dozens of companies. It was intended as an alternative to the conventional unions that had so signally failed to protect the interests of their rank and file. While it didn’t succeed in winning the battle for the workers, it did keep fighting for years afterwards, as by staging weekly protests in front of the canton court.

The moment of collective outrage slowly faded away, especially after the flood that hit the country in May 2014 turned into a national emergency. The workers at the DITA factory, however, still did not give up: in March 2015 they occupied the factory and restarted the production of cleaning products, publicly appealing for international support. Shops and retail chains decided to sell the “recuperated factory’s” products, and groups of activists volunteered to help the workers optimize production.

In general, Milan comments, the uprisings left a legacy of solidarity and activist networks, which challenge “the dominant rhetoric of ethnic hatred” and may be drawn on in future struggles.

*****

The path forward for the working class in an age of neoliberal crisis is tortuous and uncertain. Given the near-collapse of mainstream trade unionism and many left-wing political parties, it’s necessary for people the world over to forge their own institutions, their own networks, to fight back against the rampaging elite and construct a new, more equitable society. The stories collected in The Class Strikes Back are an encouraging sign that workers everywhere are already waging the war, that democratic institutions can germinate in even the most crisis-ridden of societies, and that the ruling class’s hold on power is, in fact, ultimately, rather tenuous.  The next generation of activism is sure to bring major changes to a morally corrupt civilization.

Trump, Trade Wars, and the Class Struggle

All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and [humans are] at last compelled to face with sober senses [our] real conditions of life, and [our] relations with [our] kind.

— Karl Marx and Frederick Engels, The Communist Manifesto

An unfolding trade war pitting the United States simultaneously against China, the European Union, Canada, and Mexico has begun. The economic and political consequences – intended and unintended – are now unfolding.  How this trade war develops and “ends” is a political question that cannot be predicted concretely. But the framework to foresee what is coming down the road is coming into focus.

There is no letup in the continued erosion and breakdown of the post-World War II, post-“Cold War” eras characterized at their core by the predominance of US capital in the institutions of world capitalism and in world politics.

China

On June 15, 2018 the Donald Trump Administration announced it will be adding a 25% tariff-tax on some $50 billion worth of Chinese goods imported into the United States. On June 18 Trump then threatened another 10% tariff-tax on $200 billion worth of additional Chinese commodities, raised to $500 billion on July 5, affecting virtually every Chinese product throughout the US-China production-to-exchange chain.

The first-round of tariffs, $34 billion worth, took effect on July 6, applying to 818 commodities and products. The second round, $16 billion on an additional 284 items, await “reviews,” that is vetting by the major industrial and financial oligopolies whose profits may be more or less directly affected. They are lobbying Trump and his enforcers for exemptions, waivers, and dilutions individually and collectively.

Trump’s threats to escalate were presented as being contingent on any Chinese government and state counter-tariffs on US goods and services. These, of course, were bound to happen; there could be no other political choice for the Xi Jinping government. The Chinese Ministry of Commerce immediately announced counter-measures “of the same scale and the same strength.” The statement further announced as “invalid” the recently reported “progress” on a deal that would have led to an additional $70 billion in US imports to China, based on a negotiated reduction of Chinese tariffs and other legal barriers to selected US commodities and services, including energy, agricultural, and high-tech products. Agricultural commodities were an initial focus of Chinese counter-tariffs, since China is a major market for US agricultural products, especially soy beans.

Trump’s announcement was rolled out with provocative and jingoistic rationalizations. Uncle Sam as bumbling sucker, the victim of nefarious Chinese practices. They are stealing our technology. They carry out “state subsidies” of industries and dump surplus production stealing the jobs of American workers. And so on…as if the entire system of world capitalist production, finance, and exchange were not lubricated and dependent as a whole on such practices. Practices by which the most advanced capitalist states and industrialized economies – the United States, the former colonial powers of western Europe, and Japan – are the historic masters and mentors.

At a July 5 campaign rally in Montana which drew thousands, Trump thundered:

We are bringing back our wealth from foreign countries that have been ripping us off for years…For too long we watched and we waited and we saw as other countries stole our jobs, cheated our workers, and gutted our industry.

With his trademark national chauvinism and demagogy, Trump continued:

The United States of America was the piggy bank that everybody else was robbing. Our allies in many cases were worse than our enemies. We opened our country to their goods, but they put up massive barriers to keep our products and our goods the hell out of their country because they didn’t want that competition.

