Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.)

Marx/Engels, The German Ideology

We take our Marx and Engels seriously. Recent history, beginning perhaps (in the US) with the UPS strike of 1997 and the “battle of Seattle” in 1999, now quickened by the abject financial and ideological meltdown (Fall 2008) of the three decades of the stifling “neo-liberal” era, has favored a certain revival of the radical critique of capitalism, by which we understand first and foremost the work of Karl Marx. Conferences of rock concert dimensions, attracting thousands of young people in Europe, the US and East Asia, gatherings that only a few years ago would have featured some (now happily passé) hip literary theorist, are today devoted to the work of Marx . The premature rumors of Marx’s demise–almost a cyclical indicator in their own right–have recurred often enough in the past 120 years, but Marx’s books, in the wake of the fall 2008 world financial meltdown, were cleaned out of the bookstores of the U.K. and Germany.

“Theory must seek its practice,” Marx wrote long ago, but “practice must also seek its theory”, and such theoretical ferment expresses the rising tide, in fits and starts reaching back to the 1990’s, of an accelerating global reaction to the ravages of the “neo-liberal”, “Washington consensus” phase of capitalism, after the rollback of what we might consider he last (l968-1977) offensive of the world working class.

We, less than a dozen intellectuals and militants, limited for now to the U.S. but with networks of association reaching into Europe and Asia, are launching Insurgent Notes as a contribution to this ferment.

Our minimal program of agreement is:

1. commitment to social revolution for the abolition of the wage-labor system, i.e. the capitalist mode of production, and an orientation to the wage-labor proletariat (i.e.the working class) and its potential allies as the main force for such an abolition;
2. an affirmation of the great experiences in direct democratic management of production and society (soviets, workers’ councils) that came to the fore in the failed revolutions of the 20th century (Russia, Germany, Spain, Hungary) or, closer to U.S. experience, the self-managed Seattle general strike of 1919 as important antecedents, but hardly the last word, in our project;
3. a commitment to “activity as all-sided in its production as in its consumption” (Marx, Grundrisse), and the “development of human powers as its own end” (Pre-Capitalist Economic Formations) within the expanded reproduction of humanity as the true content of communism ;
4. a deep-seated skepticism about vanguardist notions of revolution; while we at the same time affirm the need for some of kind of organization that emerges practically and concretely from real social struggle–not “sprung full-blown from the head of some world reformer” (Communist Manifesto)–and which conceives of itself not as “seizing power” but as a future tendency or current in a future self-managed society;
5. a rejection of nationalism of any kind as an obstacle to such a revolution;
6. a rejection of existing Socialist, Communist or Labour (let alone Democratic) parties in the advanced capitalist sector as alien to our project, and as parties whose (well-proven) role is nothing but the management of capitalism in one or another form, as well as rejection of the “extreme left” groupings (Trotskyists, Maoists) who see such parties as “reformist” “workers’ parties”;
7. a rejection of the few remaining “real existing socialist states” (Cuba,Vietnam, China, etc.) and their Stalinist predecessors (the defunct Soviet bloc) as any kind of model, degenerated or not, for the kind of society we wish to help build;
8. a rejection of the renascent “anti-imperialism” of recent years, associated with the loose alliance of Chavez and his Latin American allies, China, Hezbollah, Hamas, Amadinejad’s Iran, etc., as an anti-working class ideology serving emergent elites in different parts of the developing world;
9. a rejection of any strategy of “capturing the unions” for such a project, as practiced since the 1970s by various “boring from within” Trotskyists, etc.;
10. a rejection of post-modern “identity politics” as the ideological articulation of the very real problems of race, gender, and alternative sexuality, but which must be relocated in class politics.

These basic points do not particularly distinguish us from a number of existing currents, broadly associated (in the US and Europe) with the “libertarian communist” or “left communist” scenes. We do not feel the need, at this early point in our activity, to noisily affirm any distinguishing trademark, except to say that we are launching Insurgent Notes because we have found no place for ourselves in any existing grouping. We look forward to comradely dialogue with such groups and individuals who may feel some attachment to them and also look forward to larger regroupments forged in the kind of practical struggles that can cut the knot of theoretical and practical disagreement. We well remember Marx and Engels, in their London exile in the early 1850s, turning their backs on the petty wars of the sects in the ebb that followed the 1848 revolutions. While we do not see the contemporary period as one of ebb, but rather as one of a rising curve of struggle, our perspective for now is nonetheless Dante’s “segui il tuo corso elascia dir le genti” (go your own way, and let people talk).

The past 35-40 years since the 1968-1977 working-class offensive, however difficult and trying for would-be revolutionary Marxists, have hardly been without practical import for our perspectives. The collapse and disappearance of the Soviet Union and its bloc, and the devolution toward full-blown integration into the capitalist world market by China (and, more recently,Vietnam) have largely cleared away the “Russian question” over which so much polemical ink was (perhaps necessarily) spilled over so many decades. It is clearer today than it was 40 years ago that the Soviet “model,” once its brief internationalist and worker-based phase up to 1921 hardened into Stalinism and then was, as such, exported to rule one-third of the world’s population by the mid-1950s, was about the eradication of pre-capitalist social relations in agriculture, and about the “reinvention of the wheel” of primitive accumulation and the extensive phase of capital accumulation the West had experienced in the 19th century. Its nationalized property, state planning and state monopoly of foreign trade—those features which even today various Trotskyists call features of a “workers’ state”—were developed by closed mercantilist states from Renaissance Italy via 17th century Prussia to Meiji Japan. Well into the 1970s, such states were conceived by most theories on the left as being something “after” private capitalism, whereas in 2010 it is clear as day that they precede a more privatized capitalism. As their own ideologues unwittingly said, they “lay the foundations of socialism,” which is exactly the historical task—developmentof the productive forces—of capitalism. We know today, far better than 40 years ago, that “developing the productive forces” is not the task of socialism or communism. We know that the centralist and statist dimensions of Jacobinism and Bolshevism, not to mention Stalinism and Maoism, arising as they did in overwhelmingly agrarian societies, express the weakness and not the strength of the revolutions that carried them to power.

The legacy of Bolshevism in particular (which we neither embrace nor despise) has among other things greatly obscured the fundamental problem identified by Marx as the alienation of universal from cooperative labor. This problematic has been reified for over a century by variations around the themes of a (mainly intellectual) vanguard “leading” the working class and a libertarian counter-point glorifying workers as the point of production to the exclusion of all else. The much deeper reality of the problem is built into the nature of capitalist society itself, based as it is on the separation of mental and manual labor. Universal labor is science, art, and intellectual work, understood in the broadest sense, which will one day be fused, with aspects of contemporary “hands-on” material labor, into the “all-sided activity” which Marx in the Grundrisse identified as the overcoming of the antagonism of work and leisure by the abolition of commodity production. Capitalism in the past 50 years has increasingly required universal labor quite as much as cooperative labor, first in scientific research in its “ceaseless striving” to develop the productive forces and, in parallel, has enlisted artists and intellectuals to perform its increasingly threadbare ideological unification. Since most of us are, in this embryonic stage of our activity, intellectuals, we align ourselves with the tradition of Marx, as that small minority of intellectuals who refuse their assigned role in the production of ideology and turn their theoretical weapons against the wage-labor system.1 The unification of universal and cooperative labor is another way to express what we mean by “all-sided activity” (again, the Grundrisse).

We do not wish to start our existence by picking up the 1960s/1970s debates about “forms of organization”: party, soviet, workers’ council, union. All such questions are important but they are subordinate to the larger question of content. Content in this case means a program for radical social reconstruction once the world is dominated by “soviet-type” power. But in our view such a revolution will not take place if there is not prepared in advance a substantial stratum of workers with a clear programmatic idea of what we wish to do with the world when we take it away from the capitalist class. That is the true “vanguard of the working class,” not some self-appointed vanguard party intent on “seizing power.” Such an advanced stratum of workers and their allies may very well at some point form a political party, or even several, but our perspective must always be as a current in the future multi-tendency “world soviet.”

Too often in the past, in Russia (1917), Germany (1918) or Spain (1936), workers have established something resembling soviet power as we mean it (in the latter two cases really only as dual power) rooted in workers’ councils, but since such formations were lacking precisely that “programmatic imagination”—what to do next–they quickly handed real control over to the specialists of power in the state or were in short order dispersed and savagely repressed. In our view, the question of revolution is not first of all about forms of organization, but about the social-reproductive programmatic content required to abolish wage labor, commodity production, the capitalist law of value and thereby class society. And that means, for example, having clear ideas of what to do about the environment, energy, the work day, the organization of human living space, education, health care and many other issues that all but dominate the world.

These issues demand attention far beyond the individual workplace. We make this point because many of our political ancestors cut their proverbial teeth in the defense of the practical and political wisdom of workers on the job. We retain a great deal of appreciation for that perspective. But capital has moved on and the point of production is no longer quite what it once was. Profoundly radical actions and demands from the past are no longer sufficient. More jobs and workplaces in the advanced capitalist world will be abolished by the transformation than will be placed under “workers’ control.” We need to define what we want far beyond the limits imposed by what we are faced with.

Let’s take a recent example. The Argentine piqueteros developed in the late 1990s as a resistanceto the drastic attack on workers there through neo-liberal “reform.” As hundreds of factories closed and workers were thrown into unemployment and in some cases ultimately into lumpenization, the piqueteros abandoned the old factory-based strategies of the left and took the struggle to the supermarket, the hospital and the freeway blockage. They fought back against repression by attacking police stations and publicly outing the torturers of the 1976-1983 “dirty war.” In December 2001, the Argentine neo-liberal “miracle,” based on impoverishment of the once-militant working class, collapsed and the state with it. Even the middle classes were fed up with the Peronist state. The piqueteros, mainly recruited from the youth of the downsized and casualized working class, took over the center of Buenos Aires, and power lay in the streets. But no force was prepared to take the crucial next step and reorganize production on a working-class basis, and to thereby nullify the frantic efforts to cobble together a new bourgeois government. The moment was lost; thePeronists regrouped, and the piqueteros were swept aside or even co-opted into the new Peronist patronage machine.

Insurgent Notes might perhaps be distinguished by our emphasis on what Marx in vol. II of Capital called expanded social reproduction. In our future discussions of what a victorious revolution must do about the many social and biosphere problems mentioned above, above all those located outside the “immediate process of production,” we hope to begin a generalized discussion, but one which, in contrast to a sect, we hardly claim to “own.”

In contemporary “advanced capitalism” (advanced mainly in decay—as assessed by the increasing disparity between what could be and what is) an enormous number of people, the great majority of them wage-laborers (including wage-labor professionals) consume surplus-value and do not produce it. Some of what such workers do is all but essential to a human society–they educate the young, care for the sick, and attend to the elderly. However, much else that such individuals do is simply and straightforwardly a waste of their and our time on this earth. A primary focus of Insurgent Notes, in our attempt to spark a discussion of expanded social reproduction, will be the potential of how the expenditure of so much socially-unnecessary labor power, redirected to socially-useful activity and to facilitating “the radical shortening of the working day” which is the sine qua non of the full human self-development for which we fight. And such a redirection requires, it goes without saying, the abolition of the capitalist mode of production.

Insurgent Notes addresses itself initially to those sympathetic to our assessment of the overall situation and notions of what to do about it. We recognize that, for the moment, this in all likelihood means those intellectuals like ourselves and possibly some working people with a certain political and theoretical formation, or those looking for itand not finding it in the broader (self-styled) anti-capitalist milieu. We seek collaborators, initially, among those who share our interest in making the critique of political economy, the focus on social reproduction, and a program for social reconstruction central to our activity and initial intervention. We do not intend to build a network of unformed activists around ourselves as a general staff but rather, to the extent possible, within current conditions, a network fusing “universal labor” (critical intellectual work) with “cooperative labor” (practical intervention). That will mean, initially, the work of writing, editing and publicizing this journal. We intend to organize internal and external study groups on Marxian theory and revolutionary history. As our capacity to do so grows, we intend to establish ongoing investigative work on the global political economy, in order to arrive at ever-clearer understanding of what a revolutionary program and global reconstruction can mean. When we have the numbers and resources to do so, we intend to move to more popular and accessible forms of expression.

We intend to follow and, where possible, participate in ongoing struggles, large and small (an immediate example today would be in Greece), developing strategic and tactical, understanding of the necessities and possibilities of the present. We wish to reconnect with and update the Marxian tradition of strategy as developed by such figures as Engels and Trotsky, but also (more broadly) of the Clausewitzes, Makhnos, Villas, Durrutis and Sun Tzus of world history. We want to study and make accessible an understanding of the strategic and tactical strengths and weaknesses of such moments as the Argentine piqueteros (or the remarkable earlier Argentine cordobazo of 1969), the Chilean cordones comunales of 1973, the Bolivian revolt of 2003, the Oaxaca uprising of 2006, or the Kwangju uprising in South Korea in 1980. Closer to home and to our present, we would include the Seattles and Genoas of the past decade .

We wish to make this kind of knowledge available to the “real movement,” and not as the “property” of ourselves as a sect. Our organizational loyalty is precisely to that “real movement,” not to any artificial, abstract and separate self-definition apart from it. We believe that the more theoretically and practically armed the real movement is, the less it will need “leaders” and “vanguards” of any kind. In contrast to the centrality of key leaders (one thinks e.g., of Lenin) in most revolutions of the past, we feel that the deeper and more substantial the revolutionary leadership is, the stronger it will be, and the broader the base of the movement, the less violent its victory will have to be.

Cultural activities and the arts are not our strong suit, but we recognize their importance for our broader project. Consider the centrality of song for the IWW. Consider the dozens of songs created on the spot during the Oaxaca uprising. Consider the broad activities in song, dance, and movement art work of the Korean minjung movement of the 1970s, taken over into the broader Korean workers’ movement to this day. We know there is a long and noble tradition of artistic involvement in revolutionary movements reaching back more than 200 years, and since the early 20th century, avant-garde attempts of various quality to build a bridge between the arts and life. The great majority of those early 20th century efforts (German Expressionism and the Bauhaus, Russian Futurism, the artists produced by the Mexican Revolution), Dada, or surrealism) after the defeats of the 1917-1921 insurrectionary wave, were simply re-appropriated by the bourgeois cultural museum and presented under glass as “art,” stripped of their broader radical intent. After World War II, groups such as the Situationists attempted to use the method of “diversion”(detournement), first developed in poetry from Lautreamont onward, in broader subversion, but after having a certain impact on the May 1968 general strike in France, “Situationism” in turn was made respectable almost to the point of the creation of “Situationist Studies” and “Situationism scholars” in universities. These currents all represented attempts to use methods first developed in the arts to the communication of radical ideas. We recall the Polish workers of Poznan who, in 1956, briefly captured the state radio network to present their own perspectives or, again, in Oaxaca where the movement captured and controlled radio and TVstations for weeks.

Something takes place in revolutionary moments that have been studied and captured in writing—to the extent that it can be captured in retrospect at all–only rarely, where the Marxian concept of the “class-for-itself” steps out of textbook exegesis and “seizes the masses,” something akin to amaterialist version of Hegel’s idea that “the truth is a Bacchanalian revel in which no member is not drunk.” Or again to paraphrase Hegel’s notion that the “real is rational” when the real is understood as exactly such moments, those which occur when the “inverted world” of the everyday is turned upside down, when the isolated individual realizes his/her true reality in a collective surge that few, if any, suspect could slumber under such passive appearances. One suspects that something of this kind took place in Barcelona in July 1936 when the unarmed crowds charged the military and police and won the day or in Budapest in November 1956 when the country was placed under a national system of workers’ councils in a few days. In such moments, we suspect, Marxian theory, strategy, and aesthetic expression all fuse into some ephemeral collective sense of being capable of everything, whatever the odds.

We should not exaggerate their importance, because history has shown quite clearly that they were, in fact, not capable of everything. But we of Insurgent Notes wish to keep clearly in mind that such qualitative moments in history are a fundamental part of what we call reality, and we hope to locate all other aspects of our activity in that future maturing in the present.

If these ideas converge with your own, contact us.

• 1“a portion of bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole,” Communist Manifesto, London 1979, p. 91.

The Historical Moment That Produced Us

Global Revolution or Recomposition of Capital?

1789 1848 1871 1905 1917 1968 20??

I. Dispersal and Regroupment in Working-Class History in the Capitalist Era

The years 1917-1921 constituted the first worldwide assault on capitalism by the revolutionary working class, centered in Germany and in Russia. That assault was crushed, and the counter-offensive of the following years took the form of, transitionally, fascism, and more enduringly, Social Democratic welfare statism, Stalinism and Third World development states, which succeeded—almost— in burying the memory of its true content and character.

The years 1968–1977 marked the return of revolution, and at least the partial recovery, in a much deepened development of capital’s hegemony, of the communist project left in abeyance by the earlier defeat. The task of Insurgent Notes is to deepen that recovery and to participate in the theoretical and practical regroupment for the next—and hopefully last—global assault.

Looking back from the vantage point of the latest phase of the world crisis that erupted in 2008 (itself merely the latest twist of the “slow crash landing,” sometimes faster, sometimes slower, that began ca. 1970), and from the working-class response to it that, in fits and starts, is taking shape today, one cannot help being struck by the staggering banality of most social, political and cultural life around the world since the late 1970s. By that we hardly mean that “nothing happened”: one need only recall the dismantling of the Social Democratic welfare state, the collapse of the Soviet bloc and reunification of Germany, the rise of East Asia as the most dynamic economic zone in the world, or the emergence of radical Islam. But for those of us who lived through the mass struggles of the 1960s and early 1970s, the three and a half decades of the long slide of the world capitalist system, prior to the meltdown of October 2008, must appear as one of the longest and strangest historical periods since the communist movement first emerged in the 1840s.Those of us too young to have experienced the years of repeated mass movements in the streets, in the heart of advanced capitalism, must make an even greater leap of imagination to grasp the unreality of an era successively characterized by dominant ideology as the “Washington Consensus,” neo-liberalism, globalization, “post-modern” or the “end of history”. From the Paris Commune (1871) to the Russian Revolution of 1905, we might recall a relative ebb of struggle of comparable length, but even then, there was a steady expansion of the organized working-class movement, above all in Europe, both in trade unions and mass-based workers’ parties, on a sufficient scale to even produce, by 1900, the ideological disarray of “revisionism”.

That was then—still the era of the ascendant phase of capitalism on a world scale—and this is now.

By contrast, the period from the mid-1970s onward has been one of almost uninterrupted defeat: brutal dictatorships in the southern cone of Latin America (Chile, Argentina, Uruguay, Brazil); the crushing and cooptation of the Polish worker explosion of 1980–81, containment of the radical currents of the South African workers’ movement in the managed transition from apartheid to austerity, defeat of the workers’ councils of the Iranian Revolution, defeat after defeat of old-style single-industry struggles in the capitalist heartland, from the downsizing of French steel (1979), by way of FIAT in Italy (1980), to the British miners’ strike (1984–85).

The US saw a long string of defeats of traditional union struggles: from PATCO (1981) to Greyhound (1983), Phelps-Dodge Copper (1984) and P-9 (1986) to the Jay, Maine paper strike of 1987–88. By the end of this phase, Wal-Mart had replaced General Motors as the biggest US employer.

Even when workers fought back in forms beyond the traditional, they lost:

• Brazilian workers staged some impressive strikes in the late 1970s but were then channeled into electoral containment by Lula and the Workers’ Party and largely downsized in turn; steel and auto were the most important employers in the late 70s, and Macdonalds and security had replaced them 10 years later.
• Chronically unemployed Algerian youth rioted in 1988 but were co-opted into the Islamic movement and ground up in the subsequent civil war.
• Oil workers and others established workers’ councils during the Iranian revolution (1978–81) whose repression was a major priority of the Islamic Republic that highjacked the overthrow of the shah.
• The South Korean working class exploded in 1987 and made gains into the early 90s, after which it was beaten back by salami tactics and then by the tsunami of the IMF crisis of 1997-98.
• The South African masses forced the dismantling of apartheid, only to be handed over to neo-liberalism by the ANC.
• The Argentine piqueteros’ movement of 2001–2002 brought the government there to its knees, but did no more, and was dispersed and co-opted by the recycling of Peronism.

Add to this picture the succession of local war upon war, from Lebanon (1975–1990) to the 40-odd wars in progress in the early 1990s, culminating (to date) in the 1994-1998 African near continent-wide war (4 million dead), the U.S. debacle in Iraq and potential new debacles in Afghanistan and perhaps Pakistan. The proliferation of murderous nationalisms in ex-Yugoslavia and on the periphery of the ex-Soviet Union made the proletarian internationalism that forced the end of World War I seem very remote indeed.

II. The Global Wage-Labor Work Force as the Sole Practical Universal

As we emerge, hopefully, from this dismal period of rollback, we recall Rosa Luxemburg’s remark, shortly before her murder in 1919: “The revolution says: I was, I am, I shall be!” We assert the ongoing reality of communism, “the real movement developing before our eyes,” as Marx put it in the Manifesto. Like Hegel’s “knights of history,” we locate our identities not in any immediacy but in the emerging new universal that must be the cutting edge of the next global offensive.

What does this “universal” mean? As a first approximation, it means the global program which can unify, as a “class-for-itself”—a class prepared to take over the world and reorganize it in a completely new way—the wage-labor forces currently dispersed in the (somewhat diminished but still central) classic “blue collar” proletariat, the dispersed and casualized sub-proletariat, and those elements of the technical, scientific, intellectual and cultural strata susceptible to allying with such forces. These are, in “inverted” form, the forces actually comprising what Marx called the “total worker” (Gesamtarbeiter). Scattered around the world as it is, above all by the past four decades of debt-driven social retrogression, this “total worker” may seem to be a chimera, but it nonetheless, under the scattered appearances—the very fragments theorized and glorified by “identity politics— of capital accumulation, it does the world’s “use-value” work every day. Subordinated as these forces currently are to the increasingly insane drive of the accumulation of CAPITAL careening toward barbarism and planetary destruction, the programmatic reunification we advocate may seem “utopian,” but it is in fact the survival of this outmoded social system in any remotely humane form which is the real utopia of our time.

It is to the programmatic and practical unification of these forces that we of Insurgent Notes are committed.

III. Working-Class Dispersal and Regroupment as an Historically Ascendant Spiral

As the admittedly dense language in the preceding may be opaque to some, a bit of “unpacking” is in order.

The last concerted proletarian offensive of 1968–1977 might be characterized, on a world scale, as a revolt against the factory assembly line. Although, as indicated, this movement failed to articulate and implement an “alternative social project,” the goals seemed, to some, relatively clear. Reconnecting with the workers’ councils and other forms of mass assembly of the previous great revolutions (Russia 1917, Germany 1918, Spain 1936, Hungary 1956) or less total mass strike phenomena (such as Portugal in 1974–75 or the black-led wildcat movement in Europe and the U.S. from the 1950s to 1973), the goals of the movement were understood to be taking over the existing industrial plant and placing it under “workers’ control.” Given the already skewed character of capitalist “growth” after 1945—we need only think of the net negative social impact of the automobile—such a perspective was already flawed, but it at least had the merit both of seeming palpable to many workers and of providing a focus for the most advanced struggles of that time: the generalized wildcat movement in Europe and North America.

“All power to the international workers’ councils” was the seemingly best “universal” of that era, and there were ephemeral moments when its realization did not seem that far off.

The capitalist counter-offensive involved a direct attack on the “visible” dimension of the movement toward “generalized self-management”: breaking up the big factory into cottage industry and isolated rural “greenfield” sites, further de-urbanizing workers into sprawl and exurbia, the casualization of labor, outsourcing to the Third World, and “high tech” intensification of production. The resulting “de-socialization” of the workers of the 1968–1977 rebellion achieved in these ways was deep and thorough. It was a textbook illustration of the way in which technology—in this case, first of all, new telecommunications and improved transportation—is inseparable from its capitalist uses; not since the mass production of the automobile did an innovation have such an initial impact of isolating and dispersing the universal class which the proletariat IS. That such telecommunications and transportation may tomorrow contribute to the practical unification we advocate is another matter, and remains to be seen.

Our guarded optimism is only strengthened by the long view. Strange as the preceding decades may have been, cycles of defeat and renewal of the movement to abolish bourgeois capitalist society are nothing new. The workers’ movement has repeatedly had to regroup and learn from defeat, and to respond to new forms of capitalist containment. From the Enragés and the Babouvist Conspiracy of Equals of the French Revolution until 1848, the very early movement had to slough off conspiratorial putschism (Blanqui) and various utopian schemes (Owen, Fourier) to emerge in the first concrete, armed expression of communism in the Paris June Days of 1848 and their extensions in other parts of Europe. Out of that 1840s upsurge came the mature self-consciousness of the movement in the work and practical activity of Marx and Engels. The long boom following the defeat of 1848 brought on the 1860s rise of struggles, from U.S. slave emancipation to the European strike wave that produced the multi-tendency First International and culminated in the Paris Commune.

The crushing of the Commune and dispersal of the First International marked the shift of the cutting edge of capitalist development and the maturing workers’ movement to Germany, the long illusion of Social Democratic reformism (trade unions and parliamentary activity), as well as the bowdlerization of Marx’s theory of the real movement into an ideology for the industrial development of backward countries, first in Germany and then, more fatally, in Russia. It inaugurated what might be called the “century of Social Democracy” and Social Democracy’s bastard spinoff, Stalinism (1875-1975), the fatal illusion of statist socialism. Marx and Engels from the earliest opportunity denounced the term “Social Democracy” as an eclectic hodge-podge having nothing to do with communism as they understood it (cf. Critique of the Gotha Program, private correspondence), but the grey eminences of what became the Second International (1889-1914) quietly buried the founders’ critique under the seemingly relentless electoral and trade union advances in western Europe. The illusion that socialism/ communism meant state planning of nationalized property (understood moreover within individual, autarchic nation-states) in fact covered over the reality of a world transition from the formal/extensive to the real/intensive domination of capital (1870s-1940s), a transition perfectly adumbrated in yet another unknown (until 1932) work of Marx, the so-called Unpublished Sixth Chapter of Volume 1 of Capital.

The “real movement that abolishes existing conditions” ripped open the self-contented humdrum world of Social Democracy in the Russian-Polish mass strikes of 1905-1906. As in the Paris Commune with its groping attempt at the abolition in practice of the state (e.g. immediate revocability of delegation), the explosion of 1905 placed on the historical agenda, against the parliamentary gradualism, trade unionism and productivist planism of the Second International, the soviet and the workers’ council as the far more advanced forms of working-class power. And soviets and workers’ councils in turn were at the center of the 1917-1921 world insurrectionary wave, centered in Germany and Russia, that ultimately spread to, and was defeated in, 30 countries. Out of that groundswell from 1905 to 1921 came the next generation of revolutionary theoreticians, including Luxemburg, Bordiga, Gorter and Pannekoek,^[1] the self-conscious expressions of the practical discoveries of the working class in motion.

The revolutionary wave of 1917-1921, however, was not deep enough to end the “century of Social Democracy” and productivist top-down planning; quite the contrary, it made the latter more directly palatable to the stabilization of capital. Capitalism recovered its balance, over new mounds of working-class corpses, through previously unknown, or barely adumbrated forms of statism, a decade of depression and a second world war that achieved for the first time (in contrast to the actual reformism of the pre-1914 period) a “recomposition”; this recomposition covered over the reality that in 1914, on a world scale, the global productive forces necessary to abolish commodity production already existed. Part of this recomposition involved intensified accumulation in the semi-colonial and newly independent ex-colonial worlds, as the hegemonic British empire as well as the French empire gave way to American hegemony.

IV. Recomposition and Revolt in the Era of Capitalist Decadence

The long expansion after World War II, under the auspices of various statisms of self-styled progressive veneer, largely seemed to have exorcised the “specter of communism,” particularly since the word as well as the trappings had been taken over by totalitarian states ruling one-third of the world’s population. Workers on the shop floor, however, knew differently, and in both major blocs regrouped and found their way to new forms of struggle, most notably the wildcat strike which from the mid-1950s onward grew in momentum in the US, the UK, France, Spain, and Italy. Polish workers in 1956 forced a shakeup of the Stalinist state and, in Hungary a few months later, without a Leninist vanguard party in sight, proletarians built a national system of workers’ councils in a matter of days and overthrew the regime. In France in 1968, workers staged the longest wildcat general strike in history. This wildcat moment of the workers’ movement after the 1950s had in many places by 1970 wrested de facto control of the shop floor from the capitalists, but it never went beyond that to the practical elaboration of a social project beyond capitalism, and succumbed to the capitalist counter-offensive which began to gather momentum by the mid-1970s. That counter-offensive intensified with the successive triumphs of Thatcher in the UK, Reagan in the US, Mitterand in France, and Teng in China, joined after 1985 by Gorbachev in Russia. Not since the pre-1914 era had ideology spoken so globally with one voice, orchestrating 1) the biggest disparity in wealth since the 1920s, 2) the shredding of most of the social safety nets had been created in the preceding statist era, and 3) using new telecommunications and transportation technologies, a “globalized” dispersion of production that seemed to fragment the previous concentrations of workers which made possible the wildcat era in the West.

All of history since 1914, then, has involved the successive (and to date successful) attempts to stave off the reality of the superannuation of capitalist social relationships, to periodically, through destruction, repression and ideology, to force working people and their struggles back into those relations, whatever the social and human cost.

Since World War I, these capitalist recoveries, in contrast to the 1815–1914 era, have involved recomposition, in the same way that they involve massive destruction of workers and physical plant in a way unknown in the previous century of capital’s dominance. Mere collapse, deflation, depression and “automatic” recovery, as in the decennial crises analyzed by Marx in Capital, no longer sufficed. Recomposition, in contrast to genuine reformism as it was practiced before 1914, means a “reshuffling of the deck,” a lowering of the total social wage bill under the appearances of inclusiveness: trade unions and socialist parties disciplining the working class, worker-management cooperation schemes, or, closer to the present, diversity counselors, NGOs, women CEOs and green capitalism.

What characterizes the new post-1914 period (variously called “decadence,” “the epoch of imperialist decay,” the “real domination of capital”), in contrast to the previous one, is that capital expands, and social reproduction contracts. Recoveries, such as the postwar boom (1945–1970) involved such a recomposition, made possible by the earlier massive destruction, (two world wars, a decade of depression, fascism and Stalinism) the reorganization of the world system (end of the British and French empires, transformation of the world economy—minus the Soviet bloc and China— into a “dollar bloc” under the Marshall Plan, IMF and World Bank, and the imposition of a new “standard of value” based on the new technologies of the 20s and 30s (mainly of consumer durables, e.g. the auto and household appliances) that had been bottled up by the previous, superseded national markets. This recomposition ran out of steam in the mild 1966 recessions (Japan, Germany, US), the 1968 dollar crisis and the final crackup of the Bretton Woods system (1971–73). Not accidentally, that latter period of unraveling saw the sharpest class struggle in decades, before or since.

V. Capital Seeks a New Equilibrium Through Destruction, 1970–present: The Slow Crash Landing

Since that time, capital has been groping for another successful recomposition based on a new “standard of value”,^[2] whatever the consequences for social reproduction on a world scale. Those consequences have been destructive enough, and they have hardly run their course.

In these four decades, as indicated, capital expands, social reproduction on a world scale contracts.

Let’s look more closely at the chronology.

1970-73 was the beginning of the “slow crash landing,” announced by the bankruptcy of the Penn Central railroad, a U.S. recession, Nixon’s belated discovery that he was a Keynesian, and his unilateral dissolution of the Bretton Wood system of fixed exchange rates in August 1971. Above all through the pyramiding of debt, capital has mainly kept up the appearances of “normality” in North America, western Europe and East Asia: :”normal” recessions in 73-75, 80-82, 90-91, 2001-2, and the current one beginning in 2007. But looked at from a social reproductive view, the post-1960s history of capitalism has been, on a WORLD scale, little less than a substitute World War III, attempting once again the recomposition achieved in 1914-1945. We merely list the highlights: a 20-30% fall in real living standards in the US, the replacement of the one-paycheck family by the 2-3 paycheck family, whole regions de-industrialized; in western Europe, an average of 8-10% unemployment over most of the period and a general (as yet incomplete) dismantling of the welfare state; in eastern Europe and Russia, wholesale retrogression for workers surrounding enclaves of yuppiedom, built (in Russia) on ground rent from natural resources, not any real production, and in eastern Europe on speculative flows of Western capital into real estate. When we “factor in” Latin America, Africa, the non- oil Middle East, the ex-Soviet Central Asian countries, India and the rest of non-Tiger Asia, we are talking about billions of stunted lives and millions of deaths from disease and general slum existence. Mexico in those decades went from being the “next Korea” (Wall St. Journal, ca. 1990) to the possible next Afghanistan (Financial Times, March 2010).

Only East Asia, now extended to coastal China, stands out as a partial exception, and even there Korea, Thailand and Indonesia underwent the terrible retrogression of the 1997-98 crisis, and China’s post-1978 growth has left about 850 million peasants and its floating unemployed army of 100 million quite out of the boom.

The similarly-touted “India shining” has been exposed by large-scale rural poverty, a suicide epidemic of bankrupted weavers, worker unrest in the industrial suburbs of Delhi, and the resurgence of the Maoist Naxalite guerrilla movement, previously declared all but extinct following large-scale repression in the 1970s.

Asian growth, already a minority phenomenon in the two “emerging giants” China and India,, is more than offset by all the retrogression on a world scale.

But one cannot conceive of a new global assault against capitalism comparable to, and surpassing 1917-1921 or 1968-1977, without a concrete analysis of the changing conditions of the wage-labor proletariat over the past 35 years, conditions as discontinuous with those of assembly-line workers in Detroit or British Leyland or Renault-Billancourt (Paris) in 1968, as the latter were discontinuous with the conditions of German, Russian or Italian workers right after World War I.

VI. Capital’s Assault on Proletarian Concentration

Marx, in the beautiful passages on “Machinery and Modern Industry” in vol. I of Capital, points out that the history of technology can be written in terms of the ceaseless struggle between capital and labor over the length and conditions of the working day, and one must also understand everything capital has done since the late 1970s as a counter-offensive against the worker insurgency of the 60s and 70s. The issue is one of locating a new universal for the unification of the conditions of world wage labor, similar to the practical discovery of the soviet and the workers’ council before and after World War I, and their transient “recovery” in the decade after 1968. The issue is one of locating “immanently,” in today’s world production and reproduction, the “inverted” form pointing to what Marx described in the Grundrisse :

…Capital’s ceaseless striving towards the general form of wealth drives labour beyond the limits of its natural paltriness (Naturbedürfdigkeit) and thus creates the material elements for the development of the rich individuality which is as all-sided in its production as in its consumption, and whose labour also therefore no longer appears as labor, but as the full development of activity itself…^[3]

Capital, deeply frightened by the inchoate emergence in 1968-1977 of the search for this “full development of activity itself” responded to the breakdown of the old conditions of accumulation with its second great recompostion of the world working class (following that of 1914-1945), achieved through the breakup and dispersion, on a large scale, of the big factory and its high concentration of workers in dense urban areas in the U.S. and in Europe. It intensified production through new technologies and a revolution in communication and transportation. Capital’s struggle was, as it had always been, to increase productivity while eliminating, as much as possible, living labor from production, but given the high level of productivity already achieved in the 1960s, it was a constant, mystified struggle against the reality that, on a world scale, the living labor necessary to materially reproduce the system had already become “superfluous” as a portion of the total population, and yet urgently necessary, in the dominant social relations, to continue the capitalist expansion of value. We need look no further than the 7 million people in the U.S. prison system (awaiting trial, in prison or on parole, 2% of the 300 million total) to see the warehousing of capital’s surplus population, not to mention the two billion people similarly marginalized in various parts of the Third World.

Technology as such, we understand even more clearly today, following the “high-tech” “new economy” hoopla of the 1980s and 1990s, , is not capital, even if existing technology must of necessity be the material embodiment of capitalist social relationships.

VII. Capital’s Struggle Against the Specter of Its Own Abolition Since the Eruption of the Communist Movement in 1848 and Thereafter

The 1848 emergence of communism as a real movement in the European working class forced capitalist ideology to increasingly mystify, in contrast to all previous class formations, what society could do, namely abolish wage labor, commodity production, capital and, with them, social classes, starting with the wage-labor proletariat. To that end it discarded its own classical political economy, its embrace of Enlightenment rationality, and its advocacy of the rights of the “Third Estate,” since it was now confronted with the proletarian Fourth Estate. It abandoned the Promethean social realism of its artists from Shakespeare via Goya to Balzac, and it shrunk back in horror, seeing its own emancipatory weapons turned against itself, from the devolution of its greatest philosophy, that of G.W.F. Hegel, into the radical ferment of the 1840s, leading to Karl Marx. Whereas capital had, from Tudor England via the French Revolution to various countries (e.g. Spain) into the 1840s aggressively closed down monasteries and expropriated vast church lands, its ideologues responded to the “specter of communism” by a growing flirtation with religious revival and a new irrationalism (admittedly mild indeed by comparison with the religious revival and new irrationalism of the past three decades.)

Such mystification, the frenetic ideological inversion of true human possibilities forced back into capitalist relations, had already achieved enormous proportions during the 1945-1970 postwar boom, perhaps best embodied in the aesthetics, theory and practice of “high modernism”. This was, East, West, North and South, the era of the “enlightened planner,” whether in the New York City of Robert Moses, the “science cities” of the former Soviet Union, the white elephant foreign-aid driven construction of huge, little-used steel plants and freeways to nowhere in the Third World development regimes of Nasser and Nehru, or the eerie silence of Oskar Niemeyer’s technocratic dream of Brasilia (like his similarly eerie headquarters of the French Communist Party in the Paris suburbs). Capital recovered from its brush with oblivion right after World War I, and the long decades of crisis up to 1945 necessary to re-establish global accumulation, with the pseudo- rationality of social planning of experts: the grey faceless bureaucrats of the British Labour Party and its welfare state, the arrogant technocrats of France’s “trente glorieuses,” the Stalinist bureaucrats of successive Soviet five-year plans and the promise of “goulash communism,” the “defense intellectuals” and Robert McNamaras of America’s world military sprawl. It was the era of triumphalist pseudo-rationality in ideology, from brain-dead logical positivist philosophy via the onslaught of mathematics in neo-classical “economics” to the spare formalist austerity of modernist literature, art, architecture and music, these latter carefully expunged of the radical social dimension that animated or seemed to animate some currents of modernism in the years after World War I. Only a few, in this celebratory atmosphere, were aware that, since 1848, the only real rationality was that of the self-conscious global praxis of the revolutionary working class, but while the working class began its regroupment in the wildcat strike movement from the 1950s onward, dominant ideology continued to tout the luminous future of productivist technocratic modernism, a brilliant encampment of the hidden potential of “the beach” hidden “under the paving stones,” as one wall poet lyricist in Paris in May 1968 put it.

What, then, is one to say about the task capital faced in mystifying its superannuation after it managed to contain the worker revolt of 1968-1977? Every phase of capitalist ideology since 1848, but especially since 1917, has been forced to adorn itself with fragments borrowed from the defeated revolutionary surge. One recalls Louis Napoleon’s promotion of worker organization and even of a French delegation to the early congresses of the First International. Interwar fascism was adept in borrowing the trappings and mass propaganda methods of the workers’ movement it crushed. One might then characterize the three decades after World War II, whether in welfare statist, Stalinist or Third World development guise, as the “realization” the Social Democratic Gotha Program denounced by Marx in 1875.

The capitalist counter-offensive since the late 1970s is the one closest to us, and thus merits a more detailed accounting. All these social and cultural phenomena, from the breakup of cities into suburbia and exurbia, the proliferation of shopping malls and “edge cities,” the “reconquest” of the inner city, previously abandoned by the middle classes during the postwar boom, in the form of worldwide gentrification and expulsion of the poor to trashy sprawl, by way of the overt corporate takeover of “education,” to the even greater privatization and atomization of people by individual technologies and the vast ocean of trivia they “communicate,” must be understood from the vantage point of the potential human material community whose inversion they are. And it must never be forgotten that these “post-modern” phenomena, in North America, Europe and East Asia, touted as they are as “growth,” coexist on a world scale with the “planet of slums,” in Mike Davis’s phrase.

What is noteworthy about the past three decades is the way capital appropriated for itself much of the ideological froth of the defeated and co-opted movements of the 1960s.^[4] It was not the first time that the rebellion of the alienated middle classes helped to pioneer the next phase of accumulation. In the 1930s it was exactly these classes who populated the bureaucracies of the emerging welfare state. After the late 1970s, one might say that the personal computer, for the well-to-do classes of the “advanced” capitalist sector, will stand as a symbol of this phase of accumulation as the automobile did for the earlier period. Yet the computer, like the automobile before it, was much more than a technology, bound up as it was with a whole ideology of freedom. That latter ideology was the “revolution” against “bigness” and “bureaucracy” and “hierarchy,” against the “Organization Man” and the “grey flannel suit,” once among the battle cries of the 60s New Left. Where the earlier movement, both in its political as in its Bohemian/ counter-cultural form, had counterposed hedonistic consumption to the then-dominant “Puritanism,” here was the capitalist class and its minions themselves, headed by its Wall Street and City of London yuppie vanguard, plunging into designer drugs, gourmet restaurants and high fashion S+M. Not much was said about the ever-lengthening work week, both for these “creative classes” touted by hip and vacuous social theorists (e.g. Richard Florida), not to mention for the two- and three-paycheck working class family that was the road kill of the “new economy” and the “information superhighway”. And for the “creative classes” and many others, the PC, cell phone and Blackberry eliminated the antagonism between work and leisure, not in Marx’s “all-sided activity,” but as 24/7…work.

The quasi-totalitarian incorporation of failed rebellion reached into every aspect of life, from chic New York restaurants in some former warehouse district, with photographs of 1930s breadlines as interior decoration, to the obliteration of the offbeat café or independent bookstore by Barnes and Noble. Huge shopping malls appeared with little or no service personnel, let alone people knowledgeable about the merchandise, in cavernous halls of commodities; every business and state agency able to do so replaced receptionists with endless telephone trees of irrelevant options and interminable waits, cutting costs by forcing unpaid labor time on those they ostensibly “served”; all the “oppositional” culture of the past, from blues and jazz to once-subversive books was served up under cellophane at Borders. In the name of the new, ultra-reified hype of “information” (as if books such as Hegel’s Phenomenology of Mind or Marx’s Capital constitute “information” side by side with the latest Tom Peters management manual), libraries shredded millions of books to move into reduced, wired space. Arrogant Silicon Valley CEOs and their publicists who had always hated books and serious thought touted the “paperless” economy of the new millennium. Millions of “middle management” jobs (admittedly of no redeeming social importance) disappeared through high-tech downsizing, and those who lost them disappeared into the recycled suburban oblivion covered over by the chorus of the “new economy”. Universities remade “liberal” education as extended vocational training for their “customers,” handing over the tattered remnants of the old humanities to the “everything is corrupt” mantras of the post-modern deconstructionist Lumpenintelligentsia, expert in projecting its (no argument- very real) corruption onto the very emancipatory universal movements in history—revolutions—from which Insurgent Notes draws inspiration. Such ideological decay helpfully diverted attention from the accelerating decay of American infrastructure—the “old economy” of sewers, subways, street and road pavement, bridges, New Orleans levees, or tenement apartment buildings. Perhaps most astounding in this whole ideological facelift was the emergence of the MBA and computer geek and investment banker, figures widely reviled and ridiculed in the climate of the 1960s, as little less than culture heroes and “revolutionaries”. The forgotten “absent-minded professor” ,still (in some cases) having a whiff of the old (and now passé) humanism, was replaced by the sleek, tanned, cynical “radical” post-modern literary theorist, networking his or her way to tenure and from conference to conference.

Modest houses and neighborhoods built for workers in the late 19th and early 20th centuries, in the post-1970s reoccupation of the inner city by the dual income /no kids yuppie class, were refurbished in the general “quotation” of the culture of the past, stripped bare of the vibrant street life that had once made them bearable for their earlier inhabitants. (Adding insult to injury is the little-discussed “fact” that the typical US working-class family spent 15% of its income on housing in 1950, and spends on average 50%—usually one full paycheck—today.) This new dispensation also involved a massive war on memory, from the proposal to turn Auschwitz into a theme park to the malling of the site of the great street battles of San Francisco’s 1934 general strike. Radical longshoremen in the 1950s had mixed with literary Bohemia in San Francisco’s North Beach or at New York’s White Horse Tavern, but today the fully-containerized ports have relocated far away, with one-tenth the number of workers, and one hardly imagines a similar mixing in those old venues of the yuppies and the zoned-out workers from the nearest Macdonalds.

