Easy Money: The Reserve Bank of Australia and the tremors in capital accumulation

On the 2^nd of August the Reserve Bank of Australia (RBA) reduced the cash rate to the historic low of 1.5%. The actions of the central bank often seem either arcane or uninteresting to the vast majority of us – except perhaps for those playing the markets and various gold-bugs, currency cranks and other tin-foil hat aficionados. However we should pay attention to the RBA. The RBA’s action was an attempt to intervene on the level of money in a way to forestall a further decline in the prospects for the capitalist mode of production in Australia and thus dampen any intensification in social conflict or malfunctioning such a decline might contribute to. Therefore it also tells us much about the health of capitalism in Australia on a whole and gives us an insight into the terrain on which our efforts for emancipation play out.

It is important to place an understanding of money right in the centre of radical critiques of capitalist society. Money is a coagulant that holds together so much of capitalist society as well as the form in which capital finds its clearest expression. Money dominates our lives. ‘The individual carries his social power, as well as his bonds with society, in his pocket’ (Marx 1993, 157). In our world money is incredibly heavy: ‘the wealth of societies in which the capitalist mode of production prevails appears as an “immense collection of commodities”…’ and it is our access to money which allows us to access this wealth which is the collective product of our vast creative capacities and their metabolism with the world (Marx 1990, 127). There are very few moments of the day when the amount of money in my pocket, in my bank account and the level of debt on my credit card isn’t on my mind. Yet on the other hand money is now incredibly insubstantial: since the end of the direct linkage of the US dollar to gold and all other currencies to the US dollar money no longer has any other references than itself. This has facilitated a vast and dizzying explosion of liquidity. This contradiction was seen so starkly in the response to the crisis when vast sums of money were either willed into existence by states or appeared as state debts as the financial system was bailed out whilst money for many people evaporated and plunged them into poverty.

Anti-capitalists in Australia have not been very good at making sense of money and finance nor popularising this critique. We rely too much on very general arguments about the madness of markets or robotic interpretations of the tendency of the rate of profit to fall. We haven’t been very good at explaining the specifics of this crisis or why crises and malfunctions that appear on the level of money are actually products and expressions of much deeper systemic dynamics. This space has been filled by less savoury types: currency cranks, Larouchites, anti-Semites and other species of reactionaries. Part of our collective self-emancipation is demystifying the operations of capital on all levels.

So what did the RBA actually do?

The RBA lowered the overnight cash rate. The cash rate is the interest rate that banks - authorised deposit-taking institutions or ADIs – pay to borrow funds from other banks in the money market on an overnight basis via accounts held by the RBA. Since the early 1990s the cash rate has become ‘the standard instrument of choice’ for the monetary policy of central banks(Cagliarini, Kent, and Stevens 2010, 22). It works because banks lend out vastly larger amounts than they have in deposits; and banks constantly borrow from each so they can lend and meet their various obligations. The RBA sets a target overnight cash rate to signal to the market then acts in the following way:

The Reserve Bank uses its domestic market operations (sometimes called ‘open market operations’) to keep the cash rate as close as possible to the target set by the Board, by managing the supply of funds available to banks in the money market.

 

The cash rate is determined in the money market as a result of the interaction of demand for and supply of overnight funds. The Reserve Bank's ability to pursue successfully a target for the cash rate stems from its control over the supply of funds which banks use to settle transactions among themselves. These are called exchange settlement funds, after the accounts at the Reserve Bank in which banks hold these funds.

 

If the Reserve Bank supplies more exchange settlement funds than the commercial banks wish to hold, the banks will try to shed funds by lending more in the cash market, resulting in a tendency for the cash rate to fall. Conversely, if the Reserve Bank supplies less than banks wish to hold, they will respond by trying to borrow more in the cash market to build up their holdings of exchange settlement funds; in the process, they will bid up the cash rate.(Reserve Bank of Australia)

In short the RBA attempts to lower the interest rate to stimulate lending by banks and increase it to draw back on lending. This is the form that monetary policy takes today: adjusting the cash rate is an attempt to impact the supply of money. In contemporary financialised capitalism we have a fiat currency but most money is credit money – money that is created by banks ex nihilo at the moment it is lent. As financialisation has grown so too has the importance of the central bank. ‘The financial system became even more dependent on using central bank money as obligatory means of payment for the settlement of debts’(Papadatos 2012, 120).