Trump is upending the decades-long, highly profitable arrangements between the US capitalist class, its various governments in Washington, and the Chinese state. US capital would invest in commodity production inside China for sales to the US and other developed capitalist markets. It has been an arrangement that has been crucial in the formation and accumulation of state and private capital in China by Chinese business owners and government officials.

While it is very difficult to calculate precisely balance-of-trade surpluses and deficits of nation-states within globalized production chains, as well as calculating so-called “services” onto the balance sheets, China’s trade “surplus” in finished goods with the United States has been in the low-to-mid 100s of billions of dollars range for many years. A good slice of which is recycled and parked in US Treasuries. This greatly cushions the impact for US debt markets, making it easier for US federal and private banking institutions to obscure, dilute, and hide dollar-denominated debt. It also helps the US Federal Reserve suppress higher interest rates, and keeps low or non-existent tax rates and outlays for billionaires, millionaires, and US-style oligarchs.

China today owns nearly $2 trillion in US Treasury securities, which makes it the largest US “foreign creditor” and the second largest owner of US bonds, after the Federal Reserve itself. No one can know for sure what the impact of the unfolding trade war will be on Chinese purchases of US Treasuries, insofar as the US-China balance of trade numbers and those of China’s purchases of US government debt have become the intertwined sine qua non of the entire economic and financial relationship. China’s vast holdings register both leverage and vulnerable dependency. China’s decades-long massive economic expansion and growth (high single-digit to low double-digit GDP rises every year since 1991!) has been strongly predicated on maintaining China’s access to US markets for the wholesale and retail sales of these commodities.

Over the decades US-China economic ties and exchange led to the massive expansion of Chinese factory manufacturing and industrial development, as well as huge profits for US capitalists and their Chinese state and private partners.

This process also contributed mightily to the large expansion of the Chinese industrial proletariat, including a super-exploited sector of migrant workers, and urban petty bourgeoisie, with the concurrent reduction in the size of China’s peasant population. All of this has led to the massive production and reproduction of surplus value in the country based on the application of labor power to produce commodities to be exchanged, that is, sold in the US and world markets.

This massive production and reproduction of real value, real social wealth, and real capital was certainly siphoned off disproportionately and corruptly by Chinese bureaucrats and capitalists. But it has also been massively invested in infrastructure and urban development projects, led by high-speed rail production and construction.

Two giant Chinese initiatives in the past period highlight these historical developments. First, the Chinese Belt and Road Initiative which promotes regional “connectivity” through infrastructure and other economic projects, and second, the China-initiated Asian Infrastructure Investment Bank (AIIB) which finances infrastructure and other economic projects in the Asian-Pacific region. AIIB is headquartered in Shanghai and has 86 members, including a number of US NATO “allies.”  Washington, from Barack Obama to Trump, has so far declined to be any part of it. Moreover, China has publicly issued its Made in China 2025 plan to be world leaders in future industrial applications in artificial intelligence, robotics, and chip manufacturing, which is viewed with hostility in Washington.

Looming Recession?

Washington – and this is a largely bipartisan cry – gets particularly worked up over so-called state aid and subsidies to Chinese industries and companies that are themselves state or quasi-state-owned or nominally private. China also attempts to get around efforts led by Washington to pressure companies to restrict Chinese access to some technologies by making such access a condition for sales and commercial exchanges in the vast Chinese markets themselves.

A June 29 column in the Financial Times (“Bond markets send signals of a looming recession”) by University of Chicago “Professor of Finance” Raghuram Rajan states:

[E]conomic metric estimates of the effects of one or two rounds of tariff rises are small. But the models do not capture the intertwined nature of global supply chains. Moreover, the effect on business sentiment, as well as the pall of uncertainty cast over investment will be considerable, A trade war will be costly.

Rajan points to the political difficulties for any governments and national leaderships today “to be seen [as] giving in to threats, making trade conflicts more likely.” He then continues with:

… a final reason for concern. China is cleaning up its financial system, an immensely complicated task given the debt that has built up. Growth has slowed, the cost of riskier loans has been rising, as have defaults. The Chinese authorities are working to spread losses across the system, but this needs to be managed carefully to avoid panic. If China is caught in a trade war while it is still restructuring its financial system, its difficulties could spread abroad.

If the dynamic of a large-scale US-China trade war is unleashed, then it will have critical economic and commercial – and therefore political — consequences for the trade and diplomatic regime that has been built up and stabilized over many decades between Beijing and Washington – and Wall Street and China.1

The EU, Canada, and Mexico

The tariffs on China set in motion by Trump and his Executive Branch team of Commerce Secretary Wilbur Ross, White House National Trade Council Director Peter Navarro, and Treasury Secretary Steven Mnuchin came on top of tariffs on steel and aluminum exports carried out against Canada, the European Union, and Mexico, announced with great hoopla, earlier in the June month. These ostensibly aim at boosting US domestic steel and aluminum production, but also led to immediate retaliatory measures of equal reach and value by all. So far, every dollar-value of US tariff-taxes have been met with an equal value in counter-tariffs. Can that be sustained?