Just as capitalism, through primitive accumulation, had always lived in part off the looting and destruction of pre-capitalist social formations, so had bourgeois culture in its ascendant centuries lived off pre-capitalist cultural strata (e.g. its mimetic relationship to the European aristocracy). As capital turned inward on itself, the self-cannibalization of its social reproductive base since the late 1970s was echoed with eerie concision in the self-cannibalization of its once-emancipatory culture in the ideological Ebola virus spread by the post-modern nihilists and deconstructionists, the Foucaults, the Saids and the Derridas. As Marx said long ago, “the ruling ideas of every epoch are the ideas of the ruling class.”

VIII. Class Regroupment and Its Enemies: Porto Alegre, NGOs and the World Social Forum against the Global Working Class

This cultural offensive has not been without its political counterpart. The non-Marxist left has repeatedly been essential to capitalism in reshaping it for a new phase of accumulation. One need only remember Proudhon and his 150 years of influence on worker-run cooperatives^[5] in a capitalist framework, or, closer to our own time, the role of Social Democracy, Stalinism and Labourism (and even fascism, from the ex-leftists such as Mussolini who initially forged it) in laying the foundations for the post-1945 Keynesian welfare state.

But just as in the way that, in the 1950s and 1960s, many leftists shifted their hopes (during an apparent period of working-class ebb in the West) to romanticized guerrilla movements in Latin America, Africa and Asia, only to be bitterly disappointed by their results and above all to be taken aback by the working class explosion in Europe and the U.S. in the 1960s and 1970s, the shift of emphasis in the 1980s and 1990s shift to social movements, in a radically transformed world context, grows from a similar ebb. The world working class, and only secondarily the social movements, holds the key to any positive 21st century future we wish to see. The newly-created working classes that have emerged in parts of the Third World in recent decades naturally mean that the next working class explosion will not look like the last one, any more than the last one looked like those of the interwar period. Without such an explosion, the social movements will only be, as they have seemed so far to be in Latin America, mere adjuncts to a newly reconstituted capitalist state, possibly with Chavez’s Venezuela or even Lula’s Brazil as a paradigm.

If world capitalism manages to reconstitute a viable framework of accumulation out of the current crisis, many of the new social movements—identity politics built around race, ethnicity, gender, alternative sexuality, energy and the environment, hostile to class content—will have played such a role. The polemical fire of the World Social Forum and lesser venues is mainly aimed mainly at neo-liberalism and neo-conservatism, not at capitalism and nor the global Keynesians Stiglitz, Sachs, Soros, Krugman et al. who are among the leading candidates to reshape a future capitalist restructuring at the expense of the working class and its potential allies, as their predecessor J.M. Keynes helped do in the 1930s and 1940s. The World Social Forum’s exemplary proponents of “global justice” include the Stalinist Fidel Castro, the petro-Peronist Hugo Chavez, or the former Khmer Rouge admirer Samir Amin.

One proponent of such “progressive forces” wrote recently, and typically:

”…the challenge for progressive forces, as ever, is to establish the difference between ‘reformist reforms’ and reforms that advance a ‘non-reformist’ agenda. The latter would include generous social policies stressing decommodification, and capital controls and more inward-oriented industrial strategies allowing democratic control of finance and ultimately of production itself.”^[6]

If such a program is to have “capital controls” and “democratic control of finance” one wonders how serious “decommodification” is to occur, since commodity production is central to the existence of capital and finance.

New social movements are nowhere so prominent or successful as in Latin America, where a new populism has been on the ascendant in recent years. Lula was certainly a pioneer of this trend,^[7] from the social-movement orientation of the early years of the Brazilian Workers’ Party to his…disappointing …(if predictable) performance once in control of the state. The Argentine piqueteros overthrew a government in December 2001, and then, after failing to replace it with anything else (pace John Holloway^[8]) split into a right and left wing, with the right wing now administering state workfare and welfare programs for the remade (and Peronist) governments on a highly politicized basis. Evo Morales in Bolivia seems similarly to be using the momentum of the social movements that stopped the privatization of natural resources in 2003 (setting aside for a moment the implications of state property) for a new legitimation of the state. And the most elaborate development of this trend culminates, to date, in Hugo Chavez’s Bolivarian “socialism of the 21st century,”^[9] with the standing professional army at its core, complete with Cuban advisors, using ground rent revenues from oil to finance a new version of the Peruvian (1968-1975) military model which was one of Chavez’s foremost influences. A new form of state paternalism is being reconstituted on the basis of the social movements, replacing the old authoritarian state paternalism (e.g. Peron, Vargas) which is no longer viable.

Yet side by side with this fanfare, new workers’ struggles have emerged in Latin America. In 2006, the Oaxaca uprising, set off by the teachers’ union but quickly transformed into an urban insurrection, brought to the fore a radical “asembleista” element over months, more or less simultaneous with the weeks-long investing of downtown Mexico City after the stolen election of that year, a mass occupation that went well beyond the left-bourgeois party (the PRD) of the aggrieved loser Lopez Obrador. There have been general strikes in Ecuador and Peru. There have been a few exemplary strikes in Venezuela sounding a discordant note in the hoopla over Chavez (a hoopla increasingly more fervent among his foreign cheerleaders than in the Venezuelan masses). In Argentina, in 2001-2, the piqueteros (despite their shortcomings mentioned earlier) and the creative methods of struggle beyond the factory they had developed earlier brought down the Peronist state for a brief moment before demonstrating their own inability to go any farther. Aspects of this Latin American ferment have also percolated into the U.S., as in the May Day mobilizations of Latino immigrants in 2007 and 2010.

Social movement theorists reiterate again and again that “organized labor” can no longer be the unifying force for a much more atomized, casualized and dispersed workforce that it once was.

Insurgent Notes is not preoccupied in the slightest with “organized labor” but with the working class as a whole. It is important never to lose sight of the historical backdrop of this shift of emphasis from the working class to the new social movements. Again and again the pattern has emerged, as in Brazil (1978-83), Poland (1980-81) and Korea (1987-1990) of a sort of culmination of “old style” industrialization (the “mass production worker” as some say today) of an explosion of wildcat strikes, important victories, followed by a capitalist counter-offensive that boils down to the full implementation of the all-too-familiar out-sourcing, casualization, and de-industrialization ad nauseam. In Brazil in 1983, the CUT (the main union federation, including Lula’s metal workers’ union) was riding the prestige of those strikes. By 2000, the CUT was reduced almost to social work, teaching laid-off auto workers how to start fruit stands around the downsized factory gates. Similar the landless movement (os sim-terra as they are called in Portuguese) has combined some important successes in the face of harsh repression with the repeated problem of peasants falling away once they have acquired their piece of land. In South Korea, the late 1980s strike wave gave way to a proliferation of NGO’s, “peace activists” and chatter about “civil society”.

The new social movements emerged in the early 1980s to fill the gap left by this devastating counter-offensive of capital against the world working class. To take only one paradigmatic example, FIAT in Italy spent billions in those years shifting from the big Turin factories to cottage production producing as many or more cars with far fewer workers, spread out in small towns. The wildcat wave of the late 1970s was broken. It could almost be a paradigm for an epoch. Capital is prepared to destroy society to continue as capital.

In recent years, in addition to Latin America, there has been an impressive groundswell of strikes around the Third World (textile strikes in Bangladesh and Egypt, the TEKEL strike in Turkey, general strikes in Vietnam, struggles in Gurgaon (India)^[10] the role of the Indonesian working class in the overthrow of Suharto in 1998, 70,000 “incidents” a year in China involving e.g. privatization, looting of pension funds).^[11] Outsourcing, casualization and temp work has obviously blurred the boundaries of the classical, relatively stable blue-collar proletariat of the pre-1980 period. Whatever their condition, the blue-collar workers of China, India, Brazil, or Southeast Asia movements, not to mention the workers of the ex-Soviet bloc which have become available to capital accumulation in recent decades, are already part of the emerging next proletarian offensive.

IX. Summary and Program

Faced with this rising tide of an opposition groping for coherence, and fearful of provoking further escalation through five-thumbed immediate confrontation and repression, capital in the recent period has rediscovered the strategy and tactics of the Italian industrialists faced with the factory occupations of 1920: fold their arms and wait. As in Argentina in 2002 or in Oaxaca in 2006, or—on a smaller scale—the 77-day Ssangyong Auto factory occupation in South Korea in 2009, the basic message from the capitalists and the state to the insurgents is: “you’ve taken over the factory, the town, the country? Fine. Are you ready to run it yourselves?” (One recalls a similar meeting in January 1919 between British Prime Minister Lloyd George and the heads of the British Trade Union Council—not that the latter ever had any intention of taking over anything) When the insurgent movement fails to rise to that challenge, tempers fray, patience is exhausted, the professional leftists capture the mikes, people tire of endless meetings, however democratic (all this drift helped along by whatever repression the state can muster politically while awaiting its moment to strike back massively) and the movement collapses. In these recent instances (unlike Italy in 1920), a massive bloodletting has not been necessary after the defeat (which hardly means that selective deadly repression did not follow). The point is rather that, without a “programmatically-armed” militant stratum, one that will not spontaneously converge in the run-up to the final showdown, without a concrete idea of “another social project” (to use a certain language), the movement melts away, often with relatively few shots fired. (This is not to deny the often important and creative role of “spontaneity”^[12] in the early, ascendant phase when the movement seems to go from strength to strength.)

This absence of a broad-based alternative to rule by elites—whether by the bourgeoisie or by professional leftists prepared to outlast everyone else in interminable meetings and then vote their agenda at 2 AM—has always been the basis of class society, whether “reactionary” or “progressive”. Passivity, voluntary or induced, is always the handmaiden of “bureaucracy”. And in our view, the best antidote to such a defeat is the widest possible propagation of the concrete programmatic aspects of a different “social project” and practical testing of such knowledge on the way to working-class power. Our aim is to help the working class become the ruling class in the process of dissolving all classes.

To summarize:

1. capital since the wildcat rebellion of the 60s/70s (with extensions in such places as Brazil, Poland, Korea) has been engaged in a quasi-conscious counter-strategy to break up the centers of proletarian concentration, creating as much as possible the new atomized, casualized, dispersed wage-labor populations for whom the one paycheck family, long-term job security, benefits, secure housing, education and”aspirations” (however bourgeois) for the nextgeneration are not even a memory.
2. This is closely tied to the financialization of capitalism. This is not ‘normal’ capital accumulation. It is destroying the material basis of social reproduction, both in terms of labor power and means of production (including infrastructure and nature).
3. This development expresses the fact that value (in Marx’s sense) was already superannuated in the crisis of the 60s/70s, and that capital on a world scale has to perform massive retrogression to reconstitute an adequate rate of profit, not in the debt-for-equity restructurings and mergers and acquisitions, but in real production and reproduction.
4. The programmatic question can obviously not be one of rebuilding the old mass production factories as such. No one misses the assembly line, and automobile- centered production and consumption has already ravaged enough “social” space. It has been pointed out often enough that, despite the creativity of the wildcat movements from the 50s to the 70s, most of the left (myself included) theorized the factory worker as worker, and not as the leading force in a striving to break the logic of factory work
   to accede to a Grundrisse-like “activity as all- sided in its production as in its consumption,” i.e. communism. Nonetheless, while recognizing that mass production seemed to produce something much closer to class consciousness and class
   action than what we have seen since, we can also recognize that breaking the old “social contract” of the post-World War II period also broke the conservatism built into attachment to one job, a mortgage, etc. that must have inhibited as much solidarity as it fostered, in one factory, in one industry. This has led, in some countries such as France and Italy, to movements of working-class youth, who will never have the stability their parents had, using this precarious mobility as a way of building city-wide “flying picket” movements centered on whole cities as opposed to one big factory or industry.
5. In an “Hegelian Marxist” perspective, i.e. a realistic perspective, the reality of the world working class (Gesamtarbeiter) is the current potential of the world working class
   to build a society beyond value production. That is the reality against which capital has been fighting since the 60s/70s, and in fact since the early 20th century. It determines the true framework of struggles today. A Stiglitz- Sachs et al. inspired global Keynesianism, built on the new social movements, would be the exact update of the Keynesian reorganization of capitalism coming out of the transitional crisis of 1914-1945.
6. Our task must be to articulate the full implications of that positive power which lies beyond the disorientation of today. We must further try to show where that potential surfaces in micro-ways in the struggles of the present. For example, the suburban youth of the Paris region routinely ride free on the trains in and out of the city, and physically confront the train personnel who are obliged to collect fares. A campaign for free public transportation could unite such elements, freeing the train personnel from an important part of their “cop” role. The same could be said for many toll-takers of daily life, to give only one example of where proletarians are set against sub-proletarians.

What follows in conclusion, then, is a program for the “first hundred days” of a successful proletarian revolution in key countries, and hopefully throughout the world in short order. It is intended to illustrate the potential for a rapid dismantling of “value” production in Marx’s sense. It is of course merely a probe, open to discussion and critique:

1. implementation of a program of technology export to equalize upward the Third World.
2. creation of a minimum threshold of world income.
3. dismantling of the oil-auto-steel complex, shifting to mass transport and trains.
4. abolish the bloated sector of the military; police; state bureaucracy; corporate bureaucracy; prisons; FIRE; (finance- insurance- real estate); security guards; intelligence services; cashiers and toll takers.
5. taking the huge mass of labor power freed by this to radically shortening of the work week
6. crash programs around alternative energy: (in the long run, if possible) nuclear fusion power, solar, wind, etc.
7. application of the “more is less” principle to as much as possible (examples: satellite phones supersede land-line technology in the Third World, cheap CDs supersede expensive stereo systems, etc.).
8. a concerted world agrarian program aimed at using food resources of North America and Europe and developing Third World agriculture.
9. integration of industrial and agricultural production, and the breakup of megalopolitan concentration of population. This implies the abolition of suburbia and exurbia, and radical transformation of cities. The implications of this for energy consumption are profound.
10. automation of all drudgery that can be automated.
11. generalization of access to computers and education for full global and regional planning by the associated producers
12. free health and dental care.
13. integration of education with production and reproduction.
14. the shift of R&D currently connected with the unproductive sector into productive use
15. the great increase in productivity of labor will as make as many basic goods free as quickly as possible, thereby freeing all workers involved in collecting money and accounting for it.
16. a global shortening of the work week.
17. centralization of everything that must be centralized (e.g use of world resources) and decentralization of everything that can be decentralized (e.g control of the labor process within the general framework)
18. measures to deal with the atmosphere, most importantly the phasing out of fossil fuel use by 3 and 6

Once again, at this stage, such programmatic points are only suggestive and wide open to debate, focusing not on “forms of organization” but on the content of a world beyond value, in which “the multiplication of human powers is its own end.”^[13]

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1. ^[1] While we do not locate ourselves in the Bolshevik tradition, of which the contemporary remnants of Trotskyism are –in contrast to Stalinists and Maoists—the serious continuity, we hardly dismiss Lenin and Trotsky out of hand, as many libertarian communists tend to do. Lenin’s intransigeant internationalist stance in 1914 and his 1917 April Theses, like Trotsky’s almost unique application of the theory of permanent revolution to Russia, well before 1917, were revolutionary moments. What we reject in Leninism and Trotskyism would take us far afield, but the fetishization of organization and “leadership” (in the case of Trotsky) are obvious starting points for our critique. ↩
2. ^[2] By “standard of value” we mean the generalized “common denominator” or “unit of value” based on a new, higher productivity of labor achieved through crisis and shakeout for the next phase of accumulation, through the incorporation of new technologies and a higher productivity of labor. The postwar boom of 1945-1975, for example, was based on the previous thirty years of destruction of people and capital plant, but also on new mass production (e.g. in auto) introduced during the pre-1945 period, as well as the greatly expanded world market made possible by the destruction of the British and French empires and the reduction of Europe’s national bourgeoisies (French, German, etc.) to the generalized dollar standard. Each successive “standard of value” represents “apples” to the “oranges” of the previous one, in this case that achieved through the long shakeout (1873-1896) making possible the boom preceding World War I. ↩
3. ^[3] Karl Marx, Grundrisse, London, 1973, p. 325. ↩
4. ^[4] Tom Frank’s (2000), though flawed by its undercurrent of nostalgia for New Deal statism, is a good portrait about how the “revolutionary” pretensions of the 1980s and 1990s “new economy” took over a huge element of the 1960s New Left/hippie counter-culture. ↩
5. ^[5] The Mondragon cooperative in Spain (which somehow operated without a hitch during the Franco dictatorship) is a favorite reference of some new social movement activists for an egalitarian capitalism (we agree it is capitalism). ↩
6. ^[6] Patrick Bond, paper presented to the Socialism for the 2lst Century conference, Jinju, South Korea, May 2007. We quoted these muddled formulations as merely exemplary, while recognizing Bond’s deep and serious involvement in social struggles in South Africa. ↩
7. ^[7] In its early (1980s) dynamic phase, the Brazilian Workers’ Party (PT) distinguished itself from the moribund Brazilian Communist Party (PCB) by saying, in effect, that an earlier militant joined the PCB and only then became involved in trade unions, etc. whereas its own militants came to the PT as activists in various social movements. ↩
8. ^[8] Holloway’s book How to Change the World Without Taking Power, and its cheerful, even adamant refusal to say anything about a program for “the next step,” was tested in Argentina in 2001-02 (where it had been wildly popular). It failed the test. ↩
9. ^[9] Cf. Internationalist Perspectives, #51-52 and #53. ↩
10. ^[10] In 2008, an Italian CEO was beaten to death by workers in a New Delhi suburb during an attempted downsizing of the workforce. ↩
11. ^[11] Though they occurred 30 years ago, one should not overlook the workers’ councils established by oil workers in 1980-81 during the Iranian revolution, repressed and shut down when the Islamicists consolidated their hold. ↩
12. ^[12] CLR James, in his discussion of the seemingly overnight takeover of Hungary by a national system of workers’ councils in 1956, points out that, contrary to any spontaneist interpretation, the ability of Hungarian workers to accomplish this was in all likelihood prepared in advance by years of experience of bureaucratic Stalinist regimentation and shopfloor discussions of its consequences and cure. ↩
13. ^[13] Marx, Pre-Capitalist Economic Formations. ↩

1. Cold Comfort



Encouraged by the headline in the March 12 edition of the Wall Street Journal that read “Massive Defaults Produce Rare Annual Dip In Obligations, Clear Ground for Growth,” the US bourgeoisie paused from their daily feedings at the public trough, took their lips from the government‘s breast, checked the status of the batteries on their defibrillators [green=good; gold=gooder], removed their hands from each other’s and everybody else’s pockets [temporarily], bundled themselves in their TARPS and parachutes, and all together and all at once, in a display of unity not seen since the funeral for their idiot-hero Ronald Reagan, selected the exact same tune from their individual IPods [purchased on Overstock.com] and started to lip-synch to their favorite song, to which they knew the words by heart.

Texting, tweeting, facebooking, bluetoothing the lyrics from IPod to IPhone to Blackberry to Droid to Pixie to Touch to Samsung to HTC to Nokia, from hand to handset in a daisy chain of 1s and 0s, living their collective Life of Brian, they lipped and synched… “Look On the Bright Side of Life…”

But… but when it came to that part of the song, those lyrics–that part about giving a little whistle, they tried and tried. And they couldn’t. The bourgeoisie didn’t have spit.

Meanwhile, those who had created this golden opportunity, this drip-feed in the hospital bed of capitalist reproduction; those who had been foreclosed upon, put underwater, by the debacle in the mortgage, and mortgage backed securities, markets; those who had lost jobs and received dwindling unemployment benefits; those who had lost their unemployment benefits and relied upon food stamps, food pantries, food charity; those who could no longer meet the tuition requirements of so-called “public” universities; those who wondered why the Federal Reserve could by $1.7 trillion of mortgage backed securities, but couldn’t buy their mortgages; those who wondered how the government could guarantee $300 billion in debt issued by banks, but couldn’t guarantee payment for a single doctor’s visit; those… all those and more, hearing that same song, recalling that same movie, they too shared a single thought, “More crucifixions!”

2. Results…

The development of the productive forces of social labor is the historic task and justification of capital. It is exactly by doing this that it unconsciously creates the material conditions for a higher mode of production. What makes Ricardo uneasy here is that profit–the stimulus of capitalist production and the condition of accumulation as also the driving force for accumulation–is endangered by the law of development of production itself. And the quantitative relation is everything here.

—Karl Marx, Economic Manuscripts, General Law of the Fall in the Rate of Profit

Looking at his mates on the crosses near and far, Brian wondered, “How did I get here?” which struck a chord with our bourgeoisie. Amnesia is the closest the bourgeoisie ever get to self-understanding. If Brian’s arms hadn’t been pinned to the crucifix, he might have shrugged his shoulders. As it was he just kept on singing.

How did they get all of us here, to this place of dreary acting, poor comedy, and bad music? Way back when…

Increased capital investments from 1992-2000 in the United States drove the rate of return on investment for capitalism as a whole up and then into decline, leading to the recession of 2001-2003. Annual real investment in manufacturing fixed assets had peaked in 1998 at $198.3 billion, and ended 2000 at the $198.1 billion mark. By 2003 the amount had fallen to $147 billion.

Indeed, in 2002, 2003, 2004 capital spending was below the values claimed for depreciation and capital consumption of property, plant, and equipment [PPE]. In the third-quarter of 2001, net PPE for US manufacturing was measured at $1180 billion. A year later, that figure had declined to $1173 billion. By the third-quarter of 2003, the value was $1142 billion, and by the third-quarter 2004, $1101 billion, equal to the net value of PPE in 1999.

In 2003, manufacturing profits began a spectacular recovery. By 2004, manufacturing profits were 12% above their 2000 peak according to the US Bureau of Economic Analysis. On a year-over-year basis, profits in 2005 increased 50 percent. In 2006, they grew another 24.4 percent.

Net capital investment did not increase to the amounts of the prior decade. Increased capital consumption limited net capital spending to amounts half, and three-quarters of the net amount invested in 2000. In fact the amount spent annually has remained below the 2000 mark for every year following. However, replacement and expansion of fixed assets, even on a restricted basis are essential to capitalism. Reduced net investment, investment above and beyond that required to compensate for the wear and tear on existing equipment, accompanied by increasing gross investment is the result of the previous capital accumulation of fixed assets.

Annual amounts of capital investment had increased more than 40% between 1993 and 1998, but between 1998 and 2000, the increase was less than 2 percent. The mass and the rate of surplus value extraction, the time it took for the worker to reproduce a value equivalent his/her own wage was incrementally improved. The bourgeoisie measure the “value added” in production by measuring the costs of inputs, material, labor, fuel, etc in production and, essentially, deducting those costs from the final realized value of sales.

The accumulated investment in production during the 1992-2000 period, the costs of expanded production reduced the ratio of the mass of surplus value, the “value added” as the Department of Commerce’s Annual Survey of Manufacturers calls it, to the total value of the products produced.

In 1998, that ratio of value added to total value measured 48.5 percent.

In 2000, the ratio declined to 46.9 percent.

In 2001, despite reduced capital investment, reduced production worker wages and wage rates, reduced costs of materials in production, the ratio declined again to 46.6 percent.

By 2002, yearly capital investment amounts were 21% below the 2000 peak, and the total wage expenditure was 9% below that of 2000. The value added ratio improved to 48.2 percent.

The bourgeoisie thought they had found an answer and it made them look, and feel smart. Reduce investment, control costs, and hoard cash.

In 2003, yearly capital investment was 28% below its 2000 peak. Total wage costs declined again. With the rising cost of petroleum, fuels, and energy used in production, however, the value added ratio declined to 47.9 percent. The bourgeoisie were smart and had the answer. The mass of value added increased and approached the previous peak of 2000.

In 2004, the steady decline in production workers and production hours offset the minor increase in total wage costs. Again costs of materials in production increased and reduced the value added ratio to 47.3 percent.

In 2005, unable to remain comfortable with increased costs of the material, the fuels, the energy absorbed in production, the bourgeoisie found an old answer waiting for them– boosting the rate of surplus value extraction through increased capital expenditures. The capital spending amount grew 13 percent. The mass of value added shot up by 10% over the year earlier, exceeding the increases of the 90s. The bourgeoisie had their answer, or so they thought. The ratio of added value fell to 46.6 percent, and was a question put off for another year.

In 2006, capital investment increased by another 10 percent. It had to, as only increased rates of production created the possibility for the mass of value to compensate for the fall in its rate of reproduction. With total wage costs still 6% below those of 2000, the rate of added value reproduction fell again to 45.6 percent.

The US bourgeoisie, knowing better than some that overproduction is not under consumption, that overproduction is exactly as Marx described it– an overproduction of the means of production of capital unable to exploit labor at a sufficient intensity– built the recovery of 2003 on basis of reduced capital spending, reduced rates of expansion of the means of production, accumulation of capital as money to be hoarded, or distributed to executives, owners, investors, in a word to its classmates, and of course, control of wage rates.

While operating income did recover, something else recovered even more for US manufacturing– and that was recurring income from non-operating sources. These non-operating sources include interest payments, dividends, royalties, earning from minority interests in other businesses. Prior to the recession of 2001, these revenue streams were about 33 to 40 percent of the amounts for operating earnings. However, after 2004, the size of all other income from non-operating sources increases to 50, then 60, and 70-75 percent of the amount for operating earnings, and accounts for almost 40 percent of total income. The US bourgeoisie was earning its money the old-fashioned way– by making others work productively for it.

At the same time cash, US government securities, and other securities held by US manufacturing companies increased 50 percent from 2003 levels, peaking in the 4th quarter 2007 at $454 billion.

It was a closed fist policy of US manufacturing between 2002 and 2005, building its cash hoard, investing in stock buybacks, awarding dividends.

For capital, rate, speed, velocity time is everything. A deceleration in, not just the rate of return, but the growth in that rate, means that more and more time is being consumed between the extraction of value and its realization as profit. Once capital increases the levels of investment in production, any delay in the return on that investment, threatens the core of its existence, expanded reproduction, and delay, relative to investment, was creeping back into capital’s rate of recovery.

	2005-2006	2006-2007	2007-2008	2008-2009
recovery rate (ratio of value: net property, plant, equipment to operating income)	3.2 years	2.91 years	3.0 years	4.47 years
% change operating revenue	+5	+4.9	+6.5	-20
% change operating income	+16	+.3	-12	-21.3
% change net property, plant, equipment	+5.1	+3	+4.4	-1.12

The bourgeoisie were out of answers. The recovery from the 2001-2003 contraction was not at all like the recovery from the 1991 recession. The post 1991 recovery brought reduced input costs to the production and circulation, the reproduction of capital, or rather, reduced input costs for the production and circulation of commodity capital brought about the 1991 recovery. The Surface Transportation Board’s Rail Rate Index for the years 1990 through 2004 recorded a 25 percent decline, meaning the rates charged to customers by railroads for moving a ton of freight a mile had declined. But for the years 2004 through 2007, the index recorded a 16 percent increase as railroads sought to offset declining rates of profit by increasing the costs to customers.

Hidden beneath all the noise and clamor of Wall Street, of all the investment bankers at all the trading desks slapping themselves on the back with each new deal– manufacturing had all ready rung the closing bell in 2007.

Those who didn’t hear it couldn’t hear it. They were too smart. They were too stupid.

3. Freeing Andy Fastow, Being Andy Fastow

What were the bankers, the private equity investors, the hedge funds to do? What had they done?

Industry’s closed fist, clasped hand policy created the open palm policy of the investment and commercial banks, the mortgage financing agencies, and the thrift institutions. The only revenue streams that the financiers could tap, that they could attack and divert, were those based on wages and salaries, on the personal income of those working and poor, working and not so poor.

Banks, for one, shifted their “portfolios” from the previous, pre 2003 50-50 mix of consumer loans and industrial loans to a 2:1 ratio in favor of consumer loans. The banks and finance companies had to do this in that industry had ceased borrowing. The banks and finance companies, taking a lesson from the government sponsored Federal Home Loan Mortgage Corporation [FMAC] and Federal National Mortgage Association [FNMA], packaged the revenue streams from the consumer debt as assets unto themselves, establishing then not the value of the underlying assets as collateral, but the service on the debt opposite those assets as assets to themselves, pledging not the encumbered asset, but the encumbering of assets as an asset in and of itself. Leverage was the place to stand as finance tried to move the world and bring profits into orbit around its own black hole.

For an asset to function as capital, to be capitalized, the asset must circulate in the markets, must appear to buyers and sellers alike as a mechanism, a means, a method for continuing the expansion of value. The expansion of value itself however requires re-engaging labor-power; value restores itself, recharges itself, and requites itself through its exchange, its aggrandizement of wage-labor. Yet the very restrictions, diminution of wage-labor the bourgeoisie had imposed as its “recovery program” reduced the breadth, the expanse of that exchange. The derivatives of capital’s derived life had nowhere to go except into the reproduction of further derivatives. What had been the anthem of capital, “Cash is King,” became anathema to finance capital which karaoked its response, “Cash is Trash” Between what had been and what is, the totality of capitalism, what will be, is captured– “Trash is King!”

Debt and credit come into being in the moments of capital’s transformations from money to productive capital to increased commodity capital to more money. Debt and credit come into being in the delay, the lags, the interruptions, and the dynamic disequilibrium of capitalist production. In this dynamic disequilibrium, this anti-synchronicity, finance, leverage, take on a life not exactly of their own but rather take capital’s already expropriated life, the labor of others, as its own. At one and the same time, leverage exists as a bridge to accumulation, and as the fire that burns those bridges.

Capital maintains its identity as capital precisely to the degree that it can command the labor of others, and that it can command others to labor. For finance capital, the arrangement is a little bit different. Finance capital is finance capital to the degree that it commands OPM, other people’s money.

If money represents and it most definitely represents the materialization of time as value, the clock parading about as the cash register, then finance is the clock winding down, time running out, and value not materializing. Finance becomes capital disembodied from the production of value and reconstituted as the devaluation of production.

The ideologists of capitalism are paid handsomely to proclaim the rationality of the free market system, where all men are recreated equal by their commodities as buyers and sellers. Finance capital, however, recreates itself in the irrationality of the markets, in the divergence between prices; in the disparity between particular prices and particular values. Arbitrage and hedging are two of the strategies designed to take advantage of the disparity between prices and values in the market, in prices between markets.

Arbitrage and hedges straddle very small variations in these prices. The straddle, “taking a position,” has a definite duration which can extend from weeks to months to years. So “simple” arbitrage, simple “hedging,” provides a small return over a long term, more or less mimicking the problem besetting industrial capital as its constant, and particularly its fixed component grows.

As is the case with all capital, finance capital must accumulate in order to exist. Valorization requires expanded reproduction, the mass production of straddles. This expansion of quantity requires that proportionately less money be committed so that the rate, the ratio of the “front money” to the market value of the straddles is remains below the rate of return that can be captured in the arbitrage, the distinction, the discontinuity between price and value. Consequently, debt reproduces the very same diminished rates of return that beset industrial commodity production. And debt must accrue upon debt in the attempt to capture, redirect, absorb, and distribute a portion of the socially available profit.

The underlying loans–the residential mortgages, credit-card debt, automobile financing, commercial real estate mortgages–all have periods of duration that exceed the duration of the straddles. As a result, securitization creates a situation where finance capitalism is essentially “borrowing short” and “lending long.”

Borrowing short and lending long is the banker’s equivalent of “buying high, selling low.” The process is one of self-liquidation, self-devaluation, with the devaluation obscured, temporarily, by and in the rapidity of the transactions; in the circulation; in the turnover; in the “flip” of the debt instruments.

In order to sustain the ability to “flip,” and encumber, more assets, with new and greater debt, the process of securitization must be moved off balance sheet, so that the balance sheet appears unencumbered. The securitization is spun-off as an independent entity, “the investment vehicle.” This entity purchases the packaged securities from the investment bank, the packager, with money borrowed from the packager or other lenders. The special purpose vehicle then obtains a rating for the structured notes from one or more of bond rating firms–Moody’s, S&P, Fitch–perhaps after arranging for another investment fund, bank, insurer to cover the notional value of the securities with credit default swaps, assuring payment of the face value, or a certain portion of the face value, should the assets backing the asset-backed-securities decline in value, and suffer from reductions in underlying repayment rates.

The use of structured investment vehicles manifests that fundamental market relation–the as if existence of debt instruments. The structured investment vehicles perform as if; act as if they had a value and a utility of their own. These instruments act as if the reproduction of more instruments of the same sort is the purpose of material production. Spinning the SIV’s into a separate entity is the materialization of this as if existence in that the debt standing in opposition to the value of the assets now reappears in capital’s circuits as if it were an asset unto itself.

The conversion of debt into a tradable asset is neither the cause nor the result of an “irrational exuberance,” speculative excess, over-leveraging of the capitalist economy; nor is it Minsky’s moment, Mickey’s Monkey, Ponzi’s scheming, Kondratieff’s long wave, Goldman’s short selling, your father’s day trading or your mother’s night at Bernie’s. It, the conversion of debt into an exchangeable asset, is a logical, necessary, rational, inherent moment in devaluation of value.

It, the conversion of debt into an exchangeable asset, is fictitious capital only to the extent that all capital is fictitious as soon as it loses the power to reproduce itself quickly, and profitably enough.

In moving these special purpose investment vehicles, the boutique shell corporations, “off balance sheet,” the bourgeoisie were, of course, reconnecting with their hallowed tradition of maintaining two sets of books. While considered by some small minds to be less than honest, keeping two sets of books by creating off-balance sheet vehicles has been the way central banks, international monetary overseers, legislatures and national treasuries have mediated the problems of capitalist reproduction for years.

Fannie Mae and Freddie Mac were created as “off-balance sheet” vehicles, and even in their rescue have not yet been placed on the US Treasury’s balance sheet.

What, after all, is a “bad bank,” created by consolidating and reconstituting the impaired assets of a bank or banks, into a single entity, other than a special purpose investment vehicle, an off-balance sheet enterprise?

Capital had traveled a path from asset utilization to asset optimization to asset inflation and from asset inflation to asset liquidation and finally asset denial. Value which once upon a time claimed real dominance over men and women’s labor through actual accumulation of capital, now proclaimed its marginal utility in the masses of collateralized debt, structured investment vehicles; in its junk.

The bourgeoisie were still rich all right, some richer than they had ever been. They were getting rich now not by pocketing the already produced wealth of others, but by liquidating the wealth already pocketed by others.

4. …and Prospects

The periodical depreciation of the existing capital, which is one of the immanent means of capitalist production by which the fall in the rate of profit is checked and the accumulation of capital-value through the formation of new capital promoted, disturbs the existing conditions, within which the process of circulation and reproduction of capital takes place, and is therefore accompanied by sudden stagnations and crises in the process of production.

—Karl Marx, Capital, volume 3, The Law of the Falling Tendency of the Rate of Profit, II. Conflict between the Expansion of Production and the Creation of Values

Having reduced employment by millions worldwide, reduced compensation costs by billions, mothballed more billions in fixed assets [another off balance sheet maneuver], pumped more money into fewer hands than ever before [never have so few owed so little to so many for so much], written off approximately $2 trillion in non-performing debt worldwide , forced industrial capacity and capacity utilization rates below historic averages and previous lows, the bourgeoisie were almost ready to take their hands out of each other’s and the government pockets, roll up somebody else’s sleeves, and get back to the hard work of accumulation.

Quarterly reports recorded increased earnings for Caterpillar, Whirlpool, and Intel.

After a dramatic decline in the first three quarters of 2009, one that led to AP Moeller-Maersk declaring its first ever annual loss, container traffic hadpicked up as US exports, and US imports increased in the second half of the year. The FRB’s Beige Book found economic conditions “stabilizing,” with capacity utilization rates increasing. The Kansas City Fed reported manufacturing output increasing.

And there was more good news. Between 2007 and 2009, cash holdings of the non-financial companies in the S&P 500 increased by fifty percent to a record $930 billion [and that accounts for cash held in the US. Nobody, including the US Federal Reserve and the US Bureau of Economic Analysis is quite sure how much cash these corporations hold outside the US].

Pretty soon bourgeois Brian and friends were more than singing “look on the bright side of life,” they were convinced they were seeing the bright side of life, which was just like seeing the light at the end of the tunnel. Except…

Except almost doesn’t count, and the light at the end of the tunnel was just a tracer round coming their way. The “off-balance sheet activity” of maneuvering and sequestering encumbered assets into structured investments concentrated the risk of collapse of one sector of capital’s network of exchanges, finance, while simultaneously expanding the expanding liability through all of capital’s interactions. The bourgeoisie call this “contagion.” We call it capitalism.

The specific lags and delays, the asynchronous movements and phases of capital’s conversions of money into commodities and commodities into money that finance is supposed to reconcile become the inability of finance capital to reconcile the conversions of capital into commodities and money as a whole.

The accumulation of debt, the leverage applied to the economy as a whole is the conversion of the overproduction of capital itself into a trading platform where the liquidation of assets is the object of the trade, where accumulation is decomposition, where realization of value is devalorization.

The notional values of one-quarter of all residential mortgages in the United States are now greater than the market values of the properties mortgaged. That isn’t just being underwater,that’s being drowned, carried out to sea, and eaten by bottom-feeding mollusks.

Between them, JP Morgan Chase, Wells Fargo, Citibank, and Wells Fargo hold 2.1 million mortgages with an approximate face value of $600 billion that are more than 60 days delinquent in payments. Nationally, a total of 6 million residential mortgages, once valued at about $1.5 trillion are either 60 days overdue, in foreclosure, or have completed foreclosure and are now in banks’ inventories. Banks have yet to write down the losses on half these mortgages.

In 2008, approximately 80% of commercial mortgage backed securities coming due were redeemed at face value. In 2009, only 30% of that debt was redeemed at face value.

Junk bonds, so much in favor that they were just recently trading without discounts in the market will require $700 billion in refinancing in the 2012-2014, overlapping with $1.5 trillion in commercial real estate debt that will face restructuring.

The securitization of assets could generate enough friction in the rapidity of its flips to keep itself afloat as long as finance capital’s claims on labor power, on wage-labor, were senior to all other claims on that wage-labor. When those claims cannot, or are not, sustained due to unemployment, reduced wages, restructuring, due to the foreclosure process itself which substitutes collateral, dead labor, devalued accumulation, for living labor, for expanded reproduction, for self-replicating value, for valorization, then the respite, the recovery, from the economic contraction is episodic, while the contraction itself is the narrative, both theme and… coda.

The first winds of capitalism’s upturn bring something that smells just like 2008 all over again. This time, however, it’s more than just the brothers Lehman on the verge of collapse.

The bourgeoisie concentrated their non-performing, deadbeat, subprime, delinquent assets, all their junk property and junk politicians into their favorite,off-balance sheet structured vehicle– into that ship of bigger fools called the ship of state. And now, after transferring so much of the public purse to the private sow’s ears of the bankers,the governments had no resources remaining to pay the service on the debt the governmentscontracted in order to act that bigger fool in the first place. What’s worse than holding to the bigger fool theory of capitalist accumulation than the shock of recognizing yourselves as the bigger fool? That’s an easy one. Paying for your own foolishness is worse than being foolish. And so the bourgeoisie beat the other snare drum in their matched set, shifting the beat from subsidy [ours] to austerity [theirs, that being the rest of us].

In Greece, Ireland, Britain, Spain, Italy, Portugal, bankers and minister are united in their calls for financial responsibility after years of promoting, marketing,irresponsibility. The financial markets themselves have already called in their markers, with the LIBOR [the London Interbank Offering Rate, the rate at which banks lend money to each other] at the highest level since December 2008 in the wake of Lehman Bros. collapse. European Union bank issuance and trading of commercial paper [short-term unsecured debt instruments] in the commercial paper money markets,has declined dramatically in the last 3 months. Positions of foreign banks in the US commercial paper markets, where dollar reserves can be accessed have declined by approximately one-third. The European banks have moved their reserves into the safety of the European Central Bank. It is this retrenchment that compelled the US Federal Reserve to reactivate its open-ended currency swap lines with the Bank of England and the European Central Bank.The LIBOR rate had actually begun its climb in December 2009, as the anticipated, heralded, applauded “recovery” proved conspicuous in its absence. Money being what it is, that is to say everything to the bourgeoisie not only talks, it sings, and like a canary in a coal mine. This canary was so busy holding its breath in anticipation of “recovery,” it knocked itself unconscious.

The growth experienced in the fourth quarter 2009 in the US and Europe, slowed significantly in the first quarter 2010. In the United States, approximately half of that reduced growth was attributable to inventory restocking, rather than new orders. More importantly, corporate profit growth also slowed in the first quarter 2010. Most importantly, revenue growth slowed, and manufacturing revenues remained below 2007 levels.

2009, which has been the “year of the bond,” as corporations, advanced countries, and emerging market countries attempted to load up on cash to offset the reduced revenues, turned into 2010’s flight from all issues, except US Treasury instruments.

The European Union issued a “rescue package” for member countries that effectively put the entire Union under IMF supervision, as any country seeking access to the funding vehicles will be required to a submit an austerity plan to the IMF before funds can be released.

What is at the core of the EU’s rescue program? It is nothing other than the creation of more off-balance-sheet funding facilities. Half the notional value of the rescue package has no correlation with actual resources dedicated to the program. Rather, funding needs will be met by special-purpose investment vehicles issuing debt securities guaranteed by the member countries of the European Union.

It’s as if the bourgeoisie are victims of their own obsessive-compulsive disorder; as if they were playing musical chairs at a dinner party in a Bunuel movie; where there were no chairs, no musicians, and no one could ever leave.

Whatever comfort the US bourgeoisie might take in the troubles of their compatriots and competitors is tempered by the fact the five biggest US banks, JP Morgan, Chase, Bank of America, Citigroup, Goldman-Sachs, Morgan Stanly all carry exposure, that is to say hold securities, of the euro zone countries equal to 81 percent of their Tier 1 capital. Their exposure to Ireland, Spain, and Italy amounts to 25 percent of their Tier 1 capital.

Austerity appears to the bourgeoisie to be the only solution. Just as expansion means using OPM, other peoples’ money, austerity means other peoples’ austerity. Finance capital, having attached itself to all aspects of social consumption through its collateralized debt obligations, its asset backed securities, its structured investment vehicles, will make its claims not against the value of property, but directly against the social product available for consumption. The sequestered, retired, non-performing instruments of real production and circulation–airplanes, locomotives, ships, trucks–require reduced, not expanded, social consumption. Living labor has to follow dead labor in the upside down world of capitalist expropriation. Wages, income, benefits will be forced below subsistence levels. Finance capital leads advanced capitalism to the most developed expression of its primitive demands. Capitalism finds its future in the past of its xenophobia, austerity, privation, and most importantly, destruction of the means of labor and the laborers themselves.

Text from https://web.archive.org/web/20250419010257/http://insurgentnotes.com/2010/06/paper-torches/

It was recently reported by the Bureau of Labor Statistics of the US Department of Labor that, in 2009, the union membership rate—the percent of wage and salary workers who were members of a union—was 12.3 percent, essentially unchanged from 12.4 percent a year earlier.

However, the number of wage and salary workers belonging to unions declined by 771,000 to 15.3 million, largely reflecting the overall drop in employment due to the crisis. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers. Nothing so surprising so far! A combination of employer assaults on unions and a deep-seated conviction on the part of many workers that unions seldom represented anything other than the interests of those who run them had all but inevitably contributed to a steady erosion in the ranks of union members.

Of perhaps greater interest was the finding that, for the first time, more public sector employees (7.9 million) belonged to a union than did private sector employees (7.4 million), despite there being five times more wage and salary workers in the private sector. As a result, the union membership rate for public sector workers (37.4%) was much higher than the rate for private industry workers (7.2%). Workers in education, training, and library occupations had the highest unionization rate at 38.1 percent. Close behind were protective service workers at 35.6%. Protective service workers include police, jail and prison guards.

