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By the time you read this, a crisis different from September 11th may well be foremost in people’s minds. Read on. For us today, all the crises merge to one and we can see the form of Enron within September 11th and vice-versa. Now, beyond the death and destruction, the horror of an event like September 11th is the horror of losing control of your world. This feeling is an extension of the ordinary experience of being a resident of modern capitalist society. Here, work, commuting, shopping, television and the Internet are transmitted to you in ways that are beyond any individual or collective control.
But not knowing what things happened or how they happened is a part of this misery. Aside from reflexes of anger, the explosion of Internet texts and public discussions have shown how many average people have felt a great need to get a handle on the events. This text is one more contribution towards creating such an understanding. And we naturally aim to make some connections that have not yet been made. We aim to show the connection between the organization of daily life and various disasters which seem to come from nowhere. We’re not aiming to be surprising in our basic outline. But equally, we aim to go beyond any particular conspiracy theories and show these events as natural products of the world as it stands today. We’d like to think people would find getting to the bottom of things worth the abstraction and generality this discussion will sometimes involve. For brevity, factual details will be in hyperlinks or footnotes.
Just about anyone who has thought about it has considered many ways the present world system could collapse. From military insanity to bureaucracy to environmental degradation to economic crisis to information overload, many doomsday scenarios can seem fairly plausible. Even the experts will chorus how they don’t understand the size and complexity of the derivative market, global warming, the chance of nuclear war or other dangers. But the very complexity of the world has made previous prophecies of doom less credible when they failed to appear. Just look at “Y2K”. The world has hovered in mid air long after some folks expected an end.
So where does this leave us? Well we now have some evidence some process is moving. For us, September 11th did not signal that a crisis had begun. It simply signaled that this world could no longer hide the effect of an ongoing crisis. But this also shows what is one key point; there is much chaos below the surface.
And the secrecy of a problem, say intelligence operations or corporate finance, makes the problem tricky to deal with. So, the beginning of dealing effectively this kind of thing is to reconcile to it for the moment. We must recognize that information around the total state of the world will be limited for a time. We aren’t going see all the debt or all the secret files or know all the deals for a little bit now.
We can see many among the elite who behave as if they are sleepwalking. If the companies who’s managers were snuffed out by September 11th cared much, they have no shown it by searching for any deeper causes of the events. If investors who lost money on Enron care, they still haven’t dug very far. Another key point is how the simple pace of life in America has accelerated to fair degree. Conscious, calculated systems have been a part of this but the irrational processes of the speculative bubbles played a big part as well (and there’s also the intersection of the two). But with this reality, the elite are unlikely to get a handle on any larger situation.
This edifice was held together by more connections than any single person knew about. These connections previously served to make things appear extremely stable, so stable that many could indeed simply go to sleep. But once the whole contraption begins to fail, things go the opposite way. Collapse happens without anyone being able to coherently describe why. The events in Argentina show an elite that is not willing to stop its own crimes even if they ultimately destroy the country which they profit from.
A bit of digging will show immediate facts outside the mainstream story. Indeed that mainstream version of events makes sense only if you believe in cartoon devils, “hatred” as being capable of producing action at a distance and other factors. Concretely, no particular plausible reconstruction of the WTC hijackers’ operation has been made. If one grainy video with Ossama Bin Laden taking credit has been found, certainly an equivalent one with Charles Manson or Tupac Shapur taking credit could be found (well actually, the Japanese Red Army did take credit). But this is beside the point.
All theories of practical psychology agree that a period of shock gives a persuader the opportunity to “install” ideas of the persuader’s choice. It is not surprising then that essentially the first word out of President Bush’s mouth was the laughable lie “no one could have predicted this” (for comforting the ignorant this has a counterpart in Alan Greenspan’s “you never know for sure it's a bubble until after it's popped”).
Cemented with the shock of the moment, it took Bush’s absurdity about six months to fall apart. We know now, that the list of those predicting the events, on various levels, is both wide and deep. We can now see the “mainstream” press and the public “waking up” to the idea that perhaps someone had the job of preventing things like the WTC attack. Indeed, they discovered, after some research, that the job belonged to those secret agencies which they pumped billions of dollars into. Yet such are the layers of the current crisis that such insights yield nothing of substance.
Once we get over the shock of the initial events, other questions appear. The stream of current events was already utterly disconnected from our lives and the immediate understanding most people have of their lives.
Altogether, living a “normal life” today involves keeping many areas of thought unexplored. Underneath any talk of democracy, experts and processes which the average person knows quite little about already organize almost everything. What you eat, what you wear, how traffic gets to be the way it is, etc.
For some people, this may seem quite fine since it frees them from the massive complexity of the system. But any surrendering to the system begins with the assumption that these incomprehensible experts at least don’t mean to simply butcher us. The events of September 11th bring this into question.
Without having any special information, we can see conclusions and ideas coming out of September 11th that seem too ugly for many people to accept. This is normal and nothing new. Many illusions of this society have been laid down as the result of earlier crisis. Really, if a tape of George Bush and Mohammed Atta shaking hands on a deal were played on national TV, this would not ultimately give the hapless public a greater insight or ability to act on the crisis.
This is a question which hides its answer in its very size. The present world has come into full flower only through the complex movement of various conflicting historical forces. There are many ways to begin thinking about it and many directions we can go in researching it. We have the gang level; the corruption of particular factions; the Bush Gang, the Bin Laden gang, the Russian gang, Vatican Gang, Factions Of The CIA or Mossad, the Rockefellers. We have the racket level; the more general corruption of whole industries and enterprises; oil, drugs, military-industrial, ideological, media, etc. We have a world whose mass of stuff has been built up in by variety of different means – billions of laborers worldwide work to reproduce our present world.
But this process doesn’t simply “add up” to change in a linear fashion – just the opposite. The nonlinearity of cause and effect, of how society operates, is a theme that will be unfolding throughout this entire discussion. One industry is not necessarily equal to another industry. One airline passenger might not be equivalent to another passenger.
Just as much, these frameworks go in a thousand directions if one attempts to merely build up an understanding by randomly putting together fact with factor. Instead, we must begin with the general understanding people already and shape it to give you a picture of particular approach.
It is worth charting imaginable force around the current crisis simply to show how this describes by itself:
n Provide a pretext for increased repression, increased law-enforcement and military budgets and so-forth.
n Arrange the death of various folks who had criticized and threatened to expose the actions of the administration, such as John O’Neil.
n Police-Repression-Prison Economy
n Prevent the slide of the stock market to towards collapse and give explanation for any economic crisis that did happen.
n The retirement scheme provides the retirement scheme provides both the necessary compensation for upper workers and middle managers and provides the capital which corporate managers can use to remain beyond the reach of ordinary large investors. Such corrupt speculation naturally means retirement funds will in general soon be exhausted and with it people’s excuse for loyalty to the system.
n The anthrax scare naturally pumped more money into anti-biowarfare programs.
n The medical-industrial complex as the one commodity which no consumer can refuse, medical commodities are also the commodity whose price can be safely escalated during even a recession. On the one, the rising price of medical care also reflects the unsustainable ill-health which life under modern capital generates. On the other hand, the shell game of packaging “health care”
n Create a sense of national pride and anger which would unite behind any project put forward by the right wing.
n Environmental destruction; Naturally, capital has not determined the level where of environmental destruction can make the entire enterprise unsustainable. Rather than stopping at the best possible level, we can see the system willing to move to the level where the destruction will be hardest calculate.
n Gain control over heroin cultivation in Afghanistan.
n The illegal drug-economy, with drug-selling, money laundering, international smuggling and police confiscation angles all adding billions to the scale.
n Create a pretext for the planned war in Afghanistan.
n Provide an opportunity for US troops and bases in central Asia and reinforce US control over the oil and natural gas resources of the region, especially to bring continuing profits to Enron Corporation.
n The oil-economy; aside from its immense, interlocked economy, we must remember that as the least energy-efficient economy, the US is under constant pressure to force down oil prices. Since dollar dominated oil prices support the teetering dollar, the US is equally under pressure to prevent the otherwise practical rise of alternatives to oil.
n September 11th was undoubtedly a product of log-rolling and bureaucratic incompetence, whether or not there was also a conspiratorial element within the US government.
n The education-economy; Rather than universities being charities oriented towards enlightening undergraduates, tuition actually subsidizes research aimed to benefit the technology economy while classes are more and more factories installing spectacular knowledge. Student loans are now at the base of a permanent debt economy and management/technical workers as the key consumers, American educational institutions are critical for maintaining the entire consumption cycle. But naturally, the structurally mandated rate of tuition increase will soon exceed the level where students are able to break even.
n Maintain US military predominance in the Mid-East, through war, make the US appear a superior location for investment as compared to other alternatives.
n The Strong dollar, the US trade deficit and the huge combined private public-private debt. Through the strong dollar, the US can continue to consume a disproportionate share of world resources, especially oil
n Insurance Industry; the system of unlimited speculation requires that a “back stop” be created to limit losses. The larger the mass of funds to be insured, the greater the profit opportunities seem. Only once the assumption of disasters appearing without correlation fails does this industry begin to fail.
n The “high-technology” economy,
n Globalization scheme; globalization has been a source of vast speculative and sustainable endeavors. Rather than productive development, drugs, oil and finance has been created.
n Allow Israel unlimited opportunity to end what was left of Palestine autonomy.
n Geopolitical calculation
n Reinforce the flagging popularity of the Bush administration.
n The electoral economy. The democracy and ideology industry, including Resynthesis Of Religion and Religious Ideology.
Let us call a phenomenon a “key factor” if it has shown an ability to trump any ordinary “slow, gradually building” change, if it has shown an ability drive the entire system on one level or another. And many writers have already pointed out strong candidates for key factor. The military-industrial complex, the pharmaceutical industry, media, illegal drugs, oil and the automobile culture, investment banking, and the police/prison industries are among the biggest on some the level of industries, though we can’t establish exact any ordering between such factors. We could trace the development of CIA manipulations, the banking dynasties, bootlegging, the schemes of unions or the growth of suburbs and consumption factories. Each of now fully fits the description of racket, with corruption, lies and enforcement.
But at the same, these rackets have appeared gradually, fading in from what might be considered one or another “normal” aspects of life. The automobile has been a normal part of daily life for fifty years.
And each of our levels blends together with the other. Al Qaida is our subject of the moment and we can see it on many levels (equivalent treatment might be made of Enron or George Bush). We see Al Qaida at the level of gang, with the CIA as co-racketeer maintaining relations with Al Qaida long after their bombing sprees became embarrassing for the American state (Labevier again). We can see Al Qaida at the level of industry, as these Labevier documents their drug dealing and other document their connections to Taliban natural gas deals. We can see Al Qaida at the level of ideology, providing a spectacular counter-image to American imperialism while working with Saudi capital and drug capital around the world.
When we talk about our “key factors”, we’re sketching a huge area. We could dive in and describe the complex aspect of one or another of our key factors. In many areas, this has already been done. Important writers include Doug Noland, Labevier, Wallerstein, Barnet Coleman, Mike Ruppert and many others. But even digesting all this leaves immense complexity and uncertainty. All our key factors appear on our chart, yet our point is not simply the mechanics of a conspiracy but, ultimately, an understanding of society.
Each of our key factors is so large that each could be considered “the cause”, “the answer”. This is especially seductive given the difficulty deciding how long oil reserves will last, what the exact source of Al Qaida’s money is, how dependent the US is on drug-money-laundering, or how mismatched are the world’s militaries. The appeal of gathering all the details of one of these factors sweetens the allure of “conspiracy theory”.
Rather than attempting to give a definitive answer on one or another of these factors, we will be exploring how uncertainty has become an inherent element of our wider world. We admit that this uncertainty is not distributed uniformly - George Bush JR. certainly has access to facts beyond us. But uncertainty remains sufficiently uniform element in the entire process that even the biggest fish today must simply swim in.
Given obscurity, we will aim to provide framework that is detailed enough to be useful while still avoiding entanglement with our world’s present fog. This text may seem quite clear at some points and rather obscure at others. This is nonetheless an effort to obey Einstein’s dictum, “be as simple as possible but no simpler”.
Each of our key factors has a natural narrative. They each have a unique historical scale and a somewhat unique dynamics. Monetary policy has both Breton Woods and the floating of the US dollars as it’s most unique touchstones. The last century’s wars, especially Vietnam and the Gulf War, provide key insights to the present strategic situation. And so forth.
We aim to describe things exactly but to get anywhere, we must be always leveraging the fuzzy understanding that everyone has of today’s world. The present era’s confusion, uncertainty and ever-present-now-of-the-media are things that can be grasped easily. Their negation, in the form of the return of history also can be quickly considered given the right circumstances.
So we can say the present crisis of capital is the most profoundly historical event of our time. The crisis has today become acute some time after the total denial of history became universal. So to understand this event, we must unravel these historical forces beginning from our immediate situation.
And this is where we are. As we’ve essentially said, starting out understanding the WTC events is waking up to act fifteen of a long Greek Tragedy. It requires a complex fabric of description to give a full picture. Realizing the crisis we will then realize that our situation lies on top of layers of historical developments, layers of crises and solutions. So sorting out this entire will take a spiral path. We may seem to repeat ourselves by nailing down some of the realities whose general outline we have already made reference to. While talking about the crisis of the capitalist system, we must still fully define the elements which constitute this system.
Tracing this fabric, we will return to certain point repeatedly to arrive at our source. For compactness,
We will lay useful of details of the intelligence agency operations at the same time we show intelligence as an instance of indirect capital (and the availability of the web for verification is another implicit factor).