On June 29, 2018 Canadian Foreign Minister Chrystia Freedland defiantly announced Canada’s response to the Trump tariffs on steel and aluminum. “We will not escalate — and we will not back down,” said Freeland. (Before her current gig as Foreign Minister for the Justin Trudeau government, Freedland was a leading editor of the Financial Times, the quintessential organ of British and world capital.)

She unveiled counter-tariffs on US goods entering Canada, including whiskey, toilet paper, washing machines, and motorboats. Altogether, Canada will tax $12.6 billion worth of American goods, which matched the value of the US tariffs on Canadian steel and aluminum.

“I cannot emphasize enough the regret with which we take these countermeasures,” Freedland added. She emphasized that the only way Canada might reverse them would be if the Trump White House rescinded first. There are always political dangers when many faces need saving at once.

Trump’s Executive Orders were invoked under the cover of “national security.” This provoked umbrage from Canadian, EU, and other US post-World War II era NATO “allies.” They pointed to the various imperialist wars they fought over the years hand-in-glove with Washington.

The current framework and regime for the regulation of tariffs and the resolution of trade disputes is the World Trade Organization (WTO). The US tariffs are already being contested in WTO bodies in a likely bruising battle. The WTO as an “objective” arbiter and judge, is clearly in danger of losing authority and fraying under great pressure. Trump’s back-to-back measures are bound to accelerate a breaking down of world capitalist trading norms and stability.

Allies and Competitors

The EU bloc, most of its individual nation-state components, and Canada are military allies of Washington — still by far the predominant military power with the most firepower and global reach on Earth – through the NATO alliance. But, at the same time, all are home bases for some of the fiercest competitors of US based multinationals and other capitalist firms in world markets. In a time of intensifying, cutthroat global competition, with financial volatility and turbulent waters ahead, the “competitors” side is being more sharply expressed and rising to the fore. The political fallout from policy choices and decisions on trade, tariffs, currency manipulations, debt and capital flows are, at the very least, posed more sharply in today’s world. Old trading blocs and ties come under pressure and weaken, rebooting political policies and alliances.

Consequences, Intended and Unintended

While Trump’s public utterances – “Trade wars are good and easy to win” – exude typical flippant political confidence on his part, these policies are highly contentious within the broader US capitalist class. Within these circles there is growing anxiety and dread that Washington will not be able to drive things through without serious political consequences in the world arena.

The shift that Trump looks to realize registers the political erosion internationally of the “neoliberal globalization” regime which greatly benefited many US-based giant corporations, banks, and businesses – and the mounds of capital behind their brands – as they set up shop in China, Mexico, and elsewhere with greatly increased profit rates. The major benefit of this inside the United States for US capitalists was the lowering of the value of labor and the evisceration of industrial jobs and industrial unions. The decisive factor involved is relatively cheaper (usually very much so) labor costs, which outweigh other disadvantages and extra costs for US-based capital in production outside the US, such as in transport costs, management training, and so on.

Of course, US capitalists couldn’t care less about the social devastation in working-class communities in the US.2

US Capital is Divided

Opposition to Trump’s measures is strongest among business groups and elected officials from both the Republican and Democratic parties who have been identified with the general “free trade” neoliberal policies worldwide that have dominated trade pacts and mainstream bourgeois economics for decades. These anti-working-class policies have increased in unpopularity since the so-called Great Recession and financial crisis of 2007-08 and are now widely discredited and hated in the US and around the world, especially among working people. But the opposition to them takes varied “populist” forms – left and right — that have done and can do little to effectively counter them or provide any program and perspective of mobilization and independent working-class political action and power. In the face of popular hostility and battered credibility, almost by inertia, the “neoliberal model” limps on.

What will be the impact on world economic developments of Trump’s tariffs? Does it give a push to the next – inevitable – financial jolts and economic downturn-recession? Will the EU, Canada, and Mexico have the political will and strength to counter them? Is there space for increasing domestic US assembly and manufacture of commodities, finished products, and capital goods (machinery, etc.) that have been “farmed out” for decades now that US labor value and costs has been driven down in recent decades? Can increased US domestic manufacturing (up 36,000 in June 2018 according to the US Bureau of Labor Statistics) sustain sales volume and profit rates?