In this essay, I’d like to explore some of the consequences of the long-term decline in union membership and the significant shift in membership towards public sector workers. First off, I’d like to highlight the trend in enrollments in postsecondary institutions over the course of the last forty years. According to the Digest of Education Statistics, total enrollments in postsecondary degree granting institutions (including both public and private, community colleges, baccalaureate colleges and graduate schools) were as follows:

Year	Total Enrollments	Increase from Decade Earlier	Percent Increase from Decade Earlier
1970	8,531,000
1980	12,097,000	3,516,000	41
1990	13,819,000	1,722,000	14
2000	15,312,000	1,493,000	11
2010	18,613,000	3,301,000	22

All told, the increase over the forty year period amounted to over ten million individuals or 117%. Much of this extraordinary growth was fueled by the federal government’s financial aid policies—including Pell Grants and subsidized student loans. Interestingly enough, the Pell Grant program has now become a major source of revenue for the fast-growing proprietary sector. Those colleges enroll about 6% of all college students but account for 20% of all Pell grant awards. They currently are fifteen of the twenty institutions receiving the most federal funds through the grant program. In 2008-2009, the University of Phoenix received $658.9 million. But this essay is not about the need to reform the Pell Grant program.

What is most remarkable is that the continued growth in enrollment has occurred in spite of the fact that many individuals who enroll in college, especially community colleges, never earn a college degree. At the City University of New York (CUNY), just about 50% of students enrolled in baccalaureate programs earn a degree in six years but less than 30% do so at the associate degree level. These figures don’t differ significantly from the national picture. Only about 52 percent of college students complete a degree, and very few do so within four years.

So why do people keep enrolling? I suggest that it is not unrelated to what has accompanied the long-term decline in union membership over the past several decades—de-industrialization and casualization—meaning the increased number of workers who are employed part-time, perhaps haphazardly, and all but certainly without security or benefits. In the face of the steady disappearance of collective means for the defense and/or advance of workers’ interests, lots of individual workers found themselves with little alternative to trying to make the best of things for themselves by attending school and hoping to earn a credential that would perhaps give them what they couldn’t find—a job that might be worth it.

But they’re not finding it in college either. Two authors have recently described the world of community college students—Mark Bosquet, in How the University Works: Higher Education in the Low-Wage Nation, concludes that most community college students are already workers and that the jobs they have make it all but impossible for them to be reasonably successful at being students—he has an especially harrowing description of students employed by UPS in Louisville. Rebecca Cox, in The College Fear Factor, describes how students are haunted by a desperate hope that they’ll be able to find something better through completing a degree. But, their desperation drives all too many of them to poor choices about which programs to enroll in and how to become successful students. For the most part, unlike membership in a union (even a rotten, lousy one), education is seen as an individual strategy. When it doesn’t work, the responsibility for failure or defeat is the individual’s—“I didn’t study enough; I picked the wrong major; I guess I’m not cut out for school. Maybe I deserve to be where I’m stuck.” To make matters worse, many unions (especially those in the health care fields) have increasingly encouraged their members to seek advancement and improvements in wages through participation in education and training programs. Front and center of this trend has been Local 1199 of SEIU, the health care workers union in New York City. Ariel Ducey, in Never Good Enough: Health Care Workers and the False Promise of Job Training, has captured the outcomes—little advancement, few improvements in wages and lots of bitterness among frustrated workers. But the bitterness is all too often accompanied by resignation—especially in a self-proclaimed and endlessly promoted “progressive” union like 1199.

Let’s turn now to the significance of the trend towards higher unionization rates in the public sector. This growth has not been the result of a higher level of militance or strike activity. Indeed, there are numerous restrictions on the right of public sector workers to strike. In New York State, the Taylor Law, approved after the 1966 transit workers’ strike in NYC, imposes fines on unions and jail-time for union leaders if workers strike. Federal workers are not even allowed to be in unions that advocate strikes–Reagan had no trouble in firing the PATCO air controllers. As a result, public sector unions are heavily dependent on cultivating the good will and friendship of various political leaders—thus, they invest heavily in political campaigns and in lobbying on both sides of the two party aisle. Recently, a veteran United Federation of Teachers (UFT—the union that represents public school teachers in New York City) member and union staffer wrote an essay arguing for political realism in the current round of collective bargaining between the union and the city. To do so, he recalled the aftermath of a teacher strike in 1968:

In November of 1968, after a brutal forty day strike teachers stumbled back to school, the dailies, the liberal intelligentsia flayed teachers and their union and the impact of the strike resonates forty years later. To make matters worse, the contract was ending, it looked as if another war was brewing with Mayor John Lindsay. A year later with the negotiations concluded the mayor and the union stood arm in arm as Governor Rockefeller signed Tier I into law, a change in the pension that was so dramatic as to boggle the mind. As they walked out of the Governor’s Office the author of the plan Dave Wittes, the UFT Secretary, leaned over and whispered to my wife, “They have no idea what they have done…” ….Why did a mayor who had done everything in his power to destroy the union agree to such a rich benefit? It was simple, just plain old politics. John Lindsay wanted to be President and he needed Al Shanker and his teachers.

He neglected to mention what the strike had been about. Put simply, it was an effort by the union to defeat efforts by the city’s black communities to achieve community control of the schools after numerous earlier efforts at school integration had failed in the face of white opposition. The strike ended with a series of compromises—to the ultimate and profound disadvantage of the students attending schools in black communities. (See Jerold Podair’s The Strike That Changed New York). But, as the staffer noted, it did wonders for the UFT. Indeed, the book by Podair could have been titled The Strike That Made the Union

In the years after 1968, several legislative acts had reduced the rich benefits gained in 1968 for teachers who joined the system afterwards—specifically by raising the retirement age. In 2005, the same author quoted above was advising UFT members looking to restore a lower retirement age:

The NYS Constitution guarantees that pension benefits for public employees may not be reduced. The legislature can create new Tiers of the pension system for future employees. Pension improvements, however, require the cooperation of the Mayor and the support of the State legislature and the Governor. Members who rail against our support of Republicans as well as Democrats are shortsighted. One party does not pass legislation. If we can take advantage of a political climate to create significant pension improvements we should seize the moment.

It took the UFT until 2008 to secure the victory it wanted but they did get it.

I don’t want to pick on the UFT but there’s another recent example of the ways in which public sector unions, especially the larger ones with substantial dues revenues, can use the regular political system to their advantage (specifically for the increase of their dues revenues). While George Pataki was Governor of New York, the state legislature passed a bill to allow individuals who provided child care services in their homes to be represented by a union. Pataki vetoed it but when he was replaced by Eliot Spitzer, the same allowance was approved through an Executive Order. In October of 2007, a representation election was held and more than 8,000 of these home providers voted to be represented by the UFT. As a result, the UFT secured the rights to represent and collect dues from 28,000 providers in NYC. The Civil Service Employees Association (CSEA) got to do the same for another 26,000 individuals elsewhere in the state. Then, in 2009, the UFT and CSEA negotiated their first contracts with the New York State Office of Children and Family Services for the newly organized child care providers. So, to recap, the unions persuaded legislators and a friendly governor to approve the right of the providers to be represented; then, the same unions won the right to represent those workers and finally negotiated a contract with a state agency. And lest it be forgotten, underneath all this is simple politics—money, votes and re-elections. Although the details may vary across the country, I suggest that the pattern represented in these stories goes a long way towards explaining why there are now more union members in the public sector.

But it doesn’t stop there. In another recent development, the current governor of New York, David Patterson announced plans to close the Moriah Shock Incarceration Correctional Facility near Mineville in the Adirondacks Mountains as part of his strategy to close the state’s budget gap. The facility, which is a special facility designed to shock inmates out of their criminal inclinations through a kind of intensive basic training, is located upon the abandoned site of a Republic Steel iron-ore mine. Currently, there are just over a hundred staff members and fewer than 200 inmates. The people who work at Moriah are represented by the Public Employees Federation (PEF), which has thrown itself full force into a campaign to save the jobs. Their argument is straightforward enough: “Moriah Shock Incarceration Correctional Facility is a community,” said Richard Sheffer, a PEF staffer, at a community rally. He went on: “Moriah embraced the facility, as it did the mines, to provide employment for the surrounding area.” From iron mines to iron bars!

Which brings us to the last of the trends of the last few decades—the trend towards incredibly high rates of imprisonment and entanglement with the various parts of the criminal justice system. Look at this graph!

Source: Bureau of Justice Statistics Correctional Surveys

All told, seven million adults are caught up in this nightmare. And the union movement in upstate New York just wants its small share and the jobs that go along with it. They want to be “unionized” protective service workers. I wonder how many of the inmates and how many of the correctional staff have ever been members of a union not in the public sector and how many have dropped out of community college. But, similar experiences aside, it does matter which side of the bars you’re on.

This is part of the state of affairs of working class struggle, or lack thereof, in the United States in 2010.

In a country where the Communist Party has dominated “left-wing” politics for over sixty years, dissent has often been deemed a “right-wing” or “counterrevolutionary” affair. Subsequently, many dissidents and parts of the general population have embraced the term “right-wing” as implying something antiauthoritarian or progressive. To make things more confusing, since 1978 the CCP itself has moved farther and farther to the right while still claiming to be socialist. All this has contributed to a very strange political environment in mainland China. On the one hand, Chinese liberals employ the rhetoric of individual rights, parliamentary democracy, and free market capitalism in opposition to the state, yet find themselves in open support of the CCP’s drive to “liberalize” and push forward market reforms. By contrast, the Chinese “New Left” is left defending many aspects of the pre-1978 Maoist system and the last vestiges of state control over the economy while opposing state-driven market policies. With but a few exceptions, what remains is either tacit or explicit support for the CCP on both sides of the political spectrum. This rather bizarre phenomenon is related to the peculiar nature of the contemporary Chinese state. Thus, a clear understanding of the nature of the state is indispensable if the Chinese “left” is to have any hope of moving away from both its authoritarian past and its current capitalist trajectory.

In China, the terms “left” and “right” or “radical” and “conservative” produce somewhat different associations in the popular mind than what we are used to in the West. While in most capitalist countries “left” and “right” are understood largely in economic terms, in China these concepts tend to be deeply entangled within a framework defined by the state, the Communist Party, and nationalism. As a result, Chinese political debates have tended to presume a rigid dichotomy between “left-wing” state socialism and “right-wing” capitalist liberal democracy. The denominations “radical” and “conservative” are equally problematic because they are not fixed to any objective criteria and refer merely to the degree to which one desires change in the status quo. The latter terms have become particularly ambiguous in China since the 1980s, when CCP ideologues began to present Maoism as a “conservative project” and neo-liberalism as a “radical” freeing of productive forces.1 Despite attempts by a few intellectuals within the “New Left” to move away from such simplicity and distortion and create a more nuanced political landscape for China, such efforts have failed in at least two respects. First, these intellectuals have not succeeded in disentangling Chinese “left-wing” political debates from an excessive identification with the state. Second, and more importantly, what achievements have been made in the realm of academia have so far failed to translate into concrete political action.

The term “New Left” was first used by Chinese liberals in a pejorative sense to describe a group of intellectuals who emerged during the 1990s as opponents of market reform. With the repudiation of “radicalism” that began in China after the ascendancy of Deng Xiaoping in 1978, the designation “leftist” came to be associated with militarization, ideological controls, national isolation, and ascetic egalitarianism. Because of these adverse associations most intellectuals within the New Left reject the label yet continue to use it for lack of a better term. Irrelevant to its negative connotations however, the term has also been disputed on ideological grounds by scholars like Wang Hui. Wang sees the crude dichotomy between liberal and New Left as a myth created by Chinese neoliberals intent on appropriating liberalism for themselves. Wang insists that “liberals” in China actually divide into two categories—the first, socially progressive liberals (which would include members of the New Left); and the second, neoliberals and neoconservatives.2 A similar remark was made by Xudong Zhang who pointed out that “an advocate for New Deal-style economic and social policies in China was considered to be a liberal in the 1980s, but ‘New Left’ by the century’s end.”3 This has prompted some to embrace the name “liberal left” (ziyou zuopai) in order to stress the group’s continuity with the proponents of “democratic socialism” and “humanistic Marxism” of the 1980s.4 While this enthusiasm for liberalism may seem reassuring to a more conservative Chinese audience, it leaves non-Chinese radicals rather disheartened.

By all accounts, the New Left does not maintain or seem to desire a unified ideological perspective. Its emergence should be understood against the backdrop of the fall of the Soviet Union, the harsh neoliberal shock therapy impressed upon Eastern Europe, and the massive restructuring of State Owned Enterprises (SOE) and dismantling of social welfare that began in China in 1993. In the 1990s, as the Chinese state moved from an authoritarian “left” to an authoritarian “right” position in an attempt to duplicate the success of the Asian tigers, Chinese liberals began to call for increased “liberalization” and a further push toward the “right.” It was this shift within the doctrine of liberalism that caused a rupture with and the eventual formation of the New Left. In a certain sense then the theoretical positions of the New Left were born in opposition to a neoliberal turn among Chinese intelligentsia and the world at large. Despite claims of being grounded in the liberal tradition, in reality, most in the New Left have been heavily influenced by Marxism (though some identify with both traditions). Many are advocates of developing a novel form of market socialism which would blend aspects of both capitalism and socialism. That being said however, the New Left also manages to evade easy definition. This is in part due to the plural nature of their ideological commitments. But more importantly it is because they embrace aspects of both Western liberalism and Marxism on the one hand and elements of Maoism and Confucianism on the other. In fact, one of their main points of contention with Chinese liberals is over the uncritical appropriation of values and institutions historically specific to the West. This tendency to reject universal values and the linear development path offered by modernity clearly distinguishes the Chinese New Left from not only their liberal opponents but also from Leninist and social democratic orthodoxy. Some have noted that this postmodern slant shares certain continuities with Maoism.5 Whatever the case may be, the desire to move beyond the simple binaries of tradition and modernity, capitalism and socialism, democracy and dictatorship has received considerable support among some of the intellectuals associated with the New Left. It has even led some to hope for the creation of a “Chinese alternative.”

Wang Hui is perhaps the most well known scholar associated with the Chinese New Left. He has published widely in both Chinese and English on issues relating to literary criticism, Chinese intellectual history, and contemporary politics. Unlike the other prominent figures in the New Left, Wang was educated in China, not the United States (though he has since spent considerable time abroad). Wang is by far one of the most original thinkers in China today. Both his polemical work and intellectual history borrow heavily from world-systems and postcolonial theory. However, his uniqueness is reflected in a Daoist inspired advocacy of transcending binary oppositions and a Foucauldian desire to recover subverted histories with which to continually critique the present. It is through this project of recovering lost history that Wang has tried to approach the question of a Chinese alternative.

In contrast to Arrighi and others who have dealt with this question,6 Wang Hui does not see China’s current development path as representative of a meaningful alternative. Moreover, he has shied away from a serious proposal for what a Chinese alternative might look like. Instead, Wang has taken on the more modest task of outlining a history of attempts by Chinese intellectuals to criticize, resist, and transcend global capitalist modernity. Wang first came to prominence in 1997 for an article he wrote in Tianya (Frontiers) entitled Contemporary China’s Ideological State and the Question of Modernity.7 He has since published a four volume intellectual history called The Rise of Modern Chinese Thought.8 In this latter work Wang interprets Chinese modernity as being rooted in fundamental contradictions. On the one hand, historically China recognized the necessity of entering into and competing within a modern system of nation-states. On the other hand, China’s modernization process was based on resistance to certain aspects of modernity and was pitted against Western imperialism.9 Wang sees the project of Chinese “socialism” then as a failed attempt to build a Chinese alternative to capitalist modernity. He traces these attempts not only to the establishment of the Chinese Communist Party but more importantly to earlier encounters with socialism beginning in the late-Qing (1644-1911) and even further back to neo-Confucian critiques of the dramatic changes China underwent during the Song dynasty (960-1279). Thus, The Rise of Modern Chinese Thought is a genealogy of “alternatives to modernity” as conceptualized by Chinese intellectuals.

Wang Hui’s interpretation of Chinese modernity as a kind of “anti-modernity” is closely connected to the issue of the nation state. For Wang the Chinese nation was built on the contradiction between a multi-ethnic “empire” with the potential to transcend the system of nation states and a Han nationalism rooted in the acceptance of China’s place within that system.10 Wang thus presents a deconstruction and subtle critique of Chinese nationalism and the state—which he appropriately describes as the natural political form of capitalist modernity. Yet for all his suspicion of the nation state, he seems to waver at the prospect of rejecting the state’s basic structural logic. Although he is rarely explicit about his own political views, this ambiguity is quite apparent in his more recent writings.

Wang’s latest work has focused on the problem of the de-politicization and bureaucratization of party politics.11 He convincingly argues that both one-party dictatorships and multiple-party representative democracies have bowed their heads to the interests of global capitalism; that popular struggles to eliminate class disparity have been replaced by compromise and bureaucratization; and that society in general has become depoliticized. Wang sees certain aspects of the Cultural Revolution (1966-1976) as having acted to correct these bureaucratic tendencies within the CCP. Here again using the past to critique the present, he highlights the pressing need for both “political and economic” democracy in China. He points to the possibility of mass participation in politics as a remedy to the potential bureaucratization and de-politicization of political parties. This call for participatory democracy (not to mention his skeptical attitude toward the Chinese state) allows Wang to challenge liberal claims about the supposed antiauthoritarianism of the free-market. It also makes him one of the more anti-authoritarian Chinese within the “left” political spectrum. But what exactly is meant by “political and economic” democracy? And how is China going to get there?

Wang Hui is not the only voice within the New Left to pose the question of a Chinese alternative. Much of Cui Zhiyuan’s work is centered around this issue as well. Unlike Wang however, Cui has focused less on abstract sociological problems and more on an analysis of concrete institutions in his critique of market reforms. A University of Chicago political science graduate, Cui was one of the initial “liberals” to break with the turn toward neo-liberalism in the mid-1990s. The reaction to his 1994 article Institutional Innovation and a Second Liberation of Thought12 first established the name “New Left” as political terminology, which was branded upon Cui in a derogatory sense by his critics. Where Wang Hui frames his discussion of a Chinese alternative largely in historical terms, Cui Zhiyuan points to specific examples—such as rural industrialization—in order to express this potential alternative in concrete terms. By the late 1980s, China’s rural industries had grown to employ a quarter of the rural workforce and were contributing to half of rural domestic product.13 Rural enterprises, or Township and Villages Enterprises (TVE), consisted of local factories, mills, and foundries geared primarily toward the production of light industry. These ranged from being genuine village collectives to private entrepreneurial ventures to offshoots of local government. However by the 1990s, growth in rural industry had begun to stagnate, China’s vast peasant population became increasingly seen as a hindrance to development, and calls for further marketization and urbanization started to overshadow the past achievements of the TVEs. As academic opinion started to turn against the TVEs, Cui Zhiyuan, along with another well known “left-liberal” Gan Yang, began to champion small rural industry and collectives as not only economically practical (in regards to absorbing labor and raising income) but as a possible alternative to Fordist models of large-scale capitalist industry. For Cui, TVEs were seen as a means of avoiding village dependency on industrial products from the cities, as well as a positive counter to increasing rural/urban disparity. Cui provocatively linked this to the legacy of the Great Leap Forward (1958-1960) and Maoist attempts at local self-sufficiency. Many of these arguments were later incorporated into Wang Hui’s depiction of Chinese modernity as an anti-modernity. Thus, for both Cui and Wang rural industrialization became seen as fundamental to China’s attempt to seek out and pursue an alternative to a capitalist model of industrial development.

Cui Zhiyuan has also written at some length about the prospects and meaning of democracy in China. Like Wang Hui, Cui is a proponent of “political and economic” democracy and is probably the one in the New Left with the most libertarian leanings. For Cui, democracy is not merely about a parliament and national elections but more importantly about “bringing politics into the economic sphere.” In several articles written over the past fifteen years, he has tried to uncover concrete examples of “native” institutions that could serve as a basis for moving ahead with local village elections and economic democracy in China.14 One of the things that distinguishes Cui’s approach from others is that he likes to take aspects of China’s past and present that are depicted as “backward” or “anachronistic” within liberal discourse and then demonstrate their actual similarities to current institutions in Japan and the West. By doing so, like Wang Hui, he is interested in cutting through the presumed binary opposition between capitalism and socialism. In addition, he intends to show how certain “collectivist” institutional structures can be both ethically just and practically efficient; and how modern capitalist nations have adopted these institutions to their advantage. Cui’s 1996 article The Angang Constitution and Post-Fordism is a good example of this.15 In it Cui compares the “worker’s management” clause in the 1960 Angang Constitution of China’s Anshan Iron and Steel Complex with contemporary trends in the Japanese and American automobile industries. His suggestion is that certain institutions from the Maoist period are entirely compatible with the most advanced organizational methods and demands of modern industry. However, despite the radical implications of many of his proposals, Cui’s writings on economic democracy generally display sympathy toward profit and management sharing schemes which reduce the tension between labor and capital. This compromising approach is consistent with his vision of a Chinese “mixed” economy that blends elements of capitalism and socialism.

While Cui goes much further than Wang in trying to articulate what a Chinese alternative might look like, it remains somewhat unclear as to whether he believes China is actively pursuing such an alternative or is in need of a radical reorientation. In the early 1990s, as the New Left was starting to coalesce, universal integration of China into the capitalist world economy had only just begun to take off. As a result, novel experimentation and reform still seemed possible on a wide scale. Such hopes were the basis for Cui’s call for a “second liberation of thought” in 1994. But a decade later this optimistic attitude was to prove untenable in the face of the competitive realities of the capitalist world market. Following Deng Xiaoping’s “southern tour” in 1992, a significant reorientation of China’s economy from a centrally planned system with limited markets to a kind of authoritarian capitalism in line with “the Asian tigers” began in earnest. Nine cities in the Northeast and Northwest and five cities on the Yangzi River were opened up to foreign trade and investment. New experiments in stock markets and private ownership as well as the granting of full business autonomy to state enterprises followed on the heels of these reforms.16 This marked the beginning of a massive restructuring of SOEs that persists into the present and has resulted in workers being laid off on an unprecedented scale. According to official statistics, in the ten-year period between 1993 and the end of 2002 layoffs in SOE and urban collectives amounted to 63 million jobs, with the biggest losses taking place after 1997. This represents a 44 percent decrease in employment within the state sector.17 In addition to layoffs, increased urbanization and capitalist style boom-and-bust cycles began to define a new kind of development path for China. Cui Zhiyuan’s response to these changes was to advocate a “return” to the novel social experimentation of the pre-1992 period. In 2004 Cui began to promote the idea of what he dubbed a “petty-bourgeois socialism.”18 By this he meant a kind of market-socialism that mixes both collective and state ownership of the means of production with private property and markets. Cui pointed to the economic writings of European “socialists” such as John Stewart Mill, Henry George, and Pierre-Joseph Proudhon as examples of alternatives to orthodox notions of both capitalism and socialism. His arguments were also heavily indebted to American analytical Marxist thinkers such as John Roemer.19

When taken together—the development of rural industry, political and economic democracy, and market-socialism—we begin to get a basic picture of what Cui Zhiyuan’s vision of a Chinese alternative would entail. But there are several obvious problems with this vision. First, as Wang Hui himself has pointed out, it shares a naïve belief in the possibility of reform to significantly shape the contours of a capitalist-driven economy. Secondly, presuming that we accept reform as a strategy of change, will reforms be won from the bottom-up or handed down from the top? What is the role of the state in promoting a Chinese alternative and how does it differ from liberal strategies of tacit support and jockeying for political influence? Does Cui believe that China is moving toward this alternative? If so, what is there for him to be critical of?

Both Wang Hui and Cui Zhiyuan, though acknowledging certain positive aspects of the Maoist era, actually trace their roots to the “humanistic Marxist” tradition that came to fruition in the 1980s, as well as sharing a lineage with earlier traditions such as the May Fourth movement (1919-1927). This seems to be one of the clear divides among those within the New Left. While some New Leftists such as Wang, Cui, and Gan Yang have embraced the May Fourth spirit of pluralism and critique (while advocating a vague market socialism), others have affirmed a clear ideological commitment to a kind of “neo-Maoism.” This latter group would include scholars such as Gao Mobo, Li Minqi, and Han Yuhai. Still others identify with a more “conventional” program of nationalization of production and social democracy. A well-known representative of this third position would be Wang Shaoguang.

Although such ideological commitments are quite diverse, there are a few points where members of the New Left do in fact converge. Aside from their obvious opposition to neo-liberalism, most of those associated with the New Left have also challenged (to greater or lesser degrees) the Communist Party’s official interpretation of Maoism. This is usually characterized by a tendency to treat the Cultural Revolution as a rejection of Soviet-style political economy and a struggle for China to forge its own path. The notion of Maoism as a Chinese alternative is something that has received considerable attention both inside and outside China since at least the late 1960s and continues to feature prominently within New Left debates. In light of this it may be helpful to briefly review the arguments for and understand the various complications surrounding this view.

As an ideological position, Maoism is somewhat hard to identify. This is due in part to the different phases of Mao Zedong’s life and the consequent changes in his thinking which accompanied these phases. Moreover, it is also due to the difficulty of separating Mao’s thoughts and actions from that of the CCP as a whole. Maoists tend to stress the differences between Mao and the Leninist orthodoxy of the CCP. This is usually accomplished by a careful examination of Mao’s writings, in particular his Critique of Soviet Economics,20 which first appeared in print during the early years of the Cultural Revolution. To his supporters, Mao Zedong Thought represents not only an alternative to capitalist liberal democracy but also to the Soviet path of devolution into “state capitalism.” In fact, the whole notion of socialism with “Chinese characteristics”—which became popular during the reform period—was largely carried over from earlier Maoist rhetoric. According to Maoists, the Maoist model of socialism is exemplified by peasant revolution, rural industrialization, national and local self-sufficiency, partial decentralization of economic and political authority, mass participation in politics, the integration of mental and manual labor, and a strong emphasis on class struggle and voluntarism.21 In this interpretation (which is ironically similar to the CCP’s 1981 evaluation, only with the values negated) the Cultural Revolution looms powerfully in the foreground as an attempt by Mao to lead the masses in a revolt against party bureaucracy and toward the creation of a more democratic and egalitarian communist future. If we are to take these claims seriously then Maoism would surely appear much less authoritarian than say Stalinism.

There are some significant problems with this portrayal of Maoism however. The first is that it takes Mao’s writings and professed ideological commitments at face value and thus conveniently sidesteps much of the reality of Maoist political economy. The disasters associated with both the Great Leap Forward and the Cultural Revolution are often qualified either by blaming party bureaucrats (as opposed to Mao) for their failings or by claiming the true history of these events has been distorted in the post-Mao era. While admitting that the repudiation of Maoism and the restoration of Marxist-Leninist “orthodoxy” after 1978 have served a clear political agenda, the wholesale detachment of Maoism from its nexus within the Chinese Communist Party is another matter entirely. Such a task is not only quite formidable but also obscures the many parallels between Mao and the CCP. How can we judge Maoism on the basis of Mao Zedong Thought alone? After all Mao himself betrayed much of his “Maoist” rhetoric during the Cultural Revolution—this includes backing away from a more autonomous restructuring of the People’s Communes, turning against the worker’s revolution in Shanghai and the various ultra-leftist groups, and even normalizing relations with the United States.22 Surely Mao’s actions and not just his words are fundamental to an assessment of the sincerity of Maoism and the Cultural Revolution.

The second problem with this portrayal relates to means and strategy. While the stated goals of Maoism may be worthy of respect if taken at face value, the question of how to realize these goals is as important as it is overlooked. This is closely connected to the discussion of Maoism as a real alternative in practice. Although the Cultural Revolution and certain aspects of Maoist political economy clearly represent a decentralization of power away from the party, they were supplemented with an ideological centralization around Mao himself. While Mao presented his rift with other top-ranking members of the CCP as one of socialism versus state-capitalism, it seems to have been equally related to the role of ideological controls in developing China’s productive forces (and building Chinese modernity). This again draws into question the sincerity of the Cultural Revolution as a genuine challenge to the status quo and an alternative path to socialism. One cannot brainwash, manipulate, and coerce people to revolt if it is to have any kind of emancipatory potential. Such has more in common with obedience than with rebellion. Arif Dirlik’s insights into the contradiction between Maoist means and ends are quite helpful here.

…the Cultural Revolution was doomed to failure because the policies that motivated it, if they were to be workable, required a social and political context different from the structure of power that had been put in place after 1949… rather than challenge the existing structure of power as the Cultural revolution professed, Maoist policies ended up as instruments in a competition for the conquest of power within the existing structure, a competition that the Cultural Revolution did much to unleash.23

Though the view that Mao was opposed to party bureaucracy certainly has some legitimacy, his alternative vision of mass campaigns controlled ideologically from above seems to seriously contradict the idea of decentralization and participatory democracy. The role of the state is crucial here. For it was precisely Mao’s position as Chairman, his control of the People’s Liberation Army (PLA), and his access to and manipulation of media outlets which enabled him to steer the Cultural Revolution. Despite the Maoist condemnation of party bureaucracy, the state apparatus was never challenged and its coercive powers as well as an ardent nationalism remained an integral feature of the Cultural Revolution. In practice therefore, Maoism, though somewhat divergent from the Soviet model, remains incredibly authoritarian in many respects; particularly in regards to its reliance on ideological controls and the coercive powers of the state.

Maoism as a Chinese alternative is thus highly problematic. Most neo-Maoists in the New Left have admitted the overall failure of the Cultural Revolution yet wish to vindicate Maoism based on its professed aims.24 But how are these aims to contribute to a Chinese alternative in the present if the means to achieve them have been proven so misguided in the past? New Leftists in general tend to remain silent on the issue of strategy. While people like Wang Hui and Cui Zhiyuan have harbored reservations toward the state, they have not suggested any alternatives to a top-down model of change supported by the state apparatus. Liberals and neoliberals, despite all their rhetoric, are avid proponents of state-lead market reforms and state protection of the private sphere. Why then do Chinese political debates lack a serious voice critical of the state? One reason is surely due to state control of the press and publishing agencies and the party’s blatant intolerance of dissent. Another reason may have to do with the legacy of a China divided from within and without and the sense of national vulnerability that is perceived to accompany a weak state. A third reason, however, stems from the state’s ambiguous role as both mitigator and patron of capitalism. No doubt it is this latter phenomenon that stands as the major obstacle to the creation of a real Chinese alternative.

As China’s GDP continues to grow at an astonishing rate (while much of the rest of the world languishes in recession) we would do well to remind ourselves that the likelihood of radical changes taking place there are slim. No meaningful alternative will be implemented from the top down. And there will be no significant challenge to the status quo so long as economic growth continues. Although the Chinese New Left has had some limited success in de-linking the positions of the “left” from those of the Chinese Communist Party, none of their ideas have yet developed into serious political demands. With the exception of some support from NGO and student volunteer groups, the New Left remains almost entirely academic in nature. Whatever one’s thoughts are on the idea of a “Chinese alternative” and the various problems that surround it, to think that an alternative of any kind is possible without a grass-roots political base is pure fantasy. In all fairness, however, without freedom of speech, press, and association, support for any independent social movement will not be easily forthcoming. It is the ultimate irony that the Communist Party now plays the most important role in the capitalist exploitation of the peasant and working classes. The CCP uses the powers of the state (both local and central) to keep wages low, working conditions horrendous, and squash dissent. Yet at the same time it is the state that has thus far prevented the complete privatization of the economy (perhaps most importantly the privatization of land). This contradiction presents a major obstacle to the Chinese New Left. If they are sincere in their attempt to break with the CCP and the old Stalinist “left” then a thorough examination of the state’s role in supporting capitalist exploitation is in order. This is true for not only the post-Maoist but for the Maoist period as well. While intellectuals like Wang Hui, Cui Zhiyuan, and Gan Yang have begun to move in this direction, they hesitate to take their arguments to their logical conclusion. Moreover, their ideas have been largely confined to the realm of academic and political debate. As China’s role in the world economy becomes increasingly important, it is imperative that the Chinese left break free of the dogmatism, nationalism, and authoritarianism which has defined its past. Only then can we begin to talk about alternatives.

Original article archived at https://web.archive.org/web/20250215041516/http://insurgentnotes.com/2010/06/chinese-new-left/

• 1Zhang, Xudong, “The Making of the Post-Tiananmen Intellectual Field: A Critical Overview.” In Whither China? Intellectual Politics in Contemporary China, ed. Xudong Zhang (1-75). Durham: Duke University Press, 2001, p. 19.
• 2Wang, Hui, “Zhongguo ‘xinziyouzhuyi’ de lishi genyuan: zailun zhongguo dalu de sixiang zhuangkuang yu xiandaixing wenti” (The Historical Roots of Chinese Neoliberalism: A Re-discussion of Mainland China’s Ideological State and the Problem of Modernity). In Quzhengzhihua de zhengzhi: duan ershishiji de zhongjie yu jiushi niandai (Depoliticized Politics: The End of the Short 20th Century and the 1990s) (98-160). Beijing: Shenghuo dushu xinzhi sanlian shudian, 2008, pp. 143-145.
  
• 3Zhang, Xudong, “The Making of the Post-Tiananmen Intellectual Field: A Critical Overview.” In Whither China? Intellectual Politics in Contemporary China, ed. Xudong Zhang (1-75). Durham: Duke University Press, 2001, p. 16.
• 4Gan, Yang, “Zhongguo ziyouzuopai de youlai” (Origins of the Chinese Liberal Left). InSichao: Zhongguo ‘xinzuopai’ jiqi yingxiang (Ideological Trends: The Chinese “New Left” and its Influence), ed. Gong Yang (110-120). Beijing: Zhongguo shehui kexue chubanshe, 2003.
• 5Dirlik, Arif, “Modernism and Antimodernism in Mao Zedong’s Marxism.” In Critical Perspectives on Mao Zedong’s Thought, ed. Dirlik, Healy, Knight (59-83). Humanities Press International, 1997.
• 6Arrighi, Giovanni, Adam Smith in Beijing: Lineages of the Twenty-First Century. Verso, 2007.
• 7Wang, Hui, “Contemporary China’s Ideological State and the Question of Modernity.” In Wither China? Intellectual Politics in Contemporary China, ed. Xudong Zhang (161-190). Durham: Duke University Press, 2001.
• 8Wang, Hui, Xiandai zhongguo sixiang de xingqi (The Rise of Modern Chinese Thought). Beijing: Shenghuo dushu xinzhi sanlian shudian, 2008.
• 9Murthy, Viren, “Modernity Against Modernity: Wang Hui’s Critical History of Chinese Thought.” Modern Intellectual History. vol. 3 no. 1, 2006, pp. 158-159.
• 10Ibid., pp. 156-158.
• 11Wang, Hui, “Quzhengzhihua de zhengzhi, baquan de duochong goucheng yu liushi niandai de xiaoshi” (Depoliticized Politics, Hegemony’s Multiple Formations, and the Fading of the 1960s). In Quzhengzhihua de zhengzhi: duan ershi shiji de zhongjie yu jiushi niandai (Depoliticized Politics: The End of the Short 20th Century and the 1990s) (1-57). Beijing: Shenghuo dushu xinzhi sanlian shudian, 2008.
• 12Cui, Zhiyuan, “Zhidu chuangxin yu di’erci sixiang jiefang” (Institutional Innovation and a Second Liberation of Thought).Ershiyi Shiji(Twenty-First Century), no. 24, Aug, 1994.
• 13Meisner, Maurice, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese Socialism, 1978-1994. New York: Hill and Wang, 1996, p. 232.
• 14Cui, Zhiyuan, “Wither China? The Discourse on Property Rights and Reform in China.” In Whither China? Intellectual Politics in Contemporary China, ed. Xudong Zhang (103-122). Durham: Duke University Press, 2001.
• 15Cui, Zhiyuan, “An’gang xianfa yu houfutezhuyi” (The Angang Constitution and Post-Fordism). In Sichao: Zhongguo ‘xinzuopai’ jiqi yingxiang (Ideological Trends: The Chinese “New Left” and its Influence), ed. Gong Yang (214-226). Beijing: Zhongguo shehui kexue chubanshe, 2003.
• 16Meisner, Maurice, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese Socialism, 1978-1994New York: Hill and Wang, 1996, pp. 479-480.
• 17Hurst, William, The Chinese Worker after Socialism. New York: Cambridge University Press, 2009, pp. 28-29.
• 18Cui, Zhiyuan, “Ruhe renshi jinri zhongguo: ‘xiaokang’ shehui jiedu” (How to Understand Today’s China: Analyzing a “Well-off” Society). Dushu (Readings), no. 4, March, 2004.
• 19Day, Alexander, The Return of the Peasant: History, Politics, and the Peasantry in Postsocialist China. Ph.D. Dissertation, University of California Santa Cruz, 2007, p. 86.
• 20Mao, Tsetung, A Critique of Soviet Economics. Trans. Moss Roberts, Monthly Review Press, 1977.
• 21See Li, Minqi, The Rise of China and the Demise of the Capitalist World Economy. Monthly Review Press, 2008, pp. 24-66; and Critical Perspectives on Mao Zedong’s Thought, ed. Dirlik, Healy, Knight. Humanities Press International, 1997.
• 22Dirlik, Arif, “Revolutions in History and Memory: The Politics of the Cultural Revolution in Historical Perspective.” In Postmodernity’s Histories: The Past as Legacy and Project (19-61). Rowman & Littlefield Publishers, Inc., 2000, pp. 32, 41.
• 23Ibid., pp. 38-39.
• 24Apologists for the Cultural Revolution usually emphasize its achievements in the areas of mass education and healthcare, for which there is considerable supporting evidence.

Introduction

The text below first appeared in ECHANGES, No, 130, Autumn 2009 as part one of a three part series on the social effects of the crisis in the U.S . We’ve shortened the original French, cutting background material on US public sector finances and social programs and correcting minor factual errors. With its focus on actions not usually considered “political” in the traditional use of the word, we think this text makes an important contribution to understanding the full ramifications of the crisis and the responses to it within the US.

We hope the question at the end, “what weight should be put on the proliferation of resistances?” stimulates wider debate, discussion and research on the larger question which frames it: do these actions in some way, despite “not following traditional paths…testify by their existence and forms to (changing) something in the capitalist system” or “are they only adaptations, helping the system overcome the crisis without changing basics?”

Most events described here took place in the earlier phase of the crisis. For several months, roughly beginning with the first bank bailouts and in the fall of 2008, through the Republic Windows occupation and ending in the spring of 2009, it seemed like a larger social explosion was building. However, even as unemployment, foreclosures and evictions remain at record highs, little in the way of the open mass action predicted by many in the traditional left has taken place. Many actions mentioned in the text, like the bank occupations, have since died out, or are no longer as visible.

But if traditional forms of class struggle can’t yet be detected, there are signs that on the micro-level, in the areas where individual resistance merges into the collective so well identified in this text, subtle but real changes are brewing. A good example is the May 31, 2010 New York Times article, “Owners Stop Paying Mortgages and Stop Fretting,” describing how, “ A growing number of people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.

This disrespect for capitalist norms of legality and private property among people who previously believed in “playing by the rules” (and maybe to a certain extent still do), can signal the beginning of larger shifts in consciousness and action, not in response to propaganda by leftist groups but by the real press of social events. They form the type of “innovating experiments that will leave traces” in the future.

We hope the question at the end, “what weight should be put on the proliferation of resistances?” stimulates wider debate, discussion and research on the larger question which frames it: do these actions in some way, despite “not following traditional paths . . . testify by their existence and forms to (changing) something in the capitalist system” or “are they only adaptations, helping the system overcome the crisis without changing basics?”

The United States’ Place in the World1

Before describing the effects of the crisis, it’s important to remember that economically and militarily the US remains by far the world’s strongest capitalist power.

The third largest world state in territory, nearly the same size as China, and with almost 304 million inhabitants, the U.S can meet 72% of its energy needs. Its natural resources—such as minerals and rich agricultural land—are the third most plentiful in the world.

Despite deindustrialization, a 12.5% fall in output and 0.5% in recent months, its industrial output remains one of the world’s highest. For example, the US is the second largest global steel producer.

The US invests more in research and development, notably in new technologies, than anywhere else. To give an idea of the extent of this investment, the research budget of the California university system alone is greater than all of France’s.

The public, business and private debt load – one of the causes of the present crisis – and especially the trade deficit are often stressed to highlight the weakness of the American economy. China, which owns 40% of this debt, is often falsely posed as holding one of the keys to the situation in the US.2 In fact, this deficit often comes from output financed by American capitalists (recouping thus a good part of the surplus value), who by importing goods at low cost holds down wages in the US itself.

The cause of the crisis in the US must be found in the context of the world capitalist economy and not credited to internal causes. These internal causes of course exist but in fact only shape the way this crisis is expressed. Despite successive setbacks and getting embroiled in unsolvable conflicts, US military strength rests on the deterrent effect of its impressive number of military bases spread over the world.

US confidence in its domination can be shown by the fact that US custom duties are the weakest in the world (3.5%) making the country one of the champions of unregulated capitalism in the global market. This economic domination is maintained by low production costs, underwritten if needed by subsidies, like those for agriculture.

Behind the Subprime Disaster: Widening Income Inequality in the US and the Decline of Workers’ Buying Power

“I think the banking institutions are more dangerous to our liberties than entire armies taken to combat. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.” (Thomas Jefferson, third US president)

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” (Henry Ford)

Before addressing the current financial crisis in the US, it’s important to point out that at least over the past decade, the average American family income has steadily declined. Estimates place the average decline of real income between 2000 and 2008 at 1000 dollars per household. Of course, this average affected different social categories unequally. Taking the auto industry as an example, to curb international competition, notably from Japanese implants in the southern US, the “Big Three” (GM, Ford, Chrysler) have steadily reduced wages and benefits (retirement and health) for more than a decade. Between 1989 and 2004 productivity rose 28% in these companies while salaries only increased 4.1 %. The significance of the drastic measures taken by “The Big Three” in auto can be seen in the fact that they have to provide guaranteed pension and health insurance for more than 2 million workers and retirees.

The decline in income for the US as a whole can be measured by other facts. From 1982 to 2005, average income rose 147% while the price of consumer goods only rose 106%. However, health care expenses increased 251% and education costs 439%, which on the whole represents an impoverishment. Other data express the same tendency: from 1989 to 2004, for the average family, income rose 35% – but retirement costs increased 119%, housing, 56%, and debt by 119%, of which 103% was mortgage debt. The same from 2000 to 2008: while average incomes rose 3%, the cost of health insurance jumped 58%.

The decline in income can be gauged another way. After the year 2000, the average personal savings rate was near to or close to zero, which is where trying to maintain living standards with credit comes from, in hopes their situation would improve, with well-known results. This income decline only worsened with the “subprime” crisis. The Gross Domestic Product shrunk from 6.3% in the 4th trimester 2008 and 6.1% in the 1st trimester 2009. In December 2008, it was estimated that household consumption fell 14.7% in a single year.3

Shrinking incomes of a large part of the population resulting in increasing housing, health, and retirement costs answers the question why in the same period an explosive growth in all types of credit, notably mortgages, developed.

The response was two-fold.

On one side, the needs of creditors, the many types of financial establishments who, disposing of capital more and more important because of gathering surplus value coming from global business operations, had to make it grow. The bursting of the tech bubble led them into financial speculation like the LBO (Leveraged Buy Out), but also into what appeared better bets, especially real estate. To a certain extent, they were helped by a division in credit operations. On one side a stock market with large reserves for businesses and bond markets and, a popular credit supermarket with sellers hawking loans like door-to-door salesmen selling vacuum cleaners, with all that occupation’s dubious practices, relentlessly competing to land clients.

On the other side, clients who, believing in social mobility and the benefits of property, (maybe a sign of social achievement) let themselves get easily persuaded in taking on such loans for both security and as symbols of social achievement. With falling living standards, it is precisely this concern with artificially preserving social rank and security not only in property but also in all its accessories which came to be the flaw which eventually engulfed the whole financial sector. The flood of mortgage loans had a double-fold effect: a boom both in construction and in consumption as a whole, linked to the home on one side by rising home values since money flowed with the pace of construction not far behind.

At first, the slow decline in incomes mentioned earlier didn’t cut into the growing mortgage market. On one hand, lack of new and potential clients because of market saturation resulted in declining incomes, intensifying even more the competition among lenders making loans consented to by clients who couldn’t pay because of their low incomes, notably with the lure of low introductory interest rates. This was seen in debtors’ defaults in the first wave of foreclosures. On the other hand, real estate speculation made those who previously held mortgages believe they held an asset whose value would never stop growing. New loans were offered, guaranteed by this speculative value, which were more readily agreed to because the drop in incomes drove mortgage holders to either maintain living standards or face any emergency with fewer resources to fall back on. This delusional extension of individual credit was a sort of substitute for class struggle because it permitted quick and easy solutions to falling incomes.