The common historic thread running through each of our key factors is the development of Marx’s labor power as a separate, corrosive factor. A notable thing to look at is the [Persian] “Gulf States”, notably including Saudi Arabia. These countries have an essentially “rented” population – the majority of the population are workers from other parts of the world who maintain the machinery and cater to needs of the oil-rich citizens. This apparent ability to muster up a worker-army for any purpose lies at the heart of the present world. Looking at the stretch of history which began a little before the “industrial revolution”, we can see a line connecting the complex unfolding of the contradictions and possibilities of these abstract operations. This line is the ability of a ruling class to liberate an abstract force, labor power, from the entirety of the social-production process. This is essentially the ability of a capitalist to hire a person to do virtually anything – meaning that whatever guards of tradition and personal desire existed have now been mostly swept away – and will be further knocked down as things continue. You have possession and control of a person’s activity and creativity without having to worry about the many dimensions of the person.
n Labor-power is a person’s power of creation reduced to a commodity, appearing as entirely separate from the person (and eventually appearing against the person). The proletarian, one who has nothing but his labor to dispose of, is the opposite pole of labor power. We view the substance “labor power” as the key ingredient for all production in our modern, capitalist world. The abstract, accumulation activity of people, removed from their intention, is the transformative force which has built (and destroyed and built again) the modern world. This power labor can be contrasted to the power of owning serf slave – the slave is not only an unwilling but he or she must still must be provided with housing and upkeep if the owner is to realize his investment from the slave. And certainly, earlier societies have had some wage-laborer. But the guildsman and the day laborers never together constituted enough power to be a predominant force. We can contrast this with today, where the vast wealth of, say, the Saudi royal family can translate into an entire hired country. From this view, the formal financial, ideological, technological, bureaucratic and cybernetic processes that have shaped the last two centuries all have been dependent on capitalist society’s ability to liberate fluid labor power. And each has in-turn extended to the ability of this fluid act.
Of course, the flip side of liberated labor power is the existence of the working class, all those who must have a steady stream of money for their survival. The liberation of labor has been the creation of people whose activity is more and more liberated from their own existence.
The imposition of labor time, of the flexibility of jobs where either you or your boss stop at any point, is the imposition of a fluid, atomized social existence beneath our “work world”. And this fluidity is a generator of the social productivity which commodity relations increasing depend on as they advance. Indeed, in our real economy, the role, the social position by appointment instead of birth, is simply another face of the liberation of labor.
Of course this experience seems totally ordinary to us today. But this experience only became common a few hundred years ago – and once the employers of wage labor came to dominate society, the present massive transformation of the globe began. And this transformation clearly hasn’t stabilized today.
n We are making an analogy between dead labor-power and a corrosive fluid covering the earth. We invite you to imagine this substance spreading both to every corner of the glob and also becoming so thicker in the areas it began that it dissolves the very hills. With this analogy, we will go on to look at the forces that move this fluid in different directions and we then ultimately look at how these forces become incoherent and collapse.
Of course, during this whole time, we also have to keep in mind that our analogy is imperfect. Labor-power isn’t perfectly fluid-like. Indeed, what we’re describing as a fluid is a circuit. The laborer sells his life to buy-back his survival. And this process itself can go to the relative advantage of capitalist or laborer or it can stop completely.
But still. We will come back to this. We start by assuming the smooth flow of labor-power so that we are on opposite side of the usual view of economics. The ordinary economist sees buying and selling of labor power as an eternal state of nature. We think it is to see it as a bolt from the blue, a new system which has only conquered the world in the last hundred years.
n What is capital? The society generates a flow of human social power that can be harnessed for an individual end and by an individual intention. So both the State Industry Of The Soviet Union, the theocracy of the Iranian Mullahs and secret activities Of The CIA or Al-Qaida all qualify as capital.
For us then, capitalism is not characterized by whether an entrepreneur faces competition in a fair market but by any entity which mobilizes labor-power for reproduction. When we say capital, we mean the whole web of social relations which maintain reproduce labor power and maintain it as this substance essentially outside each worker.
In this sense, finance and bureaucracy (or ownership and management) have always been two flip-sides of capital. The French Revolution was as much the rise of bureaucracy as it was the rise of the commercial bourgeois. And with this came ideology, the conditioning machine and the spectacle. The individual capitalist, the one who buys labor-power, ultimately is just carrier of this free-flow of labor-power. We speak of capital meaning the totality of autonomous labor-power which has made itself the dominant force in society.
Today, one can look at the great sameness in the way a public hospital, a private corporation, a multinational charity, an army, or a large church operates. Each of these is a money circulation system and rule-based bureaucracy. When we say capitalism, one can see we’re talking about these real systems rather than a hypothetical pure marketplace.
Bureaucracy and ideology have been a part of the harnessing of capital from the French Revolution and before. The methods of modern society really allow the construction of fanatical ideology of televangelism, of Iranian Theocracy, Nazi or Soviet power and so-forth.
Our bourgeois world is the realm of the free-action of labor power. When we say capital, we mean a privately controlled lump of labor-power reproducing itself in the society where this labor-power is a freely circulating commodity.
Beyond the particular firms, factories and offices which make up official capitalism, the continual churning of this entire capitalist society produces undifferentiated flood of raw labor power. Besides individual workers rushing to sell themselves, there are all manner of ways human labor escapes immediate intentions, with religious cults combining with all manner of commodity crazes. Recuperation is the re-incorporation of this general flood of labor-power back into our organized, official capital. And the recuperation process ultimately involves the reformation of a general rate of profit. Recuperation happens continually and in particular lumps. Recuperation reduces social activity and thus to a representation.
As capitalist progress opened the possibility of different, random ways of living in the sixties, these were incorporated into capitalist “alternative” culture. Certainly this alternative culture has shrunk and grown since then.
n The accumulation of capital involves an accumulation of every particular representation of life; symbolization, information, informal connections, etc. Maintaining capitalist relations implies that labor power will expand like a liquid, encompassing every need and every means of indirection. This accumulation of representation also is a creator of uniform profits for each particular realm. The movie industry requires a massive informal hierarchy to guarantee that its gargantuan products remain “in tune” with world tastes. Once the payoff of each need is calculated, it can be reduced to its minimal level.
At the highest level of representation, that of secrecy, ideology and manipulation, we can apply the term spectacular accord to Guy Debord’s rough definition of the spectacle; “the images detached from every aspect of life fuse in a common stream in which the unity of this life can no longer be reestablished.” [Society Of The Spectacle, Thesis 2, Black And Red Editions]
n The development of realms of increasing representation means that our original realm can be framed in calculations from later categories. This is the creation of new monetizing system. Aside from creating more means of consumption, the expansion of our realm of raw labor power produces new means of exchange, new stores of value and new means of representation. Attachment to images, “street cred”, positions within surveillance systems, and a host of other factor serve the uses of not only commodities but also mediums of exchange. And this process allows the formation of “pseudo-economies” or extended economies outside the conventional money accounting of capital. There is an information economy, an intelligence economy, a market place of ideas, an economy of the spectacle and so-forth. The sixties involved not simply the creation of hip commodities sold to certain types of consumers but a “hip capitalism” which operated on an initially different level than ordinary capitalism. Police and intelligence agencies operate like criminal gangs simply to gain the maximum information about these gangs. And so penetration of a criminal gang becomes an asset to be traded between departments.
These extended economies naturally reincorporate with the conventional monetized economy as scales of production increase and unique aspects vanish. Hollywood’s system of independent artists working for cheap to create movies has been monetized into an entertainment capitalism which treats ideals are usable capital. Any commodity could be seen as an information commodity even though information came after the commodity form. And information itself can reduce to probability, to signals and to secrets.
Sherman Skolnick describes the “business” of the press, which basically involves selling even true stories to the highest bidder through the willingness of the press to suppress stories of those willing to advertise. This same “information” business extends to politicians introducing crusading bills so as to obtain bribes to suppress those same bills or businesses supporting those politicians who have known “skeletons in their closets” since those blackmailable individuals can be must easily controlled.
Still, if such games are old, the “information economy” expands this process to allow the entire economy to be framed by the shaping of information.
Filtering in terms of information, ideology, secrecy, spectacle, or statistical expectations are important ways in which capital moves towards representation. Each are all abstracted forms of representation which move to encompass the “normal”.
Information can place itself the ideal commodity since all orders and all intellectual property can be coded as simple bits and bytes. Ideology can equally be the ideal commodity. Ideology essentially imagines being able to modify any market for the benefit of capital. Yet, the
The contradiction reappear in information as “information wants to free” and cyberspace is always producing more information, this hope for capital has now turned to something like anger. “As an example, LOWE'S tax system is going through a major change. They are using OS-390 COBOL, and it is common knowledge that this compiler can do a number to the data if you are not careful. I have discovered that much of the accounting data is in bad shape(invalid fields), and when I brought this up to the Hindu team leader, his comment was that it really doesn't matter. THIS WAS LIVE PRODUCTION DATA!!!!! So, now I wonder if LOWE'S books are accurate.” comment on H1B discussion section (http://www.zazona.com/ShameH1B/Horror.htm). Despite the racism, the point that information’s weakness is that it still requires labor to produce. Moreover, the information so produced has a definite value. One point which the disgruntled programmer quoted above might miss is that poor information quality can be a distinct advantage for a large corporation. Certainly, the end of Enron came with its sham revealed. But without Enron’s information fog, its explosive stock price increases could not have happened.
Thus we have seen a natural transformation from information to secrecy, lies, and ideology. Each of the later works more to distort markets than to expand them.
Any of these monetizing judgments will come after the fact. Any standard monetary value to things only comes within the fierce and obscure for a local advantage - global judgments hardly help the individual capitalist. Capital has the tendency to spread its balance over a wider and more indirect area as it expands. Thus capital will not directly face results of its dislocation of its resources until the whole process returns on its circuit back to capital.
Indeed, all those previously mentioned forces moving capital towards representation could be seen as coming from our disproportionalities of production.
n Here, we should notice that particular kinds of representation tend to predominate. Essentially, to create a realm of extended capital, a particular factor needs to seem to alter the accounting of the ordinary economy. Thus our “expanding frames of capitalism” have generally involved ideology which can change consumer decisions, conspiracy, secrecy and uncertainty which deflect efforts at consumer and business rationality, information which can show the direction of future exploitation, and statistical expectation which can show capitalist apparently rational escapes from uncertainty.
n In understanding this continuous expansion of representation, we should also understand that Money itself an indirect form compared to the labor value within a commodity. Use value is perhaps our ultimate level since commodity must have a use, even if the use is purely destructive or negative, yet neither labor value nor use value can be to facilitate exchange. Capital’s dependence on money opens the door to a dependence all our possible form representation.
n In this flow, it can happen that there is more non-monetized representation than monetized representation, within our limitless total realm of created-representations. Thus everywhere we can see the ideologist, the manager, those entrepreneurs who do not have a specific monetary value to their activity. Capital vanishes on the immediate level. Those who follow the explicit rules of the game are less visible than the logic of the game itself.
n All of our remonetizing operations involve a division of between production apparatus and organizing/profit apparatus. This division might be called the society of the conspiracy. The profits and the organizing principles today come from a few very big, very remote schemes and with everything trailing behind these.
It is natural that they comes close to describing ruling class itself when America’s intelligence agencies imagines the enemies America will face; “criminal groups ... [trafficking in] narcotics, trafficking in women, smuggling nuclear materials, illicit arms, military technologies...”.
Naturally, we look below particular scams and crises today, we see a generalized corruption.
n Once information (or some other indirect form) is capitalized, the unique qualities of the subjective, autonomous realms are gradually crushed. The natural pressure of the economy of Hollywood produces a bland, predictable product as conformist as the ideologies churned out by Washington hacks. This happen because while these capital blocks have autonomy from over-all social relation, over-time they must follow the strategies which allow them to survive both against the disposed and against other capitalists.
The capitalization of information involves counting on certain rules of engagement within the stream of information; social belief, consensus reality. The trick here is that the bulk of the ruling class will often follow those rules and believes this information more than seems plausible for. This happens even if the rules wouldn’t serve their individual interests or the information is extremely illogical.
n Wage labor relations produce a flow of externally directable labor power. This is either accumulated as our rational capital or squandered in the horrors of both speculation and state excess.
But that we can see the whole outline of capitalist history, we can see how this squandering has reproduced the system on a variety of different levels. The system reappears as indirection.
Looked at from the outside, the accelerating indirection within production is also a product of the production apparatus becoming more “socialized” (see Marx quote), more dependent on society as a whole rather than having separable parts.
n The reign of capital is the reign of the necessary illusion.
Capital must treat each aspect of production, whether simple or complex, as a linear product of wage labor. While producers treat supply, production and demand as being this way, the financial elite naturally fall into treating expectation, risk and protection as being linear products of labor.
“If we speak frankly, we have to admit that our basis of knowledge for estimating the yield ten years hence of a railway, a copper mine, a textile factory, the goodwill of a patent medicine, an Atlantic liner, a building in the City of London amounts to little and sometimes to nothing” JM Keynes, the General Theory, chap 12 sec. 3
In this example, on the one hand Keynes draws a line in the sand between the near-term “probability” which investment systems appear to be based on and the longer “uncertainty” which must merely be a matter of faith. And this shows how hold either the money or an investment must be formed from this faith in the over-all organizing of expectation within the capitalist world.
Consider how contemporary mathematics or economics textbooks often ask us to calculate the immense payout which would result from a penny deposited at compound interest several hundred years ago. $10 = $227,399,612.86 at 5% interest after 300 year. Here, we can see the raw formalism of bank reasoning. The “magic of compound interest” is expected to operate smoothly through the wars, famines, pestilences, plague sand disasters that have waltzed across those years – as if the bank manager could simply sit in the vault, feeding the money and watching it grow. Illusions of this kind are enough to explain much of the present world. Dot-com speculators certainly expected exponential growth to work for them without their working in the slightest.
We are not intending to answer the question “what is money itself” but rather look at the expansion of our representation system with money playing a key role. We know that the initial conditions which fostered capitalist production involved a surplus of people from the English enclosures and a surplus of gold money from the Spanish conquest of the Americas (including labor and lives taken from this “new world”).