Central bank policy both works by impacting the costs of banks to finance lending and also on a linguistic level in that it signals to banks and the broader market the understanding the central bank has about the shape of the economy and thus influences the conventions that bind together the herd like behaviour of financial markets (Marazzi 2014, 2015a). For example in a Bank for International Settlements study of unorthodox monetary policy it is noted that ‘there is general agreement that large-scale asset purchases did have sizeable effects on financial conditions’ however ‘most of the impact appears to take place on announcement, rather than once the purchased are actually executed’(Borio and Zabai 2016, 13). The speech acts of the central banks had more impact than their actual actions!

Of course it may not work. Banks aren’t mandated to pass on the cut – and they haven’t in full in this case – however it seems generally sensible to say given the usual caveats if it is cheaper for banks to borrow then there will be a greater tendency for them to lend. The more extreme step is that taken by the Bank of Japan and the European Central Bank of negative interest rates – in effect a tax on banks to spur them to lend(Borio and Zabai 2016, 19). The Bank of England has developed a new tool called the Term Funding Scheme that allows banks to borrow from the Bank of England at the cash rate and then they can borrow more as they lend more (Bank of England 2016, v).

Since the start of the current crisis central banks across the globe have engaged in this unorthodox monetary policy. This has three elements: quantitative easing, when central banks purchase financial assets; forward guidance, when central banks clearly indicated what they plan to do in the future; and reducing interest rates, sometimes to even negative levels (Borio and Zabai 2016). They have junked the commitment to fighting inflation – which has become a non-issue in the context of sluggish accumulation. It is important to remember what a huge ideological shift this is and how pre-crisis the dominant orthodoxy asserted that inflation targeting by independent central banks was one of the reasons that capitalism was so stable and trouble free (more fool them) (Bernanke 2004).

The actions and policies of central banks – and indeed the existence of central banks themselves – may appear to be the product of dower neoclassical technocrats but they are actually driven by struggle and crisis. Modern central banks arose or were reorientated as part of the reaction to the post World War I revolutionary wave – and then their shifts in policy from Keynesianism, monetarism and to inflation targeting were also driven by vicissitudes of accumulation and struggle (Holloway and Bonefeld 1996b). Indeed the pre-crisis commitment to inflation targeting was implicitly formulated to hold down wages and to prevent labour becoming confident and emboldened by making sure that employment didn’t grow too rabidly (McCarthy 2016). Whatever ideologies central bankers have about markets central banks themselves are core to how the state attempts to intervene in and even plan capitalism.

Unorthodox monetary policy is generally seen as being stimulative. On one hand the purpose of these measures is to secure the financial system – purchasing dud assets, allowing banks and financial institutions to borrow cheaply to meet their obligations and giving them a sense of security about the future. One the other hand it works to attempt to increase demand by intensifying the ‘privatised Keynsianism’ that undergirded neoliberalism (Bellofiore 2015, 7): by lowering interest rates the hope is the it will encourage people to borrow and spend and banks to lend. This is based in no small part on the rise in credit, especially that borrowed from banks, in our lives as a critical supplement to wages and state welfare; and that exploiting wage-earners through interest, fees and charges is increasingly important to banks (L. dos Santos 2012)[i]. But also crucially it is an attempt to lower the cost of borrowing for capital as well and thus spur investment.

In a capitalist society the driving mechanism is the capitalist mode of production which is built around taking money and throwing it into investment to produce more money - M-C-M’ - forever (Marx 1990, 251). If it becomes cheaper to borrow money then more money should be invested as capital then before. There is kind of Keynesian logic here: the lower interest rates are – the argument goes – the more attractive it is to invest in productive activity instead of just saving or playing the market. However in reality this has failed. The IMF is now warning of a ‘chronic investment deficiency’ (2016, 4).

The fact that unorthodox monetary policy hasn’t succeed in spurring this investment means that the increase in access to money hasn’t solved capital’s dilemma of how to invest and make a satisfying profit.

The RBA has been rather late to the party – mainly because capitalism in Australia has done so much better than elsewhere because, let’s face it, it has benefited from Chinese stimulus. Also one of the interesting by-products of the shift to unorthodox monetary policy is that its effectiveness constantly diminishes. In a world awash with cheap money what is some more going to do? Indeed in his final address outgoing RBA Governor Glenn Stevens seemed fairly ambivalent about the policy and very concerned about its limitations. ‘The problem now is that there is a limit to how much we can expect to achieve by relying on already indebted entities taking on more debt’(2016). Not only that there are growing concerns about how it may be contributing to other contradictions – such as the risks of the continual proliferation of debt and of intensifying instability within money itself. Thus we can think of unorthodox monetary policy, using Harvey’s (2010) language, as a ‘fix’: a monetary fix that delays and shifts but cannot solve crisis .