Thus formed, the whole system only functioned by self-perpetuation, that is, with borrowers regularly making payments. What Madoff carried off on a small scale with a few large clients, all the credit companies relying on bank networks did on a much larger scale with enormous numbers of small customers. Because of slowly declining revenues, the system reached a saturation point, then halted and started unraveling in a spiraling freefall. The economic crisis started striking the most vulnerable working-class sectors, leading to an even sharper fall.

Certainly, this trend of decline started well before 2008, not only in this risky mortgage market (the “subprimes”) but also in the US economy. The end of that year marked the 24th month that construction had fallen and the 27th consecutive month that manufacturing had also shrunk. Today, every economic sector is affected by unemployment; in April 2009, the official unemployment rate was 10% but the real rate was 16%. In that month alone, there were 149,000 jobs lost in manufacturing, 46,000 in distribution, 110,000 in construction, 135,000 in financial services and 269,000 in other sectors.

At the same time, salaries stagnated – when they weren’t “adjusted” downward. If recent financial indicators could have provoked an inflation rate of more than 6%, counter-trends, like selling goods below market value at other times raised deflationary tendencies. This continuing development makes it especially risky to predict if this unstoppable cycle of interdependence can’t continue to unravel. The more revenue falls because of unemployment, from downward pressure on salaries or from inflation, the more the real estate market erodes, the more consumer spending shrinks and the more the crisis spreads.

In a special number of the Financial Times (May 5 2009) dedicated to “The Future of Capitalism,” an article noted there was no “credible alternative to the market economy.” Strangely, all the political class on all sides, including the “revolutionary reformists” ultimately gave credit to theories of economic liberalism that Richard Posner, a supporter of the Chicago School, summarized this way: “Financiers share an initial responsibility in the depression, but can no more be blamed then a lion could be blamed for having eaten a zebra. Capitalism is Darwinian.”

The Present Limits of Traditional Means of Class Struggle

An important part of the population, those who because of their income and activities can be considered as part of the “middle class”4 is doubly punished, first, by losing their jobs and incomes, then by loss of its possessions. This time, they find it impossible to turn to real estate loans either because they have been evicted from their asset or else because plummeting real estate values cut them off from loans they previously would have drawn on. The question which interests us, is how workers, whatever their “rank” on the social scale, defend themselves against what for everyone is a worsening in living conditions; a degradation which affects people differently according to their place in the social hierarchy.

To answer this question, responses connected to work itself (against layoffs or worsening working conditions) have to be separated from responses against worsening living conditions, beginning with the effects of creditors repossessing homes (the ravages of “sub-primes”).

Contrary to what takes place in other countries, hardly any struggles against layoffs take place, although there’s sometimes the rare factory occupation as in Chicago (Republic Door and Window) and in Canada (Windsor, Ontario, dependent on auto and across from Detroit). Confronting lay-offs, like in France, everyone aims to get or even increase financial compensation. Even if these objectives are sometimes won, they have not had, as the “revolutionary” milieus hope, the effect of stimulating other struggles, so far remaining isolated cases, as in the example of workers at HartMarx (apparel) in Chicago or of a subsidiary in Rochester, New York. Furthermore, such struggles haven’t included any attempt to get the company re-opened, let alone take over production through self-management. Afraid of losing their jobs, those workers still employed (which despite unemployment is still the largest part, nearly 80-90%), don’t try to launch struggles or they try to weather the storm,.

There are still examples of struggles to renew contracts during which the bosses, taking advantage of the bleak economy, try imposing take-backs. Nearly all end in defeat, sometimes after months on strike. What took place in the “Big Three” in auto, all almost bankrupt even after years of union concessions and restructuring, shows how workers only accept new concessions to protect their jobs, even at the price of worsened working conditions. One of the conditions imposed by the government for the economic bail-out of the “Big Three” was that salaries had to be aligned with those at non-union Japanese transplant firms in the southern US But these non-union companies try to force workers into accepting wages aligned to the prevailing minimum wages of the states in which the plants are found, a never-ending race, among other concessions, in the fall of wages. Attempting to protect their profit margins from declining sales, companies cut wages with threats of layoffs. More than a quarter of wage-earners were affected, notably in non-union companies. Whether in the auto giants or in non-union shops, workers accept harsher working conditions without many struggles from fear of swelling the ranks of the unemployed.

A New York Times article from April 5th, 2009 states that “American workers have largely stayed off the streets, even as unemployment soars and companies cut wages and benefits,” adding that “they tend to view themselves as part of an upwardly mobile middle class.” On the other hand, the article states the younger generation has “found more effective ways to change the world. It’s signed up for political campaigns, and it’s not waiting for things to get so desperate that they feel forced to take to the streets.” American workers keep away from demonstrations as much from fear of seeing their jobs relocate as from any concern over preserving their image as members of the “middle class” with its hopes and ambitions. Many develop feelings of guilt and shame over what they consider a personal failure. In 2008, 159 strikes were recorded, versus 1352 in 1981.

Faced With a Fall in Social Position, No Individual Solutions

Resistances, if one can call them that, rather than stop-gaps that are imagined as temporary, are thus outlets for responses to a slow or sharp sliding down the social scale tied more to incomes than to any role under capital, coming more from a social fiction, an ideological conditioning, than from the reality of any power in the capitalist system. From this situation came the feeling that one was a member of the “middle class.”

It was inevitable that these “solutions” were first and still are individual. Everyone looks for a port in the storm. It’s a matter of preserving not so much basic survival, as with the very poor, but the appearance of status. This status, supported by family income, appeared more a frame of mind based in part on appearing well-off and secure, with hopes for going further. The fall in social position of those considered as “middle class” makes these people not react first by contact with exploitation (loss of wages, benefits, employment) but to a symbol of social status: the house. Losing “your” house is to lose an essential element of idealized social status.

Recent American newspapers are full of detailed testimonies to the different ways people use as compensation for hiding their loss in position. This is often independent of the mortgage problem, which we examine separately.

An example of one family’s situation: A couple with two children, the husband unemployed, the wife employed. They don’t have mortgage debt and are trying simply to survive, not even to maintain “status.” The family has cut non-essentials like movies and restaurants, focusing their worries on housing: they have successively lost their telephone, cable and finally their car for non-payment. When he finds a job, they first get back is their car, an absolute necessity in the U.S with the size of its cities and lack of public transportation.

For every household in financial straits, a study has shown in what order they economize:

• Cutting back electricity and heat.
• Looking for part-time work or working overtime.
• Postponing non-essential medical spending (dental, physical exams, tests).
• Borrowing from savings or retirement accounts.
• Borrowing from friends.

• Taking any available work. Brice Rump, president of a temporary work agency, Toledo Job, stated, “. . . the level of people who come to the agency is unbelievable . . . What I am seeing is a large number of very talented people who are trying to land anything. Everyone is moving down.”
• Young people joining the military.5
• Older people, whose pensions are inadequate from shrinking retirement plans, returning to work in temporary jobs where they compete with the young. More than 25% of those over 60 years old now expect to work until they die, versus 15% before the recession.6

This could be the situation of anyone facing financial trouble in all the industrialized countries. But rising unemployment (officially, more than 650,000 newly unemployed in February 2009 alone; since the crisis began, more than 7 million jobs have disappeared) changes these priorities of economizing somewhat. This rising unemployment is not slowing: in a single week, July 18, 2009 more than 30,000 joined the ranks of the unemployed. At that time, there were more than 4.4 million Americans out of work for more than 27 weeks – with more than half receiving no benefits.

Guidelines from 2008 set the poverty threshold at $10,830 for an individual (double for families), with nearly 40 million Americans falling into that category. Falling back on welfare isn’t always a choice because stricter income guidelines and sometimes pride keep many from applying. It is the same concerning health care coverage, which we will examine later. Spreading company financial difficulties makes job searching hard, even for lower work hours or short-term jobs. One example: A small state like Rhode Island, which rapidly industrialized in the 1960s followed by the real estate boom, went into decline in 2005 accompanied by rising unemployment. An offer for 80 jobs attracted over 500 applicants.

Unemployment compensation is itself subject to limits. Where labor law guarantees unemployment benefits, employers try by different means to avoid paying, by claiming employees left for reasons other than layoffs. A quarter of unemployed penalized in this fashion have to spend months appealing to get benefits. Benefits vary from state to state.

The ripple effects from mortgage defaults can’t be separated from the drop in personal incomes from previous years, a drop that quickened in 2007-2008 and jumped even more in 2009 because of rising unemployment. Two types of defaulters have to be distinguished: those who were unconscious victims of subprime mortgage and those defaulting from unemployment stemming from the economic crisis. What is the percentage of each? The first group had in some way escalated the process, which spread, affecting the whole consumer economy. That said, the effects of the world economic crisis in the U.S shouldn’t be underestimated. This crisis has only reinforced the factors around which in turn the national character of “risky” mortgages has unfolded.

The real estate market and mortgages – whether “toxic” or not – is in a kind of chaos. Slumping building prices not only deprive financial institutions of money, but also impoverish home owners, whether in default or not. In May 2009, real estate values had dropped 30%, returning sometimes to 1920s prices, with one in five borrowers owing more than the property was worth. Financial institutions are forced to destroy their own now completely depreciated properties. In California that same month, an unfinished housing complex needing an extra million dollars to complete was bulldozed after the bank decided tearing down the unsold buildings would be cheaper, only costing 100,000 dollars. The same thing took place in Cleveland, Ohio, where one street was so full of repossessed homes, now ransacked and vandalized, that it was more “profitable” to tear them down. This financial landscape is aided by all sorts of mercenaries: speculators who buy empty vandalized houses in bloc for minute sums, then sell them on the internet to gullible buyers, now indebted owners of uninhabitable houses they can’t afford to fix.

Others from the same wholesale buy-ups re-sell units for 500 dollars by offering all the necessary materials on credit for a charge of 400 a month, less than rent. Among bankrupt credit agencies, good mortgage titles from debtors who don’t know who owns their title circulate.

Overall it is hard to get more complete statistics. But even partial statistics give an idea of the extent of evictions, the “repossession” of homes by lenders, most often credit establishments–backed up by the whole banking circuit. At the end of 2008, one in ten mortgages in the state of Maryland, 100,000, were in default. In the US as a whole, in April 2009 alone, more than 150,000 more defaults were registered. Half of repossessions are concentrated in 35 out of 50 states, with California, Texas and Nevada at the top.

Those who lose their homes often in a few weeks lose everything. They are often still in debt because the value of their foreclosed house is less than they owe the bank. Those foreclosed on look first for support from close relatives and in makeshift solutions because they are destitute, still hoping that present circumstances won’t last long because “things will work out.” An American or “middle class” mindset? Newspapers are always full of testimonials to temporary “solutions,” which even if testifying to a certain distress, won’t last long, especially if affecting families. At the same time, these individual solutions tinged with hope are for the time being somewhat collective. They testify that “possible” solutions exist, even if the future remains totally unclear. What will happen if this temporary situation lasts, if the number of those living in makeshift conditions increases sharply? Who can say if that will turn into collective responses, which appear to be starting up in the related area of evictions?

We limit ourselves to sketching an outline of these stop gap measures today:

• Sharing housing with parents or friends, even if this means living in a garage. But it is the least worst of solutions, a solution which also rebuilds a class position.
• Relying on motels: a 44 year old middle class college graduate became unemployed and ended living with his wife and three children in a run-down motel room. The environment is not like his prior one: domestic arguments, prostitution, drunken fights. Furthermore, if he didn’t pay from 800-1400 dollar per month, he would have to leave 28 days later because then the stay would change into a rental the motel owner didn’t want.
• Living in trailers or mobile homes in over-crowded pre-existing trailer parks.
• Emergency shelter, an even more temporary solution since such shelters can be closed during the day and every spring. One homeless man describes conditions in these shelters: “I have been arrested because I refused to go to a shelter and I was jailed at Rikers (an island jail in New York City). I couldn’t help laughing when I saw that my sheets were stamped with “Department of Homeless Services” because prison and a shelter are one and the same. It is an example of the link between Homeless Services and the prison system here in New York. This system is completely against us. We are treated like cattle, fed like birds and worse of all, treated like everyday trash pushed to the curb.” 7
• Tent cities which have sprouted up all over the country in isolated areas or in kinds of shanty-towns where insecurity is the rule because of police crackdowns and temporary toleration by officials.
• In covered parking lots, where people can sleep in their cars.
• Substituting for overloaded or non-existent community centers, public libraries become places where people go not only looking for warmth or sleep, but also to find representatives and counselors [ … ]

Even if census counts regularly underestimate children’s situation, especially in urban families and even if before the recession, child poverty rates had risen significantly, all indicators show that in the recent period, the numbers of children living in single parent families or in unemployed households sharply increased and is still rising, while many states ,facing shortfalls, cut-off programs helping destitute families.8

Entering Illegality: Start of Collective Solutions

But not everyone tries to go as far as finding stop-gap solutions; they slide into hopelessness, which doesn’t mean those searching for solutions aren’t prey to a range of psychological pressures, with interpersonal problems of varying severity. More than half of college age adults have mental health problems (one fourth not treated): depressions and anxieties are often drowned in alcohol or drugs.

Beyond family disruptions (break-up, domestic violence, which has jumped 18%), suicides increase (reaching unprecedented levels; the suicide rates in 2008 rose 28% over 2007). Other acts signaling individual despair take place, like burning down a repossessed home (which can also be insurance fraud), and armed resistance to eviction agents which can get out of hand. These acts can end in “mass murders” whose frequency is rising dangerously, from suicides of whole families up to shootouts in schools and elsewhere or else in increasing common crime. For example, in June 2008 in Detroit, (800,000 inhabitants) 30 murders were counted – a monthly average!9 One example of these resistances stemming from hopelessness: an older man barricaded himself in his apartment, resisting eviction with weapons until exhaustion. The siege lasted 5 hours, involving 100 police and helicopters before this veritable military operation finally cut him down. This isn’t an isolated case. Likewise, there is a surge in banks or business robberies, not only by local gangs or organized crime, but also by ordinary individuals. A dramatic increase according to an FBI report: 22% in southern California, 421% in Orange County, 54% in New York, and often for small amount–one, for $1,410 “to pay my rent” and another for $1,000 to stop eviction. In the US, there are now 7.3 million prisoners, including those on parole (one out of 31 adults), and their numbers are rising.

Exploiting the need for money for everyday expenses, the banks tried to expand the credit card system, shifting problems they experienced in the mortgage sector. The dimensions taken on by this new speculative threat in May 2009 led the government to more strictly regulate the credit card industry, and imposing a 45 day delay before increasing interest rates (such changes were one cause of subprime defaults.) Right now, household debt per family averages $10,500 and these total personal debts, excluding sub-primes, climbed to 2.5 trillion dollars. The upward curve of credit card defaults mirrors exactly the progressing wave of unemployment.

But on the other side, there at the same time what could be described as positive steps, sometimes individual, sometimes collective.

In place of burning down a house being repossessed, some people getting evicted have quickly stripped all fixtures from the house, including the paving stones, leaving only walls. They are helped in this by organized gangs that have become specialists in gutting empty houses post-eviction or after former inhabitants abandoned them. We will see later the effects of the vandalized houses in the ebb and flow of real estate in the US.

A squat is a form of individual taking back but squatting in his or her own house or in an abandoned house, is a longer-term repossession, a direct and continuing confrontation with the authority of the property owner. Often, this form of action, which looks individual on the surface is in fact collective because refusing to evacuate or squatting in a former home can only take place with open or tacit support from others. This resistance takes many forms but appears outside parties and unions, having more in common with solidarity and mutual aid networks appearing in Latino demonstrations against anti-immigrant legislation. These forms suggest shifting neighborhood relations possibly signaling the appearance of a community of class interest and subsequent solidarity.

There too, we can only mention these examples because it concerns local movements rarely federating beyond the state level. […] As a rule, these local movements skirt or act wholly outside the law, and range from peaceful occupations to confrontations stopping evictions or auction sales. In Florida, a group of sympathetic lawyers, “Take Back the Law,” set up another group, “National Coalition for the Homeless,” regrouping a dozen similar groups across the US They organize a form of civil disobedience, signing up homeless candidates to supply them empty houses which otherwise would be quickly taken over by vandals or squatters. They give legal advice to start asking lenders to “produce the note” which blocks evictions because with the collapse of real estate agencies, no one knows any longer who ultimately owns the debt.

• In Minnesota, a similar organization, “Human Rights House” has organized a clandestine network baptized an “underground railroad for the modern world.”
• “Women in Transition” in Kentucky hunts for properties to squat and redistribute.
• “Metro Atlanta Task Force for the Homeless”: Intending to stay legal, this local organization approaches banks to negotiate legal occupations of abandoned houses.
• A group of unemployed construction workers in Cleveland, Ohio, fixes up abandoned houses for free, giving them to those without homes.

Picture The Homeless (PTH) in an article in Left Turn magazine, “Housing, Race and the Shelter Industrial Complex,”10 defined its task fighting for housing “regardless of race, color, or economic status” is that up to a certain point, everyone is experiencing hard times one way or another” […]. There are enough abandoned houses in Manhattan alone to house the entire homeless population in NYC. Picture the Homeless, with its allies, has proven it. As long as there are so many men, women and children in the streets of New York, then we will continue our fight. We want also to draw attention to the fact that it’s everyone’s problem and we need everyone to organize… […] Many of our discussions don’t offer the opportunity to go beyond a certain level. During these discussions, it’s important that they don’t unfold in a particular organization. It is one of the reasons why PTH is a member of groups like ‘Right to the City’ or ‘Coalition to Save Harlem.’” What is the national influence of such organizations, which appear to spring up across the country? Without doubt, it is the same people organizing or participating in more radical actions demonstrating against evictions and court hearings, and taking direct action against banks or top bankers. An ambiguous slogan circulates on the internet: “If government doesn’t want to regulate banks, then break them up.” We don’t know the national significance of these “Rapid Defense Teams” trying to organize demonstrations and intervene against evictions. We can only compile a list of these direct actions:

• In October 2008, more than 30 banks received envelopes containing white powder.
• A bank occupation in Oakland involving 40 people called by the organization ACORN; the police threw demonstrators out.
• Last February in Greenwich, Connecticut more than 300 demonstrators gathered in front of the homes of two head bankers who had refused to renegotiate mortgage loans, blockading the bankers inside and covering nearby walls with graffiti. Similar demonstrations took place Boston, Detroit, Memphis, and Cleveland.
• On April 9th, thousands of mostly immigrant demonstrators marched in Los Angeles streets for immigrant rights because of worsening conditions.
• A wave of threats, more than doubled in two years, against judges and prosecutors; so many that some of them have to seek 24 hour police protection, change their route, and install security systems at home. A special hi-tech national center has been set up to track down the origins of these threats. Bombs have been set in front of certain courts.
• An outside health clinic held on August 11-18 in Los Angeles treated more than 3,000 patients unable to pay for healthcare for free, some for serious medical problems.11

Sharp cuts in education also sometimes provoke counter-responses:

• On May 21st in Detroit, more than 200 students protested the firing of two school administrators opposing mass school closings, layoffs of 33 principals and 900 teachers.
• In Los Angeles, 9 teachers went on hunger strike against layoffs of 2,250 teachers.
• In Santa Cruz, 100 teachers and students organized a committee against restructuring and increased class size; 400 demonstrate on May 22nd, occupying university offices without arrest.

Other initiatives, both individual and collective, which we don’t hear much about, have taken over vacant or public land for subsistence cultivation, as in Detroit and elsewhere. Another response we don’t know how widespread it is and raises many questions: unemployed workers working free for an employer, either not to sink out of sight or to have a future foot in the door. This phenomenon isn’t individual; there exists an internet site listing volunteers and companies (mostly start-ups) positioned to “welcome” them. These seem similar to French job training schemes but have to be private in the US.12

What weight should be put on this proliferation of resistances, as much individual as collective, acts of desperation as much as offensive acts, survival measures, all actions often skirting legality? On one side, we can welcome these responses which, although not following traditional paths, testify no less, by their existence and forms of organization, as attempts to change something in the capitalist system. But on the other hand, we can also draw the conclusion that the system’s tolerance (despite the repressions setting limits) makes these same social phenomena only adaptations helping the system overcome its crisis without fundamentally challenging it.. It is the future which will answer this question but we can nonetheless think, to one extent or another, these new experiences will leave traces.

A recent article in the Washington Post asked: “Where are all the protests?” concluding that there is much dissatisfaction but a few protests. Yet we can see the government has brought back special anti-terrorist units from Iraq to carry out the National Guard’s normal role of securing internal security in case of social unrest. The ruling class is more aware of the dangers threatening society and assign more significance to new signs and unusual methods of resistance than traditional political groups imprisoned in orthodox schemes of class struggle. [ . . .]

Original English language text archived at https://web.archive.org/web/20250523084623/http://insurgentnotes.com/2010/06/crisis-in-the-us/ - NB a stray footnote (#3) has been omitted from this version.

• 1Crisis–its effects and the actions taken everywhere to contain the economic and social consequences–doesn’t just affect one country but is a problem of capitalism worldwide. Even if individual countries are unequally affected and take actions specific to each state, the interdependence of these actions and the effects of the crisis stretch beyond borders. On questions of the necessary overall theoretical considerations, over which both capitalists and reformers and “revolutionaries” disagree, it’s hard to sort out what is the real impact of government attempts at rescuing and their medium and long term outcomes. Only one certainty emerges: the tendency (not new but accelerated) to find new sources of profit restoring the rate of surplus value by focusing not only on making new products but also by changing working conditions. Previously, these tendencies were expressed in restructuring, concentration and changes in everyday business practices. It is workers who suffer the worse effects. More than ever, class struggle remains the basic element in the system’s capacity to survive.

  In the end, the only subject preoccupying all the powerful is in knowing just how deep this crisis is. Is it one of those periodic crises, like prior ones, which have regularly shaken the capitalist economy since the end of WWII and which were apparently overcome in a few months? Or is it a crisis on the scale of the 1930s, which was only resolved by world war? Such a question is linked to what we ask in understanding the possibilities for the system’s survival. Comparing a graph of one year decline in worldwide industrial production in June 1929 with that of April 2008 shows identical curves (Financial Times, June 16th, 2009).

  Another more practical discussion, but which we don’t want to bring up here, concerns the question if the present crisis is a financial crisis or an economic crisis of overproduction. The fact the collapse brought on by the crisis had been in the US especially notable for financial sector decline can lead to thinking that with the excessive credit boom and the independence of financial capital from ties with industrial capital, this is above all a financial crisis. This point is reinforced by the series of emergency steps taken by most States to avoid collapse of the whole banking system. Yet economic circles and political leaders are especially looking for any signs signaling an end to the crisis in manufacturing and consumer spending because it is in effectively resuming capitalist production ( and therefore exploitation of labor in different conditions than those which led to the crisis) that an exit from crisis can eventually develop.

  In this article we won’t address this set of questions. Even if we stress the international character of the crisis, the measures taken to overcome it, and class resistance, it’s not to privilege a particular case to consider what is happening in the United States as an essential element in evaluating the effects of the crisis and the steps taken nationally to overcome it. Just considering the present estimate of worldwide financial losses, US losses alone add up to 2,700 billion out of a world-wide total of 4,400 billion–or 60% of the total. American steps to contain the effects of these losses are therefore essential, which justifies devoting special interest to the US We want to show concretely how the crisis unfolds in the country, its social consequences, and what steps are taken on different levels to respond to these effects, if not to overcome the crisis itself.

• 2Some examples can be given of the relative weight of China’s development in respect to the world economy. Africa is often mentioned as an example of China’s capitalist expansion. In 2008, total trade in Africa expressed in dollars rose to 74 billion with China, 425 billion with the EU, 224 billion with the US, 267 billion with Japan and 186 billion with South Korea. China barely represented 6% of total trade, with higher percentages of investments made by India and Malaysia. If nuclear weapon stockpiling gives another measure of the relative strength of China, the number of nuclear arms inventoried is 10,500 for the U.S, 14,000 for Russia, 320 for France and 180-240 for China, as many as Israel. Even with the nuclear weapons cuts between 1700 and 2200 for Russia and the U.S in 2012, China will remain far from the US (Le Monde 24/4/2009).
• 3This fall in incomes didn’t affect all classes. From 2001 – 2007, for the 1% richest, income increased 10% per year while for the remaining 99%, it only increased 1.35% per year, less than the annual rate of inflation. The 15,000 richest families (0.1% of the population) saw their incomes grow 5.46% in 2006 and 6.04% in 2007 (this annual rate was only 0.9% in 1979).
• 4Using the term “middle classes” to speak of workers is vague. A farmer, a craftsperson, a shopkeeper are “workers owning the means of production,” (in reality, owners of debt) are labeled middle class; they have the entrepreneurial spirit… For those who are proletarians having only their labor power to sell, there is indeed a hierarchy in the worldwide labor force, without taking up again Engels’ ideas concerning England of a labor aristocracy bought-off with crumbs from the capitalists. A debatable point, because the rate of exploitation in England was higher than elsewhere. In fact, in the present context, the great gaps in incomes, both domestically and internationally, narrows, independently of any place in the hierarchy of authority, a hierarchy of incomes in which higher placed layers in this hierarchy have access to living conditions impossible for the lowest levels to reach.
• 5Seeing an influx of candidates escaping poverty, the Army has raised its admission standards, which had been lowered to assure a minimum of replacements. At the same time, the age limit has been raised from 35 to 42 years, responding to an influx of applicants whose curve matches rising unemployment rates (Baltimore Sun, August 16th, 2009).
• 6“Older Workers Rush Back into Jobs Market as Downturn Wrecks Their Retirement Plans” (Financial Times, May 10th, 2009).
• 7“Housing, Race and the Shelter-Industrial Complex” by a “bunch of folks at Picture the Homeless” in Left Turn, January-February 2009.
• 8“Study: Recession likely to leave kids worse off” (Washington Post).
• 9Every year 30,000 firearms deaths are recorded in the USA, an average of 84 per day.
• 10Left Turn, January-February 2009.
• 11This “open-air clinic” was set up by a humanitarian organization Remote Area Medical, initially founded to provide free health care to the poorest South Americans. The symbolism of having to provide the same services in the richest state in the US is obvious.
• 12“Crisis spurs people to work for free – good or bad?” (Reuters Agency, July 7, 2009).

IN CRITICAL AND SUFFOCATING TIMES

What follows is a report on the demo of the 5^th of May and the one that followed the day after and some general thoughts on the critical situation the movement in Greece is at the time being.

Although in a period of acute fiscal terrorism escalating day after day with constant threats of an imminent state bankruptcy and “sacrifices to be made”, the proletariat’s response on the eve of the voting of the new austerity measures in Greek parliament was impressive. It was probably the biggest workers’ demonstration since the fall of the dictatorship, even bigger than the 2001 demo which had led to the withdrawal of a planned pension reform. We estimate that there were more than two hundred thousand demonstrators in the centre of Athens and about fifty thousands in the rest of the country. There were strikes in almost all sectors of the (re)production process. A proletarian crowd similar to the one which had taken to the streets in December 2008 (also called derogatorily “hooded youth” by mainstream media propaganda) was also there equipped with axes, sledges, hammers, molotov cocktails, stones, gas masks, goggles and sticks. Although there were instances that hooded rioters were booed when they attempted or actually made violent attacks on buildings, in general they fitted well within this motley, colourful, angered river of demonstrators. The slogans ranged from those that rejected the political system as a whole, like “Let’s burn the Parliament brothel” to patriotic ones, like “IMF go away”, and to populist ones like “Thieves!” and “People demand crooks to be sent to prison”. Aggressive sslogans referring to politicians in general are becoming more and more dominant nowadays.

At the GSEE-ADEDY demo people started swarming the place in thousands and the GSEE president was hooted when he started speaking. When the GSEE leadership repeated their detour they had first done on the 11^th of March in order to avoid the bulk of the demo and come to the front, just few followed this time…

The demo by the PAME (the CP’s “Workers’ Front”) was also big (well over 20,000) and reached Syntagma Square first. Their plan was to stay there for a while and leave just before the main, bigger demo was about to approach. However, their members would not leave but remained there angered chanting slogans against the politicians. According to the leader of the CP there were fascist provocateurs (she actually accused the LAOS party, this mish-mash of far-right thugs and junta nostalgic scum) carrying PAME placards inciting CP members to storm the Parliament and thus discredit the party’s loyalty to the constitution! Although this accusation bears some validity because fascists were actually seen there, the truth is –according to witnesses– that the CP leaders had some difficulty with their members in leading them quickly away from the square and preventing them from shouting angry slogans against the Parliament. It’s maybe too bold to regard it as a sign of a gradual disobedience to this monolithic party’s iron rule, but in such fluid times no one really knows…

The 70 or more fascists stationed opposite the riot police were cursing the politicians (“Sons of a bitch, politicians”), chanting the national anthem and even throwing some stones against the parliament and probably had the vain intention to prevent any escalation of the violence but were soon swallowed into huge waves of demonstrators approaching the square.

Soon, crowds of workers (electricians, postal workers, municipal workers etc.) tried to enter the building from any access available but there was none as hundreds of riot cops were strung out all along the forecourt and the entrances. Another crowd of workers of both sexes and all ages stood against the cops who were in front of the Tomb of the Unknown Soldier cursing and threatening them. Despite the fact that the riot police made a massive counter-attack with tear gas and fire grenades and managed to disperse the crowd, there were constantly new blocks of demonstrators arriving in front of the Parliament while the first blocks which had been pushed back were reorganizing themselves in Panepistimiou St. and Syngrou Ave. They started smashing whatever they could and attacked the riot police squads who were strung out in the nearby streets. Although most of the big buildings in the centre of the town were closed with rolling shutters, they managed to attack some banks and state buildings. There was extensive destruction of property especially in Syngrou Ave. because the cops were not enough to react immediately against that part of the rioters as the police had been ordered to give priority to the protection of the Parliament and the evacuation of Panepistimiou St. and Stadiou St., the two main avenues through which the crowd was constantly returning to it. Luxury cars, a Tax Office building and the Prefecture of Athens were set on fire and even hours later the area looked like a war-zone.

The fights lasted for almost three hours. It is impossible to record everything that happened in the streets. Just one incident: some teachers and other workers managed to encircle a few riot cops belonging to Group D –a new body of riot police on motorcycles– and thrash them while the cops were screaming “Please no, we are workers, too”!

Demonstrators pushed into Panepistimiou St. kept returning in blocs to the Parliament and there were constant clashes with the police. The crowd was mixed again and would not go. A middle-aged municipal worker with stones in his hands was telling us moved how much the situation there reminded him of the first years after the fall of the dictatorship when he was present at the 1980 demo in commemoration of the Polytechnic uprising when the police murdered a woman, the 20-year old worker Kanellopoulou.

Soon the terrible news from foreign news agencies came on mobile phones: 3 or 4 people dead in a burnt down bank!

There were some attempts to burn down banks in various places but in most cases the crowd didn’t go forward because there were scabs locked in them. It was only the building of Marfin Bank in Stadiou St. that was finally set on fire. Just a few minutes before the tragedy started, however, it was not “hooded hooligans” who shouted “scabs” at the bank employees but organized blocks of strikers who yelled swears at them and called them to abandon the building. Given the bulk of the demo and its density, the turmoil and the noise by the chants, it’s obvious that a certain degree of confusion –common in such situations– makes it difficult to provide the accurate facts concerning this tragic incident. What seems to be closer to the truth (from fragments of information by eye-witnesses put together) is that at this particular bank, right in the heart of Athens on a general strike day, about 20 bank clerks were made to work by their boss, got locked “for their protection” and finally 3 of them died of suffocation. Initially a molotov cocktail was thrown through a hole made on the window panes into the ground floor, however, when some bank clerks were seen on the balconies again, some demonstrators called them to leave and then they tried to put the fire out. What actually happened then and how in no time at all the building was ablaze, remains unknown. The macabre series of events that followed with demonstrators trying to help those trapped inside, the fire brigade taking too long to take some of them out, the smiling billionaire banker being chased away by the angry crowd have been probably well reported. After some time the prime minister would announce the news in the Parliament condemning the “political irresponsibility” of those who resist the measures taken and “lead people to death” while the government’s “salvation measures” on the contrary “promote life”. The reversal was successful. Soon a huge operation by the riot police followed: the crowds were dispersed and chased away, the whole centre was cordoned until late in night, Exarchia got under siege, an anarchist squat was invaded and many were arrested, the Immigrants’ Haunt was invaded and trashed and a persistent smoke over the city as well as a sense of bitterness and numbness would not go away…

The consequences were visible the very next day: the media vultures capitalized on the tragic death representing it as a “personal tragedy” dissociated from its general context (mere human bodies cut off from their social relations) and some went so far as to criminalize resistance and protest. The government gained some time changing the subject of discussion and conflict and the unions felt released from any obligation to call for a strike the very day when the new measures were passed. Nonetheless, in such a general climate of fear, disappointment and freeze a few thousands gathered outside the parliament at an evening rally called by the unions and left organizations. Anger was still there, fists were raised, bottles of water and some fire crackers were thrown at the riot cops and slogans both against the parliament and the cops were chanted. An old woman was begging people to chant to “make them [the politicians] leave”, a guy pissed in a bottle and threw it to the cops, few anti-authoritarians were to be seen and when it got dark and the unions and most organizations left, people, quite ordinary, everyday people with bare hands would not go. Attacked with ferocity by the riot police, chased away, trampled down Syntagma square steps, panicked but angered young and old people got dispersed in nearby streets. Everything was back in order. However, not only fear was in their eyes; hatred was visible as well. It is certain they will be back.

Now some more general reflections:

• Cracking down on anarchists and anti-authoritarians has already started and it will get more acute. Criminalizing a whole social-political milieu reaching out to the far left organizations has always been used as a diversion by the state and it will be used even more so now that the murderous attack creates such favourable conditions. However, framing anarchists will not make those hundreds of thousands who demonstrated and even those a lot more who stayed passive but worried forget the IMF and the “salvation package” offered to them by the government. Harassing our milieu will not pay people’s bills nor guarantee their future which remains bleak. The government will soon have to incriminate resistance in general and has already started doing so as the incidents on the 6^th of May clearly indicated.

• There will be some modest effort from the state to “put the blame” on certain politicians in order to appease the “popular feeling” which may well turn into a “thirst for blood”. Some blatant cases of “corruption” may get punished and some politicians may be sacrificed just to pour oil into troubled waters.

• There is a constant reference to a “constitutional deviation” coming both from the LAOS or the CP in a recrimination spectacle, revealing though of the ruling class increasing fears of a deepening political crisis, a deepening of the legitimization crisis. Various scenarios (a businessmen’s party, a proper junta-like regime) get recycled reflecting deeper fears of a proletarian uprising but in effect are used as a re-orientation of the debt crisis issue from the streets to the central political stage and to the banal question “who will be the solution?” instead of “what is the ‘solution’?”

• Having said all that, it is time to get to the more crucial matters. It is more than clear that the sickening game of turning the dominant fear/guilt for the debt into a fear/guilt for the resistance and the (violent) uprising against the terrorism of debt has already started. If class struggle escalates, the conditions may look more and more like the ones in a proper civil war. The question of violence has already become central. In the same way we assess the state’s management of violence, we are obliged to assess proletarian violence, too: the movement has to deal with the legitimation of rebellious violence and its content in practical terms. As for the anarchist-antiauthoritarian milieu itself and its dominant insurrectional tendency the tradition of a fetishized, macho glorification of violence has been too long and consistent to remain indifferent now. Violence as an end in itself in all its variations (including armed struggle proper) has been propagated constantly for years now and especially after the December rebellion a certain degree of nihilistic decomposition has become evident (there were some references to it in our text The Rebellious Passage), extending over the milieu itself. In the periphery of this milieu, in its margins, a growing number of very young people has become visible promoting nihilistic limitless violence (dressed up as “December’s nihilism”) and “destruction” even if this also includes variable capital (in the form of scabs, “petit-bourgeois elements”, “law-abiding citizens”). Such a degeneration coming out of the rebellion and its limits as well as out of the crisis itself is clearly evident. Certain condemnations of these behaviours and a self-critique to some extent have already started in the milieu (some anarchist groups have even called the perpetrators “parastatal thugs”) and it is quite possible that organized anarchists and anti-authoritarians (groups or squats) will try to isolate both politically and operationally such tendencies. However, the situation is more complicated and it is surpassing the theoretical and practical (self)critical abilities of this milieu. In hindsight, such tragic incidents with all their consequences might have happened in the December rebellion itself: what prevented them was not only chance (a petrol station that did not explode next to buildings set on fire on Sunday the 7^th of December, the fact that the most violent riots took place at night with most buildings empty), but also the creation of a (though limited) proletarian public sphere and of communities of struggle which found their way not only through violence but also through their own content, discourse and other means of communication. It was these pre-existing communities (of students, football hooligans, immigrants, anarchists) that turned into communities of struggle by the subjects of the rebellion themselves that gave to violence a meaningful place. Will there be such communities again now that not only a proletarian minority is involved? Will there be a practical way of self-organization in the workplaces, in the neighborhoods or in the streets to determine the form and the content of the struggle and thus place violence in a liberating perspective?

Uneasy questions in pressing times but we will have to find the answers struggling.

TPTG

9th of May

Original article archived here https://web.archive.org/web/20250512050422/http://insurgentnotes.com/2010/06/recent-struggles-in-greece/

The State of California has been consumed by a severe budgetary crisis. Brought about by a combination of the large number of foreclosures, the loss of jobs and a distinctively Californian budget approval process(specifically, the requirement that all fiscal measures be approved by two-thirds majorities in both houses of the State Legislature), each year since 2007-2008 has witnessed prolonged negotiations that have resulted in significant cuts to public education and hum an services and–in the case of the State’s public university systems (the University of California and the California State University) and community colleges– tuition and fee increases for students, salary reductions for faculty and staff and significant reductions in course offerings. Recent forecasts indicate that the State’s budget crises will continue into the future.

Perhaps not surprisingly, opposition to the proposed budget cuts and the increases in student fees at the higher education systems has principally emerged from student groups in the higher education institutions. In October of 2009, a state-wide conference of oppositional forces took place at the University of California/Berkeley. The conference’s attendees agreed on a Call for a Day of Action on March 4^th. Many thousands of individuals participated in actions across the state—most of which took the forms of rallies and marches. In a few cases, the actions took more radical directions.

Afterwards, a Bay Area group, Advance the Struggle (AS), published an analysis of the politics leading up to the Day of Action that attempted to differentiate between three different political currents—centrists, adventurists and “genuine” class struggle leftists (among which AS counted itself). Their analysis was responded to by Socialist Organizer, a Fourth Internationalist Trotskyist group and one of the centrist groups included in the AS analysis; in turn, a member of Unity in Struggle (a group that is affiliated with Advance the Struggle, posted a follow up response. The discussion appears to have attracted a good deal of interest with more than sixty responses posted to the original article. What is especially noteworthy is that the discussion, for the most part, has been a very serious one—with little name-calling. We excerpt from the exchanges below (but we urge all readers to look at the full texts available on the cited web pages). We’ll join the discussion ourselves in the next issue of Insurgent Notes.

Advance the Struggle, “Crisis and Consciousness: Reflections and Lessons from March 4.”

In our last analysis of the anti-budget cut movement we identified two dominant political forces on campuses – the adventurists and the centrists (trotskyists mainly, but not exclusively). As we stated in Opening Shot, the political tension was between:

…the twin pitfalls of tailism (following behind proposals for petitions and legalistic protests) on the one hand, and adventurism (isolated militant action) on the other. Both of these approaches sidestep the political consciousness of the masses.

This was written at a very early stage of the movement, but even then it was clear to us that the differences of approaches to radicalizing consciousness were key determinants in differentiating the political forces in the movement. However, these differing approaches have often gone under-theorized due to the emphasis amongst activists being on questions of tactics. Which tactic is right for the movement at any given time? The adventurists and the centrists almost always answered this question differently, even if in practice they acted in temporary unison. For instance, after the successful occupation of Wheeler Hall on November 20 (where over 2000 students defended an occupied building), we wrote that:

In the campus movement, the two primary answers to this question have been popular organizing (general assemblies) and militant resistance (occupations). What happened last week at university campuses across California was a step toward a synthesis of these two approaches.

A synthesis of these two approaches has not happened since. Rather, what has happened is a sharpening of the differences and tensions between these dominant and at times competing approaches towards developing consciousness and turning these developments into strategic advancements in the movement. At the same time, we have also seen the development of a third approach that we call a genuine class struggle left and the purpose of our writing here is to excavate by positive example this emerging left approach. The strengthening of the movement and the radicalization of political consciousness amongst the working class are crucial components of turning movements of resistance into schools of revolutionary training. For this reason it is necessary to briefly examine the positive and negative aspects of the adventurist and centrist tendencies in order to identify what we can learn from each group’s methodologies, as well as which aspects we should leave behind. We are not aiming to abstractly compare ideologies against each other but rather seeking to identify how these ideologies relate towards the development of struggle. In writing this we must emphasize that the three main tendencies we identify are strategic approaches towards intervening in struggles and radicalizing consciousness; they are not reducible to individual people or even individual organizations. Proof of this is found in the differential approaches activists in the same Trotskyist organizations have taken in different geographical locations, specifically between UC Berkeley and UC Santa Cruz.

Our conception of consciousness is that people’s consciousness is dialectical; it constitutes a “unity of opposites” in that there is a contradictory relation between radical ideas about society as well as bourgeois ideology (mainstream ideas.) The work of revolutionaries should be to push on the radical side and counterpose it to the bourgeois side in order to resolve the contradiction in favor of revolution. Our adventurist and centrist comrades get the dialectics of consciousness wrong, each in their own way.

Both the adventurists and the centrists seek to unleash mass revolt, but neither fully comprehends how to do so. The adventurists think that mass revolt is sparked by inspirational actions of the more radical minority ready for confrontation. The centrists believe instead that those with advanced consciousness must hold themselves to what the (liberal) majority is ready for in order not to become marginalized. These perspectives are reflected in the organizational structures characteristic of each trend: closed but radical secret meetings of the adventurists and open but liberal bureaucratic general assemblies of the centrists. In order to recognize the significance of the emergent left approach we should acknowledge both the strengths and weaknesses of these two main currents.

The centrist paradigm insists on a neat and safe linear trajectory, wherein struggles organized by professional activists grow and grow and eventually blossom into a militant movement. The formula is clear: build general assemblies, organize small teach-ins and rallies, then days of action, etc. The establishment of coalitional spaces and general assemblies are the key ingredients for developing radical political class-consciousness that eventually lead towards militant direct-action (in the distant future). While it is true that building organizational forms for people to plug into is incredibly important, this approach towards doing so generally fails to tap into the intuitive militancy that the adventurists are able to relate to through their direct actions. Instead, the centrists downplay the degree of radical consciousness that already exists within large sections of the working class and argues that if a coalitional space does not approve a proposal then the movement must “not be ready” and that we must “meet people where they’re at.”

The recognition that we must “meet people where they’re at” is crucial for tapping into the latent power and consciousness of working class people. In our view it involves having a pedagogical method (which we elaborate below) and open, accessible organizational structures geared towards bringing this latent power and consciousness to the fore. However, the centrists misunderstand “meeting people where they’re at” inasmuch as they reify (that is, treat as static and unchanging) where people’s consciousness “is at”. The centrists not only meet people where they’re at, they also leave them there. By and large their lack of a revolutionary pedagogy and orientation towards gradualism leads them to lose the opportunity to water the existing seeds of militant consciousness that people do have. By avoiding the opportunity to facilitate the growth of people’s intuitive militancy in a revolutionary direction, they end up strengthening liberal and narrow tendencies within people’s minds that stem from a lack of exposure to revolutionary ideas and strategies.

Conversely, what is important to learn from and respect about the adventurists is that their literature and propaganda attempts to put forward a more total revolutionary vision for insurrection and communism; coupled with this, their actions do more to directly challenge capitalist property relations and bourgeois hegemony. The problem arises in that this means very little without meeting people where they’re at and building organizational structures in workplaces, schools and communities, so that people may move from being spontaneous participants in flashes of direct action and proceed to become active intellectual participants who understand revolutionary theory and strategy. The failure to break down capital’s hierarchical division between mental and manual labor also, ironically, ends up often leaving people where they’re at just as much as the Centrists do. People participate or defend an occupation and have a radicalizing experience, but generally don’t find an outlet by which to reflect on this experience and use it as a basis for developing a revolutionary vision of the world.