This situation began a long process of building the worker class. The expansion of labor power has involved building more complex protocols for future expectations - more complicated arrangements of hope and doubt, certainty, possibility and uncertainty. Each normal cycle of the system modernizes the system. Each crisis the faces trades present peace for future activity.
Life in America at many stages is based on a chain of future promises. The compensation for annoying work is the opportunity to be taken care of in old age or the chance for your children to go to college. And as this kind of scheme becomes more and more part of the financial system, bureaucrats have accumulated more resources to invest with the ostensible intention to use for educational, retirement or health reasons. Yet since these folks naturally had little incentive to help the “little guy” they naturally have mainly stolen the money by investing it with their friends (friend who invested their money with the original company).
If we look back from these other viewpoints, we can see money itself constructed by labor, representation and ideology. The concept of a protocol is most generalized and automated in computer attached together in communications networks. But essentially every monetary scheme requires a protocol of one sort or another.
The monetary scheme of gangsters, intelligence agents, Wall Street bankers and corrupt rulers have a similar logic of protocols which need to be followed in order.
- How bribery has a fixed series of actions,
- How the various synthetic bonds have different dereguer steps to mold into an item on the international capital market,
- How a cell of a secret organization operates and how intelligence agencies “handle” agents.
- How “public key” cryptography system exchange keys and allow entities secure communication as well as certain methods of “digitally signing” documents. Each of these processes limits the knowledge exchanged by each side of a relationship as well as the knowledge going to third parties. Each of these relies on the labor required to discover and defuse knowledge. Secrecy and uncertainty places a cap around flows of interest. Chaotic behavior can hide a trend and thus prevent people from acting on.
Legality today hinges on the intention of a person’s behavior.
Statistics is a method of placing a further cap around the flow of chaos. But statistics can never recapture the knowledge which chaos absorbs - A Ponzi scheme cannot be spotted by statistics along, medical effectiveness cannot be proved by statistics alone. Insurance companies can spot static trends but they also cannot spot the unsustainable condition - indeed to place a cap of statistics around is to avoid any further question of understanding.
“...The progressive tendency of the general rate of profit to fail is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labor.” Marx, Capital III, Chapter XXIII.
n The contradictions within the accumulation of labor power have both a quantitative dimension and a qualitative dimension. To understand our modern crisis, we must understand our massive indirection happens on the quantitative level just as much as the qualitative level. Today asset inflation is the quantitative counter-part to the spectacle’s inflation of representation.
In our narrative of the crisis can most easily follow one or the other of capital dimensions. We can show the “objective” equations of the declining rate of profit and then show how any all of the ideological barriers create their own accumulation systems equally subject to a declining rate of profit. We can oppositely show how the acceleration of represent directly creates an increasing subjective crisis.
This article must take history’s multidimensional matrix and project onto a single line of narrative. This involves inevitable discontinuities. We describe ideological indirect before the declining rate of profit and financial indirection afterwards.
Remonetization appears as capital places a quantitative wrapper over every qualitative crisis it faces.
Each of these aspects has allowed a degree of escape from the other. Spectacular advertising and media extend the system by stimulating consumption and pushing away an understanding of capital’s final results.
And once these processes become automated, they return us to the quantitative level. Information must be given a price, statistics is used to wrap uncertainty, etc. Thus, it is useful to see the quantitative contradictions wrapping the expansion of capital.
-- And ultimately, these contradictions develop from ratios within the law of values (Here, we give something like a slim summary of Marx’s Capital. To solidify the ideas, the reader is referred to the original. There are ways we expect this will become understandable. Rather than a long arithmetic discussion, we will be framing the dynamics as coming from the qualitative kernel of capitalist production. his qualitative kernel aims to give the modern, more subjectivist reader some of understanding this).
We will track the quantitative tendency of the profits to decrease. But even here, one should remember that we are jumping between quantitative and qualitative. Human beings are both subjects and objects of history today and the system’s dynamics failure to synthesize these aspects. We wish to show the crisis which reproduces itself as every level of life today as the appearance of this failure. This is a complex enough contradictions that we could frame it in several equivalent ways. One important frame is, what we say here, is that this comes from capital’s marshalling of labor-power. To see this, we show two contrasting quantities within capitalist production:
* On the one hand, you have the labor needed to reproduce a given value. This is continually growing as an over-head, especially as the world is seen and treated as a “production apparatus”.
* On the other hand, you have the labor needed to socially reproduce the laborer himself or herself, free labor itself. Capital productivity reduces this cost but not as quickly as capitalist production increases.
The key part is that our second cost is different from the productivity of capital. The difference is that usual capitalist measures of “productivity” look at the ability of enterprises to product goods embodying labor without regard to the complex combination of good which actually allow a person to socially survive. The cost of survival may indeed decline but it will not decline at the same rate as the productivity of capital advances. Essentially, the cost of food does not decline at the same rate that you can buy more computer equipment. The cost of cotton does decline at the rate the cost of plastic decline, etc.
n On the level of simple material production, these ratios lead to the declining rate of profit. Marx defined “constant capital” as materials, capital equipment and all commodities which represent labor power reused in the production process. By that token, he defined “variable capital” as the labor power which comes in the form of actual wage laborer employed in the production process. If, following Marx, we define C as constant capital and V as capital then we can get the simple equation:
C+V = W+S
Where S is the good required for the survival of the working class and S is total profits, including both consumption for the highest levels and profits reinvested in the production.
Expressed in the most simplistic terms, the rate of profit is S/(C+V). Seeing this equation, we can imagine a decline in the rate of profit comes in three forms; 1) An increase in w coming from the working class seizing a greater share of production. This can also happen when capital push w below the absolute bare survival rate and must then increase it to produce. 2) A decline in total returns coming from capital’s devastation of the eco-system. 3) A rise in relative size of constant capital.
And it is useful to see this contradiction cutting through every quantitative manifestation of labor. As these quantitative relations dominate more and more aspects of society, versions of the crisis appear everywhere from the level of immediate production to the level of information systems. Looking in more generality, we can see how all the production ratios of this society reflect a component of labor. And by that token, we can see how the system fails to deal with these ratios conversion back to a quality. We could see our survival measure for labor as being the quality of external or nature which any quantitative system misses. In the case of statistical quantification, we can see how Long Term Capital Management failed when the capitalist system’s unity disrupted the Black-Scholes equation’s need for statistical independence. We can see spectacular manipulation fails once it can offer no plausible alternative. Covert operation fail to attain their objectives and instead spread covert operations themselves and ultimately “terrorism”. The World Trade Center represented a pure quantitative expansion of building size. The airline industry’s expansion equally represented an expansion of production. It was not that no one considered the particular intersection of airplane as weapon - many people did. It was simply that the social power wielded by capitalists came from how labor they mobilized and therefore they had incentive to increase this beyond what was rational from even hoped-for laws of capital (This is not a “small is beautiful” argument. It is not the scale of capital but rather where capital takes its production).
The dependence of a bank like JP Morgan on derivatives is said to be a mystery of the current market. So far, this apparently dire situation has been put into the category of “too big to think about”. But naturally, this condition has not banished from reality in the way it has been banished from many minds.
How can such crisis really create problems. The idea of “rebooting” the economy after a financial collapse has a seductive appeal. Such view must sees this economy as simply an automatic system operating outside any collective choice. The economy seems outside the individual choice of the most absolutely dispossessed but there is more going on. We can talk of capital as a whole given that capitalists altogether have a collective interest in maintaining their power. But we must never confuse this with a system that merely aims to extract a fixed bulk of labor power. Instead, there is a fabric going from higher workers to managers up all the way to the highest rulers. Each of these levels involves an actor who must continuously and delicately adjust production processes to maintain our given level of productivity (see Hyak). And the balancing of these production relationships also involves a balance of investment, cooperation and consumption relationships. Essentially, the economy is a fabric of social relations. Looking at the top, this can be seen as an intertwined relationship where various folks identify their interests with the rulers while on the bottom this can be seen as individuals falsely identifying buying commodities with meeting their needs. If the relations of these actors are disrupted, the economy cannot simply regain its footing by choosing new capitalists.
The point is that capitalism requires a plural capitalist class. And each member of this capitalist class is not simply a member of some club. Rather, within the ground-rules of the society, this person must have a true, separate source of power. The capitalist must control a node, whether this node is a factory or an abstract investment deal, the node is still concrete control of the abstract flows happening. And they must extract a benefit, a surplus, from that node.
A simple illustration is that once a factory stops turning a profit, a capitalist who controls the factory would rather sell the equipment for scrap than maintain production for the common good, even if a tremendous common good is served. If the state provides a subsidy for to maintain this production, a capitalist may be just as happy to fatten his wallet by lying about the costs of production since he will still control the production process.
And when you have a cycle of disrupted production, you can easily have a situation where no capitalist is willing use their control of a node to maintain overall production.
All capitalist development is involves monetizing social capital - this is the counter-part of primitive accumulation and all accumulation; vital drug production is as much a private enterprise as the production of plastic flowers.
Moreover, the advance of capitalism both allows and requires that production be operated on the basis of greater “marginality”. This comes as it requires that social capital be more and more monetized and as it requires these resources to be immediately profitable.
In the form we see today, overproduction is simply a form of misproduction. We should be clear the difference between overproduction and under-consumption. Under-consumption is simply a situation where workers or other don’t have the ability to buy goods that they would otherwise buy.
At the extreme, even a capitalist society which organizes unnecessary production to create employment has dealt with misproduction to an extent - the unnecessary production is naturally designed to avoid competition with existing, productive industries.
Capital faces overproduction by sector. It has been argued that if capital paid workers better, these workers would be able to consume more and so-head off an “under-consumption” crisis.
But this would be more consumption in general and not more of the products of particular sectors. A wealthier worker might buy an extra pickup but they would have little incentive to buy identical extra economy cars. Luxury coffee production has allowed some producers to escape the present cheap coffee glut but such production requires years of planning and investment, something that the cheap producers don’t have. On the other hand, each cheap producer can get more immediate money by producing more.
Indeed, this shows how a crisis of profitability can lead to a crisis of overproduction. A particular industry which ceases to be productive based on a domestic level of production has every incentive to sell on a foreign market to make back some cash. Indeed, such extra demand will become the life-line for those enterprises who have already had their capital crushed by a declining rate of profit. And this effect causes the bankruptcy to move from individual firms to entire industries.
While it might be argued that a state system could stop this, the state bureaucrats of the Soviet Union actually faced a similar problem. Rather reallocate the type of production, they simply maximized the production of existing, unneeded goods. This is because bureaucrats’ position was dependent on the level of production rather than from providing any use.
On the material level, our contradictions appear as the tendency of capital to create vast “overcapacity” in its development.
This overcapacity comes out of both the lowering of the rate of production and the crisis of representation.
Essentially, as the rate of profit declines, capital sees highly capitalized items as its source of revival. The highly capitalized item seems to offer a greater rate of profit for the level of investment. But this situation reverses itself in any decline in the rate of profit. In these situations, it becomes profitable to operate otherwise unprofitable factories once their cost of creation is exhausted. Suddenly, an industry where the cost entry created high profits becomes one where overcapacity creates low profits.
All representation, with money as the first of them, allows one to make an uncertain win seem more valuable than a certain loss. The decision to gamble the payroll at Monte Carlo when on the verge of bankruptcy is only the most extreme example. Boosting production in a realm where high profits seem plausible would risk less jail time for a manager.
Over-production appears as various nations attempt to develop in a parallel fashion. The problem is that factories capable of supplying
If the air was suddenly ownable and considered a capital good, then its value would likely be as great as everything else combined. But this equivalence wouldn’t necessarily bring any income. Investment might even flow into the “air industry”, with the imagination that soon “deluxe air” could be sold as a luxury good.
-- Of course, the air industry might employ only enough workers to charge and pay other industries for their production and consumption of air. Or it might employ an army of marketers and product managers trying to scheme up new uses for this “new, old product”.
You might imagine that such transparent scheme would fall apart. Or you might claim that they are only an “irrational phase” of an otherwise rational system. This is wrong. The logic of capital demands that it treat its products as universalizable. Clearly, an “air industry” is only a bit more absurd than some of schemes of the dot-coms.
Capitalist logic demands that the concrete totalizing logic of labor-value be removed. In the realm of economics, this happens in terms of substituting the marginal returns theory for the labor theory of value.
In terms of reality, making the air ownable is and is not “true”. As a production apparatus becomes larger, it must begin to consider the processes required for the reproduction of the atmosphere since it impacts it a lot. Thus placing the air on the balance sheet makes
So essentially, the ownership of air is assuming that a tighter accounting keeping track of air-consumption will lead to a more efficient social configuration. The loans which the air-sellers float to maintain a high profit rate are bets that all the social connection are going remain together. Capital may know this.
At the same time, the discipline of capital requires that capitalist create an accounting where our “air sellers” assume a continually increasing stream of profits. This is corollary of thinking that it would be a product of abstract labor.
No single capitalist looks at a whole in their investment decisions. Capitalist ideology does look this whole but must mystify it.
But ultimately this isn’t so. It will drag things down.
Thinking this way, you can see capital’s contradictions on an extremely general level. The crisis of capital appears as the contradictions between the private, aliened nature of capital accumulation and the increasingly social quality of labor.
And this has only widened and extended to even more levels since Marx wrote in the nineteenth century. Really, with nothing more said, it is quite easy to imagine the dilemma which “good ship earth” is reaching as it is guided by a few hands working for their benefit.
Marx framed the growth of fixed capital within society as a whole as being an increase in the social character of production. He defined the declining rate of profit as involving a larger amount of fixed capital dividing up the same amount of living labor.