In fact a danger for capitalism is that whilst unorthodox monetary policy perhaps contributed in stabilising global capitalism after the eruption of the crisis it now risks opening up new points of malfunctioning inherent to money itself. As Marx (1993) writes in the Grundrisse:

Various forms of money may correspond better to social production in various stages; one form may remedy evils against which another is powerless; but none of them, as long as they remain money, and as long as money remains an essential relation of production, is capable of over-coming the contradictions inherent in the money relation, and can instead only hope to reproduce these contradictions in one or another form.(123)

And:

The real question is: does not the bourgeois system of exchange itself necessitate a specific instrument of exchange? Does it not necessarily create a specific equivalent for all values? One form of this instrument of exchange or of the equivalent may be handier, more fitting, may entail fewer inconveniences than another. But the inconveniences which arise from the existence of every specific instrument of exchange, or any specific but general equivalent, must necessarily reproduce themselves in every form, however differently. (127)

And:

Money does not create these antitheses and contradictions; it is, rather, the development of these contradictions and antitheses which creates the seemingly transcendental power of money.(146)

Money serves a number of contradictory roles in the capitalist mode of production. As mention above the capitalist mode of production is one driven by businesses whose sole rationale is the endless realisation of profit: transforming money into more money ad infinitum. Capital’s journey is often a tortuous one and it moves through ‘different forms with which capital clothes itself in different stages’ – money to factors of production to commodities to market and back to money (Marx 1992, 109). Each firm is interlocked into a host of others and they grow ‘as a continuous sequence of individual spirals’ (Luxemburg 2003, 7). However it is money which is the ‘general mode of existence’ of value and therefore of capital, its starting point and its endpoint, even though capital needs to move through other forms (Marx 1990, 255).

In such a society the vast amount of wealth takes the form of commodities – that is things with price tags. Money functions as the measure of value, the means that allows commodities to circulate, the unit that prices are set in and payments can be made with, something that can be horded and saved separate from the churning of production and circulation and as the substance that links all of this together globally (Marx 1990, 188-244). But these different functions come in contradiction with each other as expressions of the deep underlying malfunctions in the capitalist mode of production itself.

Unorthodox monetary policy whilst increasing the amount of money as a way of increasing the circulation of commodities and the supply of capital undermines money’s function as a measure of value and undermines savings. It fuels the growth of bubbles – where the price of certain classes of assets or commodities accelerates on the basis of more and more money flooding into the market. Unlike in the past this price inflation has been contained mainly to finance, or in the case of Australia, house prices.

Defying the doxa of neoclassical thought where rising prices is meant to signal to the market a need to increase supply or causes a decline in demand and thus leads to the decline in prices these bubbles see price and supply rise together. This is because bubbles in finance or real estates are tied to their existence as assets that are speculated on. Marazzi writes on this phenomenon in relation to financial assets:

What happens in the financial markets is exactly the opposite: the more the price of an asset increases, the more people want it, thanks in part to access to credit. This gives rise to a spiral motion, which makes prices increase, up to a point where the mechanism becomes fully self-referential, that is, detached from any substantial value.(2015b, 50)

Indeed the RBA itself is concerned about there being a glut of residential units in Melbourne and Brisbane at the very same time it carries out policy that allows this bubble to stay inflated and grow (2016c, 44). (This by the way explains why the argument made by the Right in Australia that more off-the-plan unit construction will mean cheaper housing is wrong).

The instability of these speculative bubbles comes into starker relief when we remember that so much of this new money comes into the world in the form of an ever accelerating pile of debt(McKinsey Global Institute 2015). Credit is always a bet on future profits – that the money borrowed today will be able to be put to use in a way that is productive: that it will lead to the ongoing and increased accumulation of capital. Those who lend the money hold claims on profits and incomes yet to be made. At the moment this accumulation is happening largely through constant investment into speculative assets – whose price growth is premised on the continual and growing supply of cheap money. As mentioned above investment outside of finance is in a perilous state.