Socialist Organizer, “The Lessons of March 4: A Marxist Analysis, A Response to Advance the Struggle.”

On October 24, more than 800 students, teachers, and workers came together at UC Berkeley (UCB) to decide on a statewide action plan to defend public education. Was it correct for the October 24 conference to have called for a “strike and day of action,” leaving open the choice of action to each school, or would it have been better had it, as AS and others argued, called instead for a strike of all the public sector?

AS’ basic argument in “Crisis and Consciousness” against the “Strike and Day of Action” formulation is the following:

“Because consciousness is internally contradictory, a coherent and politicized framework united around Strike will not necessarily alienate people; instead, this very framework is the type that can give practical unity and fighting capacity to organizers. As a method of struggle, ‘freedom of action’ failed to articulate a vision and a perspective of concrete struggle against budget cuts.”

If we correctly understand these somewhat vague formulations, the implied argument is that:

1. A strike at many (most?) schools and workplaces would have been possible if the 10/24 conference had called for it and/or that
2. A call for a strike would help politically orient activists in the right direction.

We will argue in this article that the political proposals and perspectives put forward by AS in “Crisis and Consciousness” are rooted in an incorrect assessment of the current objective situation, one of the most important factors of which is the current state of consciousness of the working class as a whole (not just the vanguard elements). In turn, this erroneous characterization of the concrete situation in California is rooted in what we believe is AS’ flawed approach to developing mass movements and working-class consciousness.

For Marxists, the action proposals (our ) we raise in the mass movement at any given moment must be based on a serious analysis of the objective situation (i.e., the conditions that are outside our immediate influence).

In V.I. Lenin’s famous 1920 polemic against ultraleftism, Leftwing Communism: An Infantile Disorder, he explains: “Tactics must be based on a sober and strictly objective appraisal of all the class forces in a particular state. … You must soberly follow the actual state of the class-consciousness and preparedness of the entire class (not only of its communist vanguard), and of all the working people (not only of their advanced elements).”

Of course, objective conditions and working-class consciousness are fluid (not static) and can be changed via human agency and under the pressure of events. But at a given moment these conditions are very real and play an important role in limiting (or facilitating) our actions. The art of revolutionary politics consists precisely in evaluating how far we can push forward the mass movement at any specific moment, based on our analysis of the current objective conditions.

“Strike and Day of Action” or “Strike?”

Socialist Organizer’s strong advocacy for the “strike and day of action” formulation flowed from our analysis of the uneven level of mobilization and consciousness in California. Our basic argument — as expressed at the 10/24 conference and in a lengthy text titled “In Defense of the October 24 Conference, written by some of the main conference organizers, including many Socialist Organizer members (Appendix 1) — was pretty much the following:

1. We should push for a strike — i.e., the most effective weapon of our class (short of insurrection!) — on campuses and in the unions where possible. The “Strike and Day of Action” formulation does not preclude a fight for a full strike at any given school or workplace: real strikes will happen if we are able to win the majority of workers and students to support one, not based on the formal language of a conference resolution.
2. While strikes are the ideal tactic, mass protests, walkouts, rallies and other forms of resistance are also very important (and not counterposed) vehicles to advance the mobilization, self-confidence, and (through this process) the consciousness of workers and students. It is precisely through their experience in these “lower” forms of actions that most workers and students can come to the realization of the need for a strike (provided the revolutionary vanguard participates in this process and moves it forward).
3. Given the current objective situation — marked by the very uneven level of mobilization depending on education sector (K-12, UC, etc.), region, relative class status (i.e., students, workers, teacher, etc.); the subordination of the leaderships of the trade unions to the Democrats; and the repressive anti-strike laws that penalize solidarity strikes — it is not very likely at this moment that many — let alone most— campuses and workplaces will be able to strike on March 4.
4. Thus, to limit the 10/24 call to only a strike will mean precluding the majority of schools and unions from endorsing the call and participating. If we want March 4 to be as massive and broad as possible, if we aim to build a united front coalition statewide and locally, and if we aimed to push the unions — the only existing mass organization of our class — to mobilize against the cuts, then the statewide call has to be broad enough to encompass the different levels and layers of the movement.

AS argues that our support for the compromise proposal “specifically disregards any attempt to articulate a strategy for victory.” But, in reality, we defended the “compromise proposal” in the framework of coherent strategy for victory, as outlined above.

We think the actual experience of March 4 completely vindicated this perspective. It was precisely the broad appeal of the “Strike and Day of Action” formulation (plus the widely representative nature of the united-front 10/24 conference of more than 800 activists) that allowed the March 4 call to spread like wildfire.

March 4 was a tremendous and empowering success, which made a significant nationwide impact. Literally thousands of schools participated. Hundreds of thousands (some say millions) took to the streets in more than 33 states. All trade unions in public education mobilized to some extent. Unity was forged between the different sectors of public education; between students, workers, and teachers; and between education and other public services.

Local resistance against the cuts was bolstered. The liberal tradition of lobbying in Sacramento was overcome (for at least one day). Hundreds of new activists and dozens of new organizing spaces emerged. And via their empowering experiences in struggle, many thousands of people began their process of politicization. Unfortunately, most of these positive aspects of March 4 are not even mentioned in “Crisis and Consciousness”.

Would this widespread mass mobilization have been possible if the March 4 call had been only for a strike? Very unlikely. Had the call just been for a strike, the mobilization would probably have been limited mostly to the areas of influence of the radicals (i.e., a small percentage of schools). This can be seen by the actual developments of March 4.

Every school and organization had the choice of what action to promote. As AS notes, there was much debate at most schools about what form of action to take; radicals had a good opening to push for strikes and in many cases did so (UCSC, UCB, etc.).

If the objective situation was as advanced as AS implies, then it follows that at the very least (a) the call from radicals to strike would have met with a receptive echo at many schools throughout the state, and (b) there would have been some significant organic push from below by non-radical workers and students for a strike.

But the fact is that at over 98% of schools and workplaces there was literally no motion from anybody beyond small groups of radicals for a strike. Indeed, the call for a strike met with little echo beyond UC Santa Cruz (UCSC) and among the Oakland teachers.

Only UCSC was actually shut down — and the strike committee’s excellent organizing was greatly facilitated by the special geography of the school (i.e., the unique ability to paralyze the school by blocking the two main entrances at the base of campus).

Likewise, the only union that came even close to striking (though it did not end up doing so) was the Oakland Education Association (OEA). And while AS and the Oakland March 4 Committee must be commended for their very important work in trying to push for the OEA strike to take place on March 4, the actual support from the teacher ranks in Oakland for a strike was due mostly to the logic of the pre-existing contract fight which has dragged on for months and months. (These were the objective conditions that allowed for the relative success of the Oakland committee’s initiatives with the Oakland teachers’ union.)

Unity in Struggle, “Between a Trot and a Hard Place: The Debate Within Our Movement.”

SO is right that people learn and advance their consciousness through struggle, not just through Leftist propaganda and ideological struggle between radicals and liberals. I imagine AS would agree with this; it seems like SO is misunderstanding where AS is coming from based on this one piece, without looking at AS’s overall practice which is far from confined to polemics against other Leftists. If this were really where AS is coming from why would SO call them some of the most talented and dedicated militants in the Bay Area? How would they have been able to play such a major role in the Oakland March 4th committee and elsewhere if they were focused only on polemicizing against other Leftists?

It’s hard for me to put my finger on this point, but I am sensing there is a crucial issue somewhere in this debate over the relationship between revolutionary organization and mass organization. Correct me if I’m misunderstanding this, but SO seems to assume a large distance between these two. They say that the role of revolutionaries should be to put forward correct strategic/ tactical perspectives inside mass organizations to prove to the class that socialists are the most dedicated fighters, and from that the vanguard layers of the class will join the revolutionary party. For one, this seems to focus too much on finding the correct leadership, on replacing good leadership with bad leadership, as if the class would be stronger if only more socialists said the right thing in coalition meetings. What about building off of and reinforcing the militant consciousness that non-socialists bring to the table in these meetings?

I agree that revolutionary organizations and mass organizations are not the same thing and we shouldn’t try to turn every coalition, strike committee, union, etc into a revolutionary group . I also agree that we need specifically revolutionary organizations that can put forward particularly revolutionary ideas if we want to avoid mass work being swallowed back up into economism or reformism. BUT, what about raising perspectives in mass organizations that draw out the revolutionary possibilities latent in the current mass struggle? From what I understand, adventurists in California have been doing this and they are attracting broad layers of people who were liberals in the fall and are now ultra-left Marxist or anarchists. Doesn’t this say something about people’s radical disillusionment with capitalism and the need to agitate against capitalism within the radicalizing milieu of the anti-budget cuts movement? (I’m talking now about activities and conversations among the milieu of the activists and the circles surrounding them, not necessarily every mass meeting or coalition program or flyer). What about recognizing, recording, intervening in, and advancing the current self-activity of the working class (including working class students), showing how it points toward things like the overthrow of management, workers’ control of the workplace, etc.? How can revolutionaries support and mentor organic militant-intellectuals from various workplaces and schools who get involved in the struggle with us? What forms of pedagogy and organization support this? These are the kinds of questions I see AS asking. It goes much further than simply proposing the right set of demands or the right strategy in a mass organization or coalition meeting. I have seen many Trotskyists systematically putting forward the right line in meetings but they still end up shutting out a lot of the new people who come around and they don’t follow up with them outside the meetings to support them and build their leadership.

I guess this comes back to an old debate about Lenin’s What is To Be Done? If Lenin is right and the working class can only achieve trade union consciousness in mass organizations then the only vehicle for developing revolutionary consciousness is the vanguard party. If that were true then revolutions should focus on a) shaping mass organizations and b) recruiting members to revolutionary groups. If Lenin is right then revolutionary cadre should focus on building new revolutionary leaders among people who have ALREADY joined the party. But I disagree with this formulation from What is To Be Done (and Lenin himself retracted it later in his life). The working class does develop organic militants and organic intellectuals who go beyond the limits of trade union consciousness so revolutionaries need to build intermediate organizations, what Hal Draper called “centers”, which can engage with these militants and grow with them in struggle. That includes learning from them (here is where I have a growing appreciation for AS’s critical revamping of Pedagogy of the Oppressed).

In Seattle, Unity and Struggle members are building the local of our revolutionary organization but we are not trying to recruit every worker and student militant immediately into Unity and Struggle. There is a broader milieu of revolutionary workers and students around us who have come to revolutionary consciousness through the struggle and through their life experiences. Yes we would love if as many of them as possible join Unity and Struggle but we are not assuming that they need to do that in order to be revolutionaries. We are trying to “meet them where they’re at” by supporting their revolutionary self-activity in groups like DI, IWSJ, and FADU so we can move forward together from there. I agree with how Labor’s Militant Voice put it in their response to the AS and SO pieces: ” Our role is to integrate with this movement from below, seek out the most combative and thinking layers, conduct a dialogue with these forces from which we will learn and they will learn and help organize these most thoughtful and combative layers into a cohesive fighting force.” Yes – we need to gather our forces. However, LMV incorrectly counterposes this to AS’s concept of pedagogy. As far as I can tell this is exactly what AS means by pedagogy, though AS members can clarify this better than I can.

Original article archived here: https://web.archive.org/web/20250324222601/http://insurgentnotes.com/2010/06/california-is-not-dreaming/

Nineteenth century socialists and radicals were animated by the belief that the labor of society, properly deployed, could usher in a society characterized by comfort, cooperation, and leisure. Socialist writers argued that it was society’s potential wealth, rather than existing, which should be the object of a new economic enquiry, and that the former would dwarf the latter. The key to the realization of this stupendous social wealth, to be enjoyed by all, was the conscious reorganization of the use and distribution of society’s greatest resource, its human labor power.

What is relevant about these quaint socialists is precisely that they were capable of confronting head-on the purveyors of Thatcherite “there is no alternative” ideology in their own day (Briggs, 20). In fact, the initial need for elites to publicly announce the absence of any alternative to existing social arrangements was entirely a defensive move, in response to the profoundly radical idea that human beings, in new and cooperative relations with one another and the earth, could replace poverty with plenty, and misery with joy. Today’s left could certainly use help from any quarter in developing and conveying a vision for change that puts “no alternative” ideology on the defensive and animates the popular imagination with a project for social transformation which is as profound as it is deemed feasible. The connections between the 19th century radicals and our own predicament, however, are far more direct than the mere offering of a possibly useful historical example. This is because the questions being asked are the same: Is poverty inevitable? Do we possess the resources to dramatically improve the material quality of our lives? From Thomas Malthus, the progenitor of “no alternative” politics, down through Thatcher and the austerity politics of our own day, in which our ability to guarantee subsistence to the elderly is posed as a serious question, and headlines suggest that bankruptcy may soon follow the establishment of access to medical care as a social right, “the poor ye will always have with you” has been a mainstay of capitalist ideology. The social doctrine of permanent scarcity is a powerful mechanism of social control, one that must be challenged if there is to be any mass engagement in a project which aims at significantly enhancing the material quality of life. The direct assault on this ideology by 19th century radicals, in which they argued that poverty had its root in the existing division of labor, and could only be abolished by way of its conscious reorganization, hardly seems dated, for what else is a call for social change but some proposal to alter the division of labor?

The subversive visions of social possibility which resulted in the entrance on the historical stage of the “no alternative” ideology have been all but forgotten. Radicals pointed out that the productivity gains resulting from improvements in agriculture and machinery made it possible for 100 people, working together, to produce the wants and needs of thousands, and that there was every reason to believe that such improvements would be continuous. Who could countenance poverty and overwork in the face of such productive power? The very public, “no alternative” answer to this came in the form of Thomas Malthus’ Essay on Population, in which he used the language of scientific authority to dismiss as inane any notion that gains in productivity could ever ameliorate poverty: provision the poor beyond subsistence, he argued, and their numbers will explode at a rate far outstripping any prospective improvements in factories and farms. Privately, however, Malthus took the question very seriously. How indeed might the class relations of capitalism, which have as their essence the dependence of the masses on waged labor for subsistence, survive staggering and never-ending productivity improvements which promise to steadily reduce the quantity of human labor required for the production of an ever-increasing quantity of goods? Here, Malthus agreed entirely with the radicals: the social division of labor, not the soil, was the true key to the potential wealth of society, only for Malthus, it was crucial that this be carefully managed so as to ensure the state of permanent scarcity which he so passionately believed in, though not always for the same professed reasons. Given the fantastic fertility of the soil and the stunning productive capacity of industrial technology, a commitment to scarcity can mean only one thing: the “unproductive consumers” of society, whose labor adds nothing to the quantity of goods on the market, must vastly outnumber the “productive laborers,” who produce the goods for which all members of society exchange their time or wealth.

Both faces of Malthus remain with us to the present day: the “no alternative” of permanent scarcity is both the all too familiar essence of our daily politics as well as the ideology at the heart of the discipline of economics, defined in the most widely used economics textbook of the 20th century as “the study of how men and society choose to employ scarce resources” (Perelman, 1979, 80, emphasis added). At the same time, while the invisible hand of Adam Smith may be shouted as the professed civic religion, the whispered strategy for maintaining scarcity through management of the division of labor found an influential admirer in the person of John Maynard Keynes, whose impact on the post-war structure of Western economies, and hence on our landscapes, social demography, and lives, needs no elaboration. The history of the idea that a conscious, democratic reconfiguration of the social division of labor is the key to the abolition of poverty and the freeing of people from lives organized around the exchange of time for subsistence is one which is still impacting us today. Not because the left is still making such a claim, for it has been forgotten, but because the Malthusianism of elites, formulated in direct response to both the radical vision and the material reality which gave rise to it, in essence hasn’t changed.

The story begins with anarchist William Godwin, whose 1793 book, Enquiry Concerning Political Justice swept across an England still reeling from the events of the French Revolution. In it, he argued that “while government was intended to suppress injustice, its effect has been to embody and perpetuate it,” and that the existing order of things, which so flew in the face of man’s natural equality, was the result of “the first offence” by “the man who took advantage of the weakness of his neighbors to secure a monopoly of wealth” (Godwin, pgs. 32-33; 37). Godwin’s essay was no mere incendiary rant, however, but a learned and carefully reasoned consideration of the social ethics implied by a presumption of human equality, as well as the possibilities for the material, intellectual and moral improvement of the human condition. He argued that the existing state of inequality created a “servile and truckling spirit,” that the cruel monotony of the factory system “produces a kind of ‘stupid and hopeless vacancy’ in every face,” that to be born into poverty was to be born a slave, and that “since human beings are partakers of a common nature, it follows on the principle of impartial justice that the ‘good things of the world are a common stock, upon which one man has as valid a title as another to draw for what he wants” (Godwin, 38).

This was the edifice on which Godwin erected his vision of a libertarian, anarchist communism. Godwin went much further, however, in anticipating the future themes of the radical ideologies of the 19th century, becoming an early forerunner of the labor theory of value with the claim that “what is misnamed wealth is merely ‘a power invested in certain individuals by the institution of society, to compel others to labor for their benefit’” (Godwin, 38). Crucially, he argues that both reason and justice demand that the labor of society be consciously reorganized for the purpose of eradicating poverty and overwork. It would be more just, Godwin argued, if all who were able made a contribution to the production of the goods consumed by society: “Since a small quantity of labor is sufficient to provide the means of subsistence, it would moreover increase the amount of leisure and allow everyone to cultivate his or her understanding and to experience new sources of enjoyment. The object, in the present state of society, is to multiply labor; in another state, it will be to simplify it” (Godwin, 38). This vision is at the essence of the imagined socialist alternative to capitalism.

Godwin’s book took England by storm. According to radical contemporary William Hazlitt, “No one was more talked of, more looked up to, more sought after, and wherever liberty, truth, and justice was the theme, his name was not far off…No work in our time gave such a blow to the philosophical mind of the country as the celebrated Enquiry concerning Political Justice” (Godwin, 9). The government of William Pitt declined to prosecute Godwin for treason, on the grounds that “a three guinea book could never do much harm among those who had not three shillings to spare.” The book did reach those with nothing to spare, however, as it was pirated, serialized in penny newspapers, and read aloud at workers’ gatherings all over England.

The elite reply came from Malthus, and though his basic argument is well-remembered, few recall that it was made as a broadside against socialism. He said, with very little recourse to anything like evidence, that the poor multiply according to how much food they are provided, though always at a faster rate. He readily agreed with Godwin that if aristocrats, houseservants, soldiers, and clergy, not to mention all those engaged in the production of trinkets and finery for the rich, were instead to share the work of producing society’s basic needs, that the amount of wealth produced could of course be greatly expanded, but argued that population would immediately swell to reestablish the mass poverty which in truth was an eternal, natural state. What’s fascinating is that Malthus, so willing to preach quackery about the eternity of scarcity in the interest of shoring up capitalist class relations, was equally willing to think in a sophisticated way about the problem which was posed, not just by Godwin but by the actual material conditions of his time: how can scarcity be maintained in the context of an ever-growing capacity for plenty?

Malthus attempts to answer this question in Principles of Political Economy, a text which, unlike the Essay on Population, had an elite audience in mind. He starts by proposing that the value of a commodity be defined as “the quantity of labor it commands. What follows from this definition of value is that the essence of a rich society is one which can produce the means of subsistence for the laboring classes for nearly nothing, while commanding the maximum supply of their labor.

If this can be achieved, it produces a division of labor in which a tiny minority of the working population is engaged producing the means of subsistence for the entire society, with the remainder of workers producing luxuries or services of some kind.

In economic terms, this is called restricting supply, or augmenting demand, and Malthus argues that it is absolutely necessary for the survival of capitalism, given the reality of a high level of labor productivity and a class structure which defines “value” as the ability to command labor time. Malthus wants to make clear the division of labor implications of ever-increasing levels of labor productivity, given the requirements of capitalist class relations. Starting with workers producing goods for the market, he argues that it’s unthinkable that they could ever consume a considerable share of their product. As a matter of fact – and this is crucial to the logic which serves as a foundation to his entire mode of thinking – he argues that:

It is the want of necessaries which mainly stimulates the laboring classes to produce luxuries; and were this stimulus removed or greatly weakened, so that the necessaries of life could be obtained with very little labor, instead of more time being devoted to the production of conveniences, there is every reason to think that less time would be so devoted.

In other words, keep necessities scarce, and you’ll have the labor of millions at your beck and call. As for capitalists, he argues, there are simply not enough of them to be anywhere near capable of consuming the vast quantity of products society is capable of producing, and besides, spendthrift consumption is at odds with their crucial role as investors. Landlords, of course, can be asked to do their patriotic duty by living lives of the most unparalleled extravagance, but their small numbers are no match for the stupendous productive powers of humanity, which alas – horror of horrors – promise only to ever increase. Production, therefore, must be consciously limited, and thus:

“There must therefore be a considerable class of persons who have both the will and the power to consume more material wealth than they produce. In this class the landlords stand preeminent; but if they were not assisted by the great mass of individuals engaged in personal services, whom they maintain, their own consumption would of itself be insufficient to keep up and increase the value of the produce …” (Malthus, pg. 401).

This management of supply and demand is crucial to achieving a state of capitalist prosperity, in which food, clothes and shelter take increasingly less labor to produce, but still command the same amount of labor-time in exchange, or more in the event of a boom. In a brilliant anticipation of the permanent war economy of the United States, Malthus explains that war and state debt are perfect mechanisms for enhancing value through the careful calibration of scarcity:

“One of the most striking instances of the truth of this…is to be found in the rapidity with which the loss of capital is recovered during a war which does not interrupt its commerce. The loans to government convert capital into revenue, and increase demand at the same time that they at first diminish the means of supply” (Malthus, pg. 329). Of course, war isn’t the only means. In fact, the very conditions of prosperity ushered in by war create the very opposite conditions when the war comes to an end: “a very unusual stagnation of effectual demand” (Malthus, 416). In a passage which, while written in 1821, sounds quite familiar to ears raised in the 20th century, Malthus makes the following proposal for ending a post-war recession and soaking up mass unemployment:

“It is also of importance to know that, in our endeavors to assist the working classes in a period like the present, it is desirable to employ them in those kinds of labor, the results of which do not come for sale into the market, such as roads and public works. The objection to employing a large sum in this way…would not be its tendency to diminish the capital employed in productive labor; because this, to a certain extent, is exactly what is wanted…the employment of the poor in roads and public works, and a tendency among landlords and persons of property to build, to improve and beautify their grounds, and to employ workmen and menial servants, are the means most within our power and most directly calculated to remedy the evils arising from that disturbance in the balance of produce and consumption, which has been occasioned by the sudden conversion of soldiers, sailors, and various other classes which the war employed, into productive laborers” (Malthus, 416).

It is more than ironic that the proposals of Malthus, the father of “no alternative politics” whose ideas were formed as weapons against the socialists and radicals of his age, should go on to become defined as the socialism, of sorts, of the post-World War II capitalist democracies. Indeed, Keynes quoted the above passage by Malthus, in which he makes his call for a program of public works, and called it “the best economic analysis ever written of the events of 1815-20” (Keynes, 121). After quoting from a letter from Malthus to Ricardo, in which Malthus makes the case that “an adequate proportion of unproductive consumption on the part of the landlords and the capitalists” was crucial to the ongoing production of capitalist wealth, Keynes exclaims, “If only Malthus, instead of Ricardo, had been the parent stem from which nineteenth-century economics proceeded, what a much wiser and richer place the world would be today!” (Keynes, pg. 120) He follows this by stating, “I have long claimed Robert Malthus as the first of the Cambridge economists” (Keynes, pg. 121). It is deeply ironic, if not tragic, that an intellectual son of Malthus, the man who battled Godwin with his Essay on Population before penning a class strategy to deal with productivity in such a way that it had precisely the opposite effect as that called for by the early socialists, namely that increasing productivity in the production of the necessities of life would cause continually more labor, rather than less, to be exchanged for them, would be seen as “the left” end of the economics spectrum, and even, perhaps, as somewhat socialist, by way of the association of his ideas with social democracy. Keynes may seem urbane, and even humanitarian, when compared to the likes of Milton Friedman, but we should reflect on the fact that the same could easily be said of the Malthus of Principles of Political Economy in comparison with the Malthus of Essay on Population, and pause to consider the very valuable role that both of them played in keeping the masses wedded to the yoke of labor, productivity gains be damned.

Is poverty inevitable? That question, while rarely posed so starkly, is all around us in our discussion of politics. The implicit answer that we are daily given, and which many in our society seem to have accepted, is “absolutely yes.” It is crucial, however, to trace the lineage of this “no alternative” narrative, and to realize that it was in its most vulnerable state when the question of how work was distributed in society, and for whose benefit, was subjected to scrutiny and broad public discussion. The elite reaction was public apoplexy in the form of Malthus’ Essay on Population and private sophistication in the form of the same author’s ruminations as to how increased gains in productivity could actually result in ever increasing claims on labor, thus representing the antithesis to socialism. Radical politics, simply, should place the question of the organization of labor in society back on the table. Radical intellectuals should publicly mock the notion that economic outcomes in our society have anything to do with Adam Smith’s “invisible hand,” and undertake scholarship which demonstrates that the economy is managed, in much the way advocated by Malthus and Keynes, to ensure that entire lives are exchanged for goods which require next to no human labor for their production. There is no single political strategy which follows directly from this critique. Some may seek to demonstrate just how productive humans can be by organizing their own production and consumption with friends, outside the market, while others may attempt to use the electoral arena to force a change in the social division of labor by means of the state. Of course it is possible to do both, simultaneously. Both Godwin and Malthus agree that the productive capacity of humankind, if allowed to grow outside very narrow strictures, threatens to explode the class relations of capitalism, which depend crucially on scarcity. The point is to upset that carefully calibrated scarcity by demonstrating, both intellectually and in actual production, that as the necessities of life take far less than a lifetime to produce in abundance, it’s about time we be getting on with our lives.

The wildcat strike at the Nanhai Honda factory which formally ended on June 4th with a partial victory for workers, has subsequently inspired two other Honda factories in the Pearl River Delta to go on strike. In addition, workers from several Taiwanese-owned factories have adopted similar tactics, holding a sit-in in Jiangsu and blocking roads in Shenzhen.

The initial Honda strike began on May 17th. It took place in a transmissions factory in Foshan, Guangdong. The strike lasted over two weeks and received considerable coverage in mainland Chinese newspapers. At its height, around 1,900 workers (almost the entire factory) walked off the job. Because the Nanhai factory is responsible for making car transmissions, the strike eventually stopped production at four other Honda assembly plants.1 In total, Honda’s losses amounted to 2,500 cars per day.2

Over the two week period of unrest Honda presented four different offers to the workers, all of which were rejected. The offers were designed to divide the more skilled interns from the bulk of the regular workers by offering the former more. Interns make up one third of the Nanhai factory workforce. Because interns do not sign contracts, receive no insurance plan, and are not protected under Chinese labor laws, their grievances were particularly acute. However, Honda interns are young—many having not yet graduated from school—and so were seen by management as being more susceptible to persuasion. At one point student representatives from the intern’s schools were sent to the factory to convince interns to return to work.3 In the end, all attempts to divide workers failed.

On May 26th, after management’s second offer was rejected, workers banded together to come up with a list of coherent demands which reflected their collective interests. Thus, on the following day of May 27th workers presented Honda with the following demands:

1. an increase in wages of 800 rmb per month (roughly 75% raise) for all workers.
2. additional cash bonuses based on duration of employment—a cumulative wage increase of 100 rmb every year for ten years.
3. an immediate return of worker ID cards to workers upon resumption of work; workers cannot be fired or pressured to resign after returning to work; those already fired will be reinstated; a promise that workers will not be held legally or financially responsible for the strike.
4. all wages lost, dating from May 21st up until the resumption of work, will be repaid to workers.
5. within a month of returning to work management shall respond to the various suggestions posed by workers on May 17th.
6. a reorganization of the local trade union; reelections should be held for union chairman and other representatives.4

Workers at the Nanhai factory organized themselves independently of the local trade union. Email and text messaging seem to have played an important role in facilitating communication. On several occasions over the two week period, workers decided to elect representatives to negotiate with management. This representative structure seems to have developed naturally out of the needs of the struggle and was not originally connected to any specific political goals. However, over the course of the struggle many workers began to demand a restructuring of the local unions along such democratic lines. Later, workers from a different Honda factory in Zhongshan, Guangdong who began a subsequent strike on June 9th briefly reasserted this goal as one of their primary demands.5

The official unions in China (All China Federation of Trade Unions) are state-controlled. In the Nanhai factory strike, the unions played only a “mediating” role and refused to openly support the workers. On May 31st, members of the local Shishan Town trade union even physically attacked a group of forty workers, causing seven or eight serious injuries.6 However, the incident seems to have instilled more solidarity among workers than fear. The following day, the local unions issued a public “apology” to the workers in which they tried to play down responsibility for the assault.7

The Nanhai strike formally ended on June 4th. A settlement was reached between the worker-elected negotiating committee and the General Manager of Honda Motors in China, Zeng Qinghong. Worker’s won a partial victory. Honda agreed to raise all employee wages by 500 rmb per month (around 33%), as well as agreeing to regular cash bonuses and other demands.8 The issue of restructuring the local union was not reported on. Towards the end of the strike the sixteen-member worker’s negotiating committee issued two letters to the public which were published by the Chinese media amidst much fanfare.

Media coverage of the initial Honda strike was surprisingly broad and in-depth. Although, the state-censured media received orders to stop reporting on any labor disputes as early as May 28th,9 coverage by local Guangdong media continued well up until June 4th. However, since the conclusion of the Nanhai strike, mainland media has remained completely silent in regard to the subsequent wave of wildcat strikes that have rocked other parts of China. This tacit approval of coverage of the initial Nanhai strike seems to reflect a desire on the part of the CCP to see domestic consumption rise. On June 4th, coinciding with the resolution of the Nanhai strike, the Beijing Municipal Government announced it was raising Beijing’s minimum wage by 20%.10 Later on June 9th, the Shenzhen government followed suit and announced a minimum wage increase of 10%.11 Since January, a total of fourteen Chinese provinces have declared 10%-20% increases in the minimum wage.12

As the Nanhai strike was coming to a close, another dispute erupted on the other side of the country. On June 4th, workers from the Taiwanese-owned (KOK International) rubber factory outside Shanghai began a sit-in to protest low pay and intolerable working conditions.13 Workers complained of being subjected to toxic fumes and having to labor in temperatures well over 100 degrees fahrenheit. From the beginning, the strike received almost unanimous support from workers.14 Though the sit-in started on June 4th, reports did not reach Western media until June 7th when striking workers clashed with police. Around fifty workers were injured and dozens arrested in the clash.15

Back in Guangdong, a third incident broke out in Shenzhen. On June 6th, between 300 and 500 workers from a Merry Electronics factory—a Taiwanese audio components manufacturer—staged a walkout and blocked roads for the better part of a day.16 The company immediately responded by announcing a significant wage increase, though a spokesperson denied that the increase had any relation to the strike.

As the week proceeded, two more strikes erupted in Honda factories based in Guangdong.

The second, like the initial, was in Foshan. On June 7th, workers from Honda’s Fengfu exhaust system factory folded their arms and demanded the same concessions granted the Nanhai workers. Around 250 workers, out of a total about 500, joined the strike.17 Production at the Fengfu factory had not been affected by the events of the previous two weeks, but workers had learned about the Nanhai strike through media reports. The Fengfu strike, though only lasting three days, forced production to stop at two of Honda’s four assembly plants—which had just returned to work after being paralyzed by the initial strike.18 An agreement was finally reached on the evening of June 9th which granted significant concessions to the workers.

Earlier in the day on June 9th, a third Honda strike broke out in Xiaolan, Zhongshan. The Xiaolan Honda Lock factory is responsible for supplying key sets, door locks, side mirrors, and other components for Honda automobiles. The strike apparently began when several employees were beaten up by security guards for allegedly planning an industrial action.19 Though demanding wage increases similar to the Nanhai and Fengfu workers, it is this third strike at Honda Lock that seems to have briefly taken on more radical dimensions. According to the New York Times, in addition to an 89% wage increase, Honda Lock workers at one point also demanded the right to form an independent labor union based on elected representation.20 Workers elected a ten-member “factorywide council” to enter negotiations with management on the first day of the strike. Though Honda agreed to consider the worker’s wage demands, it said it had no authority to approve an independent union. “Management said that a government labor board would decide on the workers’ requests by June 19, and asked that the workers return to their jobs in the meantime.21

On June 11th, around 500, out of a total of 1,500 workers, took to the streets outside the Honda Lock factory to demonstrate.22 Workers encountered several lines of riot police who sealed off the street, surrounding the protesters for nearly two hours. In the days following the demonstration, workers held several rallies outside the plant while waiting for management to present an acceptable offer. However, Honda Lock appears to be taking a hard-line. Because the Honda Lock factory relies on mostly unskilled labor, management has repeatedly insulted workers by offering a wage increase of 100 rmb and attempting to bring in strike breakers.23 As of June 17th, the vast majority of workers remain on strike while about 100 have returned to work.24

Beijing has maintained a strict silence over the past month. However, on June 15th, Premier Wen Jiabao responded subtly by giving a speech to a group of construction workers on the need for better labor conditions for migrant workers.25 The central government has refused to get directly involved and seems conflicted over how to handle the strikes. Though no doubt welcoming higher wages as a boost to internal consumption, the CCP does not want to see workers become too emboldened. Calls for autonomous and democratic trade unions, if granted only at the local level, would have far-reaching consequences. But workers seem to have backed away from this demand. No doubt what is of most significance in these strikes is the worker-elected negotiating committees that have sprung up in place of the unions. The Chinese media refereed to the initial Nanhai factory committee as an independent union. However, these committees clearly lack the bureaucratic character of the ACFTU. If workers continue to demand a restructuring of the unions, will the committees we have seen spring up over the past month serve as a model for this restructuring? If so, this would have truly radical implications for the Chinese working class.

Related articles

• Honda Strikers in China Offered Smaller Raise Than Sought (nytimes.com)
• China Honda plant woes mirror wider labor disputes (cnn.com)
• Toyota Closes China Car Plant as Honda Workers Return (Update2) (businessweek.com)

Original article archived at https://web.archive.org/web/20250318071906/http://insurgentnotes.com/2010/06/wildcat-strikes-in-china/

• 1On May 25th the Nanhai strike caused production to come to halt at three factories in Guangzhou; one in Zengcheng and two Huangpu. Later on May 27th a fourth Honda factory in Wuhan was brought to a complete stop. Wang Duan, “Bentian zai zhongguo si jia zuzhuangchang tingchan,” (Four Honda Assembly Plants in China Stop Production), Caixin Online, May 28th, 2010.
• 2Huang Xiwei, “Bentian zai hua gongyinglian gaoji: rijun jianchan 2,500 liang,” (Supply and Demand Chain Emergency at Honda in China: Production Drops by 2,500 Cars per Day), NDDaily, May 28, 2010.
• 3Wei Le, “Nanhai bentian tichu di san ge tixin fang’an,” (Nanhai Honda Presents a Third Wage Adjustment Offer), Caixin Online, May 30, 2010.
• 4“Bentian ti di san fen tiaoxin fang’an, gongren jixu tinggong,” (Honda Presents a Third Wage Adjustment Offer, Workers Continue to Strike), INFZM, May 31, 2010.
• 5David Barboza, “More Honda Labor Trouble in China,” New York Times, June, 9 2010.
• 6Wei Le, “Nanhai bentian bagong shijian chuxian zhiti chongtu,” (Physical Confrontation Breaks out at Nanhai Honda Strike), Caixin Online, May 31, 2010.
• 7“Nanahi qu zonggonghui, shishan zhen zonggonghui zhi bentian yuan’gong de gongkaixin,” (Open Letter from the Nanhai District Trade Union and Shishan Town Trade Union to the Workers of Honda), Caixin Online, June 2, 2010.
• 8David Barboza, “Workers in China Accept Deal, Honda Says,” New York Times, June, 4 2010.
• 9Fiona Tam, Mimi Lau, “Shutters Slammed on Reporting of Strikes,” South Chinea Morning Post, June 12, 2010.
• 10David Barboza, Hiroko Tabuchi, “Power Grows for Striking Workers,” New York Times, June 8, 2010.
• 11David Barboza, “More Honda Labor Trouble in China,” New York Times, June 9, 2010.
• 12“14 shengshi qu shangtiao zuidi gongzi, laodong mijixing zaoyu dakao,” (14 Provinces Push-up Minimum Wages, A Big Test for a Labor Intensive Economy), China News, June 11, 2010.
• 13The KOK International factory is located in Kunshan, Jiangsu.
• 14Will Clem, Mimi Lau, Choi Chi-yuk, “Hundreds Clash as Labour Strife Widens,” South China Morning Post, June 9, 2010.
• 15Tom Mitchell, “Protests Pose Challenge for Beijing,” Financial Times, June 9, 2010.
• 16David Barboza, “More Honda Labor Trouble in China,” New York Times, June 9, 2010.
• 17Tom Mitchell, Justine Lau, Robin Kwong, “Protests Pose Challenge for Beijing,” Financial Times, June 9, 2010.
• 18The strike suspended production at the Guangqi Huanpu and the Zengcheng assembly factories in Guangzhou.
• 19Mimi Lau, “Honda Hit by Strike at Third Factory,” South China Morning Post, June 10, 2010.
• 20Keith Bradsher, “Workers at Chinese Plant March in Protest,” New York Times, June 10, 2010.
• 21Ibid.
• 22Reuters, “Striking Honda Workers Hold Out for More Pay,” South China Morning Post, June 11, 2010.
• 23Mimi Lau, “Honda Looking to Recruit as Strike Drags On,” South China Morning Post, June 14, 2010.
• 24John Chan, “China: Honda Lock Strike Continues,” World Socialist Website, June 15, 2010.
• 25Kristine Kwok, Choi Chi-yuk, “Wen Appeals for Better Treatment of Migrant Workers,” South China Morning Post, June 16, 2010.

1. Scared to death that all the lights were about to go out after pulling the plug on Lehman Brothers, the bourgeoisie rolled up its sleeves, girded its loins, crossed its fingers, and reached deeper than deep for that thing of all things, that relation of all relations that is the life of all lives for the bourgeoisie—OPM, other people’s money.

Tapping the unrestricted credit lines offered by the banker’s banker—the government—the bourgeoisie helped themselves to what they knew they were entitled to, the public purse.

For the bourgeoisie, it’s always other people’s something or other. For capital to be capital, it must command other people’s labor. For finance to be finance it must command other people’s money. So when the bourgeoisie through those great organizations of inter-governmental cooperation, regulation, and exchange call for austerity, it’s always somebody else’s austerity.

After the billions in direct transfers from public treasuries to private accounts, after further billions in government guaranteed debts, after more billions in government sponsored special investment vehicles, after more than more billions in toxic assets, non-performing loans, bad debts bought and overpaid for—after all that expenditure of other people’s money, the bourgeoisie had come to the shocking conclusion that:

1. money changes everything;
2. whatever changed, it wasn’t enough;
3. a hundred billion dollars here and a hundred billion Euros there and pretty soon you’re talking about serious money;
4. somebody has to pay;
5. somebody else has to pay;
6. there is no such thing as being too rich or too thin.

“We,” say the bourgeoisie “can never be too rich. You [meaning all of us] can never be too thin.”

So first from the hack economists, journalists, commentators, representatives, ministers, senators—those agents and bagmen employed by the bourgeoisie—come the expressions of shock that other hack economists, journalists, commentators, representatives, ministers, senators—other agents and bagmen of the same bourgeoisie—could have acted so irresponsibly, could have acted with such profligacy. This only means that the bourgeoisie needs this other section of hacks to act even more irresponsibly, with even more profligacy. This time, however, the wastefulness requires a specific universality—a wastefulness in the very basis for human existence; a wastefulness determined to deprive human lives of the bare necessities for living a human life. Then even and ever greater misery and poverty must be piled atop that mountain of misery and poverty already piled up as the more than equal but opposite symbols of capitalist wealth.

First comes the shock then comes the austerity.

2. When in April and May of this year the government of Greece stood just a stone’s throw from collapse, suspended between pit of bankruptcy and the pendulum of mass demonstrations and strikes, the European Union hesitated to provide a “rescue” package, transfixed so it seemed, not by the spectacle of the conflict, but by the image of itself it saw in Greece. It wasn’t the cost that paralyzed the governments of the European Union, it was the mirror.

Merkel was reluctant to approve the “rescue” of the government of Greece without assurance that Germany’s interests would be protected, which meant that Germany’s contributions would be considered as senior to, and secured prior to, any other obligations. Merkel, of course, was only reprising the role she thought her mentor and role model would have played in the discussions. Her role model is Margaret Thatcher, but not the Thatcher of 1981, of Attila the Hen fame, but the Thatcher of today whose addled brain and lack of recognition of her current environment make her the once and future champion of everything bourgeois.

After the hemming and hawing, the toing and froing, the after you Alphonse-ing, after you Johann-ing, the half-hearted and half-assessed agreement on a “rescue,” the high command of the European Union received a phone call from US Treasury Secretary Geithner. Geithner’s elevated stature among the titans of finance is due as much to the fact that he sits on a telephone book at his desk and in restaurants as to his previous and ongoing service in Maiden Lane I, Maiden Lane II, Bear Stearns, Lehman Brothers TALF, TARP, PPIP, ABCPFF campaigns.

“You guys and dolls need to do something big,” said secretary Geithner to his counterparts, counterparties, across the Atlantic. “You need to do something dramatic. You need to impress the markets,” he said getting to the real issue, the only issue.

“Yeah,” he said, gaining confidence if not height with each pregnant pause. “You’ve got to do something completely different. Like create an off-balance sheet funding facility with a really big number and guarantee its initial capital with the revenue of the EU itself, and then you get the IMF to supplement, to partner, in this vehicle, with the IMF vetting the economic program of any government stupid enough—check that—finding it advantageous to request funding by this off-balance sheet special funding facility guaranteed by your own revenues. How does that sound?”

They looked at each other, these ministers, presidents, financiers. “It sounds just like Greece to us,” they said.

“Exactly,” said Tim, sounding less like a munchkin and more like a wizard in Oz. “That’s the point. You’re all Greek to me.”

3. Greece revealed that Europe was the sick man of Europe. The markets translated that as “you’re all Greek to us.” Banks in the sixteen euro zone countries had amassed a euro 1.25 trillion exposure to sovereign and private debt instruments of Greece, Portugal, Ireland and Spain. UK banks had amassed euro 270 billion in exposure. French banks accounted for euro 370 billion, and German banks for euro 394 billion, with approximately euro 624 billion of the total in private debt instruments and euro 140 billion in government debt issues [it was this sovereign debt exposure that Deutsche Bank was so reluctant to reveal to EU bank commissioners during the “stress test” evaluation]. The total amount of debt outstanding from these four countries exceeds euro 2 trillion. Outside this group of four, Italy alone has outstanding debt of approximately euro 1.7 trillion.

With so much debt concentrated in such poorly performing economies, the European Union commercial banks and other financial institutions found themselves virtually unable to refinance their own operating requirements in the commercial paper money markets. Banks that did attempt to circulate their short-term instruments in these markets were forced to pay three or four times their previous average interest rates.

The European Central Bank, by the end of 2009 having guaranteed bank debts in the amount of euro 433 billion, increased its direct loans to euro zone commercial banks. At the end of June 2010 the volume of these loans measured euro 879 billion. In addition to finance the operating needs of its member countries, the ECB took to directly purchasing government debt issues.

With the commercial paper markets inaccessible, with cross border lending essentially frozen, the banks themselves decided that the best, if not the only place, to risk their cash was no place at all, depositing over euro 300 billion with the ECB itself.

Meanwhile, the costs of credit default protection on the sovereign debt of Greece, Portugal, Spain, Ireland and the UK soared. The credit default swap costs on the debt of EU private financial institutions reached the levels of costs after the collapse of Lehman Brothers in 2008. Debt auctions failed in Hungary, and in Germany, with issues not being fully subscribed and discounts from face value exceeding discounts planned by the issuers.

The joker in this house of cards is, of course, fiscally righteous, monetarily strict, and financially responsible Germany. Germany’s very own bankers from their lofty position in the EU food chain can turn to the west and survey their mountains of non-performing collateralized, asset backed, structured, real estate debt in the United States.

The bankers can turn to the east and survey more mountains of under-performing sovereign debt, the debt they sought to isolate and conceal from the “stress tests” performed by the European Union.

They can look straight ahead and survey yet more mountains of non-performing commercial real estate debt ranging across Europe.