Capitalism still depends on the rate of profit since because it rests on the expansion of labor-power. As we’ve mentioned, this expansion is being managed in increasingly indirect forms, from finance to information, ideology, secret manipulation and spectacle. But as the basic conditions of the expansion labor-power are transformed, all these indirect controls lose their bearings and thus their value with respect to the underlying process.
Now the changing ratio of our two quantities boils down to the falling rate of profit. But this only becomes a full crisis as capital fully circulates. And this circulation takes us back to our expanding realm of representation - to rephrase our circular situation. Thus capital has an amazing pallet of ways to postpone the basic decline in the rate of profit.
Essentially, we return to ideology and our key factors, specifically to show how they must be lies, they how must continually expand and they how must ultimately fail.
The domination of exchange value is the domination of privatized relations. The difference between our two basic quantities and the decline in the rate of profit appears within the total web of a complex production system. The capitalization and the productivity of textiles, steel, agriculture and each expand at different rates. Human survival requires a certain quantity of each. But the process of determining this overall process is hidden in the chaotic process of capitalist development.
The state capitalism of the former Soviet Union is a good “exception that proves the rule”. Despite the rhetoric of the state serving the people, the Soviet State initially aimed to organize production for the benefit of an abstract model of production and consumption. And practically it is existed for the benefit of bureaucratic class.
“America’s thirst for oil” is neither a pure popular sentiment nor a pure construction of the ruling class. It is an synthesis of two aspects. It is based on what Americans will buy without prompting - “The Amount of Sacrifice Americans Will Be Willing to Make to Drive a Nonpolluting Car Is Exactly Zero.” A herd mentality drives things yet those with more power certainly run and accelerate it at the various times. Thus, an ideology even more irrational than the particular participants remains in the driver’s seat.
“When I say that academia is corrupt in America, I don't mean that professors are accepting bribes and giving kickbacks for government contracts. There may be a financial motive in some cases, such as the use of overhead funds for a "course buyout" to reduce a professor's workload, but I am not talking about the kind of corruption associated with Wall Street and Washington exactly. I am talking about the replacement of science with politics as the main item on the academic agenda.
“It must not have always been so. At one time, I believe academics were appointed and promoted primarily on the basis of merit and accomplishment. Within the last 20 years or so in the United States this has gradually changed into a system in which political correctness, slickness, and good salesmanship are more highly valued than good science. I don't pretend to understand the reasons for this, but I can point to many examples within our own community.” Self-made artificial intelligence expert Richard Wallace, speaking of the corruption of academia (Slashdot.org interview, Friday July 26, 2002).
One could make similar observations concerning medicine, politicians, judges or journalism. And this indirect corruption dovetails with our key systems. You won’t notice this corruption in the form of building inspectors, cops, professors or stockbrokers asking for bribes today. Rather, one sees a corruption to an entire complex – essentially submission to the spectacle itself. But one the highest level it becomes direct as well. You can see a “river of dirty money” stretching from continent to continent.
n We are looking backwards from today now that capital has decided that no facet of the state is outside the logic of money and thus has denied any formal state as separate realm. We can how money recaptures realms of indirection once initial exploration reaches the level of quantification.
A divide between capitalist and ideologist (or bureau or etc) is still this, that the ideologist is only able to accumulate in a limited area – the accumulation of prestige cannot be taken further than a certain region.
Our process could be seen as a tree where information possessors assume risk at level of the branches and pass the “digested” results further up the tree. Reality is much more messy than this but the metaphor is extremely useful none-the-less.
“One thing about the bull market of the 1990s that should shock no one is that a lot of .companies used it as a tent to hide tricks of accounting and fraudulent activities that are only now coming to light. Nor should it be surprising that much of the bull market itself was built on a bubble of speculation, this time in dot-com and other technology stocks, that burst soon after the turn of the millennium.” Robert Reno, Newsday, (8/2/2002)
“That's one of the problems of a globalized economy, and it's why people are puzzled and don't know what to do. Where can the risk capital really go?” asked a trader at a European bank in New York about where to invest when every currency seemed to be disintegrating simultaneously. Reuters, from NYT Website (8/2/2002)
Seeing capital’s tendency to move to the furthest level of indirection, we can get a deeper understanding of what we’ve called key factors. We’ve noted how secrecy, media falsification, statistical calculation, mafia control, psychological manipulation and financial indirection have all accumulated as counter weights to capital’s contradiction. Just as “ordinary” capital tends to concentrate, our conglomeration of capital and ideology form huge complexes. Each uses a particular protocol to monetize its ideology. The information economy, the health system, the military industrial complex and more are each woven through every aspect of life.
American intelligence agencies original investment in Ossama Bin Laden’s Afghan mercenaries is a natural counter-part to the rise of the blind stock portfolio.
Mafias accumulate as natural counter-weights to capital’s ordinary inability to create profits.
It is standard thing for the proponents of this society to laud it to the skies but, when pressed, to admit that the whole thing has been a sham and to blame those spectators who were foolish enough to believe them. This ideological maneuver is equivalent to the double or nothing approaches.
But naturally, they follow this admission with a statement that things really continue because this is the only game in town. And indeed the organizers of this society work hard to make sure the game remains “the only game in town”.
A Ponzi or pyramid game involves an irrationally high return based on later investors’ money being siphoned to earlier investors’.
There are two kinds of illusions within a Ponzi, one is that it can go on forever and the other that you can stop before the end appears.
We’ve seen how such a thing can occur in the “normal” order of the modern capitalist market.
The problem with such a “normal” situation is that if everyone knows where the operations of
Such a scheme has a growth rate some percentage above the standard rate of interest for a society. It actually doesn’t matter what this rate of excess is as long as a plausible argument to justify it can be found.
It is important to consider the strategy that a player considering investment in a Ponzi scheme would follow. Naturally, it is well know that there is a limit to the size of such a scheme. At the same time, a scheme might involve money being doubled several times before the end is reached. Thus an investor who believed himself to be sufficiently wily would expect to be able to reap the rewards rather than paying the consequences. While the simplest scheme has a terminal point which can be calculated, more elaborate schemes make it less certain when the end will be reached. We can roughly calculate that there are two end probabilities – a constant chance that the scheme will be uncovered and ended at any one point and an increasing chance that the scheme will run out of people willing to invest in them.
So, it still does an investor no good to know the “track record” of both this Ponzi scheme and others. The scheme has been going for a little while but still hasn’t reached its limit, then an investment may turn out to be a good gamble. Essentially, the effective Ponzi schemer has good reason to believe that he is above the cut within those who would indulge in the game at all (which is different from simply being the cut within the entire population).
Here, we can shift our perspective to look at this in terms of randomness and statistics. The “statistically perspective” attempts to extract the likelihood of future events from past events. The evolution of the general Ponzi shows the caveats to such a perspective and thus can give us a general critique of this kind of approach.
One key aspect of the statistical view is starting with purely random series’ of data values. This randomness implies that a various “coincidental” events are not likely to occur. Essentially, statistics must naturally assume that data points on a graph are all created equal. So, among other things, the statistical perspective takes the position that the observer finds himself or herself in at the present moment is no more unique than other moment on the graph. A statistician wouldn’t assume that the future will resemble the past but he would assume the same probability distribution is going to be determining the future. So, a statistician looking the graph of a Ponzi scheme will see a continuous history of growth. He may credit that there is a chance of collapse but he will assume that this chance either stays constant or increases slowly. Therefore, he must assume that the gamble looks fairly good. But clearly, he will likely be mistaken since all Ponzi scheme’s collapse.
So where does the reasoning of the statistician go wrong? In essence, it is in assuming that the information that comes is “uncorrelated”. We should notice that with any expanding Ponzi scheme, the information exposure – the publicity – increases exponentially along with the scheme itself. This can be either through advertising or through word of mouth. But in anycase, this makes it more likely that a potential investor will here of the situation at the point the scheme has expanded to the point where everyone is learning and thus at the point where everyone’s money is close to being exhausted. Essentially, the statistician is “played,” manipulated, whether the Ponzi scheme’s actively attempt this or not. Everything stops when the information winds-up being correlated. And here we can look at other statistical schemes as well. The simplest theme is the idea of investing in several risky schemes spread through the world, each of which is uncorrelated with the other. The statisticians calculate that the high returns of each of the potential payoff will compensate for potential collapse in any of these. Here, the assumption of uncorrelation will gradually come and bite these investors. But this happens through the evolution of the world “investment climate”. As more “blind” investors can be found to eat-up Chinese bonds, Argentina futures, or WorldCom receivables, a general world bubble develops. The situation of different parts of the world is no longer “uncorrelated” and things then boil down to the situation of the Ponzi investor.
Indeed, the system of “blind” investment today is actually encouraged by the CDO (collateralized debt obligations) that intention conceal which company’s bonds they hold. And these are intended to paper-over the random knocks of the economy through insurance – except that the knocks of the economy turn out to definitively not be random. Instead, these knocks all come at once, bursting these bubbles.
But we should also note how the ideology of using blind statistics here is an ideology which is oriented around concealing the nature of the markets. The markets are reflections of the historical evolution of social production. Not only has this process gone on at best a few hundred years, but the structure we have now is different from even ten or five years ago.
n The Crisis Reappearing Under Regulation is a Manifestation Of The Same Crisis Under A New Monetization.
Post-Keynesian Hyman Minsky describes how the operations of the ordinary cycles of an economy can transform particular capitalist enterprises to transform from a “productive” enterprise to a Ponzi scheme and (ideally) back again.
Hyman Minsky describes the simplest possible situation of modern capital investment. A construction firm wishes to barrow for a building that will require a couple to complete. Assume once the building is complete, it will yield a fixed income (quite an assumption but we’ll see how things get dicey even with this assumption).
To pay for the wages and materials needed for the building process, the capitalists barrow short-term each month. To pay the interest on the money barrowed, they barrow extra. The capital invested in the building serves as the guarantee for the entire loan process.
This ideal picture involves the capitalist investing none of their own capital. In actual fact, they’ll invest some though this ideal model is the model of maximizing the efficiency of capital. If money placed in the bank is recycled instantly into and then once again winds-up in the bank, ideally this achieves the maximum impetus for resources to be used efficiently; there will always be a demand for land and equipment which is lying around with the potential to be used for profit-making enterprises.
But this “efficiency” is entirely subject to the disconnects which the transition from hedge to Ponzi investment generates.
For Minsky, the solution to this financial problem is for banking regulators to be sufficiently strict to prevent this inevitable process from getting out of hand. This work could if it happened in a vacuum. If the regulatory powers, the morals and the material interests of the auditors did not change over time,
But going from our formulation of the crisis to our understanding of money as expectation, we can that regulation ultimately only increases the entire field on which capitalization and crisis unfold. This is our same cycle on a higher level. First capital experiences crisis, then an exigency, an external force, is evoked to prevent that crisis, and then finally this force break. All is fine here until circumstances conspire to cause these separate breaks to occur at the same time.
The New Deal was the rise of the bureaucratic society just as it was the limiting of the pure rule of the market. And as this process of generalized bureaucracy merged with market forces, eventually both market and bureaucracy stood perfected yet neither could protect the other.
The information economy and ideology economies were the natural triumph of the post war “mixed economy”. Yet once ideology itself is a series of token bought and sold on the market however indirectly,
The limits which were placed on banks, corporations or investment firms after 1930 were a “damping” intended to prevent the quick elastic motion of markets, this same elastic motion which hurled the economy into the depression. Still, it often forgotten that the most serious problem was the way that financial forces combined to create unsustainable development and thus lead to the crash. And naturally, with the rise of Neoliberalism, most of these limitations vanished. But more generally, the bureaucracy controlling the market has naturally become a bureaucracy which is on the market.
And here naturally corporations were able to order up a Neoliberal ideology which maximized their utility. The way that Arthur Anderson converted from a primarily audit-oriented company to a company primarily oriented around selling consulting services to those it audited is just one example.
This tendency has reached its high point presently in the vast manipulation of institutionalized indexes and statistics of every kind. The ability of Alan Greenspan to preside over an official gutting of what was considered “money” while presenting himself as the ultimate capitalist is notable.
Things had been changing quickly and silently for the whole of the 1990’s. Now things are changing quickly and loudly, yet utter confusion around over-all conditions protects capital for now.
The present system presents itself as a series of bubble. We have seen the “popping” of the dot-com bubble. This has been blamed for the recent economic declines.
There are a number of bubbles which have not yet been exposed to “popping” yet we can easily see scenarios of further popping.
The rise of one bubble can easily mask the decline of another and so we see the commentators who fail to look very hard at the growth of real estate values, medical costs, educational costs, military costs and similar things.
That the landscape had already been given to the domain of bubbles in 1998 says a lot about the state of present capitalism. That no explanation has been dreamed up these schemes says just as much.
The present Iraq war ranks as a thinly disguised effort to seize Iraqi oil and further sustain US growth. But it clearly shows the desperation of the US.
But the world economy is as unbalanced as the US economy. China’s producer economy can no more be autonomous than Japan’s producer economy or America’s consumer economy. The world economy has become more integrated yet more unbalanced than ever before.
Indeed, the US dollar is primarily protected by US consumption holding world production hostage. A decline in the dollar causes a greater decline in other nations economies causing a rise in the dollar. Starting Spring 2002, this ratchet has so brought down world stock markets without bringing down the dollar.
Argentina presents us with our best picture of a collapsing neo-liberal world.
Our entire discussion naturally follows a spiral path. The dimension of value and the spectacle mesh on more and more complex ways as one looks at more and more dimensions.
But there will also come a time for simplification. Any point of collapse is going to be our simplification.
In the conflict, we can contrast Chinese productive capacity with US financial and military power. Within the different military situations, we can contrast conventional Iraqi heavy armor with the massive airpower of the US.
So this is a conflict where different sides have strengths in different broad dimensions - military, economic, political or ideological. Even, within each conflict, there is a further asymmetry.
