This is really a diary of reflections on socialism and its range of attributes and methodologies.
1. "Socialism has no economics, so what can I possibly have to say about it that would merit consideration above any other opinion?" This is as close a paraphrase I can recall of a reply by Paul Krugman to a question posed at the American Economics Association annual meeting in New Orleans a few years ago. The question was: "Wouldn't socialism solve all these problems"? The subject was the devastation on labor and the poor in the Great Recession. He went on to quip "economically, socialism is merely expansion of public goods", which, without going into a long discourse on the economic definition of "a public good", are generally free, and non-exclusive or universal in access---no money, no exchange -- . The left labor folks did not seem pleased with Krugman's remark, but he was actually channeling Karl Marx (I've never seen Krugman
quote Marx!), who, more than once, observed that capitalism arises from scarcity, and communism from abundance. When asked about the political economy of communism -- Marx also replied -- it has none.
2. In politics, socialism tends to arise to beat back the resistance to the expansion of public goods by the private interests, and to share the rising wealth (increasing abundance) created by capitalist development.
3. Extending this thought backwards, one would judge the early phases of the Chinese and Russian revolutions (both taking place in technically and economically backward nations against putrid feudal regimes) as marked by a serious error. What does it mean, for example, to socialize a good that, for the moment, is NOT abundant, like food? It means the lines for access will be long (unproductive time is very expensive), and bribes will be made in other scarce goods to get to the front of the line. I don't see how avoiding corruption is even possible in that scenario -- a political disease that can prove fatal for a regime if it cannot be reversed. Naive economics combined with serious security threats is a particularly dangerous cocktail. At the same time, aligning the expansion of public goods with the capacity to afford and implement them will be a complex and difficult balance. The Chinese appear to be making headway in mastering this.
4. Its dangerous to think in absolutes. Consider the connection between innovation, and scarcity. In order, for example, to "abolish capitalism", one would have to postulate a theory of non-economic scarcity, since every NEW thing or service will begin as scarce. Who gets it first?
5. Unrestrained capitalism tears communities, nations, indeed the world, apart. Yet it is the engine of advances in wealth that haves sustained the uneven but nonetheless most astonishing rise of human science, art, achievement and fulfillment. It will not be modified or overcome except in rough proportion to the supply of the means of life as public goods.
Notes on Marx's proletariat.
6. Marx predicted the industrial proletariat would be the gravediggers of capitalism. A good historical economic argument can be made that indeed these wage workers were, and are, the gravediggers of a definite mode and era in capitalist development. There is good evidence and documentation on the very large impact of the class struggles -- meaning the political and economic mobilization of mass production factory workers and their communities, as an economic and social class --- in response to the dominant relations of employment then. Those relations were perfectly captured in a remark by Henry Ford that the ideal employee was "a maggot with hands".
7. Most of this mobilization was within concentrated local or regional labor markets, but occasionally, as in the 1946 coordinated CIO 'general' strike, became national. Nonetheless, it transformed the craft based US labor movement and made collective bargaining a "law of the land"-- a law created and modeled on the patterns and balance of forces of industrial relations established in the 1930s and 1940s uprisings of Marx's proletariat.
8. Nationally, Marx's "industrial proletariat" played a key role in the rise of social-democracy in the US in the form of the New Deal. Internationally, this same class advanced social democratic reforms that took both communist and socialist/social-democratic forms in Europe, similar to the New Deal (soc. security, unemployment, legalize unions) plus national health care. In the developing world run by monarchies and imperial dictatorships, including Russia, Vietnam, Cuba and China, it took primarily communist forms as a political trend -- determined by who led the liberation from colonialism. This class is playing a key role in China now demanding a rise in living standards and culture in response to the "factory of the world" labor markets. Everywhere manufacturing in the mass production phase
9. But that class -- industrial workers -- is being obliterated in advanced economies. The process is longstanding and not reversible. Most labor is hired and deployed now as a
service. Service workers' income, however is widely disparate by sector, and by the divisions of human capital (education, personality, experience, etc) and its impact on the labor market. Further the employee--employer--customer relationship is significantly altered from manufacturing in most service occupations. Even much that remains product-based in advanced economies is engaged in producing an intangible commodities (e.g. software).