The one place the German bankers did not want to look was Basel III, where the “improved” requirements for “key capital ratios,” diluted and phased in over nine years, were still too much too soon.

But it wasn’t the height of the mountains of debt that bothered the bankers; it was the fact that as high as those mountains are, they are all underwater.

Surely it’s the mountains of non-performing debt, which makes Germany’s banks technically insolvent, that weighs like an Alp on the brains and pocketbooks of the living.

“Do as I say,” implores Merkel, “Not as my bankers do.” What else could she say?

It was all Greek to the markets, with Greece itself emerging as the leader of a new world economy—a Dubai World economy with the world itself running out of Abu Dhabis.

4. So, enter austerity. Austerity appears to aim at ensuring the repayment of debt, the bourgeoisie’s first and last words being, “pay me.” In essence, in its social reproduction, austerity serves a different purpose.

If debt originates in the lags, delays, the a-synchronicity of capitals’ metamorphoses from money through commodity production and back to even more money as a claim on that expansion of value, debt concludes, realizes, itself on the extinguishing, the annihilation, the devaluation of the accumulated values of society necessary for the reproduction of value but which themselves, can no longer be sustained, be reabsorbed, recirculated, reproduced as value. Primary among that expanse of social accumulation that can no longer be sustained is the reproduction of labor power, and all that makes up labor power, itself.

So to that part of the population who are working, austerity means some will be working harder, longer, some will be working less, and shorter, but all will be reproducing a lesser social basis for reproduction. All that was substantial will become marginal, and the marginal will become substantially greater.

For that part of the population retired and receiving a pension, fewer will retire; fewer will receive pensions, those that do will receive less.

For that part of the population born into poverty, deprived of a basic, necessary education, of proper medical care, even more will be born into greater poverty. Even more will be cheated of and by an even poorer education. Even more will be excluded from already inadequate medical care.

All value must be devalued. “Everything must go!” is the slogan of this bourgeoisie’s staying in business forced liquidation sale.

The call for austerity, the programs of austerity are about destroying the overproduction of accumulated values, even and especially the miserably paltry assets of public health, transportation, education—those things that make up the social basis for expanded reproduction which is inverted into overproduction and becomes a burden to capital.

5. “Everything must go!” proclaim our salesmen of austerity. But not exactly everything will go. Military spending—that’s one thing that doesn’t really have to go, as Greece itself has shown.

Greece, the largest importer of conventional weaponry in Europe; Greece, with military spending as a percentage of its GDP twice that of the European Union; Greece whose deficit revision “scandal” has in fact been driven by military expenditures; Greece who year ago purchased two submarines from Germany neither of which has been delivered; Greece with plans to buy six frigates and 15 military helicopters from France; Greece having purchased 24 F-16 fighters from the US , has managed to exempt those expenditures from its austerity program.

Military spending is the near perfect vehicle for non-reproducible accumulation by the bourgeoisie. It is not-reproductive production, it is finance made real, its values only being realizable in not only their own destruction, but in the destruction of all other values. Military spending acts as a conduit of recuperation for the bourgeoisie, with taxes transferring and restoring a portion of the wage expenditure to capitalism and without any need for enhanced social reproduction to make use of the commodities.

If revolution is one way, the exploited’s way, of resolving the contradiction of use value and exchange value, military spending is the exploiter’s penultimate way of resolving the same contradiction. War, of course, is the bourgeoisie’s ultimate method of resolving that contradiction.

Greece shows the way to, for, and of the brave new Dubai World where submarines that list to one side, helicopters with nowhere to go, circulate among the artificial islands bursting with abandoned homes, vacant condominiums, and empty streets.

When Greece, upon agreeing to the EU rescue package, enacted the terms of its austerity program, a financial analyst remarked, “They were supposed to make these changes ten years ago.” Maybe “they” were, as part of the entry into the European Union, but guess what? Seven years ago, Portugal did make such reforms as part of its adherence to the European Union, and today it finds itself in the same predicament as Greece.

And something else not for the guessing: This is the economic contraction capitalism was supposed to have ten years ago, after the capital spending bubble of the 1994-2000 period.

6. Meanwhile, how much better off than their European cousins are the bourgeoisie in the United States where the market is the austerity program; where stimulus and contraction go hand in hand; where poverty is so established in the fabric of everyday life that increases in poverty, declines in household income, and declining numbers of insured are the recovery?

The US Census Bureau’s Income, Poverty and Health Insurance Coverage in the US: 2009, released in September 2010, verified the progress the bourgeoisie had made in reversing the little bit of progress made against poverty in the 1990s. After stagnating between 2000 and 2007, the inflation adjusted median income for families plummeted between 2007 and 2009. It took the bourgeoisie almost a decade, and two recessions, but at last poverty was back up where it belonged—embracing one in seven of the general population, but more importantly, almost one in four for those under the age of six. Nothing secures the future of capital like no future.

In 2009, per capita income declined 1.2 percent from 2008 levels. The growth in the overall poverty rate 2007-2009 exceeded the rate of increase in the 1973-1975 recession and the rate of increase measured in the combined double dip recessions of the 1980s.

In 2009, the family poverty rate increased from 2008’s 10.3 percent to 11.1 percent. The poverty rate for single-parent female head of household reached 29.9 percent.

Those without medical insurance increased to 16.7 percent of the population and the absolute numbers with coverage declined for the first decrease since 1987.

Among all workers over the age of 16, the poverty rate and absolute numbers increased in 2009, and the increase is solely the result of the decline in full-time employment. Of the general population between the ages of 25 and 34, 42.8 percent live below the poverty.

The legacy of Ronald Reagan, unlike Reagan himself, lives forever.

Besides collateralized debt obligations and synthetic asset backed securities, the legacy of that administration of Ronald Reagan, the US’s idiot version of the UK’s Thatcher, includes “new federalism.” “New federalism” was designed as the mechanism through which the national government dramatically reduced its participation in, and administration of, social welfare programs. Some forty three social welfare programs were returned to the administration of the individual states, with the national government awarding block grants which the states were to utilize toward defraying some of the costs of these programs.

The “reasoning” behind this policy was painfully clear to the most casual observer. The legislatures of many states were configured to dramatically reduce the political strength of the urban centers, and consequently, the urban poor. State governments were much more permeable to corporate influence, and much less vulnerable to that of organized labor.

Capital thought globally and acted locally well before any leftist made that a slogan.

Lobbying by corporate and large-scale agricultural interests, allied with the small town and rural distrust of big cities could, and did, effectively maintain the burden of regressive financing on the urban and poor populations. The fact that these same corporate interests proceeded to close industries, reduce employment, shatter the wage structure and generally devastate the small town and agricultural areas was the dirty, little not-so-secret tucked within the “revenue sharing” of the “new federalism.”

Sales tax and personal income taxes account for 80 percent of state government revenues in the United States. Since 2008, these flows have declined by 12 percent. So while US corporations have booked over $1 trillion in cash and liquid assets, over the next two years, state governments are facing budget shortfalls amounting to $127 billion. In some states, pension liabilities are underfunded by half.

After imposing furloughs, wage reductions, and cutting support to education and transit, states have responded, as states always respond, by attacking the weakest, the most vulnerable, those most in need of service and support. Home care services to the elderly and disabled have been reduced. Illinois has ended its support for Meals-on-Wheels programs. Alabama has reduced its provisions for housekeeping assistance to elderly people. California is proposing to eliminate adult day care centers and home support for 400,000 disabled or elderly people. Nearly every state has reduced eligibility in and payment for Medicaid services.

As reported in the New York Times of July 21, said the director of senior and disabled service for Rogue Valley, Oregon, “I’ve seen, in a matter of months, thirty years of work go down to drain.”

A decade, the 1990s reversed, a decade 2000 to 2010 lost, but most importantly, 30 years of work gone in 24 months.

“In a matter of months, thirty years of work down the drain.” There in a dozen words is the liquidation of pensions, 401Ks, the attacks on immigrant laborers, the destruction of wages, the rolling back of opportunity and equity for women in the workplace, in the doctor’s office, in the schools. There in a dozen words is the past, present, and future of capitalism, of human beings under capitalism. There in a dozen words is all you need to know about valorisation and devaluation.

7. It is not the task of the working class, or of Marxists, to reverse capitalism, to restore capitalist valorisation in the face of capital’s self-devaluation. It is the task of the working class, of Marxists; it is the task for revolution to oppose this devaluation that capital imposes upon all human relations, not things, not commodities, but actual human relations.

It is the most essential, critical task of the working class to defend the need for better than adequate medical care, better than basic education, better than tolerable public transit; to meet the needs for home care assistance, day care centers; to defend immigrant labor, women’s access to safe healthcare; to defend the social basis for human beings actually reproducing themselves as social human beings.

That defense requires the disavowal, rejection, cancellation, shredding of the debts accumulated by capital in its own attacks on that social basis; of the debts accumulated by our asset-liquidationist bourgeoisie.

That disavowal of debt requires in turn the immediate end to all military spending.

And that’s just the beginning.

Related articles
Why Accept Changes EU Leaders Say Won’t Work? (online.wsj.com)
Can the E.U. Find a Way to Fix the Euro? (time.com)
Waiting for Side Effects of Austerity Medicine (online.wsj.com)
Greek Central Bank Urges Reform (online.wsj.com)

1. Love and Infamy

The bourgeoisie, the one we know and don’t love so well, thinks it has the solution to the problems it knows and doesn’t love inherent in the accumulation of capital. The solution for everything and anything that besets capital is of course…. more capital. The solution to the problems of too little return on capital, and too little capital is more capital. The solution to the problem of too much capital, of more capital is even more capital, but relatively.
Capital, for our well-known unloved capitalist, does not mean production. It does not mean creating products, or creating the means for creating products, or creating the means for creating the means. For our capitalist, capital means only the expansion of value.
Our capitalist doesn’t mean production even when he or she says “production.” Our capitalist doesn’t mean product even when he or she says “product.” Our capitalist does not mean productivity even when he or she says “productivity.”
For our well-known unloved capitalist, product means value, production means the process of aggrandizing value, productivity means increasing the rate of aggrandizement.
For our unloved, well-known capitalist, productivity is mis-represented as the productivity of capital, which is just our capitalist’s way of taking over a quality that is alien to him or her, and to his or her property; a quality that is alienated from labor. All and everything the capitalist means is proportionately greater aggrandizement of value output per unit of input, with the input itself being measured by, existing as, value. There’s the pot, the gold, and the rainbow all wrapped into one.
So whenever capital expands, the expansion is the result of the “productivity” of capital; of improved efficiency; of optimized allocations; of rationalized resources.
Whenever capital recovers, the recovery is the result of productivity, of improved efficiency, of optimized allocations, of rationalized resources.
When capital contracts? Here our chest and tub thumping capitalist is brought up short, literally and metaphorically. If expansion and recovery are the result of improvement, optimization, productivity, rationalization—in a word “progress,” in another word “capital”—how could anything as irrational as contraction, as recession, devaluation, and depression, even occur?
When Marx, known and beloved, says reproduction he means the renewal of the circuit, the process by which labor is transformed into value. When he says expanded reproduction he means the reconversion of the surplus value aggrandized by the capitalists into the components for capitalist production for the aggrandizement of more labor. When he says accumulation, he means that the expanded reproduction requires the introduction of relatively greater amounts of machinery as value into the production process.
When Marx analyzes accumulation, he is analyzing a single process, a totality where both expansion and contraction are the result; where the sub-optimal, inefficient, irrational, unproductive moments and structure of capital are the result of the optimal, efficient, rational, magnified “productivity” of capital.
Capital itself, whether in flower or withering on the vine, has no productivity. It assumes, expropriates the productivity of labor through the command of labor time.

2. Materialism and History

Marx initiates his critique, his engagement through opposition, of capital after his critique of Hegel’s Philosophy of Right. Hegel, in this last published work, becomes the object lesson of his own definition of
liberalism as a philosophy of the abstract that capitulates to the world of the concrete. Hegel’s dialectic of reason, dialectic through negation, had reached its end, and become a veritable negation of reason. The state is an abstraction. The abstraction embodies reason. The real embodies the rational, and becomes the end to rationality. Rather than being the product and producer of history, no longer representing the sojourn of consciousness through history, the real and the rational abandon history.
Marx’s critique recognizes that Hegel’s philosophy relates a history of human beings making themselves “at home” in the world, but that the philosophy is an estranged representation of an estranged history. Hegel gives us a disavowal of reality. The dialectic of negation, conflict, opposition, antagonism becomes the affirmation of things as they are.
Marx identifies the real material by which human beings make themselves at home in the world; retrieves the real content of history, and extracts that rational kernel of the dialectic—the kernel of opposition, conflict, antagonism. That material of human history, that basis for the kernel of the dialectic is the labor process. The labor process is that activity where human beings appropriate nature and make themselves at home in the world of not entirely their own making.
The appropriation of nature through labor is a social process. The appropriation is mediated by the forms of society. Appropriation of nature, then, is simultaneously the appropriation of the labor itself. Labor creates itself and the forms in which the labor is organized, rendered, captured. The forms of capture are the different forms of private ownership, of property. If Hegel is presenting us with an estranged representation of an estranged history, the estrangement is a reflection of the estrangement in the labor process. Labor creates the conditions for its own reproduction, but only in the reproduction of its expropriation, its loss.
So we get from labor, to the labor process, to the conditions of labor, to the organization of labor as property, to labor producing the conditions for the material reproduction of society.
The conditions of production, the loss that labor imposes on itself, is nothing other than dispossession of labor from its own usefulness in directly meeting, creating, expanding, and satisfying need. Needs can only be met through the mediation of exchange, through the quantifying, the measuring of the single element common to all human labor, which is of course also the essence of history— time.
Labor dispossessed from its individual, particular abilities to provide for the laborer; labor stripped of its use; labor as time; time as the measure for exchange. Labor’s loss is time.
If time is the measure, then absent that bigger fool of whom every capitalist dreams, then the formal exchanges of commodities have to be equal, and fair; they have to be exchanges of time for time.
The reduction of labor to time is only possible because of labor’s capacity to create greater quantities than can be directly consumed. The time of labor is a quality; the quality is the ability of labor to convert itself into material products extending forward in time, beyond its own particular, and immediate, needs; to create surplus; to overproduce.
Labor’s ability to overproduce is precisely what is captured, fixed, by capital in the conversion of labor time into value.
Within the fairness, the equality of exchange of labor for wages, the unequal exchange of quality, time, for quantity takes place. Only a portion of the labor time is compensated, that time necessary for the reproduction of the laborers as a value-producing class; only that portion required for the workers to expand the reproduction of capital.
The more this labor power produces, the relatively less the power of labor; the more this labor power produces, the proportionately less is returned to the laborers; the more this labor power produces, the less the need, use, production and reproduction of labor makes up the value of the products; the more this labor power produces, the more the surplus labor, the surplus product, the surplus value, the overproduction is converted into the property of the capitalist; the more this labor power produces, the more the capital displaces, outweighs labor power in the process of reproduction; the more this labor power produces, the more the productivity of labor is consumed by and converted into the overproduction of capital.
Overproduction, inherent in the organization of labor as wage-labor, is the source and the limit to the aggrandizement of surplus-value. Overproduction is the origin and barrier to profitability. Overproduction is always the overproduction of capital, and is capital’s immanent critique.
The extraction of proportionately greater amounts of surplus labor time through reducing the time necessary for the laborers to reproduce, “work up,” values equal to their own wages, does not, and cannot, increase the new value embodied in the individual commodities, or the value of the commodities in total. Time is time.
Exchange is based on the formal equality of capital’s values, of time for time. The valorisation of capital, its expansion, requires a growing inequality in the exchange between the components internal to capitalist production, an exchange of less time for greater time—of objectified, quantified time for the quality of labor power, its surplus labor time.
Valorisation, expanded reproduction, accumulation, all these are simply manifestations of the conflict that is the heart of capitalism. From the critique of Hegel’s Philosophy of Right, Marx gets us to that heart—overproduction.

3. Elephant on a Skateboard

Since 2001, the number of production workers has declined by 21.9 percent in U.S. manufacturing industries. Economists, business school professors, union bureaucrats, journalists, politicians, some of the living junk of this junk bond capitalism, have attributed this decline to capital flight, taxes, regulation, union representation, competition, outsourcing—all of which supposedly restrict, and subvert, the natural, exuberant, uninhibited productivity of capital.
Other economists, other journalists, politicians, union bureaucrats, professors–some of that other junk– point to speculation, “financialization,” outsourcing, capital flight, and competition for the decline in the employment of production workers by “productive” capital.
These tweedledums and tweedledees of capitalism with their twiddling explanations are all of a cloth, and of the cloth. They are peddling the gospel of accumulation, more capital, as the path to increased manufacturing employment. It’s the gospel of the productivity of capital.
In the profane world, the one where money is made, the decline in the numbers of production workers is the direct, and sustained, result of the capital’s reconversion of surplus value into the means of production, into capital that amplifies the productivity of labor. Between 1973 and 1995, manufacturing productivity grew at an average annual rate of 2.7 percent in the United States. Between 1995 and 2007, the average annual rate of growth measured 4.1 percent.
The increase in labor productivity was the result of alterations, adjustment, changes in the production process brought about through the investment in fixed assets —the structures, equipment and software dedicated to production.
Fixed assets, fixed capital refers to those instruments and structure of capitalist production the value of which is transferred to the finished products only incrementally, over extended periods of time, and numerous cycles of production. Marx writes in his volume 2 of Capital:

It is this advance in one sum and the reproduction in natural form by small degrees which distinguishes this capital in the role of fixed from circulating capital.

The essential, distinguishing characteristic, of the investment in fixed capital is that it yields its value only to the degree that its usefulness, its physical capacities are consumed through the labor process. The exchange value of the fixed capital is only preserved through the destruction, depreciation, of its use value, in the labor process, which is the aggrandizement of surplus value, surplus labor time. Value is recuperated only in the slow annihilation, the extinction, of the instrument itself.
The average annual growth in productivity since 1995 is the result of very uneven periods of investment in fixed assets. The increase in manufacturing fixed assets, as measured by historical costs, measured 30 percent in the 1996-2000 period but only 13 percent in the 2000-2008 period. More importantly, the replacement rate, new investment in the stock of fixed assets compared to depreciation [which is the transference of value through the consumption of use value] measured:
167 percent of depreciation in 1996, declining to:
140 percent of depreciation in 2000, before falling in the ensuing recession to:
103 percent of depreciation in 2004, recovering to:
121 percent of depreciation in 2006, never reaching the 2000 rate, much less the 1996 ratio despite increasing to:
125 percent of depreciation in 2007 and 2008.
As profitability was peaking for nonfinancial corporations in the US in 2006, these corporations increased, albeit modestly, their investment in fixed assets.
The asynchronous aspect of the replacement rate investment in fixed assets and profitability is neither ironic nor random. This increase in investment isn’t just bad timing on the part of our bourgeoisie. Rather, the investment in fixed assets brings the hands of the clock, and the profitability of capitalism, down.
It is the essential characteristic of fixed capital that it is advanced, and procured, in a single sum, recuperating its value over repeated cycles of production. While all of the fixed assets are necessary to, and required for the labor process, for reducing the time spent by labor in reproducing the value of its own wages, only portions of the fixed capital participate in the valorisation process, which is the preservation of values through the accretion of more value.
Without a lengthening of the working day, the labor process itself only preserves the value of the fixed capital consumed in production by increasing the physical quantities of finished products, adding nothing more to the total time expended in the conversion of objects into values. Time is time, and 8 or 9 or 10 hours can never be more than itself.
While the extensive application of fixed capital to the production process reduces the time necessary for the reproduction of the value in any individual commodity, including the time necessary for the reproduction of the commodity of labor power, in displacing that labor power, the application of fixed capital lengthens the cycle, the time necessary for the reproduction of the total capital deployed in the production process. This shortening of the particular time needed for reproduction of any commodity extends the space, the volume of commodities, needed to reproduce the value of the commodity of fixed capital; and it extends the time necessary to achieve that reproduction.
Marx writing in the notebooks for his economic manuscripts that are now part of volume 33 of the Collected Works puts it this way:

The fact that the annual returns decline in proportion as the capital advanced, if there is an increase in the part of auxiliary capital consisting of fixed capital, that is if its turnover periods extends over several years—its value only entering into the product annually in the form of depreciation—is not a phenomenon peculiar to agriculture, but a general one.

General it is indeed, to capitalist development. The cycle of reproduction is lengthened by the very means that initially expands profitability, and reduces the time to the realization of profit.
The annual rates of return decline as more capital is accumulated and reintroduced into production. The exchange of fixed capital with wage-labor in the labor process aggrandizes relatively more surplus value, but it is an exchange in the valorisation process which reduces the proportion of capital actually exchanged with wage-labor. The more that capital exchanges of itself with less wage-labor, the relatively less of itself capital exchanges with wage-labor.
Our well-known and unloved capitalist is between the rock and the hard place or in this case…the fixed place. What’s to be done? If our capitalist is first on the block with his new fixed capital, the rock isn’t quite so hard, as the general social time necessary for reproduction will not yet have been altered, and our capitalist can, in essence arbitrage the difference between his or her new, improved reduced cost of production and the general, social, old price of production.
Now it’s in this arbitrage that each and every individual capitalist thinks he or she finds comparative advantage, market superiority. In a word, finds value. This arbitrage allows our unloved capitalist, and more unloved than usual by his competitors, to reroute, channel some of the profit that would flow to his or her unloving competitors into his or her own wallet. The capitalist may think he or she is pocketing the surplus value that has been personally aggrandized, but that’s never the case since, although expropriated privately, value always and only materializes in a social form, as a product of the general, abstract social labor. The arbitrage is always and only the capitalist garnering a portion, a ratio, a rate of that general, social profit.
So what do our other unloved capitalists do, now put between that same rock and the new fixed place? The answer to the problem is the problem itself. More capital. In their social existence as a class, the capitalists do en masse what they try to do individually, which is to apply more capital to production, to the accumulation of capital. In so doing, the arbitrage, the variance between any individual capitalist and the class of capitalists disappears. The arbitrage between any particular cost of production and the general social price of production approaches zero.
Still, in the process of expanded reproduction, it is precisely this moment with capitalists acting as individuals “collectively” that constitutes expansion, growth, development, increased accumulation—those happy days and good times where the future is so bright the bourgeoisie are all wearing sunglasses.
What else can our capitalist do? In reality, the question is not what the capitalist can do, but what the capitalist will/must do to offset this slowing and lengthening of the rates of return. The capitalist can/must/will charge off more to depreciation, but charging off more to depreciation is an accounting trick and has no significance to the actual costs and prices of production.
Moreover, depreciation itself does not account for the loss of accumulated value in the means of production when new mechanisms and methods of greater amplifying the productivity of labor are introduced into the labor process. Then the as yet unrealized, unabsorbed, non-transferred value stored in the old productive apparatus, a value that demanded realization at its purchase, and after purchase exists only in a latent condition to be recuperated, or re-realized, through the transfer to the entire mass of final products, is transformed into a loss. The arbitrage works the other way against our capitalist. It cuts directly across the profitability of current production.
The capitalists can/will/must attempt to function as a cartel to control production and raise, or at least stabilize, prices, thus restoring a bit of arbitrage between production and realization. Yet, raising prices only redirects the total socially available profit to specific sectors and enterprises. It is the opposite identity of the precipitating condition where the variance between the cost of production and the price of production narrowed, where the blades of the capitalist scissors began to close on the throat of accumulation. Now with the attempt at an increase in prices, the capitalists as a class are once again parceling out the socially available profit, and the total rate of accumulation will stagger and slow coincident with the hyper-accumulation realized in one or two particular sectors. Our unloved capitalists call this “stagflation.”
Our capitalist can/will/must attempt to improve the means of communication and the means of transportation in order to measure the market, moved the finished products to the markets more quickly. In short, our capitalist will inject more capital into capitalist production as a whole in order to reduce the time and cost of circulation, circulation being itself the gap, the variance, the arbitrage between production and realization, the domain of price.
Our capitalist can/will/must increase production through either intensification of labor, application of even more capital to the production process. Nothing begets overproduction like the declining returns that are the result of overproduction.
Our capitalist can/will/must push for reductions in wages, and/or the aggrandizement of greater quantities of absolute surplus value, achievable only through a lengthening of the working day.
Surplus value has, upon its, materialization only the most ephemeral of existences. Money is nothing, making more money is everything to our bourgeoisie. The realized surplus value must be moved from money in hand to money out of hand, money seeking its own expansion. That is the diktat of capitalist accumulation.
Our capitalist can/will/must liquidate, sequester, cancel, warehouse, and retire the assets of fixed capital. Liquidation will produce a relative increase in the rate of return through the diminution of the fixed asset base. In addition, forced sales of fixed assets are devaluations which work to reduce the length and number of cycles required to realize the latent value in the assets themselves. There it is! The bourgeoisie have found the perfect solution to the problems of capital that more capital can only reproduce—asset liquidation. The asset liquidation, however, then reproduces that same form of capital with the shortest half-life, cash in hand. Cash in hand is the accumulation of anti-accumulation. It is capital all dressed up with nowhere to go, except right back into contraction.
Ultimately, none of the solutions are; all of them are the manifestations of the conflict between the growth of the social means of production and the private property of the capitalist. Fixed capital is the overproduction at the heart of capital, the conversion of the “overcapacity” of labor power, of the expropriation of surplus time, surplus labor, and surplus value, made solid.

5. Wafer Thin

The nexus of despair and exhilaration, of mania and depression, of fear and greed for our capitalist is that capital lives only in its process of accumulation, in its command of the labor of others. Once accumulated, however, capital has no life, no purpose, nothing to wear, nothing to do, and no place to go, except to dissolve itself back into the process of origination. It is not just that the relationship of capital to the capitalist is as the monster describes his relationship to Dr. Frankenstein in Mary Shelley’s novel—“You are my creator, but I am your master. You must obey!”—it is also that wage-labor’s relationship to capital is the complementary opposite, the inverted identity of that relationship: “You are my master, but I am your re-creator. You’re nothing without my obedience.”
The light and life that burn so weakly beneath the mists of value are threatened with extinction in their materialization as more capital.
Our well-known, unloved capitalist undertakes his or her great responsibilities, shoulders these great obligations, carries these great burdens: to buy low and sell high; to seek out, close with, and engage a sucker every minute; to find anew a new and even bigger fool; to conduct a war of all against all; to exploit, expropriate, and otherwise reduce human labor by any and all means. All this weight is endured in the capitalist’s belief that he or she will be able to realize in the markets, will extract from the universe of exchanges, more value than he or she has in fact paid for.
By its very nature, fixed capital precludes the ability of the capitalist to recover the value of the total capital committed to the labor process through the valorisation process in a single cycle of production. If the capitalist could do so, then by definition that investment would no longer be fixed but would part of the circulating capital and the reproduction of capital would require the impossible—replacement of the means of production in their entirety in every single cycle.
Given that all capital cannot be recovered in the immediate cycle of production, but that simultaneously it is possible for the capitalist to bring a portion, a ration, of that fixed capital value to market as part of the cost of production and recover a profit, a price greater than that cost, our capitalist now lives his or her entire life, and life cycle, on the margins —on edge and at the edge over the portions, rations, ratio, rates of return on the total value that is achieved in the differential between the costs of production and the price of production.
All of capitalist economics, of capitalist theorizing, philosophizing, managing, marketing, is about margins. All of these margins are simply the ratios, the relations that capitalism utilizes to keep itself alive; to keep itself half-alive; to keep a half-life.
The margin that means more than most to our capitalist is that of the rate of return on produced assets since that ratio is derived from the ratio of net operating surplus [corporate profits + net interest + income from transfers, royalties etc] to the produced assets [net stock of capital + inventory].
In May, 2009, the US Bureau of Economic Analysis published a study of that rate of return for the years from 1997 through 2007 for US nonfinancial corporation.1 . In 1997, that ROR for US manufacturing corporations peaked at 16.4 percent before sliding to 13.7 percent in 2000. The rate then collapsed to 11.2 percent in 2001, marking the onset of the 2001-2003 contraction.
The mass of the operating surplus actually peaked in 1998, and was above the 1997 mark in 1999. However, the growth of the produced assets exceeded the growth in the mass of the operating surplus. Produced assets increased 14.6 percent between 1997 and 2001.
The recovery from the 2001-2003 contraction saw the ROR peak at 15.2 percent in 2006, declining to 15.1 percent in 2007. Despite being delayed and restricted, capital investment between 2003 and 2007 increased produced assets by 19 percent.
Nowhere did, or does, capital produce itself right out of its glory and right into its misery more blatantly than in the information-communication-technology [ICT] sector. This sector’s rate of return peaked in 1997 at 22 percent, declining to -0.7 percent in 2001, as the produced assets increased 38.6 percent. The recovery of 2003-2007 was hardly anything to email home about, as the ROR peaked in 2005 at 11.7 percent, despite the fact that the ICT sector dramatically reduced its accumulation of produced assets, with the increases amounting to only 15 percent.
While the ICT sector lowered its own expansion of produced assets, capitalism as a whole directs more and more of its accumulation into the means of information and communication, and the “motorized” complement of information and communication, the means of transportation. In 2008, 62 percent of the $679 billion US businesses spent on new equipment was directed towards communication and transportation with $233.5 billion was dedicated to means of communication and information and $185.2 billion in accumulating the means of transportation.
The improvement in communication and transportation reduces the circulation time, which itself is the variance, the gap, between production, the labor process, and exchange, the valorisation process. The means of communication assesses, prepares, and secures [as much as possible] the prospects for exchange. The means of transportation deliver the finished products to the markets where they assume the life, that brief half-life, as commodities.
Our capitalist feels something approximating love when the telephones are ringing and he or she needs more lines. Our capitalist knows something approximating love when the trucks are always out making deliveries and he or she needs more trucks.
But it’s a tough love. In his or her every attempt to improve circulation, to offset the lengthening of the cycle of return brought about by fixed capital, our capitalist can do nothing more than increase the investment in fixed assets.
The “motor” of the information-communication sector is semiconductor fabrication. The cycles of semiconductor fabrication are particularly severe given both the costly investment in the instruments and materials of production, and the rapid pace of technological innovation both in the manufacturing equipment and the processing power of the semiconductor. This lovely/deadly-profitable/unprofitable combination initially brings more powerful semiconductor arrays into the markets at prices well above their actual costs of production, but with lower prices relative to the use value, the “productivity,” the processing power of the previous semiconductor configuration.
Then, as the technological innovation in the semiconductor processing power or the method of semiconductor production proliferates throughout the industry and becomes the “normal” social time of reproduction. Market prices begin their steady decline. Production intensifies as declining prices and processing power enhance consumption. The greater processing power becomes the standard. However, as prices decline, production based on the less advanced technologies becomes unprofitable, and the market moves from furious expansion to overproduction, glut, and contraction.
Technical innovation has becomes overproduction in bulk, because overproduction of the finished product can be nothing other than the result of the overproduction of the means of production as capital. The oversupply of the semiconductors in the markets stands in the same relation to the overproduction of the fixed assets of semiconductor production as that of market prices to value.2 Emerging from the 2001-2003 recession, the equipment utilized in semiconductor fabrication embodied three significant technical innovations: 1) replacement of the 200mm size disc by the 300 mm disc, allowing greater surface area for the building of more chips in a single production cycle. This advance was first introduced in the 1997-1999 period.2) use of .09 micron technology increasing processing power and performance. 3) use of higher conductivity copper interconnects.
As the lower production costs boosted profits, and provided greater processing power, the amplified demand for flash-memory and DRAM chips sustained the use of the older 200mm disc fabrication processes. Meanwhile, capital spending programs accelerated
In 2003, only eight semiconductor fabrication companies registered more than one billion dollars in capital expenditures. In 2005, 15 companies had capital spending programs greater than one billion dollars. In 2006, and again in 2007, 16 companies had programs of more than one billion, with these 16 companies accounting for three-quarters of the entire sector’s capital expenditure.
Despite the fact that sales had peaked in 2007, fabrication capacity rose in 2008 and the first part of 2009 as the capital expansion programs were completed, and completed just in time for the implosion in chip sales. By January 2009, chip sales were 33 percent below the year earlier level.
A little too late, and a little too little, in 2009 only three companies announced capital spending budgets greater than one billion dollars. Meanwhile, the industry has fashioned a recovery of sorts, as it always fashions its recovery: shutting production lines, reducing capacity, laying-off production workers. In particular, almost all the older 200mm wafer lines have been closed, allowing the industry to register a capacity utilization rate for the first quarter 2010 of 93 percent versus 2009’s first quarter rate of 57 percent.
Numbers are one thing, but capitalism is about money, real—more or less—money. So, as a money professional said of the semiconductor industry: “This is a horrible, terrible business that no one should be in, the way it’s organized currently…You get some incremental profits for a little while, then everybody moves in and there’s oversupply again."3
The “horrible business” is not, of course, the business of semiconductor fabrication. It is the business of capital accumulation, where the very machinery of accumulation becomes the obstacle to its own valorisation. Our capitalist, unloved and well-known, is at war, now more than less, with the usefulness of his, or her, own property in the means of production. The “solutions” for recovery are reproductions of the fundamental conflict. To offset the delayed return on the accumulated fixed assets, the capitalism will demand, and sooner rather than later, lengthening of the working day in order to garner absolute surplus value; physical destruction of accumulated assets; reduction in wages and consumption not because wages are significant factors in the costs of production—they are not, in the semiconductor industry production worker wages amount to 1 or 2 percent of the total costs of production—but because reducing wages provides additional surplus value. All this and more amounts again to a reproduction of the fundamental conflict between labor organized as wage-labor, and the means of production organized as capital, a conflict to which capitalism has no, and seeks no solution. Rather it is in liquidation, destruction, deprivation, immiseration of capital—fixed, circulating, constant, and variable— that our capitalist places all of his, or her, hopes for the future.

• 1 Returns for Domestic Nonfinancial Business,” Andrew W. Hodge and Robert Corea.
• 2 Shameless self-advertisement: for a highly condensed but more detailed discussion of the anti-economics of semiconductor fabrication see Reprint on Reproduction.
• 3Avi Cohen, managing partner, Avian Securities, as quoted in the New York Times, July 5, 2009, “Despite Turmoil in Chip Industry, Signs of Hope for Micron Technology.

For decades, since the beginning of the world crisis in the early 1970’s, militants around the world have groped for a way to turn the relentless attack on the global working class from defensive, usually isolated (however valiant) struggles into an offensive one. The rise and recent fall of Andy Stern, president of the Service Employees International Union (SEIU) for fifteen years, illustrate some of the issues at hand. They illustrate, as if through a glass darkly, that in this epoch there is nothing positive for the class as a whole to be achieved through the unions. Let’s first look at the specifics in order to arrive at a general perspective.

Andy Stern resigned as president of the SEIU in April of this year in the midst of acrimony and scandal that has hardly abated. As many commentators said at the time, the once “fastest-growing union in the U.S.”, having at its peak added 900,000 new members during Stern’s tenure, had become perhaps the fastest-shrinking union, as the result of massive defections, raids on other unions and untrammeled high-handed bureaucratic politics within the SEIU itself.

Stern left the SEIU to assume a position on the board of SIGA Technologies, Inc[1]. His departure marked the ignominious end of a period of “renewal” in U.S. unionism that began with the accession of John Sweeney to president of the AFL-CIO in 1995, amid hoopla and enthusiasm by much of the left. While the technocratic Stern was never quite the object of similar enthusiasms, the SEIU itself ranked high among “progressive” unions, and Stern’s breakaway (along with six other unions) to form the rival Change to Win (CTW) coalition in 2005, in the wake of Sweeney’s abject failure to reverse union decline, further revealed terminal symptoms of the situation of unions in contemporary capitalism.

While we were neither among the cheerleaders for Sweeney nor Stern, and while we do not see (to put it mildly) trade unions as vehicles for the next emergence of the “class for itself”—the wage-labor proletarian class unified consciously and practically to take over the world in the dissolution of all classes, including (and first of all) of itself—the end of the Stern era presents an opportunity to draw up a “balance sheet” of several decades, going back to the late 1960’s, of left-wing agitation in the U.S. trade unions and more broadly in the working class, and thus to see more clearly the strategic questions of the present and the future. Few will disagree that the forty-plus years of “boring from within” existing unions by currents radicalized in the late 60’s and early 70’s, riding on the wildcat strike wave of that period (even more in Europe than in the U.S.) have overwhelmingly proved to be a dead end. But we also reject the sterile posture of currents in our own broader “libertarian” or “left communist” milieu according to which “rank-and-file” developments in and around the unions in advanced capitalism are nothing but rumblings within the “left wing of capital”.

Before dealing with the developments following the 1995 takeover of the AFL-CIO by Sweeney and his team, some background is necessary to see how the current dismal situation of the working class in the U.S. came to pass. We look for continuities and discontinuities in each phase of struggle.

In all of the class struggles in the West in the 60s and 70s, from the wildcat movement in the US, Britain and France, via the French May 68 and the Italian hot autumn, to the role of the Portuguese and Spanish workers in ending the dictatorships in Iberia in the mid-1970s–in none of these cases was the expansion of unions central to what the workers were doing or demanding.

The formation of the CIO in the US in the 1930’s and 1940’s (with formal legal collective bargaining sanctioned by the state) had already represented a step backward from the openly anti-capitalist “one big union” strategy and tactics of the IWW from 1905 to 1920. But it is undeniable that millions of workers during the Depression and up to the end of World War II were demanding and forming unions, not accidentally in a complex dialectic with the politics of Franklin Delano Roosevelt’s New Deal[2]. By contrast, during the wildcat strikes of the 1960’s and 70’s, the 1968 general strike in France, the so-called ‘creeping May’ in Italy and thereafter, in none of these strikes were workers saying “We want more unions”. The existing unions were mainly fighting against the radical workers’ movement. In Italy in the early 1970s, union bureaucrats could not even go into many factories because they would be run off by the workers. All this was in the context of the post -World War II boom, when it was easy for workers to change jobs and when very few imagined the drastically worsened situation of today. And since the end of that period and the beginning of a decades-long world economic crisis and restructuring of capitalism, no major union in the US has ever gone beyond a narrow corporatist viewpoint in dealing with the crisis.[3]

The United Auto Workers (UAW), for example, had 750,000 members in 1973 and today they probably have no more than 100,000 auto workers. During that whole period of decline, when rank-and-file left opposition groups criticized the union’s relentless accommodation to the management of the “Big Three” auto companies (GM, Ford, Chrysler), the union bureaucrats and their shills would say in a chorus ‘If it’s not broken, don’t fix it”. Now, it’s broken beyond repair. As in many other unions in decline, the bureaucrats’ main concern seemed be preserving the flow of union dues long enough to secure their own retirement. In the early 1970’s, similarly, 300,000 truck drivers in the International Brotherhood of Teamsters (IBT) were covered by the nationwide Master Freight Agreement, whereas today that number has fallen to 80,000. The almost mythical United Farm Workers (UFW) had more than 100,000 people under contract in the early 1970’s, and by the death of its founder Cesar Chavez , in 1993, merely a few thousands.

At the bottom of the world recession of 1973-1975, when official unemployment in the U.S. neared 10% (and real unemployment undoubtedly higher), various left groups in the U.S. founded their short-lived unemployed leagues (most of them barely-disguised front groups for recruitment), remembering the role of similar organizations in episodes such as the Toledo Auto- Lite strike of 1934, but nothing came of this and other “class-wide” approaches in the new period of rollback.

In Insurgent Notes No. l we alluded to the almost endless series of defeats that marked the long decline in the new period, not merely of “union membership” but of broader class struggle in the U.S. The bankrolling of the 1975 New York City “bankers’ coup”[4] by New York’s municipal unions began the trend of “sharing the pain’ with management, followed by the UAW in the bailout of Chrysler in 1979, but the crushing of the air traffic controllers (PATCO) in 1981, followed by the Greyhound bus drivers in 1983, the Phelps Dodge copper strikers in 1984, the P-9 meatpackers in 1986, and the Jay, Maine paper workers in 1987-1988 were cases where workers fought back and lost in the cascade of concessions, plant closings, outsourcings and relocations that ushered in a new era. This bloodletting continued in the 1990’s with the “Three Strikes” (Caterpillar, Staley, Bridgestone- Firestone) in Decatur, Illinois in 1993-96, the Detroit newspaper strike of 1996, or again in the Safeway strike in southern California in 2003-2004[5]. It was driven home again and again that merely “being more militant”—the main perspective of various left rank-and-file groups in the unions–was, in contrast to the earlier period of wildcats, not enough[6]. World capital accumulation had hit a wall, and that wall was falling on the working class.

In all fairness, some union struggles after the 1970’s did succeed in fighting management to a stalemate, or occasionally even winning. The Pittston (Virginia) miners’ strike of 1989 did prevent the gutting of the United Mine Workers’ (UMW) contract there, and the New York Daily News strike of 1991 prevented a management bloodletting in the print trades. Both the Harvard and much more militant HERE (Hotel and Restaurant Employees) chapter of the Yale campus workers (the latter striking four times) won gains, as did casino and hotel employees in Las Vegas and elsewhere. But it was not insignificant that these more successful struggles, in contrast to most of the defeats, took place at locales where management could not threaten to “move the factory”, or actually do so. Similarly, workers in transport sectors could, on occasion, take advantage of their location at choke points in the new “just in time” reorganization of world production flows, most notably in the 1997 United Parcel (UPS) strike, which more than any specific gains in the contract, briefly illuminated the horizon nationwide by highlighting the proliferation of precarious part-time work and by eliciting broad popular support for a worker struggle rarely seen before or since in the new (post-1970’s) era. (The chief of police in Houston, Texas even arrested scab drivers during the strike.). Two years later, the participation of 50,000 workers in the “battle in Seattle” against the World Trade Organization (WTO), despite some of the dubious ideologies on display (including nationalism and protectionism) further contributed to ripping away the media- imposed blackout on the dark underside of much-trumpeted globalization and the (now defunct) “New Economy”.

Seattle was just one (albeit dramatic) example of an attempt by some unions to project power beyond the workplace, and even there they lost control of their own rank-and-file, which joined in fighting the police. More traditional was organized labor’s unrequited love affair with the Democratic Party (a love affair to which, thankfully, millions of workers are indifferent). In exchange for hundreds of millions in campaign contributions and campaign mobilizations for Democrats[7], American unions got NAFTA and further free trade agreements (e.g. CAFTA)[8] with laughable “labor-environment set-asides”, one failed and one aborted attempt at national health care[9], and no progress whatever in rolling back “replacement worker” (i.e. scab) legal protection. Far more serious than these fruitless electoral antics by the union bureaucrats has been the ever-deepening involvement of unions in pension-fund investments, leading to situations such as the above-mentioned southern California grocery strike in which the striking UFCW (United Food and Commercial Workers) was sinking the stock market value of its own rank-and-file’s retirement fund.

We have developed elsewhere the concept of the “left wing of devalorization”[10]. “Devalorization” is a term borrowed from Marx meaning the cheapening of costs, including the cheapening of labor costs, often in a crisis situation such as the current one. The “left wing of devalorization” refers to ostensibly “progressive” phenomena where workers and other oppressed groups are offered “organization” and “participation” as the consolation prize for the diminished total social wage of the working class as a whole. A paradigm would be the corporatist self-management and worker participation schemes devised by Social Democrats and sociologists in response to the worker rebellion throughout the West in the 1960’s and early 1970’s, or the work teams first developed by Toyota and then spread around the world. One might summarize their content as mobilization and pseudo-inclusiveness with intensified exploitation and without real power.

In his fifteen years at the head of SEIU, Andy Stern brought the left wing of devalorization to new lows.

When the John Sweeney team (which included many ex-SEIU staffers) took over the AFL-CIO in 1995, American union membership had declined from its peak of 35% of the work force in 1955 to 18%. Fifteen years later, it has further declined to 12%, of which only 8% are in the private sector. It was in this situation of accelerating decline that Andy Stern, claiming to have synthesized the radical tactics of Saul Alinsky with the centralizing business ruthlessness of former General Motors CEO Alfred P. Sloan[11], emerged into national prominence, taking over the presidency of the SEIU when his predecessor, Sweeney, moved up.