Now, in this world where these entities contend on multiple levels, we have to say that the decisive levels and factors may soon be determined in practice.
And with the world in the state it is at today, the place of just about every level we mention is still a riddle.
The role of secrecy appears in just trying to determine if Bush is the imbecile he appears to be and whether this matters much for the US if he is.
On a more critical level, how much of the crisis is coming out of working class resistance versus inter-capitalist rivalry versus the exhaustion of the environment.
We can see the fail Venezuelan coup and the US’ Afghan swamp as evidence that the US is not invulnerable – if our information is at all reliable. Still, it is immensely powerful.
Every indicator points to a series of conflicts with the potential to break open this crisis on whatever levels turns out to be most decisive.
But even here, the question is only partly the disintegrating intelligence of this complex. A more blunt question is the proportion of understanding given to capital version that given to its enemies.
Consider, a given pre-capitalist society might have had the wisdom to handle the particular level of surplus resources which its social productivity generated. Capitalist society produces an autonomous surplus which overwhelms any and all of these static defenses. This contradiction embraces the whole of society on a worldwide basis. With this happening on such an immense scale, naturally particular instances of the imbalance appear on a more concrete scale.
We can see three types of crisis.
- Capital destroys environmental resources needed for human and its own survival.
- Capital faces the proletariat in a see-saw battle where greater exploitation can save capital and greater resistance can destroy capital.
- Capital’s internal dynamics cause it to weaken itself to the point that the proletariat is “forced” destroy it.
Any of these scenarios require the proletariat to take action eventually. The question is when and whether the proletariat will enter the fray.
If we’re looking at our crisis as unfolding in practice, we will know what the strength of our actors only as they come into conflict with each.
Our forces includes the level of effective deception effecting the various parts of the proletariat. This is a dimension as well. The willingness of the American proletariat to fight for their SUVs may be different from their willingness to fight without their SUVs.
The willingness of an Iraqi proletariat to fight Sadam’s repression may be different from their willingness to resist American occupiers (and here we can’t say which would be higher).
Seeing Clearly is part of a defense.
Naturally, capital has responded to its crisis by attempting to get the working class to pay for the crisis as much as possible. The commodification of life is being supplemented by the marketization of life. Not only is every part of life for sale, but the modern consumer is expected to be ready to pay any price for those things that they might want or need.
The gasoline station with its constantly varying prices shows one pole of marketization. Another pole is the many parts of consumption and production which are offered only as a package.
Buying a house, a car or medical care today has transformed into being accepted into a program – “qualifying for credit”, “qualifying for insurance”, etc. Medical care in particular often winds-up essentially unpurchasable for those outside the employment system.
By a similar token, people today are thrown ideological package deals as well. Being “in recovery” in the anti-drug system is a counter-part to being within the “drug culture”. Modern Christian or Islam offer pre-made support groups for those accepting conversion.
Now, the various deals offered people can occupy a large portion of social activity.
A. The Current State Of The Economy;
· A national (5.9%) and Oregon unemployment rate (8%) is quite high. There have been numerous bankruptcies including WorldCom, and Consolidated Freight. The Consolidated Freight bankruptcy was essentially a result of the general economic situation - the weakest company died.
· Before this recession even began, US median income had remained flat since around 1974. And many of the last ten or twenty years’ gains in income have been illusionary - increases in rent have often eaten away at any income increases, the number of people who must work to survive continually increased and the hours which they work has increased. The privileges of “White collar” workers have been reduced as company after company has “downsized”, downsizing not only makes workers more insecure but also leaves the remaining workers with pressure to do the work of several people. Just as much, the stock market bubble burned a huge number of average people, and moreover, many people will feel this if their pensions are cut based on companies having speculated with this savings.
· Extra money is being aggressively added to the system. This is happening credit cards, home refinancing, unemployment extensions, community housing grants and similar. The savings rate of the average American has gone to down to essentially - for each person who any savings, other people have just as much debt. The consumer debt level increasing quite quickly, fed by mortgage refinance and auto loans as well as easily available credit cards.
· Despite the extra money being added to the system, the economy is merely in a “holding pattern” with many companies still in the process of going bankrupt. Essentially, this happens through price deflation. Many of the goods which consumers buy come from over-seas and this
B. The Story Behind All This;
The Dollar Recycling:
· Despite the current recession, the overall American investment bubble has not “popped”. The US is still sucking up a huge amount of world investment dollars. The sucking of investment dollars is one half of the cycle of “dollar recycling”. Essentially, the US spends money on various imported items, especially oil but also manufactured goods from the East Asia and then various dollars are reinvested in American dollars, either the stock market or different bonds. The money from these goes to sustain consumer credit and government spending and from there the cycle repeats itself.
· This creates an effect that could be called the perverse logic of global chaos. Whenever there is greater chaos in the world, more investment tends to flow the US as a “safe haven”. But the whole process of dollar recycling and neo-liberal investment (more on that later) is a factor behind increasing global chaos. Thus events like September 11th, Afghan War and the coming Iraq play into the “dollar recycling process”.
The Global Capacity Glut In Various Industries:
· The automobile industry is an example and a huge example. Agriculture is another example (especially given that it also becomes terrible distorted and destructive production). Steel is another example, computers.
· But this is essentially everywhere. Many nations are capable of supplying the world - the former Soviet Republics now export steel around the world.
· Global overcapacity further creates a situation which makes the US the only country which can “lead demand”. If the world market were to be “thrown to its own devices”, global overcapacity would cause prices to plummet to a point of complete unprofitability. This means that declines in American consumption have meant even greater declines in European and Asian economic activity. And this reinforces the dollar recycling effect.
Speculation And The “Distorted” Economy:
· For the last twenty years, capitalists have felt that “ordinary” production like automobiles and refrigerators was a bad investment - this was the “old economy”. Over this time, they’ve worked hard to drum-up an alternative to this old economy - but these “alternatives” are essentially rackets of one form or another.
· The rising cost of medical insurance (project to reach %17(!) of the GNP), education, the rise of “energy traders” and the boondoggle that involved. These unproductive activities eat up useful resources. The SUV scam. Computer chips as another example of an industry where the constant expansion is needed for profits. Enron financed pipelines in various areas. And not to mention the dot-coms, which are almost over-emphasized today.
· These rackets are fed by Global, fluid, speculative investment. While global development has fueled quite a bit of effective production, there has been another vast sea of unproductive investment. Even the “productive” parts of investment face an overcapacity and thus become essentially speculative and subject to sudden collapse.
· Only SOME of the bubbles have collapse so far. Auto production continued fueled entirely by debt - Mitsubishi offers a car that’s free for a year. Housing is booming as it become the only source of money and investment. Consumer credit continues a pace.
· And all these bubbles have appeared as a counter-weight to the over-capacity. Though there is a fair amount of mutual reinforcement - excess investment also creates excess capacity and excess capacity requires a paradigm which will force or seduce people into consuming that extra capacity.
· The speculative economy is more concerned about itself than about the “real” production which it sustains. Fifty percent of health care costs involve some form of paper work. And health insurance feels a continual pressure to cut actual health care rather than cut itself. And this brings us back to all the ways the system is squeezing the working class.
Various “extra-economic measures today seem to come out of this serious situation.
(intentionally left fairly short)
C. What has REAL collapse looked like before? events various “extra-economic measures today seem to come out of this serious situation.
· One more “bounce” might be possible - nothing is certain.
· Argentina faced: Bank failure, massive unemployment,
· September 11th, Afghan War,
Our motivation column would tend to “add-up” to September 11th as a case of “Malign Neglect”. John Luftus described an alleged US intelligence policy of ignoring the activity of Saudi Agents and a policy against the surveillance of churches. It has been shown that FBI and CIA had considerable evidence that Saudi citizens were training to become pilots. The simplest approach, that of just allowing things to “take their course” quite possibly could have been seen as very useful. Indeed, such an attitude might have been happy to have some atrocity but still wind-up shocked by the intensity of the WTC attack. Other motivations would involve a more active role. The death of director of WTC security O’Neil could have required that an intelligence agency rather than the anti-US hijackers choose WTC. Here things get very murky, with possibilities of involvement by foreign intelligence agencies (Israel, Saudi Arabia or Russia) being mixed with various factions of US capital.
Still, the mystery ultimately is not the exact level of government where corruption lies. We know that, again, the CIA trained Ossama Bin Laden originally and that the exact differences between different drug-dealing conspiracies is at least murky.
This is a question which appears repeatedly; we can see the problem which the system faces and we can see the solution which it chooses. The mystery is why the system seems to need extreme measures to solve what seem, on their face, like fairly ordinary problems. One might imagine that the US realizes that moving towards peace rather than doubling war would ultimately serve its interests. One might imagine Enron would have been able to use the billions it stole in California to dig itself out of the Ponzi scheme which it had built. One might imagine that cutting through “accounting scandal” would allow the American economy to grow again. But none of this is possible. There is no point where any of these schemes can land on solid ground. It is only a question of how to bury things effectively.
This situation is the ultimately like any racket. The plotter must take increasingly extreme measures because their position has become fragile. Their position has become fragile through an accumulation of earlier acts. Now the smallest admission can cause big pieces to unravel. The flow now goes darkness.
In a racket, the criminal succeeds if its victims remain buried and forgotten. And thus any racket will eventually fail as a river of lies, corpses and distortion catches-up with it. For the racket that is capital, corpse which cannot stay buried is the proletariat, the south economic pole within capital’s magnet.
In the case of capital, the present ruling class has experienced periodic crises going back to its origins. And the solution of each of the crises has involved burying the crime within the operations of the system itself. So the massively huge and productive system of today reflects the “bad conscious” of everything that has gone before it.
Now, if we are to unravel the present crisis, we will wind-up pealing an onion of crisis and manipulation. We can trace our various present crises to a whole series of dates and events in the past. And this is on many different levels as well – the economic, political, ideological or geopolitical.
The answer to similar question generally involves big parts of the system being a continuing criminal enterprise, a continuing unstable situation which needs to grow and takes its direction on the basis that anything that slows it down will likely kill it.
Here, the criminal enterprise and the Ponzi are closely linked. The Ponzi scheme involves an accumulation of debt beyond any ability to pay. The criminal enterprise operates with a destruction, paranoia and risk that make its ultimate end quite likely.
We could list the many critical industries and processes which are moving at unsustainable rates; the medical system, the drug-economy, the oil-economy, all the items on our “column B” and so-forth. Here, while one of these aspects will often meld seamlessly into another. Still, each of these plays a decisive position needed to reproduce the capitalist economy – and each is equivalent able to stop capital decisively. While many of these meld seamlessly into others each of these factors plays one critical role in the reproduction of capitalist society;
Each of these has the character, to varying degrees of mafias, of Ponzi schemes and a racket (high technology has shown itself a fine Ponzi scheme while avoiding international violence of the drug or the oil industry). Each of these is palpably unsustainable, is powerfully integrated with the other scheme, is critically necessary for the entire economy and each brings a river of cash into the pockets of a very small number of individuals.
On the one hand, we can wonder how the present system has run such elaborate swindles. On the other hand, we can wonder in what way has the present system ever been anything but a swindle.
è Our comparison turns on all those phenomena which are products of congealed labor. Once an ideological becomes part of total social processes, it has both a qualitative and quantitative dimension just a production has.
è Our basic approach turns on socially necessary value production. A product that experiences increases in the “productivity” of both labor and capital will simply become more socially available – this means either a large consumption level becomes standard (as is the case with computer chips) or its production becomes less a part of total production. In anycase, we can look around and see that many good needed for survival have not reached the level of ultra-productivity. Just as much, our formulation is that capital goods are the sum-total of “indirect goods”, goods which are harnessed to change social conditions rather than for immediate consumption (survival consumption or luxury consumption). With this general view, it becomes clear that the production of “indirect goods” has certainly risen and risen steeply. Information, ideology, advertising, office complexes and factories have accumulated tremendously. A music company twenty years ago might have spent some time producing music. Today, the bulk of “music capital” involves the ownership and processing of a portfolio of hits, a piece of the “classic rock” portfolio, an oeuvre which changes only slowly today.
With this, it might be objected that much of this capital accumulation is of dubious “real” value. Yes indeed but this doesn’t detract from the effect. The dubiousness of the needs clearly show how easy it would be to have a shift to social context where this capital is no longer needed. But it doesn’t prevent these accumulated songs from being an immense accumulation of valuable social capital. What has accumulated is labor that is necessary in the context of the present order, labor that’s necessary given how people live today. And it is worth looking at the music context in even greater detail to see this. Any one person has fairly constant tastes in music,– these are often formed at a certain age and then remain constant thorough-out life, especially given a world of capital where a fifty-hour workday can doesn’t give much time for tastes to evolve. Music often touches what seems deepest within a person, their feeling of what is possible or impossible. So it is not surprising that the classic rock stable focuses on the sixties. As reprocessed by the media, the sixties constitutes a mythical map of all those paths of rebellion which lead back to back to capitalist society, all those rebellions which be calculated and represented.
The sixties was the period of evolution from classical capitalism to spectacular. Our modern, atomized spectacular society has experienced the same qualitative evolution as happened then – indeed, the capitalization is a force which tends to make it freeze. Thus, once the myth has been created, there is no need for any wholesale modification. Instead, the portfolio of classic rock can be tweaked, perfected and charted. And ironically, this also strengths the original rockers, who can be seen as far more spontaneous than the calculated copies of today. Certainly, the strengthening of entire portfolio involves adding a few new spontaneous individuals and episodes – the LA hardcore scene or the Seattle Grunge scene might be stuck onto some version of our basic myth but ultimately maintains the myth complex. It is easy to fall into a tone of distain and there is much that deserves distain here. But our statement is ultimately not a moral judgment but the point that this complex is grafted onto our real lives. The effectiveness of these representations are material realities of our culture – not good or bad “thoughts” within a “collective unconscious”. What is important is what material evolution they imply. On one hand, the possession of this complex serves as the fixed capital of our music capitalists. On the other hand, human creativity does have a tendency to escape any particular framework set-up for it and thus there is a tendency a essentially new form to become popular against all the existing forms, all the calculated novelties and variations of the same.