Capital’s fantasy is that of money which simply grows into more money without having to move through the difficult world of the production and circulation of commodities. Credit itself is a necessary part of the totality of capitalism which simultaneously increases its growth and the growth of its contradictions. In the postFordist period capitalism became ‘financialised’(Lapavitsas 2013) with finance growing both in size and as a proportion of the economy and becoming ‘cosubstantial with the very production of goods and services’(Marazzi 2011, 28). This growth of finance was a product of capital attempting to flee labour; to run from the struggles of the 1960s and 70s (Holloway and Bonefeld 1996a, 213) . This swelling has continued after the 2007-8 meltdown. The radical critique is that there is a limit to this – that capital can try to escape from production, and thus from us, but it only does so by deferring a day of reckoning. At some point the law of value asserts itself similar to how ‘the law of gravity asserts itself when a person’s house collapses on top of him’(Marx 1990, 168).

Credit has to command labour. It has to do so by integrating labour into the capital relation on the basis of the supremacy of the valorisation process rather than an accumulation of monetary claims upon the future exploitation of labour. Productive accumulation has to succeed in order for money capital to be sustained. Failure to turn credit into effective command over labour involves insolvency and bankruptcy for capital as whole. Crisis shows what money is. (Bonefeld 1996, 196)

Certainly there is considerable worry about asset bubbles and huge piles of debt. Yet so far the bubbles haven’t popped and each debt crisis is allayed by more debt. Unorthodox monetary policy is like a vast anti-gravity machine that has been able to delay the day of reckoning. The cost however is that it postpones crisis today by accumulating even greater and greater sources of risk. Unorthodox monetary policy today seems to necessitate unorthodox monetary policy tomorrow. It does seem unlikely that this can go on forever…

Underneath all of this is another growing realisation about the failure of states to do anything else – to address the underlying problems of profitability (often expressed in the mystified form of a worry about ‘productivity’) that beset capitalism globally. Thus the latest IMF(2016) advice to the G20 reads like a panic list of panaceas – ones that probably won’t be implemented and would be unlikely to have any impact if they were. The IMF wants some states to pay off their debts, others to spend more, workers to work harder and be more flexible and yet wages to rise.

A final element to consider is how much monetary policy today is starting to splinter internationally. There is increasing commentary that the Peoples Bank of China has broken with previous commitments to keep the value of the RMB stable and has pushed it down to make Chinese exports cheaper and thus to also export some of the contradictions of over-accumulation (Evans-Pritchard 2016). So too the RBA is investigating the possibility of implementing quantitative easing to hold down the Australian dollar (Shapiro 2016). In this sense money’s function as world money is coming under increased strain and the tensions within the global imperial order are becoming starker (obviously however the US dollar still remains the default global currency).

And before you say it, no other forms of monetary policy wouldn’t solve these problems. Linking money back to a commodity, returning to inflation targeting, crypto-currencies, block chain, whatever would simply shift how the contradictions in capitalism appear on the level of money.

Why did they do it?

There are two levels to answer this. The most obvious is the continual slow decline of the prospects of capital in Australia as part of the global malfunction and malaise. Another reason is the systemic failure of any government to carry out its promised reforms to make conditions more attractive to capital: and the cause of this failure is us….as weak as we seem. As I have written about there was a Plan A for capital: reduce the social wage, privatise state assets and then invest in infrastructure as stimulus and as a source of profit. This plan also involved the intensification of state power to break multiple points of opposition: the construction unions, community opposition and environmentalists. All of this fell apart. Defeated on the streets, in elections and in the Senate. In a case of high farce the NSW plan to sell power assets – and NSW is the only example of where this Plan A still being carried out – has just been scuttled as the Federal government has blocked the sale of Ausgrid to Chinese interests. This has thrown into doubt the infrastructure construction that the funds generated from this leasing where going to finance (Brook 2016). The Turnbull-Morrison Coalition government has thus added another nail in the coffin of the strategy of the previous Abbot-Hockey Coalition government. The replacement strategy of the Turnbull-Morrison Government – reduce state debt to facilitate tax cuts for capital and try to increase productivity by hobbling the construction unions and throwing money at ‘innovation’ (Turbbull 2016) – seem equally doomed to die a death in the Senate.

The comrades at Left Flank with their concept of ‘antipolitics’ have made the most convincing explanation for the state’s incapacity to carry out a plan for capital that can defeat our, by historical standards, relatively weak level of opposition. The core of the antipolitics argument is that the unfolding of neoliberalism lead to the disintegration of any social base for political parties, the political class and politics more broadly (Humphrys and Tietze 2013, Tietze and Humphrys 2015). However I think Humphrys and Tietze tend to underestimate the role that class compositions plays in this and are more pessimistic about the current levels of struggle than I am. My own attempt to add to this debate in part 3 of the ‘Australia You’re Standing In It’ remains only an expanding pile of notes.