10. To the "proletariat's" significant achievements in raising wages and standards in manufacturing, and contributing to a vast expansion of democratic power world-wide, must be added the accelerated incentives for corporations to automate. Add to this the ability to export labor intensive manufacturing to less developed parts of the world, or closer to export markets and/or important resources, voila, you have both the seeds and bitter fruits of the disappearance of the "middle class". Recovery from this phase will not be led by the disappeared, but by.....who? The end now has to include erosion of the "lower" class, and the "upper" classes, altogether, by the advance of "free stuff"
Socialism and Fascism
11. In the prolog to World War II, German and Italian fascism triumphed because Left and social democratic forces failed to unite to defeat it. On the social democratic side were forces who supported reform of capitalist relations. On the Left, mostly Communist, were those who saw capitalism itself as the cause of the fascist threat, and (therefore?) an inevitable consequence of capitalist relations. An important question is: Was that failure to unite to defeat fascism inevitable? Did it really require raising the question to an entirely different international level, where the question of unity had to be put before Roosevelt, Stalin and Churchill?
It's worth reviewing the connection between capitalism and fascism, in light of the rise of Trump and other 21st Century--hatched fascist movements. I start from the following premises, which I do not want to argue here, but seem beyond debate:
- Capitalism has long term as well as short term cycles. The long term ones are associated with sudden or accumulated major shifts in both technology, and capital accumulation. Technology over time (and the science behind it) radically restructures the division of labor in society, and thus alters its class and political structure in profound ways. Such restructuring demands vast sums of capital to achieve, and deploy throughout economies and societies. This results in a powerful tendency, well documented by Thomas Piketty, toward inequality and the undermining of democracy as instability grows.
- Capitalist development generates, at different times and stages, powerful incentives both for and against democratic social organization. On the one hand, no owner of a business wants the state to be handing out prerogatives and monopolies (like the Kings did!) to their favorites (unless its him!). On the other, they resist EVERY tax intended to avert the catastrophes associated with rising inequalities and the injustices they inflict and perpetuate.
- Fascist movements have signatures that are unique to each culture in which they arise, but they share 1) active support and financing from the most degraded faction of the rich; 2) a reliance on racism, nationalism and fear to divide and separate their adversaries, since they seldom actually represent a majority of the population; 3) a wholesale rejection of democratic institutions and values in favor of rule by force.
12. We see today in the US a revised form of the divisions that failed to halt fascism in the 1930s. The US has a two party system which naturally evolves from the winner take all outcomes and rules that dominate most elections. The divisions between anti-fascist forces thus take place
mainly within and around the Democratic Party, at least for now. The Hillary-Bernie gap is the most publicized reflection. But there are more dimensions than that. Neither trade unions, pro-equality movements, pro-peace, public health and environmental advocates, most liberal and "new" capital (think Robert Rubin for an example), nor many others have identical stances or interests -- though all are
mostly opposed to the fascist threat. It is unreasonable to expect these forces to
unite as one---because they are NOT 'one'. But it is essential that they
coalesce to rid themselves of the threat that will doom them all.
13 For the liberal and social democrat, no reforms will happen until the threat to democracy by fascists is defeated. That cannot happen without joining with the Left, which means that the commitment to REFORM to remedy the social basis of the fascist threat must be sincere. For the Left, "capitalism", reformed or not, will persist as long as the means of life are significantly satisfied by commodities -- things sold and purchased for cash or credit. Commodities will persist as long as they are scarce, and recede in proportion to rising abundance. So too with capitalism and socialism. As abundance grows the former will recede and the latter expand. What is socialism? We will know we are there when most stuff is free.
more to come.
ROME – Nationalism versus globalism, not populism versus elitism, appears to be this decade's defining political conflict. Almost wherever we look – at the United States or Italy or Germany or Britain, not to mention China, Russia, and India – an upsurge of national feeling has become the main driving force of political events.
THE WESTERN CRACK-UP
Jun 21, 2018 JAVIER SOLANA worries that Donald Trump's policies and behavior are starting to leave a permanent mark on US alliances.
6Add to BookmarksBy contrast, the supposed rebellion of "common people" against elites has not been much in evidence. Billionaires have taken over US politics under President Donald Trump; unelected professors run the "populist" Italian government; and all over the world, taxes have been slashed on the ever-rising incomes of financiers, technologists, and corporate managers. Meanwhile, ordinary workers have resigned themselves to the reality that high-quality housing, education, and even health care are hopelessly beyond their reach.