Stern had begun as a social worker[12]. Born in 1950, he had caught the tail end of the New Left, before initially studying business at the University of Pennsylvania’s Wharton School, after which he widened his horizons. His experience as a social worker did give him insight into the welfare system that he later used in organizing home care attendants in…novel…ways. His business school background exposed him to management theories such as Sloan’s (the benefits of centralizing dispersed and conflicting local power bases, as Sloan had done at GM) which were in fact a departure from typical union local fiefdoms, mob-controlled or not. Stern took over the SEIU when it was riding on the prestige of the Janitors for Justice campaign in Los Angeles in 1990, when the LAPD had clubbed Latino janitors in front of the TV cameras, after which the ensuing uproar forced management to cave. The janitors’ strike was led by militants with experience in Central American civil wars in e.g. Nicaragua and El Salvador, and hence cut from a rather different cloth than many American workers. (The janitors did get a pay raise from $4 to $4.25 per hour, but the black janitors they had previously replaced had earned $12 an hour.) A paradigm for the Stern era was established early on, in 1995, when one of Sweeney’s last acts as the head of SEIU was to put the LA janitors’ local into trusteeship after it elected officers too militant for his tastes (some of the very same Central American janitors), then replace them with an appointee, from the Washington office of the union, and reorganize the janitors into a huge SEIU local covering most of California in which “rank-and-file rebellion” would be suffocated. The janitor militants staged a hunger strike at their own union headquarters, to no avail. From 1996 onward, Andy Stern took over this method, placing 14% of all SEIU locals under trusteeship over the next decade and a half, , usually sending in an SEIU staffer, fresh off some college campus, to replace the local leadership. In 2002, for example, San Francisco janitors in SEIU local 87 balked at a Stern-engineered merger and were put in trusteeship. The new regional local made significant health care concessions. Pittsburgh local 29, called an “anachronism” by Stern, was merged into a huge tri-state entity. Another SEIU “local” stretched from Trenton, New Jersey to Hartford, Connecticut. And so it went.

This was not exactly the kind of renewal of organized labor that the Sweeney team had promised, but such was in fact exactly the kind of renewal that Andy Stern delivered, adding 900,000 new members (at least on paper) to SEIU over fifteen years.

To understand Stern’s methods, as they developed after the LA janitors’ episode, a bit of context is helpful. In the run-up to the triumph of the new Sweeney team at the AFL-CIO, a rather misplaced debate had taken place in and around the labor movement about prioritizing either the “high road” or the “low road” as the way forward. The “high road” offered a rosy perspective of labor participation in the burgeoning technology sectors of the (now happily forgotten) “New Economy”, with high-wage high-skilled jobs expanding in tandem with high tech and the technology-intensive innovations in core U.S. industries. The “low road” looked instead to organizing the tens of millions of working poor, casuals and temps who had emerged from the 1970’s crisis as the gritty reality of the “great American jobs machine” that won accolades from such various quarters as conservative think tanks and European ideologues looking to break the “stagnation” of high-wage, stodgy Europe with its tougher laws on layoffs, its early retirement and its universal health care[13]. Then-U.S. President Bill Clinton had already contributed a mass of potential new constituents for the “low road” option with the 1994 passage of NAFTA, the US-Canada-Mexico free trade agreement, which gutted Mexican agriculture by American imports and forced millions off the land and into the precarious migration to El Norte, where minimum-wage (or worse) jobs, fly-by-night employers and the INS (immigration police) awaited them[14]. He added millions more with his 1996 abolition of welfare, presented, along with the other remnants of New Deal big-government liberalism, as an anachronism in the illusory, debt-driven “Great Moderation” of those years. While the majority of those affected by “welfare reform” were…children, Clinton’s “welfare to work” soon had millions of their mothers commuting hours a day to minimum-wage jobs in far suburbia for slightly more than their previous welfare checks. (Presumably anticipating further gate receipts, Sweeney’s “new” AFL-CIO said nothing about Clinton’s effective abolition of welfare.)

High-tech capitalists showed little interest in playing their part in any “high road” strategy for a will-o-the-wisp high-wage labor-management condominium, so the “low road” won hands down. Thus, to get a bit ahead of our story, in 2005, the split between the AFL-CIO and Stern’s Change to Win was precisely between the older CIO unions still standing (however much in retreat) such as the UAW, the USW, the UMW or the IAM, and unions that stood to gain members from the new millions of minimum wage workers: the SEIU, the IBT, the UFCW, UNITE, HERE, and the Laborers (LIUNA)[15].

A Marxist—this Marxist–might say with some accuracy that the split occurred between workers producing primarily relative surplus value and those producing absolute surplus value[16]. Not incidentally, they were also in sectors least affected by the off-shoring of factories in the previous period.

Stern quickly put the ideas of Sloan and the Harvard Business Review to work, on the model of the LA janitors’ campaign and its aftermath. He engineered the cleanout of some Mafia elements in New York, Boston, Detroit and Chicago or the notorious Gus Bevona of New York’s famous Local 32 BJ (from which Sweeney had emerged) with a combination of organizational hardball and some golden parachutes to get people to go quietly. Stern aimed at national unions in hospitals, long-term care, public service, and building services. Stern’s method of “organizing” was unique in that it was more aimed at organizing key politicians such as then-California governor Gray Davis or currently embroiled ex-Illinois governor Rod Blagojevich with large campaign contributions, after which these politicians would approve collective bargaining for categories of workers who had never been mobilized.

As Stern put it in reply to some critics of his top-down, high-handed approach:

“Workers want their lives to be changed. They want strength and a voice, not some purist, intellectual, historical, mythical democracy. Workers can win when they are united, and leaders who stand in the way of change screaming “democracy” fail to understand how workers exercise the limited power they have in a country where only 8.2% of the private sector are in unions. They just don’t get it!”[17]

In the California case, , in February 1999 SEIU won the right from Gov. Davis to represent 74,000 home care attendants, claiming it was “the biggest organizing victory in the U.S.” since the 1937 Flint sit-downs of the UAW; quite a comedown from the Battle of the Overpass. The attendants got a raise to $8.15 per hour. But as Robert Fitch pointed out, most of the people organized were not really workers, but welfare recipients caring for family and friends. The SEIU made big contributions to the Los Angeles county board of supervisors and mayoral candidates to promote the creation of an entity with which union could “bargain”, which happened in due course. Only one-fourth of the eligible workers voted in the election to establish the union.[18]

The same pattern was repeated in Illinois. Stern gave Rod Blagojevich $800,000 in campaign contributions to obtain his backing for SEIU, which he granted in 2004. SEIU had in fact been collecting dues from the Illinois home care attendants for 20 years, with no agency to bargain with. As in California, the “rank-and-file” were primarily former welfare recipients caring for children, earning $50 a day, having had no raise since 1986, and with no health care benefits, sick days, or retirement[19].

But it got even better. In order to win collective bargaining representation at private nursing homes, the SEIU blocked with their managements in Florida, Texas and particularly California against indigent patients’ rights, getting the California legislature to pass a bill which gave the nursing homes $3 billion over 5 years, guaranteed company profits, and gutted patients’ rights. The SEIU then joined with the nursing homes to crush the Nursing Home Residents Bill of Rights, much to the consternation of activists attempting to curb elder abuse in such homes. The SEIU claimed this was to help workers and improve patient care. In exchange for this help, the nursing homes agreed not to block SEIU organizing. Stern and SEIU also formed an alliance with California health care giant Kaiser Permanente, and in the state of New York, lobbied with employers for legislative funding and a plan to close hospitals.

These tactics by Stern and the SEIU were not without their critics, including internal critics. One example was the widely-touted Boston janitors’ strike of October 2002. 11,000 janitors in the Boston region, including many Latinos, struck for three weeks, and ended the strike with a contract granting 30% salary increases over five years and health insurance for some part-time janitors. But under the contract, only 1,000 part-time workers in the largest buildings won fully-paid health insurance, whereas three-fourths of the strikers were part-timers, and the full-timers already had health insurance. The strike was widely supported by the local media and by the Massachusetts political and business establishment, as well as by clergy and U.S. Senators Ted Kennedy and John Kerry. Everyone except the striking workers fell all over themselves proclaiming it a victory. As one dissenting SEIU staffer of the striking local said afterward, “My first concern in calling the strike a ‘victory’ is that not a single worker I know believes it to be such.” According to this staffer, the janitors became “deeply angry” seeing the contract in print and called the union “vendidos” (sellouts) because of inadequate pay raises over five years: “…the International placed so much emphasis on winning something (on full-time jobs and health benefits for some part-timers) that they were willing to totally cave on wages”[20].

But these criticisms of Stern’s method at SEIU were nothing compared to the firestorm that developed after July 2005 when he led five million members out of Sweeney’s hapless AFL-CIO into the new federation, Change to Win (CTW), mentioned earlier.

The groundwork had been laid when Stern created the New Unity Partnership (NUP) with Bruce Raynor of UNITE and John Wilhelm of HERE in 2004. In these two figures, the New Left turn to the working class in the late 1960’s again casts a long shadow. Bruce Raynor came out of 1960’s SDS and civil rights activism to work, after 1973, for the then-Textile Workers Union of America, (TWUA) while first graduating from the Cornell University School of Industrial and Labor Relations. He came to prominence in the long struggle to organize the Southern textile company J.P. Stevens. Raynor, once apparently known as the “Lenin of the South”, spent 20 years in the TWUA organizing in southern states. John Wilhelm started work with HERE in 1969 after graduating from Yale and led the successful 1984 strike there. He was also involved in some organizing victories among hotel and casino employees in Las Vegas in the late 1980’s.

UNITE was the merger of three earlier textile worker unions, a merger itself reflecting the massive loss of jobs in that sector[21]. Following the merger of the Textile Workers, Amalgamated, and ILGWU (merged in UNITE) the combined membership (estimated at 450,000) was less than ACTWU alone in 1976[22]. Raynor’s UNITE and Wilhelm’s HERE in turn merged to form UNITE HERE.

After 2005, not much changed, but rather intensified, with Change To Win[23]. In April 2007, when the rival AFL-CIO endorsed single-payer (extending Medicare to all) in the brewing health care debate, Stern said that government should play only a secondary role in healthcare; a couple of months before, he had held a press conference with the CEO of the notorious anti-labor Wal-Mart announcing their joint project for “Better Health Care Together Campaign”[24]. The officials of another CTW affiliate, the UFCW, checked in with the highest salaries in organized labor, approximately ten times the average salary of a grocery employee. But criticism without and within intensified as well. In February 2006, two thousand SEIU members at the University of Massachusetts bolted from the union to reject the imposition of another mass local[25]. Stern responded with a crackdown on rank-and-file militants. In typical fashion, in September 2007, the California SEIU merged twenty locals into three and laid off hundreds of union staff based on political criteria. In February 2008, the SEIU sent Dennis Rivera, leader of New York’s health care union 1199 and another fallen angel of the left, to raid the Puerto Rican teachers’ union[26].

In August 2008, sleaze merged with the well-established high-handed organizational methods and warfare with other unions. In Los Angeles, Stern appointee Tyrone Freeman resigned after it was revealed that he had directed $600,000 in contracts to his wife and paid his mother-in-law $8000 a month to take care of his daughter and other staffers’ kids. Annelle Grajeda, the appointed president of Local 721 and Stern’s designated successor to his emerging breakaway rival Sal Rosselli (cf. below) after the latter’s pending ouster, had put her boyfriend on multiple salaries while he was working as county employee.

Probably most serious was the crisis involving California nurses, a battle which still continues at this writing. Unhappy with Stern’s overtures to the management of health provider Kaiser Permanente (again pointing to a deal at the expense of patient rights) and the usual top-down treatment of members, thousands of SEIU nurses rallied in Oakland at a rally in March 2008 demanding their de-certification from the union so they could form another one. This occurred, however, under the leadership of Sal Rosselli, previously a strong Stern supporter who had earlier praised the SEIU contract with Kaiser, but who by 2008 was calling for direct election of union officers instead of by convention delegates. Shortly after the Oakland rally, SEIU thugs attacked a Labor Notes conference in Detroit where a nurse from Rosselli’s faction was scheduled to speak, with one SEIUer dying of a heart attack during the melee. Through all this, Andy Stern was lobbying with employers to close hospitals in New York state, saying that responsible unions should embrace outsourcing, and attacking the California nurses for opposing “jointness” in health care. . In June 2009, anti-Stern reformers took over a Massachusetts SEIU local, and Stern laid off 75 organizers in a “reorganization”. In July 2009, as part of the California nursing battle, the SEIU colluded with Kaiser to remove shop stewards.

With fires burning on so many fronts, open civil war had erupted in March 2009 in UNITE HERE. Bruce Raynor of UNITE was effectively working to take a large part of the fused membership into the SEIU, having made a deal with Stern; he became an SEIU Executive Vice President while still drawing a salary from UNITE. The financial stakes were considerable: UNITE owns the Amalgamated Bank, with $5bn assets, and valuable New York City property. True to form, Stern and Raynor had made secret deals with companies to allow union organizing while waiving workers’ right to strike. In April 2009, the SEIU moved to break up UNITE HERE, and UNITE- controlled regional councils, under Raynor, voted to leave the union. Ultimately about one-fourth of the membership followed Raynor into the SEIU.

With this legacy, Andy Stern resigned as SEIU president in April 2010, and was succeeded by Mary Kay Henry, one of his own intimate circle, who promised a kinder, gentler SEIU and a healing process with rival unions.

At the end of such a dismal tale, it is necessary to step back from mere chronology and try to draw the political lessons. As indicated at the outset, at the tail end of the New Left experience in the U.S. ca. 1970 various vanguard groups made a “turn” to the working class. These groups were inspired in part by the militant wildcat strike wave that peaked in 1973 (the high points of which were the black-led strikes of DRUM and ELRUM in Detroit, the nationwide Teamster wildcat of 1970, the Lordstown (Ohio) wildcat of 1972, and the shutdown of the Dodge Main plant in Detroit by black militants who cut the power in summer 1973) and that was still showing signs of life as late as the UMW rank-and-file’s rejection of Jimmy Carter’s imposition of the Taft-Hartley law during the coalfield strike of 1977-78. At its peak, thousands of Trotskyists, Maoists and assorted Marxist- Leninists, not to mention independents, took blue-collar jobs in this turn, constituting the first left-wing “intervention” in the American working-class since the expulsion of conscious leftists from all but a few small unions by McCarthyism, the Cold War and the general rollback of the 1950’s. One could say a great deal—and a great deal was said at the time—about the artificiality of such an attempt. While many of those participating in this turn did in fact come off of college campuses (such as Stern, Raynor and Wilhelm), many among them were nonetheless of working-class background themselves. Few if any were aware at the time that decades of ebb and rollback were beginning, and given the labor market two decades later, the better-paying blue-collar jobs available in 1970 and still around in 1990 looked pretty good by comparison with many of the alternatives. All in all, in the former U.S. industrial heartland of the Midwest, little came of these efforts[27]. A fair number of these “industrializers” tired of blue-collar jobs and migrated into the middle levels of the trade union bureaucracies, where they became an important base of Sweeney’s attempted makeover of the AFL-CIO in 1995. (One Marxist- Leninist, Bill Fletcher of the Maoist Freedom Road group, was briefly a member of Sweeney’s inner circle.) Their opposition to traditional AFL-CIO involvement in Cold War foreign policy forced a major debate within some major unions over the U.S. intervention in Central America in the 1980’s. Many of them were swept up in Jesse Jackson’s 1984 and 1988 presidential campaigns. To the extent they maintained their earlier political commitments, they increasingly wore two hats, simon-pure trade union militant by day and radical sect member by night.

For it was precisely ca. 1970 that the postwar boom was ending, and what was beginning was the biggest economic restructuring since the final supersession of craft production by intensified industrial production ca. 1900 and the mass production of consumer durables (1920’s, 1930’s). The “wildcat” perspective was nowhere in the wave of plant closings, downsizings, outsourcings, quality control, technical intensification of the labor process, concession bargaining, the de-industrialization of whole regions, and the flood of German and Japanese goods produced with newer factories and methods abroad[28]. The recessions of 1969-1970 and much more so of 1973-1975 wrong-footed the rank-and-file rebellion, and the management counter-offensive in the U.S. and Europe has generally held the upper hand ever since. In the older industrial countries such as the U.K. and the U.S. (not accidentally the dominant world financial centers), the much-touted shift to a “post-industrial” “service” economy seemingly covered over this rollback of the productive work force, so that today less than 10% of the U.K. work force remains engaged in industry and in the U.S. less than 20%. The U.K. had long ceded world financial pre-eminence to the U.S., but from the Thatcher era onward, it was the net capital flows into the City of London which kept Britain solvent; the U.S. shifted from being the world’s largest creditor to the world’s largest debtor ca. 1984. The U.S. balance-of-trade deficit has, since 1971, ceased to be negative only at the bottom of the post-1970 recessions, until the next debt-driven “consumer-led” recovery begins.

The deeper problem, of course, as argued in IN No. l,[29] was that capitalism on a world scale as of 1970 had reached the limits of its recomposition and recovery from the long crisis of 1914-1945 and had again run up against the barrier whereby capitalist accumulation of “value” grew in opposition to the expanded material reproduction of society. Capital was again manifesting its tendency to simultaneously expel living labor from the production process through higher productivity and on the other hand its absolute need of living labor to maintain itself as capital[30]. This expansion of absolute surplus-value production is the true basis, beneath appearances, of the proliferation since 1970 of the low-wage “low road” jobs of the type that Andy Stern’s SEIU set out to organize. This is the true basis of the proliferation of fast-food outlets, Starbucks, Wal-Mart, home care attendants, in short of the “great American jobs machine” that added 30 million jobs after the 1970’s, the majority of which no longer paid enough to support one worker, let alone reproduce a family. The single most important material “fact” of the past fifty years of capitalist accumulation in the U.S. is the disappearance of the single-paycheck working-class family.

Capital’s search for a new foundation for accumulation has hardly run its course. The shakeout that erupted to the surface in the fall of 2008 is only an acceleration of a forty-year process. World accumulation, in order to find a new expansive footing, must be restructured in a way similar to the restructuring whereby the U.S. replaced Britain as the hegemon, with the necessary “reshuffling of the deck” to reflect the new world distribution of cutting-edge production that can no longer accomodate New York as the unquestioned world financial center, the special status of the U.S. dollar, and the other institutions (IMF, World Bank, WTO) through which U.S. exercised supremacy after 1945. Such a reorganization necessarily passes through geopolitics, starting with NATO and the U.S. military presence in 110 countries. And these institutional considerations in turn come down to the dynamic between classes, just as they did in 1914-1945. Seen in this perspective, capital can carry out this restructuring only through the same violence and destruction through which it survived the previous “Thirty Years’ War” epoch of crisis. War and increasingly authoritarian regimes, ramped up by the “war on terror” and the ever-accelerating e-totalitarianism already in place, are the likely way stations to any new phase of capital accumulation.

We must now locate the class struggle, as sketched out above, in this larger process. Capital, as indicated, finally resolved its previous global impasse in 1945 by the founding of U.S. hegemony and that hegemony’s institutions on the ruins of World War II and by the defeat and containment of the working class everywhere, made possible by the channeling of class struggle by Socialist, Communist and Labour parties, not to mention the trade unions the latter controlled. The world capitalist class “thinks globally and acts globally”, whatever localist outlook mystified left opinion wishes to counterpose to it. The world working class must therefore do the same; if it is defeated, as it was defeated between 1914 and the end of World War II, world history will mark another “1945”, whatever the specific outcome, at the beginning of any new capitalist cycle[31]. Capitalists conducted World War II in full awareness of what had happened in 1917-1918, and are fully intent on preventing, with all the murderous means at their disposal[32], a repetition of that brief moment in which they seemed to lose control.

Seen in this perspective, as stated at the outset, there is nothing positive, for the class as a whole, to be achieved through the unions. We remember the murderous, lynch-mob repression that rained down on the IWW from 1917 to 1920 as an anticipation of what the American capitalists will attempt to do to any serious opposition when the chips are down, and today’s unions are, to put it mildly, nothing like the IWW and obviously not a serious opposition. Mainstream American unions dutifully lined up to serve on government-enforced labor-management boards in both imperialist world wars[33]. Closer to the present, one need only recall the meek, red-white-and-blue, we’re-all-in-this-together reaction of American unions in the immediate aftermath of 9/11, the day when ordinary Americans first experienced what peoples around the world have experienced at the hands of U.S. imperialism a thousand times in the era of its hegemony. With such precedents, and with the U.S. increasingly bogged down in its rapidly-failing Middle East and South Asian policy from Turkey to Pakistan, by way of Palestine, Iran and Afghanistan, and provoking China over Korea and in the South China Sea, one can only imagine what American unions will do in the next serious (and/or fabricated) war scare.

But here we are a bit ahead of ourselves. Such an apocalyptic perspective (and in our view the historical juncture, particular when seen in tandem with the environmental crisis, is indeed apocalyptic) in 2010, somewhat resembles Schelling’s “night in which all cows are black”[34], a dumb totality in which all the specific realities (e.g. the rise and fall of Andy Stern and the fallout from it) of the present disappear. The process we point to, which we previously characterized as a “slow crash landing”[35], might drag on for years, perhaps decades, particularly given the absence, for the near to medium future, of any power or power bloc capable of challenging the U.S. for hegemony. The patient is terminally ill, but it would be foolish to pinpoint the date of demise, particularly because the process is fluid and will be determined by what the global working class does or does not do.

IN No. 1 outlined a possible program for an exit from “value production” by a successful world revolution[36]. Such a program, eminently debatable in its specifics, has concrete meaning only insofar as it emerges from the necessities of global reproduction and from the huge gap between such necessities and the worldwide retrogressionist assault on workers now underway. The issue is obviously to connect it meaningfully to the struggles, or their absence, of today.

The recent world panorama is mixed, at best. In the current issue of IN, we run articles on the recent strikes in China, ongoing strikes in Bangladesh, and the impressive TEKEL strike in Turkey of last spring. Hundreds of thousands of Greeks went into the streets in May to oppose the European Union’s super-austerity, and gave Yiannis Panagopoulos,

head of the General Confederation of Workers in Greece, the pelting of eggs and beating he so richly deserved[37]. However relatively quiet the U.S. may be for the moment, this is not the case on a world scale.

The struggles in the U.S. and Europe in the 1960’s and 1970’s combined many elements that obviously went beyond the workplace and the shop floor[38], and in fact often eclipsed what was happening on the shop floor. For the U.S. alone, in addition to the mounting wildcat strikes, we recall the different phases of the black movement, the antiwar and GI movements, the (mainly middle-class) youth and student movements, the Latino (Chicano and Puerto Rican) movements, the prison movement, the women’s movement and the gay movement. A situation had been created in which militancy in one sphere encouraged militancy in others, and ultimately broke down the boundaries between spheres altogether in an increasingly visible totality. The bare outlines of a similar totality, since the mid-1990’s, have been taking shape in the contemporary period.

What distinguishes our present from the 1960’s is that the revolts in that earlier period, in the U.S. and Europe[39], were in large part directed against institutions created by the moderate left as they emerged from World War II, whether the Keynesian/Social Democratic welfare state or the trade unions. What characterized the revolts of that period was an ever-greater “outflanking” of bureaucratic “reformist” institutions (political parties, unions) created by the postwar Keynesian settlement in the West. A paradigm might be the uproar in the UAW in 1973 when the union bureaucrats announced with great pomp a new contract inscribing a “four-day week”. Factory militants, already involved in large-scale absenteeism, responded: “The four-day week? We already have the four-day week!”

Today, when “reform” has become the war cry of the capitalists themselves, by which is meant “taking back” the “bloated” “entitlements” of “rent-seekers” (the Wall Street bankers and their bonuses, of course, never figure among the “rent-seekers”) in “painful adjustments” supposedly to make way for a recovery that never comes[40], struggles worldwide have necessarily taken on a new and mainly defensive character.[41] The ruling classes of Europe pursue salami tactics to pare down its welfare state, finding (like their American counterparts) the post-2008 meltdown a most useful wedge for doing so, even as they spent hundreds of billions to rescue their banks.

We cannot will into existence the next conjuncture in which a “contagion of struggle” reappears. A look at the years between the crash of 1929 and the first major U.S. strikes in 1934 shows great quiescence but also battles against foreclosures, rent parties, or the Bonus March on Washington in 1931[42]; in the general desolation, they were perhaps straws in the wind. And the great strikes of 1934 in San Francisco, Minneapolis, Toledo and throughout the Southern textile industry, right up to the steel strike and Flint auto sit-downs of 1936-37 did occur on the upswing from the depths of the Depression. (One further cannot discount the political dimension of hopes, misplaced as they may have been, generated by the launching of Roosevelt’s New Deal.)[43] The problem in the U.S. and Europe for nearly forty years is that there has been no upswing in which workers could recapture the high ground they occupied at the peak of the postwar boom.

Capitalism in 1934, not to mention in 2010, had already entered the epoch (ca. 1914) in which its true goal of expanding value runs counter, on a world scale, to the expanded material reproduction of society[44]. Seen on a world scale, the global economic crisis of today will be worse than that of the 1930’s, not to mention the accelerating environmental catastrophe[45] now underway, beyond comparison to anything in the 1930’s.

Let’s put it bluntly: for the class as a whole to advance, to even win back the ground lost over forty years, the apparatus of production must be taken away from the capitalists. “Reform” has been the war cry of the neo-liberal pro-market right for decades, echoing the fact that there is no possible reformism on the left. Much of the left-wing opposition in the U.S. labor movement[46], as it culminated in the Sweeney fiasco, has been involved in trying to interest the capitalists in a game from which they have walked away. Much of this left could think of nothing better to do, in fall 2008, than cheer the election of Barack Obama, who had been backed by more Wall Street money than his “conservative” opponent McCain, and who brought in, to administer the crisis, the likes of Tim Geithner, Larry Summers and Hilary Clinton, all veterans of multiple crimes against the working class[47].

Taking the apparatus of production away from the capitalists means social revolution, and a revolution moreover international from the beginning. It was argued[48] previously that the “real economy” on a world scale, and nowhere more than in the U.S., has been so distorted by capitalist accumulation over decades that only a program for social reconstruction can make clear how much of contemporary “reality” will have to be swept away to rebuild the world on the basis of “use-values”.

We hardly say this from some absolutist posture dismissive of contemporary struggles, small and large, that do not directly pose the question of “expropriating the expropriators”. As Marx put it in his letter to Ruge in 1843, “we merely tell the world why it struggles, and consciousness is something the world must acquire, even if it does not want to”[49]. We point to examples such as the Buenos Aires subway workers in 2003 who, confronted with a plan from management for 2000 layoffs, struck to demand a 6-hour day for all, and 2000 new hires to make the system work with the shorter shifts. They won.

Not all defensive struggles, probably not even most, can be turned around in this fashion. Most will lose, as most have lost (at least in the U.S.) over the past 35 or 40 years. Centered as we are in the U.S., at least for now, the task is to bring home to workers the kinds of struggles underway everywhere in the world, to internationalize the awareness of the class. But beyond the specifics of those struggles that erupt, win or lose, the main perspective must be to point to the world dynamic of capital and the need for workers on a world scale to either put an end to capital or suffer the (already quite visible) consequences. Capital is a meat grinder we are inside of. The tipping point in this process is as impossible to predict in advance as the bread riot that led to the French Revolution or the women’s day demonstration that led to the overthrow of the Russian tsar or, closer to us, the gesture of Rosa Parks that led to the Montgomery bus boycott.

A meaningful advance of workers’ struggles means bringing into existence class-wide organizations. Where those with such a perspective find themselves, by hook or by crook, in trade unions, the issue is to broaden struggles to include the unemployed wherever possible, on the model of (e.g.) the Buenos Aires subway workers. Such militants participate in unions, where circumstances require it, always with a perspective beyond unions and of their supersession into class-wide organizations[50]. The miserable ghettoization of different parts of the class in (declining) corporatist formations, bound hand and foot by labor law and decades of anti-worker legislation, that cannot even come to each others’ aid in meaningful solidarity, not to mention the abject refusal (with few notable exceptions)[51] to breach legality, has to end. This serene indifference to non-members, including unemployed workers who the day before yesterday were members, has to end. Many of these corporatist formations themselves, it seems all but forgotten, were built decades ago by workers willing to break the law.

In the U.S. in particular, where 88% of the work force is not in unions, where 20% of the work force is unemployed or underemployed and more become homeless every day, where there are almost as many proletarians or sub-proletarians in the prison system as in unions (and where, finally, a not insignificant number of union members are police and prison personnel[52]) the idea of “basing a revolutionary strategy on the unions”, of “capturing the unions” for revolution, ideas still propagated today by various and sundry Trotskyists, is a joke.

IN’s role is to bring into existence, in collaboration with like-minded others, the worldwide programmatically-armed current that can help turn the current defensive rollback into an offensive one, and help push that offensive past the point of no return.

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Notes

[1] SIGA is a company specializing in the development of pharmaceutical agents to combat bio-warfare pathogens.

[2] On important holdovers from the IWW, battling top-down CIO methods from the start, see the essays in Staughton Lynd, ed. “We Are All Leaders”: The Alternative Unionism of the Early 1930’s. (1996).

[3] Following 3000 strikes in the year 1987 alone, with a further strike wave continuing until 1990 in many cases in fact demanding and forming unions, South Korea is something of an exception to this trend. By the early 1990’s, however, under the cover of still-fiery rhetoric, South Korea’s unions as well had settled (and had been beaten) into the more familiar acceptance of a capitalist framework. See home.earthlink.net/~lrgoldner/korea.html for a brief account of this containment.

[4] With New York City on the verge of bankruptcy, its banker creditors seized control and total oversight of the city budget through an entity called “Big MAC” (Municipal Assistance Corporation). The city’s municipal unions sank tens of millions of their pension funds into Big MAC bonds while the bankers pushed through civil service 40,000 layoffs and slashed city services.

[5] See my article on this defeat at http://home.earth link.net/~lrgoldner/supermarket.htm

[6] It should be pointed out that in addition to these better-known episodes of defeat was the year-in, year-out grinding down of working people, without a battle, without even an awareness that a war was in progress (Cf. Wallace Peterson The Silent Depression, 1994, for the basic statistics, albeit within a Keynesian framework.) Some of this has been compensated, until recently, by low-level state and local programs, now on the chopping block in the general crisis of state and urban finane.

[7] Stern’s SEIU, for example, contributed $85 million to the electoral campaign of Barack Obama.

[8] NAFTA was the North American Free Trade Agreement; CAFTA was the Central American Free Trade Agreement. On NAFTA, cf. below.

[9] According to some estimates, 80% of strikes in the past two decades have had health care as a main, if not the main issue.

[10] See L. Goldner, The Remaking of the American Working Class, http://home.earthlink.net/~lrgoldner/remaking

[11] Stern also cited as influences the futurologists Alvin and Heidi Toffler as well as the Republican Congressman and right-wing ideologue Newt Gingrich. In his book, A Country That Works, Stern even criticized the “class-struggle mentality” of the U.S. labor movement.

[12] The material in the following section draws on the informative chapter on Stern in Robert Fitch’s otherwise deeply flawed Solidarity for Sale (2006), Steve Early’s Embedded in the Labor Movement (2009) and articles in the Detroit-based Labor Notes.

Fitch points out that Stern’s most important ideas on organization came from the Harvard Business Review.

[13] This of course was prior to the 2010 crisis of the very foundations of the European Union, which offered many new openings to introduce the “Anglo-American” model, or worse.

[14] Cf. the journalistic but fact-packed account of the sleaze surrounding the passage of NAFTA in John R. MacArthur, The Selling of “Free Trade”: NAFTA, Washington, and the Subversion of American Democracy (1995). Contemporary, historically-blind media hand-wringing about the murderous drug wars in Mexico (28,000 dead in the past three years) never mention NAFTA’s decimation of Mexican agriculture as “background.

[15] Change to Win (CTW) unions were, as indicated, the SEIU, the IBT (Teamsters) the UFCW (organizing grocery employees), UNITE (the result of the fusion of several textile worker unions), HERE (hotel and restaurant workers) and LIUNA, organizing laborers. Robert Fitch points out (op. cit.) that of the main CTW unions, three (SEIU, the IBT and LIUNA) had recent or ongoing histories of Mafia influence.

[16] Relative surplus value is Marx’s term for that extracted by intensification of the labor process through new technology; absolute surplus value comes from the lengthening of the working day. Relative surplus value had been preponderant in the post-World War II boom in the West; as that accumulation reached its limits, more and more absolute surplus value compensated for stagnating profits in the technology-intensive industries.

[17] Quoted in Steve Early, Embedded with Organized Labor (2009), p. 221.

[18] Fitch op. cit

[19] Ibid

[20] Early, op. cit. pp. 226-227.

[21] This merger was a swan song of an earlier period of American unions. The Amalgamated Clothing Workers of America was led by “labor statesman” Sidney Hillman for its first thirty years, and helped found the CIO. Amalgamated merged with the Textile Workers Union of America in 1976 to form the Amalgamated Clothing and Textile Workers Union This merger then merged with the International Ladies’ Garment Workers’ Union (of David Dubinsky fame) in 1995 to create the Union of Needletrades, Industrial and Textile Employees (UNITE).

[22] Cf. Robert Fitch, op. cit. Ch. 9 “UNITE’s Garment Gulag”. UNITE was involved in a number of scandals involved in non-enforcement of New York sweatshop contracts that on paper provided for decent wages and benefits, but actually often had worse conditions than many “unorganized” sweatshops. According to Fitch, a sweatshop thus became (for example, for the campus-based anti-sweatshop movement) a sweatshop not organized by UNITE.

[23] The material in the following paragraphs draws heavily on Steve Early, op. cit.

[24] Actually in some ways this was a departure, as the typical SEIU overture was for union recognition in exchange for no health plan.

[25] The material in the following section is from Labor Notes, different issues from 2005 to 2010.

[26] This union had been stripped of its bargaining rights for striking against the government over privatization and other issues.

[27] The great exception was the short-lived success of the International Socialists (IS) in helping to elect Ron Carey president of the Teamsters in 1991, helped in turn by the U.S. Department of Justice’s takeover of the union with the stated aim of eliminating Mafia influence. This complex tale should be told in another article, but a good start is Fitch’s material on Carey in Solidarity for Sale.

[28] For a portrait of this wrenching period for millions of American workers, using the example of Chicago, cf. David Ranney, Global Decisions, Local Collisions. Urban Life in the New World Order (2003), describing job loss, divorce, wife-beating, mortgage forclosures, homelessness, suicide and anomie in the wake of factory closings there.

[29] Cf. IN No. 1, “The Historical Moment Which Produced US”.

[30] K. Marx, Grundrisse, (English translation, 1973), p. 706. “Capital itself is the moving contradiction, (in) that it presses to reduce labor time to a minimum, while it posits labor time, on the other side, as sole measure and source of wealth.”

[31] The only sure prediction is a formalization of the recognition of relative U.S. decline.

[32] The Allies bombed German and Italian working-class neighborhoods instead of factories in order to paralyze Axis war production. Cf. the writings of the historian Tim Mason, especially Nazism, fascism and the working class (1995) on the fear of working-class revolt in the Nazi regime.

[33] It should be pointed out that, during World War II, this class collaboration did not go unopposed, particularly after the AFL, the CIO and the CPUSA signed on to the wartime “no strike” pledge. Cf. Marty Glaberman, Wartime Strikes, Detroit, 1980.

[34] GFW Hegel criticized his contemporary Schelling for conceiving of reality as a totality—all to the good—but as a totality in which the developmental specificity of it different “moments” disappeared into an indeterminate (one might say, today, New Age) whole.

[35] IN No. 1 ….

[36] IN No. 1, “Historical Moment”.

[37] Panagopoulos had attempted to calm an angry crowd in front the the Greek Parliament, the latter surrounded by riot police. The shower of eggs began immediately, after which Panagopoulos was roughed up by the crowd and had to flee for protection behind police lines.

[38] The focus of vol. I of Marx’s Capital, “the immediate process of production”.

[39] We are not forgetting the struggles and revolts of that period in the Third World, but they in their great majority lacked a clear-cut proletarian character. That is, in many countries, no longer the case, as our coverage of some of those strikes shows.

[40] The paradigm for such vile propaganda, diverting attention from the huge U.S. disparities in wealth, beyond anything achieved in the 1920’s, is the Peter G. Peterson Institute for International Economics in Washington DC, which for decades has banged away about the need to reduce Social Security and Medicare to solve the U.S. crisis. The Petersen Institute is a good example of the update of the “Goebbels principle” according to which if an outrageous lie is repeated often enough, it sinks into general consciousness.

[41] Cf. Lance Carter’s short article in IN No. 1 and the longer article in the current issue on the recent strikes in China. It is true that these strikes in China were offensive, but they must be seen in tandem with the many struggles, going back years, in the northeastern “rust bowl” against factory closings, managerial asset stripping and looting of pension funds in the older “state-owned enterprises” (SOEs). In China as well, after three decades of 10+% growth, wages have declined as a portion of GDP.

[42] Tens of thousands of World War I vets converged on Washington DC demanding Federal money owed them, and encamped for months; they were finally dispersed by army units under the command of Gens. Douglas MacArthur and Dwight D. Eisenhower.

[43] One can take the measure of the difference between even the 1930’ s and today by comparing the mass struggles of FDR’s first years in power with the relative silence of most left opposition during Obama’s first two years. Similarly, the electoral triumphs of the Popular Front in Spain and in France in 1936 set off, in the Spanish case, a revolutionary crisis and ,in the French, mass factory occupations. Forty-five years later, the respective elections of Felipe Gonzalez (Spanish Prime Minister 1982-1996) and Francois Mitterand (French President, 1981-1995) were followed in both countries by fifteen years of quiescence, punctuated by a few defensive, stopgap struggles. Between the two periods is a vast deflation, from hard experience, of the illusions of “the left in power”.

[44] Cf. “The Historical Moment Which Produced Us” in IN No l for an unpacking of this theoretical framework.

[45] Cf. John Garvey’s article on the BP oil spill in this issue. In addition to the incalculable damage to the Gulf of Mexico, 2010 has so far witnessed the hottest summer on record in many parts of the world, a huge ice island breaking off of Greenland’s glaciers, the Russian wheat crop seriously reduced by drought, and large-scale flooding in Pakistan and China.

[46] An opposition perhaps best articulated by the Detroit-based monthly Labor Notes.

[47] Geithner came straight from experience at the New York Fed and the IMF; Summers, as Bill Clinton’s Undersecretary of the Treasury, had read the riot act to the Asian powers during the 1997-98 Asian meltdown to force them to accept the IMF’s draconian bailout (in fact, a leveraged buyout by U.S. capital of Asian assets) and Hilary Clinton had been involved in such notable achievements of the 1990’s as the 1993 health care fiasco (keeping single payer off the radar), NAFTA and the abolition of welfare.

[48] See Insurgent Notes No. 1, “Historical Moment”.

[49] The full context of Marx’s remark is: “Hence, nothing prevents us from making criticism of politics, participation in politics, and therefore real struggles, the starting point of our criticism, and from identifying our criticism with them. In that case we do not confront the world in a doctrinaire way with a new principle: Here is the truth, kneel down before it! We develop new principles for the world out of the world’s own principles. We do not say to the world: Cease your struggles, they are foolish; we will give you the true slogan of struggle. We merely show the world what it is really fighting for, and consciousness is something that it has to acquire, even if it does not want to.”

[50] For an excellent example of how this has been done in the post-1970’s crisis period, cf. the interview with Scott McGuire “Class Struggle Beyond Unions” http://home.earthlink.net/~lrgoldner/scott.html

[51] We note here the three-day strike of the New York City transit workers (TWU) in December 2005 in defiance of New York State’s infamous Taylor Law forbidding strikes by public employees.

[52] Cf. John Garvey, “Workers’ Progress? From Iron Mines to Iron Bars” in Insurgent Notes No. l. In Pennsylvania, the state AFL-CIO was prevented from issuing a statement of support for death row prisoner Mumia abu-Jamal by police and prison personnel organized in AFSCME; in California, AFSCME similarly opposed any punishment of its prison guard members who had forced prisoners into gladiator battles in the super-max for their own amusement. Most recently, California unions did not lift a finger when the subway cop who killed Oscar Grant in cold blood was convicted of “involuntary manslaughter”.

While the oil “spill” at the Macondo well in the Gulf of Mexico (fifty miles off the Louisiana coast) that began with an explosion and fire on the Deepwater Horizon on April 20th has received a great deal of attention in the regular news media (some of it, by the way, quite serious and critical), it’s necessary to place the explosion and its aftermath in some larger contexts.

In early September of 2010, British Petroleum (BP) issued a report summarizing the results of its internal investigation. Not surprisingly, it focused attention on a series of small technical problems and human errors made just before and after the initial leak. In addition, it also attempted, in very subdued fashion (as befitting an objective investigation), to deflect responsibility for virtually all of those technical and human errors onto the shoulders of its corporate partners, Transocean and Halliburton, proving once again that there’s no honor among thieves.1

As many media commentators have already pointed out, the report should best be seen as BP’s initial test-run of its defense against allegations of “gross” negligence as compared to just ordinary regular negligence. Apparently, the cost difference of a legal finding in such a matter is a mere $15 billion. For the moment, I’ll leave it to the courts to sort out the legal issues—without implying that the courts will supply either justice or wisdom. I just have other fish to fry. I do, however, want to suggest that a preoccupation with degrees of negligence amongst the various parties or with the narrowly legal dimensions of the disaster is likely to divert attention from what are, ultimately, much more serious matters.

Disasters certainly have their attractions. Who hasn’t wanted to watch a fire down the street? But we usually prefer that they don’t last as long as this one. The best ones last only as long as a feature movie. You know the script–the day starts out as usual (coffee and a kiss good-bye); something odd happens; no one really notices; the odd things keep coming; all hell breaks loose; an odd couple, thrown together through even odder coincidences, realizes what’s happening; they know something that no one else knows; they frantically try to notify the authorities; the authorities are in denial or campaigning for re-election; the wife or child of one of the authorities gets caught in some of the bad stuff; the authorities eventually take notice; they recognize the odd-ball wisdom of the oddly associated couple; they agree to do what seems impossible; the first try doesn’t work; the even odder scientist recommends an adjustment; it’s done and the town/city/nation/world is saved. Whew! All in just less than two hours! (Let me confess—I like those movies as much as anyone. I also like a lot of other bad movies and some good movies). But this is no movie.

The prolonged flood of oil into the Gulf of Mexico, over the better part of four months, and the yet to be properly accounted for, long-term impact on the natural environment and the well-being of residents in the coastal communities suggest that we need to lengthen our attention spans a bit. The disaster should attract the deep attention of Americans, and especially American workers, to the devastation that is the result of oil (and by extension, gas and coal) production across the globe. What’s at stake is something much bigger than the possibility of our next vacation on the shores of the Gulf of Mexico. The Gulf disaster is a window into seeing how oil and other forms of energy production have devastated all too many natural environments and ruined the lives of all too many people across the planet.

For descriptions of the social and natural degradation associated with oil production in places as varied as Venezuela, Ecuador, Nigeria, Equatorial Guinea, Azerbaijan and Russia, see Crude World: The Violent Twilight of Oil by Peter Maass. For a close-up examination of the devastation in the Niger Delta, see Curse of the Black Gold: 50 Years of Oil in the Niger Delta by Michael Watts, with photographs by Ed Kashi. (According to that book, an equivalent of the Exxon Valdez oil leak has been drowning Nigeria for each of the last fifty years). For a compelling fictional view of the ways in which oil is the pain and suffering that keep on oozing out in that area, see Helon Habila’s new Oil and Water. And for visual images of what long-term degradation looks like in Nigeria and Ecuador, see the following videos:

• Ecuador
  Crude: Official Trailer
  Amazon Crude
• Niger Delta
  “Sweet Crude”, Oil in the Niger Delta-1/2
  “Sweet Crude”, Oil in the Niger Delta-2/2

If we concentrate too much on surface appearances or are relieved by a too-soon happy ending, we become susceptible to: 1) the false assurances of advertising (which BP, with its cute yellow and green logo, has been exceedingly generous in funding—so much so that it may be responsible for the New York Times showing a profit this year); 2) news reports paid indirectly through advertising, and 3) somewhat paradoxically, the lures of a variety of conspiracy-oriented explanations of what lies beneath the surface. It is essential that we acquire sufficient understandings of scientific/technical issues in order to adequately assess what has happened and what its consequences might be. This essay is the product of an effort in self-education on some of those matters. I welcome all corrections of facts and flawed interpretations.