And once such new form appears, it devalues all the previous calculations of the music machine. And here our whole crisis appears.
è We would say the present world crisis has as one instance the type of crisis which the Soviet Union experienced. Indeed, given that the present system has aggressively worked to make each part of itself serve as insurance for each other part, it is logical that the system is experiencing every normal sort of crisis simultaneously. Thus it is falling apart like the “wonderful one-horse shay” (which was built with each part just as strong as each other part and thus continued till one day it fell apart all at once).
More specifically, through it’s possession of a single ideology of working class power, the Soviet bureaucracy avoided the cycle of reorganization which the normal capitalist creates. But this lead to ultimate dissolution based on bureaucrats loosing the coherence which the law of value offered.
Our present society normally can and has experienced a huge amount of reorganization. The rise of ideological capital here has resulted in an equivalent package deal preventing fundamental reorganization. Speculative spikes within the market essentially play a similar role to the ideological freezing which the Soviet Economy experienced.
è This is last point on our basic outline.
è Basically, all of the emergency procedures become part of the capitalist itself. Greenspan’s market interventions have become a predictable affair and thus they taken into account by our discussion of ideological brakes on the crisis – brakes which become accelerators once their effectiveness breaks down.
è On the sure, the most immediate thing that our crisis explanation adds to Noland’s Minsky-Von Mises synthesis is an explanation for the venal behavior of the elites. Capitalist sites like PrudentBear.com are naturally going to be the best source for up-to-the-minute data about the crisis – they have a strong incentive to determine exactly when it is going to be. We revolutionaries don’t have the resources or the need to duplicate such research though we should be able to evaluate it. Noland’s message is relatively simple – an evolving credit bubble is shaping the US economy with “dollar cycling” initially sustaining but ultimately poise to bring it down. For us, the secret flow of funds into the US is also an important through much harder to calculate factor.
But that doesn’t need an absolute value. As mentioned, the biggest thing is why has this regime of foolish credit expansion gone fully into the saddle. We’d describe capitalized ideology as the driving force for this. The overlapping interests of various groups together reached the point you couldn’t get decisions based on a coherent direction for the entire system. Instead, the result was the simple tying together of loosely related forces.
Of course, the first Great Depression involved similar though less wide-ranging forces as today. The point is that the measures against the Great Depression produced contravening institutions to these original schemes. What’s interesting is how these were ignored or swept away in the last five years of craziness.
One point we’d differ with Nolan on is “de-industrialization”. It is overly simplistic to call the American economy de-industrialized.
The “real” sector of the economy essentially is as industrial as ever. The point is that the economy as totalizing factor is dependent on more and more “Ponzi Production”, the massive production of useless things, to give it order. These things can be good or services. The over-production of cars is as much a uselessness action as the over-production of software or computers. The economy is distorted in both the goods and service sector. But this distortion is what justifies the condition of endless growth which so parts of the social-economic system depend on.
è It is important to admit that we are indeed talking about different system which each different “currencies”. Money is one currency, prestige and power serve as limited monetary systems in each area they are part of. These are systems which can’t be directly compared. But they are systems that are each headed in the same direction and that each depend on each other.
At the highest levels of state power, the power of Alan Greenspan or high CIA officials might not directly translate to billions and it is none-the-less mobilized to defend and control the floating billions of dollars.
At the same time, these players sit on top of a massive of ruling bureaucracy and ideology. They can no longer move the market by fiat but must be agents of the mass of theories, interests, rhetoric and calculations which have evolved in practice for rolling the ball of wax down the road. And this mass of ideologies loses its barings and effectiveness as immediate profit interests and the interests of other each ideologies become intertwined with it. The intertwining of either moneyed interests or other ideologies ultimately makes these complexes more highly capitalized. Connect with other ideologies will ultimately connect with moneyed interests in anycase but beyond that, the ultimate factor simply that these ideologies represent chunks of congealed labor-power. nSo here, these highest powers face a crisis equivalent to that of the capitalist companies – and their vast powers still don’t give the ability to either escape this or to pull the ordinary capitalist out of their predicament.
Part of this crisis is that the world changes too quickly for such a vast complex. But where it is analogous to the monetary crisis is in the combining of ideological interests. By taking a racket, on say the economic level, like Neoliberalism, and placing it on the political level, combines these two ideological ships and can extract more influence – this is our analogue of a highly capitalized enterprise seizing markets and gaining profits through more productivity.
And just as much, the vast mass of secret knowledge kept by intelligence agencies and other forces has these properties in spades. Once various forces try to use secret knowledge to their advantage, it becomes the ultimate
è By interdependence, each enterprise depends on flows from other enterprises and is required to “pay up” at a previously fixed rate. When total rates declines, the ratio of the possible flow change, cause a deficit – i.e. driving various enterprises bankrupt.
Capital’s approach extends commitments elaborately to the past and the future. We can talk about the total capital for any moment but this isn’t what either a capitalist or a manager sees, they see what comes in a moment, which can be different from the trend. Indeed, Ponzi scheme conditions are exactly when the apparent flows go oppositely to the
There will be no answer to all the questions raised here. For the agora, the bulk of ruling class activity will be happening behind a current of lies. Thus the following is, at best, a collection of speculations concerning the various maneuvering factions.
The willingness of the bond trader to allow the destruction of their capital should be explained in any conspiracy. Financial markets have shown a willingness to allow massive collapses like Argentina if the collapse is predicted and compensated for. Many states and factions believe that the US dollar is on its way towards collapse. The US support Al Qaida in Bosnia and other locations up until September 11th – if not after
The “Intelligence Community” is a correct term. Intelligence agencies do not have a hierarchical bureaucratic structure – individuals can and do wield much influence outside the usual organization charts.
In all of the factions which we could name – Zionists, Skull And Bone, Russian or other mafias, Iran Contra Veterans, etc, we could imagine that conflict within each group could have as significant as conflict between the different groups; vague reports have surfaced around shoot-outs within Mosad Headquarters.
The Skull And Bones faction of the US ruling class is known to use intentional obscurity in their operations and this matches’ Richard Labeviere’s assessment “America; Big Brother Or A Ship Without A Rudder”, a series of hap-hazard measures. These are ideally intended to both balance multiple interests and to protect the invisible center. A policy built on “Around and around and around she goes and where she stops, nobody knows...” can, at various times, give various factions the impression that they will benefit. But this doesn’t mean the ball will continue rolling the same direction.
The willingness of various politicians to persecute constructive or corrosive politics is ultimately a result of the times, not the faction involved. – [Henry] Stimson was "opposed to a Carthaginian Peace" in which Germany was reduced to a non-functioning society. He wrote, "The Ruhr and Saarland... [must not] be turned into a second rate industrial land ... regardless of what it means to Germany... [rather] to the welfare of the entire continent". This is as opposed the corrosive policies of today.
The conditions of the Afghan war are fairly obscure, with many US claim appearing dubiously dubious. When the Special Forces serves as the body guards of the Afghan president, things can’t be doing peachy. The Anthrax attack seems to have been perpetrated by the CIA itself – but the spin that this isn’t part of any plan.
The Enron scandal is not done. The ultimate whereabouts and even the operations of Enron’s money have not been determined. The Afghan war wasn’t just about oil but also drugs – the CIA and US Banks didn’t like the destruction of the opium crop.
The US dollar can only decline in stages because so many parts of world trade are pegged to it. Oil, the debts of third world countries, the currencies of China and many third world countries and its a standard of investment everywhere. But this doesn’t make it impossible and it can make it more extreme when it does happen.
Money Laundering And Offshore banking hasn’t really been halted since it is needed to support US Banks and serve US mafias. Neoliberalism has provoked one of the greatest falls in standards of living ever, worldwide.
A fair portion of total world trade consists of subsidiaries of the same company sending goods from country to country. This makes profits and losses extremely easy to hide.
“Hindu Fundamentalism” is one of the most synthetic religions ever manufactured. But it illuminates the dynamics of Christian, Jewish and Islamic fanaticism quite well. Everywhere, a synthetic method of recruiting the uprooted middle classes is used
Israeli spies seemed to live near Mohammed Atta. But moreover the scenario that US intelligence agencies are infiltrated by various countries agents. The transnationalization of the US intelligence agencies is a natural product of the privatization of the government.
The CIA prefers to sell drugs as part of its operations because this multiplies its budget, hides its money sources, and gives it access to other secret cables. The Russian Mafia stole the bulk of foreign aid and investment coming into the country after the “fall of communism”. Monsanto’s actual revenues from genetic engineering have been minimal. GE has in general been disappointing
Capital’s crisis cannot be seen as simply the schemes of particular factions. But neither can it be seen as a comfortingly abstract flow of money separate from our historical actor. The “anti-conspiracy” logic of a David Corn shows the willingness of today’s “kept Marxists” to look at even less than what is viewed by “conspiracy theorists”. To go oppositely, we must say more while noticing the ideas and events that these times bring to light. We can mention commentators who have traced phenomena which we view as different larger or smaller dimension of the crisis; “The End Of American Hegemony”, Doug Noland’s Credit Bubble Bulletin, Various conspiracy theorists tracing the rise of the “cryptocracy”, Guy Debord tracing the evolution of the spectacle, The National Review’s tracing of US military capacity.
Now, each of these pieces of the crisis shows some of the same dimensions of our simplest crisis. We can see these tendencies in the monetary dimensions of capital as well as the non-monetary dimensions – ideology was the currency of the Soviet Union and ideology could not circulate in the same way as currency.
While the operations of the system are hidden, many folks have documented this in consideration detail; Barnet Coleman, Labevier, Michael Ruppert, Doug Nolan, and beyond are all useful. The factual text of these people have large, important chunk of information in them. But none of these pictures are either in great enough detail, in a large frame or reliable enough to really satisfy us. If you read From The Wilderness and The Political Economy Of War And Peace In Afghanistan, say, you will find yourself still uncertain what US motivations are, how big the drug economy is compared to the oil economy compared to the economy of smuggling “pirated” goods and so-forth. This is natural both for a world-scale process and also given the universal secrecy that pervades the present world.
A survey of economic “conspiracy theory” natural reveals a combination of highly plausible, plausible and dubious information. In just about any of the theorizing, one can find blind spots where theorizer accepts a legality or an official figure when other, well documented information points in other directions.
And a key point is that things that might seem well established like the US Federal Government budget deficit are screwed in a number of directions. Documented items like Fannie Mae and Gannie Mae bonds implicitly add to the deficit without being seen doing so by the bulk of world investors. But besides this, there is the
The “Gold Anti-Trust Association” somehow believes their exposure of a conspiracy to prop up the US economy could result in this conspiracy’s stopping business. While this group wields quite a bit of economic might for conspiracists, they naturally don’t consider that courts and media have always served the spirit of “helping society as a whole” as much as the letters of any laws – and “society as a whole” demands the continuation of the present economic order. Naturally, a judge would say in contemporary language “So you say these people, at the highest level of society, are secretly and illegally engaging in manipulations to maintain corporate profits and economic production itself? And your problem with that is what?”
Just as much, we can see the generally intelligent and insightful Doug Noland fail to mention off budget items and gold manipulation as he otherwise describes the quandary of the US economy extremely well.
The same paradox, of trying to draw conclusions and act on a vast array of uncertain information appears. We would like to think that, having no fixed point to defend in this society, we can see more clearly the whole movement of things.
Just as much, we have no villains we wish to puncture in relation heroes. Whatever his level of corruption, we expect that Bush engages in activities motivated by the situation which the whole US economic-system puts him in.
Looking at the economic statistics of the United States is useful if you consider that they can’t all be falsified in an out-and-out manner.
Historically, America has leveraged its vast land and natural resource base for comparative economic advantage. Energy, raw materials, or agriculture can each give a relative advantage to an economy which has them in abundance. With capital’s usual short-term frame, this leveraging of resources involves both using these resources as well as using resources to encourage consumption. It is common for builders in reasonably cold climates like Oregon to uninsolated houses heated with only inefficient space heaters. This gives means both cheaper houses for the builder and more money for the electric company, while the energy prices are still relatively low enough that the homeowner won’t go broke.
We can see an extension of this kind of reason in the development of vast suburbs eating farmland, huge mall and the horribly inefficient automobile culture in general.
The development of capitalism in general has involved the substitution of machinery and energy for labor. If the USA can use energy in a profligate fashion, then it can speed that process.
America is no longer self-sufficient in energy however. But America’s comparative economic advantage still depends on being able to use energy wastefully. And today, along with the still-existent domestic supplies of oil, America receives a special discount from Saudi Arabia in recompense for America’s protection of the Saudi monarchy.
But still, US oil dependence is not simply a matter of free supply. The profits from Mid-East oil flow back into dollar dominated investments and ultimately US Treasury Bills, supporting both the trade deficit and the US dollar. Moreover, American domestic oil is produced at the relatively high cost of $10/barrel. By this token, the reduction of oil price below a certain point would cause considerable dislocation in the still-surviving US oil industry.
Thus keeping price of world oil within a given range, and essentially receiving a cut, is a crucial factor for the dominance of “American” capital. The American state has used its military power over the last fifty years to assure that situation. At the same time, this has not involved the classical image of colonialism. The house of Saud has been the largest part of the US oil control strategy, though there are many other parts.
And America is far from totally controlling the Saudis. The tremendous power of Saudi oil wealth has made the US-Saudi relationship more and more of a partnership, a partnership where each side is attempting to find alternative power and resources.