The dominance of nationalism over egalitarianism is particularly striking in Italy and Britain, two countries once famous for their phlegmatic sense of national identity. Flags in Britain are notable for their absence even on government buildings, and until the Brexit referendum the people there were so relaxed about their nationhood that they could not even be bothered to agree on the country's name: the United Kingdom, Britain, or England, Wales, and Scotland.
Italians were even less nationalistic. Since the European Union's founding, Italians have been the biggest proponents of federalism, with opinion polls showing that, until recently, voters had more trust in EU leaders in Brussels than in their own government in Rome. Italians are passionate about their culture, history, food, and football, but their patriotism has mostly been directed to regions and cities, not to the nation state. They prefer to be ruled from Brussels than from Rome.
The far-right League party, the junior member in Italy's new coalition government, was still called the Northern League until this year. One of its favorite slogans was "Garibaldi did not unite Italy; he divided Africa," and its main political demand was the country's abolition. Instead, the party demanded the creation of a new country called Padania that would separate the prosperous northern regions from the corruption and poverty of Rome and points south.
What, then, explains the sudden dominance of nationalism? There is not much positively patriotic about the new nationalism in Italy, Britain, or even the US. Instead, the upsurge of national feeling seems largely a xenophobic phenomenon, as famously defined by the Czech-American sociologist Karl Deutsch: "A nation is a group of people linked together by a common error about their ancestry and a common dislike of their neighbors." Hard times – low wages, inequality, regional deprivation, and post-crisis austerity – provoke a hunt for scapegoats, and foreigners are always a tempting target.
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There is nothing patriotic about Trump's belligerence against Mexican immigrants and Canadian imports, or the nativist policies of the new Italian government, or Theresa May's most famous statement after becoming UK Prime Minister: "If you believe you are a citizen of the world, you are a citizen of nowhere. You don't understand what citizenship means."
Now for some good news for those of us still proud to be "citizens of the world": The xenophobic effort to blame economic hardship on foreigners is doomed to failure.
Consider the post-crisis effort to divert popular anger about the collapse of market fundamentalist economics onto "greedy bankers." This ultimately failed, in part because bankers have huge resources to defend themselves, which foreigners generally do not. But banker-bashing failed to assuage public anger mainly because attacking finance did nothing to boost wages, diminish inequality, or reverse social neglect. The same will be true of the current attacks on foreign influence, whether through immigration or trade.
Britain, for example, is gradually waking up to the fact that European issues have nothing to do with the genuine political grievances that motivated a large part of the "Leave" vote. Instead, the Brexit negotiations will now dominate and distract British politics for many years, or even decades. And Britain's nationalist confrontation with the rest of Europe will offer politicians of all parties endless excuses for failing to improve everyday life.
In the months or years ahead, voters in the US and Italy will learn the same lesson. There, too, scapegoating foreign influences, whether through trade or immigration, will do nothing to lift living standards or address the sources of political discontent.
Italy has legitimate grievances against the EU: hypocritical and inequitable policies on asylum and sea rescues, self-defeating fiscal rules, and economically illiterate financial policies. But the new government is also exploiting the nationalist upsurge to attack reforms that have nothing to do with Europe and are vital to Italy's economic success.
Successive Italian governments since the financial crisis have gradually laid the foundations for pension, labor market, and banking reforms. These changes have created the conditions for economic recovery, which began last year, following a decade of recession; but they have been politically unpopular and are now being denounced as symbols of elitist foreign oppression. If the new government abandons all three reform projects, Italians can also abandon hope of economic recovery, perhaps for another decade.
The US will also discover that attacking foreign interests is no panacea and can make hardship worse. Trump thinks his measures against imports from China, Germany, and Canada will hurt these trading partners and create American jobs. This might have been true when the US economy was suffering weak growth and deflation. But in a world of strong demand and rising inflation, German and Chinese exporters will find new markets for their products, whereas US manufacturers will struggle to replace foreign suppliers. BMW and Huawei will be just fine, whereas tariffs will act as a tax on American consumers, through higher prices, and on American workers, businesses, and homeowners, through rising interest rates.
The opposite of populist nationalism is not globalist elitism; it is economic realism. And in the end, reality will win.