Diminished US Political Power

There are wide layers in top US business, financial, and social circles who do worry that Trump is accelerating and deepening the deterioration in US political influence worldwide. They are anxious that Trump’s course, rather that restoring the post-World War II full-spectrum dominance of US capital – capsulized in his campaign slogan “Make America Great Again” – will do the opposite and actually accelerate US decline.

There is considerable substance to this anxiety. Under Trump there has been a striking US political isolation in world political forums on one major international political question after another: Washington’s withdrawal from the (fairly toothless, in any case) Paris climate change accords; Trump’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear production and activity, an agreement which was ratified by China, France, Germany, Russia, the UK, and the EU as a body; Washington’s humiliating isolation every year in the UN over its criminal and hated blockade of revolutionary Cuba; and issues around Israel and Palestine that might ameliorate Palestinian conditions and advance a two-state solution.

Korea is Hardly a Trump Triumph

Trump’s escalating moves on US trade and exchange with China were announced when the ink was hardly dry on the document issued, amid great world attention and hoopla, after the June 12 Summit between Donald Trump and the Kim Jong-un government in the Democratic People’s Republic of Korea (DPRK).

While the Trump White House has been eager to spin the Summit results as a feather in its cap, his ability to do so was necessarily predicated on the US suspension of “war games” and other joint US-South Korean military maneuvers off the North Korean coasts. Maintaining Washington’s “right” and political will to do so became politically untenable following the Kim government’s ending of missile launches, atmospheric and underground tests, and even the verified destruction of one nuclear site while at the same time the two Korean governments deepened relations through friendly encounters amid popular enthusiasm. No one can seriously doubt that the Moon Jae-in government in South Korea favored and pushed for the US suspension of the “joint” war games.

It seems apparent that China and South Korea forcefully intervened behind the scenes to keep the US-DPRK talks on track. In reality, Trump and Secretary of State Mike Pompeo (with National Security Advisor John Bolton kept in the shadows) found themselves in an isolated diplomatic and political corner and risked a politically unwinnable confrontation with both China, South Korea and the United Nations large majority. This became even more dangerous politically for Washington on the heels of the US withdrawal from JCPOA treaty with Iran.

As this article was being finished, the US-DPRK negotiations had a negative public eruption after US Secretary of State Mike Pompeo met with top North Korean authorities in Pyongyang. The DPRK Foreign Ministry issued a detailed statement on July 7, calling the meetings “regretful” and Pompeo’s apparent sole focus on unilateral DPRK denuclearization “gangster-like.” The DPRK statement promoted, “in the spirit of” the Singapore Summit and its written statement signed by Trump and Kim, an interconnected focus on issues like a formal peace treaty replacing the “Armistice” ending military combat in 1953; improved US-DPRK bilateral relations; and building a “peace regime on the Korean Peninsula,” that is, building on the momentum of improving relations between the two Korean governments and states. Pompeo and Trump have both downplayed the DPRK statement, with Trump on July 9 spinning that China “may be exerting pressure on a deal because of our posture on Chinese Trade – Hope Not!”

Of course, as the DPRK statement said, “suspension of one action called exercises is a highly reversible step which can be resumed at any time or any moment as all of its military force remains intact in its previously held positions without scraping even a rifle.” Nevertheless, for the Trump Administration to revert to a “maximum pressure” policy while demanding North Korean capitulation and permanently subordinating all other political issues, starting with formal and actual bilateral and multilateral peace, is not politically tenable, starting with South Korea and China and, overwhelmingly, world public opinion.

Mexico

The July 1 landslide election in Mexico of left-wing “populist”Andres Manuel Lopez Abrador (AMLO) is also setting Washington’s nerves on edge. It is not Lopez Obrador’s political orientation and program, per se, that is setting off (mostly muted) alarms. While he is solidly progressive with anti-imperialist instincts flowing from Mexican and Latin American historical experience, AMLO has sent out clear signals that he is loath to directly promote anti-capitalist measures and policies. His campaign focused on the corruption of private capital and the Mexican capitalist state and the intertwined, massive violence and death associated with the illegal capitalist drug cartels.3

What is worrying for the US (and Mexican) ruling classes is the tremendous enthusiasm and mobilizations around AMLO’s campaign, which points to the rising expectations among Mexican working people and youth who want action and who are saying Enough is Enough! Rather than channel mass political combativity into harmless electoralism and parliamentary wrangling, it is more likely that any significant progressive measures promoted by the Lopez Obrador government and its clear majority in both houses of Mexico’s legislature, will spur on the class struggle. This is particularly worrisome for the guardians of US imperialism, given the remarkable history of gratuitous, patronizing insults and anti-Mexican demagogy employed by Donald Trump since the beginning of his campaign for US president. And his reactionary and brutal anti-migrant policies once in office.