There is no reasonable price for oil. The “natural” price of the stuff is simply the cost of finding it and pumping it out of the ground. This price would, of course, encourage an even quicker, more inefficient development of capitalism as well as an even greater devastation of environment, and ultimately as harder crash. A price which would encourages a miserly use of oil and search for alternatives would have to be supported by some monopoly control. At the same time, the unequal distribution of oil around the globe makes such monopoly control quite common. But even higher prices don’t promote more inefficiency unless the state moves things in that direction. This is a dilemma for capital. While environmentalist have wrung their hands over it, we can see that high capital today simply says “let the chips fall where they may”.
With permutations of world capital, currency and raw materials markets, a piece of capital good which is worth billions of dollars at one market level may absolutely worthless at another level. The obvious example here is a large, energy-inefficient American factory or mall. We should remember that simultaneously, vast amount of corporate bonds represent such pieces of capital goods would quite likely be floating around the world markets. So the failure of one piece of capital equipment would represent a failure for many entities, possibly pushing them over the edge as well.
Thus current, our heavily interlinked, Neoliberal world ironically cannot afford the failures of investment which it touts as “market discipline” – especially the level of failure which would result from a global adjustment of oil prices.
Thus, the weight of the large ruling capitalists is not towards the market forces which would result in more efficient capital long-term but in protecting the bulk of the very large (generally absurd) moneymaking projects today. It does strategically toss overboard the most costly or obvious of these, such as Enron, but this is to strengthen the still sticky remainder. The absurdity of models like petroleum-energy consumption, wood-fiber paper, nuclear power, automobile transportation, the Microsoft-Intel personal computer and others have been well documented.
Indeed, if there is anywhere that modern capitalism provides efficiency, it is at the simple level of allowing any given factory an rough understanding of the labor-efficiency of a given machinery investment. Otherwise, most of what we is an inane progression of technological innovation providing a mixed bag for improvements to the actual experience of living.
The automobile has estimated to absorb 30% of the US economy – and here oil is used to produce the tires they cars drive on, the roads they drive on, the plastics they as well as the energy that propels them. By this, finding an alternative to sustain the auto is a difficult trick. When ruling class publications say “oil is the most flexible energy source the world has known” they are implicitly noticing the dislocation which the automobile economy would experience.
The US had certainly evolved to be “The World’s Policeman”. Certainly this means it imposes immediate US interests on the world as a whole. Today, “US Interests” are becoming murkier and murkier in some places and remain clear in other places. This is not a different situation from the situation of the ruling faction within a given state. US Oil capital today clearly rules in the US to the detriment of the broad range of capitalist interests. This is the “price of power” and capitalist interests as a whole acquiesce to this. But these interests are still able to main a situation that is “close enough” to the rule of laws that capital as a whole can maintain itself.
There is no reason for a “Theory Of Imperialism” separate from our general conception of capital since the unequal power relationships between nations are analogous to unequal power relationship within nations. The bourgeois of the “dominated” nations of the third world have the two tendencies of appearing to align themselves with US “Hegemony” or of appearing to oppose US interests. Neither position of third world bourgeois is final but each is taken according to the movement of political economy. We can the agile shifting of the president of Pakistan around support the US and opposing the Taliban. Just as much, we can see the shifting of Saddam Hussein from US asset to public enemy number one.
All of capital’s modern relationships are built with the remainder of pre-capitalist relationships. National chauvinism, ethnic chauvinism and gender chauvinism together evolved from patriarchal empires and from the xenophobia of many different pre-capitalist relationships. But we have neither patriarchal capitalism nor imperial capitalism nor racist capitalism but simply capitalism.
Drugs are perhaps the most traded form of contraband but there are quite a few other forces. Contraband has a dynamic that is in many ways more
The Political Economy Of War And Peace In Afghanistan
Dollars For Terror
April 22, 02 National Review Article had an article describing US military logger-heads in relation to the Mid-East.
One critical aspect is that current US budgets purchase very little bang-for-the-buck, through they use lots and lots of bucks and so get lots of bang.
US military interests are becoming more and more focused on being able to intervene anywhere while US ability is clearly flagging. The failure of the attempted coup in Venezuela shows a US no longer having unassailable influence in Latin America.
Israeli adventures point in a similar direction – Israel is not a US pawn today but its own mini-imperialism with a strangle-hold on US politics. Its destabilization of formerly US allied nations is done with a basic sneer.
The US spending less and less of its GDP on defense partly because more and more of its GDP is an illusion – the speculative value of real estate cannot be turned into aircraft carriers, the scam of medical care cannot be turned into aircraft carriers, indeed the vampiric US medical system can only grow with defense outlays and suck their effectiveness.
It is not only small boys that can call naked emperors. If “the emperor’s new cloths” are also his suit of armor, he is poorly outfitted for battle.
The US has gotten a lot of its concession through its economic clout. But US economic clout also depends on its military might – the US dollar allows the massive import of resources to be ONLY a relatively large deficit. A sharply declining dollar would tremendously reduce how much the US could buy abroad. And this would reduce US military preparations. Everything now stands together and more and more shakily.
Immanuel Wallerstein’s “The Eagle Has Crash Landed” is intended as a picture of world geopolitical movements of the last hundred and fifty years, focusing on the rise and decline of American Hegemony.
Summarizing an event of this sort in ten pages may seem simplistic. Yet having the basic events condensed to ten pages has the useful quality of allowing the reader to mentally balance the various factors which have played out their roles during this period. Essentially, having a snapshot or two of the overall situation is critical for seeing expanding trends.
Despite the current propaganda, Wallerstein’s total picture of the US in decline as hegemon is useful. Indeed, it seem characteristic of a truly declining power that the decline and problems cannot be mentioned or accepted and therefore cannot be changed.
And all this is true even if some of Wallerstein’s points are grossly simplified.
We would take issue not with the decline of the US but with the
Wallerstein’s elements in summing-up this movement are the economic, the military, the ideological and the technological. But even those categories are a simplification. We are traveling through many-dimensional space and so we must consider what
Nations today resemble corporations just as corporations resemble nations. Judging the power of a company with a large workforce versus a company with a large income versus a company with a lot of money in the bank is difficult. Comparing the strength of India versus Switzerland versus Saudi Arabia is tricky. The only conclusion you can come to is that there are strengths of different sorts.
All this discussion assumes capitalism as the basic context. But capitalism is rapidly evolving, is subject to suddenly developing opposition and rejection, and acts relative to the world financial order. Indeed, a developing world capitalism could be seen as the force which propelled the rise and fall of the various world hegemons (England, Germany, USA and USSR) rather than this capitalism simply being a means the various world powers used to attain advantage.
The more complex the process, the more different views there are of it. Whether the corporation, the nation, or the wealthy investor is the factor “in the drivers seat” depends on what level you are observing the driving from.
Thus if we have a difference with Wallerstein, it is a matter of wanting to see even more dimensions.
And in the present situation, where this capitalism is going is certainly up to question. “Neoliberalism” presented itself as the force for globalization. Yet it is doubtful whether the Neoliberal period actually resulted in more coherent development world wide.
The rise of Neoliberalism has been the rise of a corrupt falsification of world finance. Whether in Argentina, Japan, or the US, fluid investors have implied that those claiming high rates of profit will siphon off virtually all investment.
And here, we use dualities like “health and sickness”, “strength and weakness”, “corrosion, rebuilding and collapse” and so-forth to describe the movement of the system. No one of these is an exact synonym for the other. Using all of these at the appropriate time is useful to fully color the picture of how things are developing.
This approach will not be entirely accurate and this is the point. The economy is not separate from the human beings which make it up. We must avoid the process of Merton and Scholes’, the process of projecting the uniform fluidity of heat equations onto this human activity.
Consider a large automobile engine. There are some relatively simple problems, like an air-leak, which can prevent the vehicle from running until they are repaired but which do not cause long-term harm. There are other problems which may only begin with small noise but which will gradually damage an engine beyond repair if they are allowed to continue. For problems of this sort, the need to repair them can seem disproportionate to the inconvenience they cause.
Now, the capitalist system is not quite analogous to an engine but it can experience which over time corrode its basic functioning without preventing from continuing.
Another point in any sketch of the global crisis is that globalization has caused things to operate on a level other than the national level. This isn’t saying nations disappear any more than separate corporate interests disappear but the kinds of conflicts transform. “America” has gone from being a particular state to being a product or brand. Certainly, the nation of the Unite State Of America has had a particular origin and a particular development. The world of abstract, prepackaged products and brands just as much has had a distinct history which will remain wrapped-up in capital’s European and American origins. This is logical within the development of capital – later versions of any product, from rock and roll to tooth paste, are merely an echo of earlier approaches. Paul Fussel notes how American class imagery is ultimately organized by Anglophilia. Japanese advertising imagery is even more clearly a simple arranging of purely foreign, high-prestige symbols according to local semiotic syntax. And as a spectacle in the sense of the Situationist International, the
The conflict of interdependent opponents is not necessarily
a peaceful, placid matter but it does make things much more murky. The American
resolve to end the Iraqi state could be described as a reaction to the
possibility of China or other states using rogue states as cat’s-paws against
Western interests. Intelligence Analyst Gordon Thomas has reported: “The 70-page report is entitled "Global
Trends Up To 2015". The document was prepared by over 50 CIA analysts plus
a number at the Institute of International Studies in London, a think-tank
frequently consulted by the world's major intelligence agencies.
The report begins by stating that all those agencies will face a common enemy: "Powerful criminal groups who will corrupt leaders of unstable economically fragile states. The criminals will institute themselves into banks and businesses and take over insurgent political movements to control substantial geographic areas. Their income will come from narcotics, trafficking in women, smuggling nuclear materials, illicit arms, military technologies. The groups will indulge in global financial fraud and racketeering. The most dangerous time will be between the period 2002 and 2008."
The report then analyses the role of the intelligence services in this scenario.
CHINA: Its Secret Intelligence Service (CSIS) will stage an escalating series of crises to ensure China will become the new superpower of the Third Millennium.
"CSIS will provide the biological and chemical weapons and the 'suitcase bombs', small nuclear devices, to wage terrorist war against the United States. CSIS will increasingly support such rogue states as Iran and Iraq who will have developed long-range missiles by the year 2005. By 2015 those weapons will have the capability of hitting any city in the United States and Europe. Those weapons will carry nuclear, chemical and biological warheads."
The report predicts the CSIS will exploit Europe's growing ethnic refugee problems, "especially in Germany, Italy and Britain."”
Such predictions are themselves ideological constructs. Despite the great information access of the CIA, we can expect that such a pronouncement would also serve a particular agenda – we know that when Russia was “the enemy”, all the evils of the world were tied to it. It’s logical that without much other evidence, China would receive similar treatment. But just as much, it’s logical that interdependent enemies would use apparent rogue elements for their purposes.
The position of governmental and corporate bureaucrats has evolved incrementally over the last two hundred years. When we describe a qualitative break with older approaches, this is in context of the new total system we describe rather merely all the changes adding up – though certainly things have changed in the last fifty, the last twenty and the last ten years.
A modern bureaucrat is today in a highly competitive situation. The club of guaranteed ruling elite has gotten smaller as the economic restructuring of the US and other states has proceeded. Lawyers in the highest law-firms face long hours, with even country club retreats being oriented to work and systematic contacts rather than leisure. President Clinton and cabinet members faced a congress continually dogging their actions. Intel Corporation sets the goal of removing a percentage of their workers each year and this bureaucratic terror goes up to managers and high technical workers. This continual bureaucratic war is naturally no around “larger issues” but around the most mundane and petty questions of image and organization procedure. The Republicans attacking Clinton and friends never once used the ammunition of serious debate (or even mentioned the truely serious crimes of Clinton) but rather focused on the pettiest questions of marital infidelities, lying and small, “unwarranted” gifts.
At the same time, this bureaucrat is more and more a conduit of ideology, of information product in a variety of forms. Reports are prepared for both higher-ups, for group meetings and discussions, for mass media or for the corporation to give to those who buy their product. And all of this information is taken from similar sources. Generally, this information passes through several hands before finally reaching a wider audience. Corporations and governments vary in how formally the process is structured, and the structures themselves change constantly. But the process remains fundamentally information processing.
So this flow of information is a gradual piecing together of ideas by people who much have their “ears to the ground”, who follow the trends closely. Still, this means any change is going to take the “safe way out”.
The factors which unify the actions of these folks are the various ideologies which permeate this society. And by ideologies I mean those expressions and symbols which circulate on an equivalent level of capital. These ideologies range from corporate goals to management theories to pluralism and patriotism. The “substantive” decisions that a bureaucrat makes have to jive with the vast sea of paper which they process. And we should realize that in many ways such guiding ideologies are the ultimate expression of capital in this situation. Each has invested time and prestige into an attachment to one or another ideologies. And moreover, a bureaucrat ultimately cannot conjure any justification for their existence than one or another of the more totalizing of these ideologies (such as liberalism, anti-communism and so-forth).
The guiding ideologies of bureaucrats and organization do change, even on a rapid basis. But they can only change to other ideologies and according to the ideological economy of the situation. We can see in early 2002, ideological of militarist of the US committing more and more to war with Saddam Hussein regardless of the every Arab nation in region aligning against them. This attachment to militaristic ideology is distinctly irrational but is logical give the
The bureaucracy is a feedback system and has imposed many methods of modifying itself. “Reform” is strong ideology today and reform is continuous. Yet with bureaucratic decisions made the way they are, reform will happen along an incredibly predictable path.
Now the highly competitive quality of bureaucracy causes a bureaucrat to be “highly response” to the flow of which comes their way. But simultaneously, it makes the bureaucrat unlikely take risky or dangerous action with regard to this information.
One might argue that an older, more purely hierarchical organization of bureaucracy allowed some initiative to those at the top while today the group-think of the present kind of apparatus gives virtually no-one what could be called wide space for independent action. But any one change is relative and we can even some counter-tendencies to a purely sclerotic bureaucracy. The US doesn’t resemble Kafka’s Austro-Hungarian or similar “heavy” bureaucracies or slow bureaucracies. On the contrary, present day bureaucracy acts very fluidly.