I often typify the last 20 years as a time of defeats for our side with the antiwar movement being the central example – (this is a long running point of debate with Nick at Revolts Now). Humphrey and Peter pointed out to me recently that I have ignored the campaign against WorkChoices and that it was far more widespread and far more successful than the antiwar movement since it brought down the Howard Government. My perspective on this period is coloured by my own personal experience of it and that this struggle seemed heavily locked down by the trade union bureaucracy (perhaps with the exception of the formation of Union Solidarity groups in Victoria); and the ALP’s subsequent Fair Work Act functions in an asphyxiating way on the class. It is true that no Coalition government since has been game enough to attempt widespread industrial relations reform beyond targeting specific unions under the accusation of corruption. Yet on the other hand even the RBA itself states that one of the possible reasons that wage growth is so low is the decline in the ‘bargaining power of labour’ (Jacobs and Rush 2015).

Glenn Stevens pretty much stated in his farewell speech that the state’s incapacity to rule for the interests of capital on a whole are a problem. Focusing on the failure to reduce debt and deficit he said:

Many difficult choices will need to be made along the path of budgetary adjustment. At present, general public debate starts with commitment to the need for reform and for putting public finances on a sustainable medium-term track. But when specific ideas are proposed that will actually make a difference over the medium to long term, the conversation quickly shifts to rather narrow notions of ‘fairness’, people look to their own positions, the interest groups all come out and the specific proposals often run into the sand. If we think this rather other-worldly discussion will not have to give way to a more hard-nosed conversation, we are kidding ourselves. That will occur should there be a moment of crisis, but it would be better if it occurred before then.(Stevens 2016)

And he remarked on the inadequate capacities of monetary policy: ‘But in the end, we are living in a world in which the ability of monetary policy alone to boost growth sustainably is very likely to be a good deal more limited than we might wish.’

In this context the RBA is attempting to respond to the unfolding weirdness of capital accumulation in Australia. On one hand Australian growth remains strong at 3% annually (from March 2015 to March 2016)(Reserve Bank of Australia 2016c, 33). Yet the other indicators are poor: investment and profits are down and wage growth is stagnating (Reserve Bank of Australia 2016a, 8-10). The RBA is especially concerned with the rising proportion of employment that is part-time(2016c, 40). Growth has been maintained by credit: credit in the form of Chinese stimulus and household credit in Australia. The former has kept the level of resource exports higher than expected (even as mining investment plunges) and the latter has driven the rise in real estate prices – especially the development of units. The concern of the RBA is that credit growth is failing at the same time that local and global indicators are worsening. Thus the RBA is making a wager on what is to come.

It is always interesting to look at the statements of organisations such as the RBA as it gives you an insight into how such bodies think. How do factions for capital understanding capitalism? They, on the whole, misread it; but this doesn’t mean that are complete wrong. After all both Keynes and Friedman were wrong but they were right enough to be practically useful for capital. The nature of capitalism obscures how it functions to its participants and mainstream ideologies add another layer to the mystification. Thus at best the RBA reads the surface phenomena of the unfolding of the economy within a framework built on the underlying assumption that capitalism naturally returns to growth and equilibrium. Of course the impact that central banks have on the conventions of the market mean they have to moderate their language too.

In making their decision the RBA Board were concerned about a number of phenomena but two seemed especially crucial: declining growth in China and low inflation in Australia (Reserve Bank of Australia 2016b). As I have argued before low inflation is an indicator of low price growth and thus dwindling economic activity. Both are evidence that the stimulating credit bubbles are beginning to slow their swelling and thus with no other clear options for the bank to take the course left open to them was to try to inflate them further. The RBA is worried the future of the Chinese economy is uncertain, especially that of the real estate market, and that the Chinese government is less convinced it can delay any slow down by expanding the already vast amounts of debt. Lower Chinese growth would impact the prices and volumes of resource exports and thus undermine one of the pillars holding up capital accumulation in Australia (2016c, 70).

Secondly the RBA is attentive to slight slow downs in the growth of real estate credit and prices in Australia. This threatens to undermine the viability of the vast amount of unit development in the works: ‘if growth in housing demand does not continue to keep pace with the large increases in supply already in the pipeline, it could place downward pressure on prices and rents and increase the risk that off-the-plan purchases fail to settle’(Reserve Bank of Australia 2016c, 72). This worry is being debated by economists and speculators in more dramatic terms (Quelch 2016).