In any case, a window into the arrogance of the US ruling rich came with a short editorial in the July 3 Wall Street Journal, titled “The Peso Federales.” Acknowledging Lopez Obrador’s “landslide” and “mandate,” the Journal’s editors warn of the pressure coming from a “different sort of election – the one that takes place daily in financial markets.” Pointing to a 1% drop in the Mexican peso (that “recovered” the next day) following the election, the editorial continued “the president-elect now has to worry what the markets think if he wants to improve the lives of Mexicans.”

One of the biggest concerns for the academic, journalist, and big-business monitors of world economic developments today, prior to the next sharp economic crisis and recession-depression, is that there has been a significant and growing outflow of capital from so-called “emerging” countries into the capital markets of the most advanced capitalist economies, especially the US. This is reversing a mild trend otherwise in recent years.

Sharp turns down for the Argentine peso is the starkest expression of this tendency. In June 2018 the IMF came up with a $50 billion “loan,” a bail out for austerity package, that has already provoked the biggest labor mobilizations in that country for over a decade.

The Class Struggle Will Ratchet Up

When you enter a period like the current one, within the transition from one era-epoch to another, old truisms become stale, alliances and allies can and do change, traditional state-to-state relations become strained and even boil over. No one can doubt that class struggle, social polarization, and political volatility is likely to be ratcheted up considerably in the context of the coming global economic downturn. This will happen everywhere and anywhere. In the United States itself we can expect more massive working class and popular eruptions – seemingly coming out of nowhere – like the wave of solid, disciplined, and victorious teacher’s strikes in the US states of West Virginia, Oklahoma, and Arizona in early 2018.

The unfolding trade wars unleashed by Donald Trump are now facts on the ground. To cite the great socialist pioneer Frederick Engels:

Those who unleash controlled forces, also unleash uncontrolled forces.

  1. The origins of the contemporary US-China relationship and the deeply intertwined  economic ties between both came during the final period of the Vietnam War. US President Richard Nixon and his Secretary of State Henry Kissinger carried out a secret diplomacy with the Mao Zedong-Zhou Enlai Chinese government in the early 1970s to establish mutually beneficial ties. The context was the sharp crisis and looming defeat of the US war effort in Vietnam and Indochina. Nixon and Kissinger were under tremendous pressure to end all US military operations and withdraw US troops from Vietnam and Southeast Asia. They were keen to preserve the “South” Vietnamese neo-colonial state and hoped to manipulate China (and China’s fierce political antagonist, the Soviet Union) to pressure the Vietnamese revolutionaries – who they both gave crucial military aid to — to make concessions to Nixon. This failed and Washington went down to final military defeat in 1975. Nevertheless a de facto political alliance and the foundations for the massive expansion of economic exchange between the United States and China was consolidated over four decades under both Republican and Democratic White Houses and Congresses.
  2. Before retiring in 2016, I was a Locomotive Engineer for Amtrak and member of the Brotherhood of Locomotive Engineers and the teamsters Union. I operated the high-speed Acela and other passenger trains between New York city and Washington, DC. For some 25 years, I would see, along the main line tracks from the locomotive cab, on the Northeast Corridor tracks, especially along the stretches between Wilmington, Delaware and Philadelphia towards Trenton, New Jersey, mile after mile of rotted out and abandoned industrial facilities, factories, plants, mills, metal shop, giant behemoths and myriad smaller ones in what were once, in the world War 2 era and subsequent decades, I imagined thriving working-class communities employing many tens and hundreds of thousands of workers. Today they really look like documentary films from the Battle of Stalingrad on the World War 2 Eastern Front. The authorities, decade after decade, never even bothered to tear them down. I would joke to younger workers in my cab qualifying on the physical characteristics of the territory – track speeds, interlocking rules, industrial sidings, and so on – when we would pass these areas, that the state should put a giant bubble over it all and open up “The Museum of American Industrial Glory.”
  3. The stunning failure of Mexico’s “war on drugs” has left hundreds of thousands dead and mutilated without making a dent in the production, consumption, or the profits of the cartels, and the corrupt wealth of officials up and down the supply chain. The production, marketing, and commercial exchange of cannabis, cocaine, methamphetamine, cocaine, opium, and heroin is a major component of the Mexican capitalist economy as a whole, counting for perhaps up to 10% of GDP, as well as propping up Mexican banking.