What is significant is that in the flow of information within bureaucracy, each person winds up directed and director. From intra-corporate reports to mass media to political, the bulk of various kinds of information takes up a large percentage of both the commodities and the capital produced by today’s capital. Now, as capital, this information is something that cannot simply be discarded.
The intentional construction and distribution of information involves continuous calculations around its ultimate result –this is done formally by advertisers or US Army “Psychological Operations” officers and informally by bureaucrat tailoring a report for the audience.
Now the critical aspect is that this flow of information turns in on itself more and more. As an atomized resident of a capitalist society, the bureaucrat really has no basis for his or her opinion other than from the sea of ideology circulating around them. Thus ideology is both the marching orders which determine a particular action and the principles which will be used in a longer-range planning. Buying, say, lawn mowers is called patriotic by those who are still in a sense patriotic.
A complexity of the inputs and outputs here only accelerates the effect. A modern war, advertising campaign or corporate restructuring requires a larger and larger phalanx of bureaucrats taking different decisions. To serve the interests of the center, these various distinct decisions must be unified by approved ideology.
A relative distinction can be drawn between the top and the middle of the bureaucracy.
Those closer to the top have more of a structure of a cable or gang than a fixed hierarchy. The name “the octopus” sometimes circulates around different deals. But in fact, we can see once again a flow of various schemes, intentions and controls. Certainly, the uncertainty of events adds to this as well.
Clumps gather together, usually on the basis of a strongman or a central scheme and then fragment, often forming other clumps. One can trace the alliances, schemes, murders and doubles of say the Bush family, the Iran-contra figures or Mossad or who-all.
Gang-logic dictates both adherence to the strongman and a certain fragmentation. The only guarantee of safety that a gangster has is a stronger gangster. Yet the urge for profits naturally opens up the need for counter-gangs. Gangster rise with their loyalty yet must also break with the leader at the right time and the right manner as well.
And this is the point of any conspiracy or racket. It happens between powers which launch event who’s result they only guess at. Whether an act is a terrorist explosion, a heroin deal or an invasion of a country, it is not known for certain whether it will make money and it is often not seen who will benefiting most after a period of time. Flows follow a path similar to “legitimate” business, though generally change is quicker and more chaotic.
Aside from an allegiance to ideology, top bureaucrats tend to be united by the secrecy of particular plots and activities.
An interesting CIA method is to intentionally utilize those who
We have mentioned the “indirection corruption” has become rampant enough that it effectively rules the present world.
This indirect corruption is the situation of being beholden to a swath of ideologies. Senators are no longer directly bought but are none-the-less entirely controlled by a mesh of monetary and ideological interests.
Marx mentioned that the goal of capturing the state a hundred years ago was the capture of vast monies in the bureaucracy. Today, a direct capture of this sort is prevented but this only makes an indirect capture more appealing.
The rule of ideologies is not a new factor. The vast amount of money riding on the domination of particular ideologies is new. Essentially, a vast hoard of money is invested in the spectacle itself – the media itself is only the smallest part of this – indeed as “fair broker” the stake of Time Warner in various imagery might be less than that of General Motors or George W. Bush.
It is worth noting that the CIA purposefully recruited Islamist extremists for the original Afghan Civil War against the USSR. This approach was based on the idea that these reactionaries would be the best defenders of capitalist property. It is also involved the reasoning that a simplistic, fanatical psychology can be directed at nearly any source. In the “intelligence” psychology, Islamicists would be considered “easy to program”.
And today, from Bin Laden to Newt Gingritch to “Hindu Fundamentalism”, we see the oldest ideologies supplemented by the most cynical, modern methods of psychology and conditioning. The motivation systems are more and more short-term, emotionalistic rhetoric.
Ideologies in general justify to the mass the way capital operates as well as organizing what the capitalist themselves do. James Watt’s statement “when we cut down all the trees, Jesus will come” shows guiding principles in harmony with the economic dynamics of the new order.
Just as much, an ideology is a mechanism and enterprise with many experts which rely its existence. Islamicists not only believe their version of Islam but also rely on it for their social position and they advance Islam to advance themselves.
What could be called the progressive, the Keynesian, or the social democratic agenda of Western Capital appeared after WWII. This broad trend appeared after Western capitalists had had been bloodied in a number of ways. The Western Power had emerged victorious in WWII but this victory was far from undisputed. The great depression showed market inefficiency in a very brutal fashion and “Communism” still seemed to constitute what appeared to be a serious threat.
So it made sense for much Western capital to adopt an agenda which offered concessions to the working class and planning to avoid the still-remembered excess of a market gone mad. Like any broad, historical movement, this agenda had many contradictory aspects. But it also animated much of the approach of capital.
Now over the 30 years after 1945, the progressive consensus broke down to both the left and the right and the speculative financial sector grew to a larger and more powerful part of the economy (after having been reigned-in somewhat during the depression).
Thus from 1973 to 1980, capital sought new approaches to solving its problems. The Neoliberal agenda, which became essentially consensus during and after Reagan, was fairly natural for those times. Western Capital seemed in a much better shape relative conditions than 1940 and far better 1930. But the progressive which had previously brought it its victories now seemed to be bringing it chaos.
The progressive agenda had not demonstrated an ability to end class struggle. Moreover, the struggles that were happening seemed somewhat dependant on progressive institutions like universities. Rightwing, free market, anticommunism had never gone away on any Western country since it represented a natural ideology of various sectors of capital – the vast, backwards parts of the US constitute a “residual supply” of rightwing ideology ready to jump to the fore. Thus it was natural for this agenda become dominant again.
Relatively rightwing politicians in the US had accepted various parts of progressive agenda, with Eisenhower presiding during the CIO’s organizing drives and so-forth. But this also meant that the US didn’t have many constituencies ready to defend progressivism wholeheartedly.
During the Reagan and post-Reagan periods, the left has much more thoroughly caved-in to Neoliberalism than the right caved-in to progressivism. Certainly, the way that Neoliberalism systematically created an ideology and spread it through every level of society was part of this process using an array of media outlets, think tanks, university professors and lobbyists was a factor. But we must look behind this and see how this is a result of the ideology having won the key battle already, the battle for capital’s essential consensus. “TINA”, “There Is No Alternative” is indeed ridiculous if it is saying that a capitalist most be managed on the basis of Neoliberalism on a day-to-day basis. Really Neoliberalism has been a progressively more fragile way of managing the present society. But “there is no alternative” which has been accepted by the ultimate movers and shakers. The willingness of American union hacks to accept Reagan’s program ultimately didn’t come from propaganda but from these hacks knowing their interests lay ultimately with capital rather than with their own members – remember the US government in ways paved the way for the power of even the most “progressive” unions.
In the third world, it is worth remembering that the post-colonial development period was considered a terrible failure for most of the third world. The East Asian nations were the main exception to this (with other near-industrialized nations like Argentina suffering gradual decline).
The post-colonial world also involved considerable “neocolonial” domination by US and other multinational corporations within Western allied states. At the same time, the direction of the third world overall was progressive in the sense that there was an emphasis on building large, monopolistic development projects. The US and the Soviet Union engaged in a worldwide competition for allies, each offering variations of a raw-material-supplier relationship to the ruling elites of the third world. But both the US and the Soviet Model ultimately hardly brought prosperity to the third world people or allowed much real economic development. Third World elites tended to simply pocket the cash which came from grants (and they still are pocketing cash, as are first-world elites). The quandary of the third world was and is that industrial and managerial production tends to produce all of the desirable jobs and position within the world market but this sector is already taken. Rightwing, progressive and state capitalist factions have all failed to solve this problem (though Neoliberalism at its most ruthless says things like “starvation happens”, the horrors of the third world clearly have shown a way of biting the Western powers including the US).
It is important to remember that the third world has developed more slowly and from a smaller economic base than the first world. This has meant the proverbial widening gap in relation to the first world. Moreover, the third world has actually lost more and more of its independent scientific research or cultural research abilities.
“Hinduism too has many conflicting histories. Only since the last century has there been Hinduism as such. ‘Hindu’ was a word used by outsiders to describe a place and people – not an institutionalized religion. The people who actually lived in this part of the world were followers of various saints, such as Shivites in Tamil Nadu and Vaishnavites in Gujarat and Bengal. The representations of Ram, hero of the Ramayana, used to vary greatly from region to region. But the many Ramayanas have now become one. In early 1987 an 18-month-long version of the Ramayana ran on prime-time TV. The most popular programs ever shown in India, they represented an important step towards standardizing Hinduism for national consumption.
“A couple of months after the Ramayana mega-series the Vishnu Hindu Parishad (World Hindu Council) called on Hindus throughout India and the world to make holy bricks for the construction of a temple at Ayodhya. Bricks came from as far away as Vancouver, Canada and Durban, South Africa. Construction was deferred until after the national elections of 1989, in which the BJP captured 86 seats, compared with the two they had won in 1984.”
issue 247 - September 1993
ISI officials more directly connected to 911 than any known Al-Qaida Lieutenants.
The usual pipeline/gas/Enron connection
The tendency of US occupation of Afghanistan to enflame the region and the question of whether the US can really afford the war
Russians actually gaining influence after the Afghan War
Citibank Money Laundering and various case studies
The offshore banking industry consists of completely anonymous bank accounts spread throughout the entire world. The Caribbean is one of the common centers of such anonymous banking but it be remembered that offshore Caribbean banks are effectively American banks – the money ultimately is deposited in American banks, with the Caribbean bank serving mainly to shield the identity of the customer. One important motivation for the US to accept such arrangements is the enormous American trade deficit, which requires a continual inflow of capital to finance. Yet a more fundamental motivation is the capitalist class itself. America is ruled by a capitalist class unified mainly by its pure abstract and its need to make profits by the immediate churning of money throughout the world. The main motivation for offshore banking is criminality.
- On March 18, 2002, you could still find many offshore banks offering debt cards usable in any American ATM. Claims that the US has cracked-down on offshore banking are thus essentially bogus.
“Among the most prominent examples are the seven funds created by George Soros. Born in Hungary, Soros became an American citizen in the 1950s. Backed now by great European wealth, he operates globally outside the U.S. regulatory system. All of the Soros funds are offshore – that is, outside the control of the federal government – and do not have U.S. citizens as investors. Soros himself is the prototype transnational capitalist. His speculative operations have created a vast amount of unregulated world money that flows in and out of national economies at the push of a computer key. His Quota Fund wages huge bets on global currency, bond, equity, and commodity market trends. The most famous Soros fund, the Quantum Fund N.V., has speculated against European and Asian currencies and made over $1 billion against the British pound in 1992.” (http://www.studien-von-zeitfragen.de/Global/Drug_Policy/DRUGPO_1/drugpo_1.HTM)
Al used offshore banking as well as “Islamic” banking. It should be noted that impetus for the growth of “Islamic” business in Egypt was Egypt’s alliance with the US and Israel. And US certainly encouraged an Islamicization of all the Mid Eastern nations which has alliances with.
“Enron was at it’s heart a derivatives trading company”
“...the estimated notional amount of outstanding OTC derivatives as of year-end 2000 was $95.2 trillion. And that estimate most likely is an understatement.”
Testimony of Frank Partnoy
Professor of Law, University of San Diego School of Law
Hearings before the United States Senate
Committee on Governmental Affairs, January 24, 2002
CIA efforts to lower the price of gold (http://www.gold-eagle.com/gold_digest_01/chapman032601.html) and much more
The 911 speculation itself
See Soros description
Neoliberalism has been a global collapse of living standards.
“The late 20th Century will go down in World history as a period of global impoverishment marked by the collapse of productive systems in the developing World, the demise of national institutions and the disintegration of health and educational programmes.”
Global Poverty In The Late 20th Century, Michel Chossudovsky
“The country may be the IMF's prize acolyte, with 90% of its banks and 40% of its industry in the hands of international capital, but the result is a disaster.
“Since the early 1970s Argentina's external debt has increased from $7.6bn to $132bn (or even $155bn), and the $40bn that the state collected from privatisation went up in smoke. Unemployment has risen from 3% to 20%, the number of people in extreme poverty from 200,000 to 5m, those in poverty from 1m to 14m, illiteracy has increased from 2% to 12% and functional illiteracy from 5% to 32%. And the foreign investments of political and union leaders and industrialists now amount to $120bn. The neoliberal show state is a demonstration model of the scale of theft and its disastrous effects on society.”
Le Monde Diplomatique, (http://mondediplo.com/2002/01/12argentina)
Iran making only Persian rugs, Argentina only makes
Both the market and extra-market measures can be somewhat arbitrary in judging “real” efficiency of production. One sometimes reasonable measure of efficiency is how well an economy uses space.
We should note here that the US economy essentially competed on the world market through misusing or squandering the “reserve” territory which it has.
This has involved both directly decimating the wilderness and also spreading out the population in an absurdly disperse fashion – the culture of suburb, automobile and shopping mall.
Recent studies have shown giant retail “boxes” in general and Wal-Mart in particular as being virtually the only source for mid-nineties growth in American “productivity”. But we should consider that any significant increase in the price of oil would down such growth into a decline considering the vast amount of driving that the suburban model of existence provides.
Now, the various energy shocks which America has experienced haven’t given any impetus for the nation to become more efficient; such efficiency can’t be made up of individual marketplace decision but has to come from an organized collective or government response. Simple example: a renter living in a poorly insulated house might pay less if he paid to have it insulated but he would have to pay more now and might not be around later to get the benefit. The renters landlord has no incentive to insulate the house either, since the landlord does not pay any utility bills.
The British and American use of Wahabi-ism
See Dollars For Terror, Political Economy Of War And Peace in Afghanistan
Auto industry maxim; http://www.wired.com/wired/archive/10.08/fuelcellcars_pr.html