There is a strange logic here; which is evidence of the deep contradictions within capital accumulation itself. Despite Australian household debt being a record high of 125% of GDP the declining rate of the growth of this debt is taken by the RBA as a sign that increasing it further wouldn’t be a problem: ‘This suggested that the risks associated with rising household sector leverage and rapid gains in housing prices had diminished’ (though to be fair Stevens in his farewell speech is concerned about it) (Reserve Bank of Australia 2016b, Stevens 2016). This slow down in the rate of credit growth has been further exacerbated by the decision of a number of major banks to ‘place restrictions on lending to non-residents or borrowers reliant on foreign income’(Reserve Bank of Australia 2016c, 49). How we are meant to service rising debts when our wage grow is stagnating is unanswered.

It is crucial to understand the malfunctions in both China and Australia as symptoms of the global crisis of over-accumulation and not some free floating causes. They embody both the continuing impact of the crisis and the growing problems with the attempts to delay the power of the meltdown. To sum up and return to my previous metaphor the reduction of the cash rate by the RBA, like unorthodox monetary policy across the globe, is an attempt to direct more power to an anti-gravitational machine that is struggling with its task – and does so in a way that could further intensify the stress-fractures to come. The IMF’s panicked prognosis at the G20 Finance Ministers and Central Bank Governors’ Meetings was based on a probably correct understanding: ‘Global growth remains weak and fragile’ and beset by worries, risks and potentially breakdowns (2016). The force of gravity is strong.

What does this mean for us?

Should we care? How does all this matter for us? Since we are so deeply indebt low interest rates seem like a God-send – especially since not only are our debts rising but our savings are declining (Reserve Bank of Australia 2016a, 5). So far the global economy and that in Australia has defied our Marxian doom saying – the roof hasn’t yet fallen in. Yet the activity of the RBA is indicative that thinkers for capital are acting increasingly anxiously to sure up the structure. As disorganised as we are we could perhaps at least start factoring this possibility into our thinking. Is there are a way we can assert our collective interests in this context that starts to open pathways to a radical different kind of society?

More directly it also highlights what is at stake in some current struggles. In Brisbane many of my comrades are very involved in struggles around The Right To the City – and the centre of this is opposition to the West Village development at the old Absoe site in West End. The actions and analysis of the RBA shows us that such developments that are rapidly reshaping the major cities across Australia aren’t solely the product of bad planning and shysters: they are core to capital accumulation in Australia and the central bank is doing all it can to support them. That’s what we are up against. This also gives us some insight into the Government’s attempts to disarm the CFMEU. It isn’t just a case of rightwing ideology – but rather an attempt to make real estate development as profitable as possible. As homeless people in Melbourne squat houses and community groups in Sydney oppose toll roads, or the NSW government cracks down on the Red and Black block in an attempt to make Parramatta seem less ‘Westie’ or ‘ethnic’ we should have some sense of what the stakes are for capital in these struggles. On this point we should take heart. It shows the weakness and precarity of capital. A major development slowed or even stopped in the heart of Brisbane could have a serious knock on effect to Australian capitalism on a whole.

I also think there are some unsettling implications. It is further evidence that the ‘high credit, high work, high consumption’ deal that underscored the social order during the mining boom is fraying and coming apart. The bubble of house prices shows us one of the deep lines of internal inequality amongst the working class and the complex relationship that we have with capitalism. Rising house prices lock some of us out of owning their own place. For the two thirds of households that do own their own house it increases the value of our major asset and source of collateral. For those of us paying off their nosebleed mortgages low interest rates gives us some breathing room; but for those of us who are retired and living off our super or savings it guts our income. It is probably safe to expect that these internal inequalities within the class map on in a rough way to hierarchies of race and gender and our incredibly heterogeneous class composition. This gives us some insight into our challenge to recompose ourselves across these stratifications and the possibility that these divisions will find further reactionary expressions.

All of this as the engine of the social order, the capitalist mode of production, starts to shake, and the methods of its maintenance create new problems. To channel C.L.R James channelling Voltaire ‘smash up the Mess’. ‘Ecrasez l’infame’(2013, 31).

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[i] Humphrey McQueen recently pointed out to me that credit has always been important as a way of supplementing wages; in the past however often this would be store credit and would rely on denser geographically specific bonds between people that would guarantee the debtor.