Simultaneously, we need to imagine ways in which the remarkable scientific/technical expertise that is primarily deployed for the purpose of production for production’s sake (in this case of oil, but, more generally, of just about everything that’s bought and sold) might be re-appropriated for the long-term reduction of unnecessary labor and the comprehensive production, preservation and thoughtful use of non-human resources. This imagination would, I think, be greatly enhanced by a new appreciation for the ways in which Karl Marx’s critique of political economy was informed by a delicate and sophisticated interpretation of the relationship between humans and nature as well as his prescient understanding of the terrible costs of the squandering of human lives, the products of human labor and nature’s treasures in societies dominated by capital.

Eleven Men Dead

Eleven men died on the Deepwater Horizon. They appear to have come from a rich cross-section of the population of the states bordering the Gulf.2 Even now, their names are probably not well known outside their families and the communities they lived in. In this miserable year of 2010, they joined the 29 coal miners killed in the Upper Big Branch disaster in Montcoal, West Virginia and the seven Chinese coal miners who are reported to die every day of the year and still others elsewhere in the count of victims sacrificed in the energy industry and the many thousands unnecessarily lost in the Haitian earthquake at the beginning of the year and the recent floods in Pakistan as a result of the inadequacy of the physical infra-structures in those lands.

This essay will not likely be read by any of the family members or friends of the eleven who died and it can hardly claim to serve as much of a memorial to their too short lives. But their deaths must not be forgotten. We are long overdue for a renewed commitment to the elemental affirmation of solidarity that “An injury to one is an injury to all.” Solidarity, however, cannot end at a workplace, a company, an industry or a border. When we embrace those who died in the Gulf, we must embrace all those many un-named others who have died and are dying, slowly or suddenly, all over the world. Furthermore, solidarity should not be seen as its own ultimate self-justification. Solidarity in the face of a social system that continues to produce maimed and dead workers cannot be content with shared anger at the pain and suffering. It needs to be complemented by a vision that points to a world where such casualties are not assumed to be all but inevitable. We need a solidarity that is deeply influenced by and respectful of the traditions of the last two centuries of workers’ struggles but, at the same time, is inspired by the practical need to abolish the conditions that gave rise to such solidarity in the first place. Ultimately, we need solidarity for what we want and not just solidarity against what we are damaged by.

The Gulf of Mexico

Most Americans who took geography in middle school and social studies in high school know that the Gulf of Mexico is the third great shoreline of the United States—along with the Atlantic and Pacific coasts (let’s leave out Alaska for now). The US coast that stretches from the Florida Keys north to the Florida Panhandle, then west along Alabama, Mississippi and Louisiana and finally south along Texas (until it meets the Mexican border) totals almost 1700 miles. The Mexican coast, which curves like a semi-circle towards Cuba, adds almost 1400 miles. The Gulf’s southern boundary is formed by the island of Cuba.

Thirty four American rivers (including the Mississippi and Rio Grande) eventually drain into the Gulf; a number of Mexican rivers (including the Grijalva and Usumacinta) do as well. Water flows back and forth from the Gulf and the Atlantic Ocean through two relatively narrow bodies of water—the Florida Straits and the Yucatan Channel. All told, the Gulf includes approximately 615,000 square miles and 660 quadrillion gallons of water, although the water is shallow along the coast lines–leading to a large number of barrier islands and marshes—as in the Mississippi Delta. (As we’ll see below, that’s a lot of water to use to hide some oil. But hiding is not disappearing).

The Mississippi Delta is one of a handful of similar environs in the world—along with the Niger, Mekong, Nile and others not as well known. Deltas are complex mixes of land and water that seem to have something of the character and shape of tangled knitting yarn or the apparently haphazard structure of an uncut forest. It’s easy to imagine that, in an unspoiled delta, someone unfamiliar with the local territory would be lost in no time at all. That complex environment serves the purpose of holding the deltas together so that they can, in turn, serve as the productive breeding grounds of a remarkably diverse array of plants and fishes. They are simultaneously fragile and strong.

The Gulf is one of the world’s warmest bodies of water. Its distinctive ecology makes it extraordinarily bountiful—Gulf fisheries yield more fish, shrimp and shellfish each year than the south and mid-Atlantic, Chesapeake Bay and New England areas combined. And, obviously enough, a great deal of oil and gas is trapped below its floor. As a result, the two major economic activities conducted in the Gulf waters are oil drilling and fishing. For the better part of sixty years, most of the local people hoped and prayed they could have: “Both, thank you.”

What Have They Done to the Gulf?

Long before the devastation wrecked by the Deepwater Horizon catastrophe, the Gulf was under siege—from river drainage, from dumping of all sorts and from the ongoing and sometimes long-forgotten after-effects of oil exploration. Anne McClintock has eloquently captured the state of the Gulf:

The Gulf also bears the brunt of agricultural pollution from the heartland: runoff and waste from Midwest cornfields, sewage plants, golf courses, factories, nitrogen from fertilizer drain down the Mississippi into the Gulf every year. And through those damaged and vanishing marshes, massive watery superhighways have been cut, canals and passageways for the barges and huge ships on their way to the Gulf. Every straight line in the marshes is man made and a road to destruction. Every straight line has been forcibly dredged for flood control and shipping, the river and marshes forcibly reengineered by levees and canals to stop flooding, thereby fatally closing off the silt and fresh water that the marshes need to sustain themselves, and rendering them vulnerable to the yearly slow violence of the hurricanes.3

As a result of the drainage from the Midwest heartland, it’s reported that 1.5 million tons of nitrogen are dumped into the Gulf every year. The nitrogen dumping results in the accelerated growth of phytoplankton (microscopic single-celled plants which live near the surface of the water because they need sunlight). They, like all of us, die and fall to the bottom. Then they are digested by bacteria (maybe the same ones that are digesting the dispersed oil) which consume lots of oxygen. When there is less oxygen, there is less support for marine life. As a result of this on-going deluge, a dead zone (technically, a hypoxic zone) has spread across the Gulf from Galveston in Texas to Venice in Louisiana. The dead zone now consumes 8,000 square miles—a sea area as big as Lake Ontario—one of the Great Lakes. It’s the second biggest dead zone in the world’s waters; the biggest one is in the Baltic Sea in northern Europe.

Let’s take a detour to what has been and is being promoted as an alternative energy strategy—the conversion of corn to ethanol. Ethanol now composes 10% of gasoline at many pumps. Sounds good—grow corn under God’s sunlight and turn it into fuel. God would be pleased—if he was given a proper briefing about the matter. Unfortunately, things are not as simple as God would like. Any increase in corn production results in an increase in the increased use of fertilizers. An increase in the use of fertilizers produces an increase in nitrogen drainage—which increases the size of the dead zone in the Gulf of Mexico.

But that’s not all. One report I read said that there were 10,000 miles of oil canals through the marshes of the Mississippi Delta. It’s bad enough that the construction of the canals destroyed marsh land but the resulting straight-line channels allow saltwater from the Gulf to flow into the marshes thereby allowing the saltwater to poison the plant life in the marshes.

It may be that some of what’s now wrong is the result of what appeared to be right. The Mississippi River used to flood every few years. People who lived along the river understandably enough wanted to figure out a way to avoid being flooded–so they built a massive system of levees to keep the river at bay. And, in spite of the massive failure of the levees in New Orleans five years ago, the system mostly prevents flooding. But, at the same time, it prevents the deposit of soil sediment carried down the river which leads to the disintegration of the marshes. The soil which would have sustained the marshes is, instead, dumped directly into the Gulf. Since 1932, Louisiana has lost approximately 1,900 square miles of land mass–almost equal to the state of Delaware.

And what’s left after oil exploration and production? There are more than 27,000 abandoned oil wells (out of about 50,000 that were ever drilled) and more than 1,000 unused production platforms in the Gulf. Approximately 3,500 of the abandoned wells have been considered temporary cases and have never been permanently sealed. But some of the temporarily abandoned wells have been abandoned since the 1950s. (Just recently, the US Interior Department ordered that those temporarily abandoned wells be permanently sealed).

The result of all this is an industrial netherworld—eerily reminiscent of the abandoned factories littering once productive cities and towns in the Midwest and Northeast parts of the country. But it’s scarier:

….since the 1950s, decades of greed and deregulation have turned the Gulf into the United States’ largest industrial wasteland. The Gulf is an immense, watery mausoleum to the hedonistic high times of the military-industrial petro-era. If a gigantic hand emptied the Gulf like a basin of water, we would see a drowned version of industrial New Jersey: seeping oil-rigs, dumped military ordinance, unexploded bombs, thousands of miles of pipelines, a giant watery wrecking-yard, cluttered with the debris of a century of industrial waste. Miles from anywhere, the spires of an oil rig rise from the marshes, like a church to a demonic god.

Perhaps the only good thing that can be said about the recent spill is that it has brought to the surface some of the long-term degradation that has occurred in the Gulf.

Global Oil Production

“It is almost impossible for someone who is not in the industry to begin to understand the magnitude of the industry and what we do.4 ”

One of the reasons why it might be so hard to understand the magnitude of the petroleum industry is that an awful lot of the oil industry is rather invisible to those of us who don’t live near where it’s produced or refined (and where its ravages are most evident). Peter Maass, in Crude World, comments that: “In a technological sleight of hand, oil can be extracted from the deserts of Arabia, processed to eliminate water and natural gas, sent through pipelines to a terminal on the gulf, loaded onto a supertanker and shipped to a port thousands of miles away, then run through a refinery and poured into a tanker truck that delivers it to a suburban gas station, where it is pumped into an SUV—all without anyone actually glimpsing the stuff” (p. 14-15).

Oil production is profoundly dependent on a combination of complex machines and sophisticated technology. It is not nearly as dependent on actual workers. By way of illustration, in Saudi Arabia (the country with the largest proven reserves and the current leader in oil output), out of a population of 20 million, only 50,000 work in the oil industry and there are typically only 500 new hires per year. The oil workforce includes many foreigners and they, along with their Saudi counterparts, live in separate compounds that look more like American suburbs than the Arabian desert—in recognition of this somewhat bizarre reality, they call themselves Aramcons.

In the Gulf of Mexico, the off shore oil industry employs about 150,000 people although most of them are not out on the water—in large part, because drilling and production don’t really require much human labor. At the time of the Deepwater Horizon explosion, there were only 126 people on the rig, most of whom worked for Transocean.

According to petroleum industry reports from Market Research, in the United States, there are about 5,000 exploration and production companies with annual revenues of approximately $250 billion; 150 refineries operated by about 90 companies with annual revenues of $700 billion, and 5,700 wholesale distribution companies with annual revenues of $750 billion. But the wealth and power of the US-based industry is not reflected in its control of the raw resource. North American oil companies only control approximately 3.5% of producible oil equivalent (oil and natural gas) reserves.

Offshore Oil Production

In April 2010, world production of all liquid fuels was 86.62 million barrels a day but, perhaps surprisingly, offshore deepwater production was only just over 5 million barrels a day—about 6% of global oil production. However, offshore production is expected to be 40% of world production by the end of this decade—as they drill deeper and farther off shore.

Off shore drilling is now underway in countries across the globe (including Brazil, Great Britain, Norway, Tunisia, Egypt, India, Indonesia and Vietnam). In the US, offshore drilling is concentrated in the western and central Gulf (it is prohibited off the Florida coast) and, in a very limited way, off California; 90% of the production comes from the Gulf. In 2009, Gulf oil production was 1.6 million barrels per day—or 31% of all domestic oil production; natural gas production was 11% of all domestic gas production.

Off shore drilling takes place in two quite different marine environments—shallow and deep water. Immediately offshore, the water is relatively shallow (less than 700 feet); however, it eventually drops off fairly dramatically to a depth of as much as three miles—so the deepwater wells are also the ones farthest from land. For thirty years, the drilling took place in shallow waters but the development of new drilling technologies launched the era of deep water drilling in 1979. Deepwater oil production surpassed shallow water production in 2001. In 2009, 80% of offshore oil production and 45% of natural gas production came from deepwater.

States have jurisdiction over oil drilling that takes place within three and a half miles of their shorelines but, for curious reasons (having to do in part with the fact that Texas was admitted to the Union as an independent nation), Texas and Florida control access for more than ten miles from their shores. The United States claims the right to all resources within 200 miles of its coast and the federal government controls oil exploration by selling leases through a bidding process. (There’s a finely worded agreement that splits the difference in the Gulf in those areas that could be claimed by both Mexico and the US). In 2009, the federal government earned at least $6 billion (and maybe as much as $10 billion) from offshore oil leases; since 1953, the government has collected $200 billion in various kinds of payments.

Over the past 45 years, 17.5 billion barrels of oil have been produced from off shore wells across the globe, but only just over a half million barrels have been spilled—30.3 barrels per 1 million barrels produced. And all but two of the largest marine spills of petroleum occurred at the ocean surface—as the result of war sabotage and tanker accidents. Only one serious spill previously took place in the Gulf—the Ixtoc I spill in June of 1979 on a well being drilled for Petroleos Mexicanos (PEMEX) by Transocean. (This summary of spills is based on the expert testimony of Ted Patzek, Professor and Chair of the Petroleum and Geosystems Engineering Department at the University of Texas in Austin before the Energy and Environment Subcommittee of the Energy and Commerce Committee of the House of Representatives on June 9th. So far as I can tell, Patzek is quite critical of many of the industry’s practices and I don’t think he was trying to make things look good. Perhaps I am wrong). Lest I be misunderstood, these facts, regarding the relatively small number of “spills,” obscure something of terrible importance—the most significant devastation of the seas and lands where oil drilling occurs is not from the infrequent spectacular disaster but rather from the routine, day in/day out operations of the industry.

The small number of “spills” is in spite of the fact that drilling has been fairly intense. More than 50,000 wells have been drilled in federal waters since 1947. A total of 331 wells were drilled in federal waters of the Gulf in 2009. The Gulf has 7,000 active leases; 64% are in deepwater (greater than 1,000 feet). But, in March of this year, there were only 25 wells in deep water, as compared to over 3500 in depths less than 1,000 feet. Nearly 4,000 wells have been drilled in depths greater than 1,000 feet and 700 in depths greater than 5,000 feet. This suggests a very low rate of finding oil. One source suggested that two-thirds of all drilled wells were never put into production because of a finding that there was not enough oil to make it profitable. (See Caesar below).

Exploration, production and transportation are conducted with an extraordinarily complex array of equipment and machinery. One of the hallmarks of the industry’s leaders is a more or less endless race to build bigger, drill deeper and claim world records along the way. It’s not yet clear if BP will claim the record for the biggest spill. Some of the nature of this strange state of affairs is reflected in the names given to the projects and drill sites in the Gulf—including Atlantis, Mad Dog, Thunder Horse (previously Crazy Horse), and Blind Faith.

In 1996, Royal Dutch Shell installed Bullwinkle, all 1,736 feet of it, standing in 1,350 feet of water, in the Gulf.[5] Bullwinkle was taller than what was then the world’s tallest building, Chicago’s Sears Tower, but only 262 feet was above the water. The newest drills, even newer than the Deepwater Horizon, are being designed to operate in 12,000 feet of water and to drill 40,000 feet below the sea floor. Their size matches their reach. By way of example, Transocean’s new Discoverer Clear Leader is classified as a 6th generation deepwater rig—part of what the company calls its ultra-deepwater fleet. It was built in Okpo, South Korea in 2009. It has a length of 835 feet and a breadth of 125 feet. Its derrick is 225 feet tall with an 80 foot base. It can house up to 200 workers.

Another rig, named Perdido, is operated by Shell. It was put into service in 2008. It’s not a ship; it floats in the water and is anchored to the sea floor by giant cables. It is 550 feet long and 118 feet wide. According to one gushing report, it’s nearly as tall as the Eiffel Tower and weighs as much as 10,000 cars. It was built in Finland (at a cost of $3 billion) and towed to Texas. You can see what it looks like and how it was put into place in this video clip:

Perdido is designed to pump oil from 35 wells stretched across 30 miles. The rig is lighter than others because the process that separates the oil from water, grease and various heavy metals takes place on the sea floor, instead of on the rig, and the oil is pumped directly into a pipeline system that leads to an on-shore refinery. Another example of the invisibility of oil production!

In case you were wondering, all of the equipment in deep water is installed, maintained and repaired by remote controlled submersibles—controlled by people at computer terminals on the rig or on land. Human beings cannot work at the depths of the wells.

In most cases, oil rigs are not owned by the exploration companies; instead they’re leased from companies like Transocean. In the case of the Deepwater Horizon, the rig was leased to a BP-led consortium that also included Texas-based Anadarko and a wholly owned US subsidiary of Mitsui in Japan. A tangled web indeed!

I haven’t mentioned it yet but there is something else that almost everyone knows about the Gulf of Mexico—it has hurricanes. Not surprisingly, hurricanes pose a serious threat to the drilling structures. In 2005, hundreds of platforms and pipelines were destroyed by hurricanes Rita and Katrina.

In spite of the advanced technological wizardry and the incredible power of the machines involved, control over work remains the same as in the sweat shop—the boss orders you to do what he wants. And, not surprisingly, that results in injuries and death, even without a disaster:

• A 2008 CDC (Center for Disease Control) report said that the overall fatality rate for workers in the oil and gas extraction industry was “approximately seven times the rate for all workers” between 2003 and 2006, with many deaths caused by accidents involving machinery and pipes.
• The Minerals Management Service reported that there had been 1,298 accidents on rigs and platforms between 2006 and 2009—as well as 30 deaths.

Before we leave the Gulf oil scene, let’s note three important realities. First, according to one insider report, oil companies stopped investing in staff and in oil drilling technologies during various down periods in oil process. As a result, they rely on multiple contractors (such as Transocean and Halliburton) to provide the technical expertise that they lack. This, according to many reports in the aftermath of the Deepwater Horizon explosion, results in a situation where no one is in charge and no one is responsible (more about that topic below). Second, the increasing computerization of the oil exploration and production processes in the deepwater environment has shifted the responsibility for decisions away from people on the ground (I meant to say water) who might have genuine knowledge about local conditions to people reading data produced by software, written by still other people with little knowledge of the actual geology or physics of the sea floor. Third, the expansion of offshore oil production was prompted, not surprisingly, by high oil prices. But the construction of the offshore rigs and the exploratory work takes time and money and, once again not so surprisingly, the timing is not always right—just when the well is ready to start producing, the price of oil could drop. What’s a poor oil company to do? Most of the time, it will keep on producing. Since time is money, when you want to make more money, you want to spend less time–which is what BP wanted to do in April of 2010!

The Spill, The Cleanup and The Aftermath

The Spill

I won’t rehearse the well-reported details of the events leading up to the explosion.5

Suffice it to say that it was apparently clear to more than a few of those on board the rig that things were not being done the way they should have been and that behind all of the bad decisions was–MONEY. The Deepwater Horizon was an expensive piece of equipment and it was taking a long time to get the drilling of the well completed. The well was more than forty days behind schedule by April and each day that went by apparently cost BP between $800,000 and $1 million. There was a good deal of pressure to get things done and numerous warnings were ignored. The most illuminating account of what led up to the explosion and what the explosion was like has been authored by Ed Caesar in a special report for The Sunday Times in London on September 12th. Let me mention a few of what I thought were important revelations in his article:

• BP apparently finances the companies, like Transocean, that then do the drilling work—meaning that those drilling companies are beholden to the big oil companies for their ability to build and operate the rigs.
• BP was not planning to start production from the Macondo well any time soon. It had apparently confirmed that there was lots of oil and was going to cap the well and hold it in reserve for connection to its pipeline system sometime in the future. The rush to complete was, therefore, not exactly a rush to produce. (We should not, however, assume that it will never return to the source).
• The blowout occurred “because those responsible for this well failed to control pressure. At three miles beneath the seabed, where the Deepwater Horizon was drilling, the pressure from the surrounding rocks is so great you could crush a double-decker bus to the size of a shoebox. ….If you fail to control these extreme forces, you can start producing oil and gas in unsafe conditions. And, if you start producing oil and gas, and all the safety barriers between the reservoir and the rig fail, you have a blowout.”
• Gas from the blowout was sucked into the rig’s diesel engines, which caused at least two explosions and a horrifying fire, which was visible from 145 miles away.

Although I believe that this has been reported previously and many readers may know about it, the surviving workers were kept on a nearby service boat and were forbidden to use phones or radios. They didn’t arrive on land until twenty-eight hours after they were pulled out of the water. Then they were “strongly encouraged” to sign a document which reads: “I was not a witness to the incident requiring the evacuation and have no first-hand or personal knowledge regarding the incident. I was not injured as a result of the incident or evacuation (quoted in Caesar).” Apparently even those individuals who were in the hospital were encouraged to sign. It appears clear that BP was not prepared for the technical consequences of a blowout, the human consequences of an explosion or the environmental consequences of a massive spill (see below) but it was very well prepared for the financial, legal and public relations consequences of all of the above.

Caesar focused attention on the story of Jason Anderson, one of the eleven dead. Anderson had the second highest Transocean position on the well and he had become increasingly worried about what might happen. He had confided in his father (a veteran oil worker) and his wife. Just before he returned to the rig for the last time, he and his wife re-wrote their wills and talked about decisions regarding their children’s future. He told his father, “If they keep this up, they will kill every one of us.”

This heart-breaking story invites a question—a big one: Why did workers who knew that so much was wrong and that they were in great danger keep going back to work? I’ll return to that in the last section.

The Cleanup

The cleanup consisted of five principal activities—

1.Skimming (or scooping up) and burning of oil, especially near the spill site;

2.Spraying of dispersants to break up the oil—meaning that smaller particles would drop to the sea floor where ever-ready microbes were invited to an imaginary feast;

3. Spreading of containment booms along the shorelines to capture oil coming in with the tides;
cleaning up the beaches, and

4.Covering up as much as possible.

The least objectionable of the cleanup activities were the skimming and burning. In those cases, the oil being collected or burned off was no longer in the water. On the other hand, the use of dispersants could very well turn out to the making of a prolonged assault against the environment and all its inhabitants. BP sprayed enormous quantities (at least 1.8 million gallons) of what many consider to be poisonous dispersants (Corexit 9500 and 9527). Initially, the spraying was done fairly far off shore by plane but there are now reports from Mississippi that in August, BP furtively deployed private contractors in small boats, specifically contractors from out-of-state that were not involved in the very public containment boom effort, named the Vessels of Opportunity (VOO) program, to spray close to the land. Indeed, it appears that local residents working on the cleanup were being used to find oil that was then sprayed, rather than to skim that oil.6 This suggests that BP, with the close cooperation and support of the Coast Guard, was doing everything possible to make things look far better than they really were.

But the price of this sinister magic act is going to be steep. Corexit, manufactured by Nalco (a company that provides high technology chemicals and services for the oil industry), is nasty stuff—so much so that, in the days immediately after the explosion, the Environmental Protection Administration (EPA) ruled that it should only be used in “extremely rare” situations. But the Coast Guard routinely approved BP’s requests to spray. Anne McClintock summarized what Corexit does:

The main ingredient in Corexit is 2-Butoxyethenol, which is toxic to blood, kidneys, liver and the central nervous system. Corexit is mutagenic for bacteria, huge amounts of which live in the Gulf of Mexico. Corexit ruptures red blood cells and accumulates as it moves up the food chain. The EPA, reluctant at first to release data, eventually conceded that Corexit is lethal for 50% of any group of test animals that comes in contact with it. Even the Department of Transportation classifies Corexit as “Class 6.1: Poisonous Material” for transportation purposes. The risks of Corexit to humans, the fragile marsh ecosystems and marine life are potentially staggering. Riki Ott, a marine toxicologist and tireless community activist, has testified meeting people all over the Gulf who are showing symptoms: “headaches, dizziness, sore throats, burning eyes, rashes and blisters that go so deep, they are leaving scars.” Dispersants have never been used in such quantities before, or at such depths in the ocean, or on open marshland. Dispersants are so dangerous because they accumulate up the food chain. Fiddler crabs absorb the toxins in their muscles and are then eaten by birds. Coyotes and feral pigs eat the bird corpses. Pelicans absorb the toxins from fish and even lightly oiled pelicans ingest the oil through their constant preening. Larger marine life like tuna, dolphins and whales carry the greatest lethal loads. Stories have been told by fishermen finding vast, floating graveyards of birds, dolphins and whale corpses near the Macondo well site, which, they say, are secretly disposed of at night.7

BP did employ a small army of cleaners—including some prison labor in Alabama (for which it received federal subsidies for providing work-release opportunities). However, the beach cleanup has been described as a Keystone Kops routine. In late June, Julia Reed wrote:

Last week was supposed to be the week the president finally got out in front of the oil spill. It was supposed to be the week when he stopped trying to figure out whose ass to kick and just get on with it. But here we are on Day 64 of the oil spill and still there is no sense that someone—anyone—is in charge. That has been the case on the ground from day one. The shore cleanup that BP contracted and subcontracted out is a tragic joke. Teams of untrained, barely employable (sic) folks are bused into Grand Isle from nearby parishes to “patrol” the beach for tar balls. They put a handful of tar balls into enormous clear plastic bags and mostly take breaks beneath the docks and in the air-conditioned food tents, since it is stultifyingly hot. They are not trained to tell the difference between a tar ball and a jellyfish; worse, they are inadvertently trampling sensitive bird breeding grounds. After they leave, another crew comes and rounds up the bags and trucks them off (again over sensitive marshland and breeding grounds); last week came word that the majority of these bags containing hazardous oil waste were being dumped next to a Houma Indian reservation. These workers are not allowed to speak to reporters, which brings us to one of the countless appalling aspects of the spill response. BP has been effectively banning press coverage with our own government’s collusion. A photographer from the New Orleans Times-Picayune was banned by the FAA from flying over the spill to take pictures.8

An NBC reporter, cited in the same account, suggested that the cleanup was the “equivalent of trying to clean the Superdome with a toothbrush.”

It seems clear that cleaning up the spill was never quite the goal. That goal might better be described as clearing up the spill—in other words, making it go away, even if it didn’t really go away–for both short-term publicity purposes and long-term legal ones.

The Aftermath

In the weeks and months after the explosion and especially after the drill was plugged, there was a great deal of conflicting testimony about the extent of damage to the waters and to the living creatures who inhabit the water or depend on its products for food. A very confident report issued by the National Oceanic and Atmospheric Administration (NOAA) on August 4th proclaimed that the majority of the oil had been burned, skimmed, dispersed, recovered or evaporated. That rosy picture has been challenged by a number of independent scientists, including oceanographer and veteran Gulf researcher, Samantha Joye of the University of Georgia. In the middle of August, based on work tracking oil plumes below the surface, Joye and a colleague published a memo which asserted that three-fourths of the oil (or at least three million gallons) was still in the ecosystem. In mid-September, Joye reported on her more recent research in areas of up to 80 miles from the well. She found evidence of oil in both shallow and deep waters.9

According to a New York Times editorial on September 20th, the National Oceanic and Atmospheric Administration appeared ready to concede that its earlier estimate might have been premature and announced that it would conduct a new systematic study to measure the oil and to assess its impact. It would, of course, be better by far if the damage turns out to be less rather than more but such a result should not provide any reassurance that this spill was not one more very serious assault against the Gulf. Indeed, even as I finished this essay, I came across a TV report from Louisiana that many thousands of dead fish had been found in Bayou Chaland in Plaquemines Parish. In all likelihood, the oil spill will slowly disappear from the news reports but its left-overs will not disappear from the Gulf.

Truth and Consequences

Although Ed Caesar’s article from the Sunday Times that I referred to above is very informative, at the end it comes up short on at least one important matter. He argues that the oil spill was “completely avoidable.” By that he means that it is evident that careless maintenance of equipment, cutting corners on various recommended steps to ensure the integrity of the well and ignoring the advice of people who knew what was going on—in a volatile marine and geological environment–all came together to result in a disaster. At one level, of course, he’s right–this disaster could have been avoided. But, and this is a big but, the accumulation of disasters is part and parcel of the contemporary world scene. One or another accident might be avoided but the logic that produces disasters is inescapable.

In an essay intended to introduce the writings of Amadeo Bordiga, an Italian communist, on the disastrous consequences of capitalist production, on the Antagonism web site, the authors commented that, “Capitalism produces disasters almost as fast as it produces commodities.” They suggested that it’s useful to think about disasters as “massacres that take place without deliberate planning.” And then they go on:

The massacres here are unplanned only in the sense that no date was set in advance, or orders given to shoot. In this sense disasters are different from wars. Yet the possibility of catastrophe is planned for whenever unnecessary risks are taken in the planning of new buildings, industrial processes or machines, or when environmental or biological processes are left to take their course without intervention that could prevent them or minimize their impact. Disasters come in different forms. There are slow-motion disasters, an accumulation of deaths in ones and twos that add up to mass carnage. …. Then there are sudden accidents resulting in mass casualties caused by technical failures of machines or buildings, such as train or plane crashes. Finally there are natural disasters featuring environmental factors such as floods and droughts, but often with social causes.

Although the emphasis in the lines above was on disasters resulting in human deaths, I believe the analysis is easily enough re-worked to make sense of the oil spill. It was a sudden accident that took place in the context of a slow motion disaster that resulted in human deaths and a likely environmental disaster. To the extent that the oil spill in the Gulf is followed, more or less rapidly, by a return to production as usual, it is all but certain that the slow death of the Gulf will proceed on schedule—unless and until there’s another accident which becomes a disaster.

Bordiga points to essential characteristics of capitalist production that result in a tendency towards disaster; they are the embrace of supposed expertise linked to the specialization of labor and the capitalization of science. Both seem relevant to the Gulf spill. Bordiga, who had been trained as an engineer, acknowledged that some design problems could be solved through modeling in the laboratory. But not all! Thus:

The geological problem is not one for the smoking saloon or the test tank. It is one of lengthy human experience based on the proofs of historical building. Human and social experience. For all modern engineering, in so far as it makes things which are not pocket-sized or cars, constructing things fixed to the Earth’s crust, the key problem is the land/building relationship (for a simple house, the foundations). There are no perennially valid formulae but instead many skillful applications to choose from after gaining hard-learnt experience. Taking a big salary and smoking in front of the computer is not sufficient. This experience ripens over the centuries: whoever believes in progress and in the jest that last season’s latest discovery contains the wisdom of all time, may get a big salary, but causes disasters, statistics for which, and they alone, show progress. … At the bottom of these reckless projects [he was talking about dams in Italy], dictated and imposed by the hunger for profit, by an economic law to which all the navies, the surveyor and chief engineer must all bow, for which reason it is foolish remedy to uncover the guilty party at an inquest, lies the most idiotic of modern cults, the cult of specialization. Not only is it inhuman to hunt down the scapegoat, but also vain, since one has allowed this stupid productive society to arise, made of separate sections. No one is guilty because, if someone takes off the blindfold for a moment, he can say that he gave advice requested by the next section, that he was the expert, the specialist, the competent person.10

Marx Once Again

On a number of occasions in Capital, Marx described various interactions among humans and between humans and nature as having the character of a metabolism. In this instance, he is discussing the labor process:

The labor process, as we have just presented it in its simple and abstract elements, is purposeful activity aimed at the production of use values. It is an appropriation of what exists in nature for the requirements of man. It is the universal condition for the metabolic interaction [Stoffwechsel] between man and nature, the everlasting nature-imposed condition of human existence, and it is therefore independent of every form of that existence, or rather it is common to all forms of society in which human beings live (Volume I, 290).

At the same time, Marx makes clear that the labor process is not the same in all situations. Specifically, when the labor process becomes a process by which a capitalist consumes labor power, the “worker works under the control of the capitalist to whom his labor belongs” and the product is the property of the capitalist:

… the product is the property of the capitalist and not that of the worker, its immediate producer. Suppose that a capitalist pays for a day’s worth of labour-power; then the right to use that power for a day belongs to him, just as much as the right to use any other commodity, such as a horse he had hired for a day. The use of a commodity belongs to its purchaser, and the seller of labour-power, by giving his labour, does no more, in reality than part with the use-value he has sold. From the instant he steps into the workshop, the use-value of his labour-power, and therefore also its use, which is labour, belongs to the capitalist. By the purchase of labour-power, the capitalist incorporates labour, as a living agent of fermentation, into the lifeless constituents of the product, which also belongs to him. From his point of view, the labour process is nothing more than the consumption of the commodity purchased, i.e. of labour-power; but he can consume this labour-power only by adding the means of production to it. The labour process is a process between things that the capitalist has purchased, things which belong to him. Thus the product of this process belongs to him just as much as the wine which is the product of fermentation going on in his cellar (291-292).

Marx had previously explained that the means of production included the instruments of labor (tools and machines) and the objects of labor (materials either spontaneously provided by nature or natural materials processed through previous labor). He wrote: “An instrument of labour is a thing, or complex of things, which the worker interposes between himself and the object of his labour and which serves as a conductor, directing his activity onto that object. He makes use of the mechanical, physical and chemical properties of some substances in order to set them to work on other substances as instruments of his power, and in accordance with his purposes” (285).

A page before, in a famous passage, Marx had celebrated the uniqueness of human labor:

A spider conducts operations which resemble those of the weaver, and a bee would put many a human architect to shame by the construction of its honeycomb cells. But what distinguishes the worst architect from the best of the bees is that the architect builds the cell in his mind before he constructs it in wax. At the end of every labour process, a result emerges which had already been conceived by the worker at the beginning, hence already existed ideally. Man not only effects a change of form in the materials of nature; he also realizes [verwirklicht] his own purpose in those materials.

But then he changes his tone:

And this is a purpose he is conscious of, it determines the mode of his activity with the rigidity of a law, and he must subordinate his will to it. This subordination is no mere momentary act. Apart from the exertion of the working organs, a purposeful will is required for the entire duration of the work. This means close attention. The less he is attracted by the nature of the work and the way in which it has to be accomplished, and the less, therefore, he enjoys it as the free play of his own physical and mental powers, the closer his attention is forced to be (284).

In a few sentences, we have gone from the wonder of an architect’s imagination to the need to pay close attention to something you hate to do. The move is from the possibilities of free creation to the realities of wage slavery.

Human labor, subordinated to capital, is alienated—as is the science used by capital in its relentless pursuit of surplus value through production. In a footnote in Volume III, Marx observed:

Science, generally speaking, costs the capitalist nothing, a fact that by no means prevents him from exploiting it. ‘Alien’ science is incorporated by capital just as ‘alien’ labour is. But ‘capitalist’ appropriation and ‘personal’ appropriation, whether of science or material wealth, are totally different things. Dr. Ure himself deplores the gross ignorance of mechanical science which exists among his beloved machinery-exploiting manufacturers, and Liebig can tell us about the astounding ignorance of chemistry displayed by English chemical manufacturers (508-509).11

Ignorance aside, commodity production promotes and is sustained by a dramatic increase in circulation which, in turn, transforms the ways in which human beings stand in relation to each other and to nature. “…the circuit made by one commodity in the course of its metamorphoses is inextricably entwined with the circuit of other commodities (Volume I, 207). Marx further comments:

… the exchange of commodities breaks through all of the individual and local limitations of the direct exchange of products, and develops the metabolic process of human labour. On the other hand, there develops a whole network of social connections of natural origin, entirely beyond the control of the human agents (207).

In Volume III, Marx approvingly cites the findings of von Liebig, who described a “rift” in that metabolism:

…large landed property reduces the agricultural population to an ever decreasing minimum and confronts it with an ever growing industrial population crammed together in large towns; in this way it produces conditions that provoke an irreparable rift in the interdependent process of social metabolism, a metabolism prescribed by the natural laws of life itself. The result of this is a squandering of the vitality of the soil, which is carried by trade far beyond the bounds of a single country (949).

Many years earlier, in the Economic and Philosophic Manuscripts, Marx had written:

Man lives from nature, i.e., nature is his body, and he must maintain a continuing dialogue with it if he is not to die. To say that man’s physical and mental life is linked to nature simply means that nature is linked to itself, for man is part of nature.

But Marx had a complex understanding of nature:

With the exception of the extractive industries, such as mining, hunting, fishing (and agriculture, but only in so far as it starts by breaking up virgin soil), where the material for labour is provided directly by nature, all branches of industry deal with raw material, i.e., an object of labour which has already been filtered through labour, which is itself already a product of labour. An example is seed in agriculture. Animals and plants which are accustomed to consider as products of nature, may be, in their present form, not only products of, say, last year’s labour but the result of a gradual transformation continued through many generations under human control, and through the agency of human labour (Volume I, 287-288).

Thus, while society is in nature, nature is also in society.

Finally, Marx was, among other things, genuinely attentive to the need to preserve what had been passed down:

From the standpoint of a higher socio-economic formation, the private property of particular individuals will appear just as absurd as the private property of one man in other men. Even an entire society, a nation, or all simultaneously existing societies taken together, are not the owners of the earth. They are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations, as boni patres familias [good heads of the household] (Volume III, 911).

The advances made possible through the application of science and technology have brought us to the brink. As was first suggested more than a hundred years ago, the choice is between socialism and barbarism. The Gulf disaster, and the on-going disasters elsewhere, hint at how the barbaric alternative will announce itself. We remain in need of some new examples for how the socialist alternative might be advanced instead. And we need them sooner rather than later.

Although capitalism is obviously characterized by the accumulation of extraordinary wealth by a relative handful, that is not the essence of the beast. The fact of the matter is that the majority of shares in BP might very well be held on behalf of the pensions of millions of English workers—who wouldn’t want to hurt a feather on the wing of a pelican in the Gulf, let alone make life miserable for the people who live around the Gulf. But capitalism goes on just the same—no matter if the owner is a Rockefeller with a top hat (or more currently, a Bill Gates or Warren Buffet with their humanitarian commitments) or many un-named millions of workers, turned into unwitting accomplices in the reproduction of their own misery.

What people are willing to put up with depends on circumstances. In the US, almost forty years of a slow wearing down of wages, benefits and working conditions have increasingly resulted in workers being willing to put up with almost anything—even the possibility or likelihood of death. When Jason Anderson and his wife re-wrote their wills, they weren’t doing something very different from what many millions of people in this country do every day—they hope for the best while they prepare for the worst. I don’t think that we’re going to convince very many workers, even those who are going out to rigs as dangerous as the Deepwater Horizon, that they should change their minds. In general, we don’t change our minds because someone convinces us that we’re wrong. The fact of the matter is that most of us are never wrong! Instead, we change our minds when the worlds we live in change. But it doesn’t happen automatically. The world of the people who live around the Gulf of Mexico has changed (probably for a long time). What they make of those changes remains to be seen.

Ultimately, it’s not a problem of the mind; it’s a problem of the will. Whose will is it that keeps us going the way we are? The will of capital, albeit a capital that’s been refurbished for our modern times. That will cloaks itself in the garb of progress, science and technology. At the same time, it justifies itself by the invocation, in the developed countries and those (like China) on the fast track to development, of an apparently all but incontrovertible need to maintain “our way of life.” That way of life threatens to fairly quickly become a threat to the possibility of life in any form that we would want to be part of.

But this is no argument that the real cause of environmental degradation lies with the individuals who drive cars or chill their homes. There is a great deal of what we have become accustomed to that will have to be reconsidered and there is a great deal to be gained by individuals and various communities experimenting with new ways of living now that could serve as potentially valuable models for what we might decide to do. But the root cause of the degradation lies with the on-going transformation of human labor power into a hostile power that increasingly dominates all aspects of human life.

• 1 BP is not alone in its efforts to double-cross. Mitsui (a Japan-based multi-national company), which owned a stake in the well, has refused to pay BP $480 million for its share of the costs incurred in the effort to stop the spill and clean up the Gulf.
• 2 The eleven men were Jason Anderson (Midfield, Texas), Dale Burkeen (Philadelphia, Mississippi), Donald Clark (Newellton, Louisiana), Stephen Curtis (Georgetown, Louisiana), Gordon James (Baton Rouge, Louisiana), Wyatt Kemp (Jonesville, Louisiana), Karl Kleppinger, Jr. ( Natchez, Mississipp), Blair Manuel (Gonzales, Louisiana), Dewey Revette (State Line, Mississippi), Shane Roshto (Liberty, Mississippi), Adam Weise (Yorktown, Texas). A video gallery of their photos and brief biographies is available at CNN
• 3See Slow Violence and the BP Coverups.
• 4 Lee Raymond, Chairman and CEO, ExxonMobil, February 2003, quoted in Crude World, p. 119.
• 5Much has been made of the lack of powerful oversight by the government as a result of the cozy relationship between the oil companies and the leadership and staff of the Minerals Management Service, especially in the Gulf. That is undoubtedly true.
• 6See Evidence Mounts of BP Spraying Toxic Dispersants for details.
• 7See Slow Violence and the BP Coverups.
• 8 See The BP Oil Spill: Keystone Kop Kleanup?
• 9See Joye’s blog at Focusing in on oil.
• 10Murdering the dead: Amadeo Bordiga on capitalism and other disasters – Antagonism.
• 11 Andrew Ure was a doctor, a chemist, an author and an apologist for large-scale industry. Marx frequently made use of his work but was very critical of his views. Justus von Liebig, was a chemist, from whom Marx apparently borrowed the concept of metabolism.

Between May and July of this year a series of high-profile strikes in foreign-owned auto parts plants spread throughout China’s coastal regions. Strikes in China are nothing new, but the recent strike wave was remarkable in at least three respects: the amount of concessions granted to workers; the degree of publicity it initially received in the Chinese media; and the prospects for showcase union reform that it has helped push onto the agenda. Although the strikes were directed primarily at unfair wages, there were some attempts to address the more political question of union representation. Workers that I spoke with who had participated in strikes at Honda factories had clearly been politicized by the events and were well aware of strikes occurring throughout China’s auto industry.

The first and only strike to make headlines in the Chinese press began on May 17th and lasted until June 4th. It took place at Honda’s Nanhai factory in Foshan, Guangdong. The strike was kicked off by two workers from the factory’s assembly division. Well aware of their central position within the production line, these two young workers were quickly joined by the rest of the assembly division and were able to suspend production throughout almost the entire factory.1 Their actions sparked over two weeks of protest which at its height gained the support of some 1,900 workers. The strike eventually stopped production at four Honda assembly plants and went on to inspire at least eleven large-scale strikes in other foreign-owned auto factories.2 Was this strike wave the result of mere spontaneity? Why were the strikes so ubiquitous in the auto industry? And why did they take place in mostly Japanese-owned (or Japanese-invested) factories?

Although the Nanhai Honda strike was uniformly presented as the spark that ignited the fire, according to a report from the Hong Kong Liaison Office of the ITUC/GUF,3 the Nanhai strike was actually a culmination of industrial unrest in related enterprises which began a year earlier in June of 2009.4 Such information is important in showing that much about the Nanhai strike was only slightly unique to the auto industry and was more than just a reaction to the spontaneous decision of two young workers. The strike wave should first be understood within the context of increasing social unrest nationwide since the early 1990s. Between 1993 and the years 2004 and 2005, the Ministry of Public Security recorded an increase from 8,700 incidents of social unrest nationwide to 74,000 and 87,000 incidents respectively.5 Because of the negative implications of such statistics, the Ministry of Public Security stopped publishing them after 2006. In addition, the recent strike wave was concentrated within the Pearl River Delta (the heart of Chinese industry) which has seen a peak of labor unrest since 2003. Although the Pearl River Delta is known for its high percentage of labor disputes handled through legal means, the region is certainly not without its share of protests and strikes. In Shenzhen city alone there were sixty cases of strikes recorded as early as 1993, and 110 cases of specifically large-scale strikes for the year 1999.6 In the larger Guangdong region, one report documented 182 cases of strikes involving over 400 people between 1994 and 1995.7

While the recent strikes are clearly not without precedent, the amount of attention and support from the media went well beyond established protocol. The Nanhai strike began receiving coverage in the Chinese press within the first week of its appearance. Because Nanhai is a transmissions plant, the strike caused production to come to a halt at three assembly plants in Guangzhou on the 25th and one in Wuhan on the 27th. Following the suspension of production at these other Honda factories the Western media began to take notice. The Ministry of Propaganda then issued instructions to pull coverage of the strike on May 28th.8 In spite of this, the local Guangdong media continued to cover the strike up until its conclusion. On May 31st, after 200 thugs affiliated with the local trade union physically assaulted a group of workers, the Nanhai strike turned into a national incident. Letters from the trade union, sympathetic academics, and the striking workers themselves were all published in the mainland press. Meanwhile, all this was transpiring within a climate of outrage over the treatment of workers at Foxconn Technology (a Taiwanese-owned electronics manufacturer with operations in Shenzhen). The Chinese media thus played a key role in presenting the Nanhai strike as not only erupting without precedent but more importantly as a heroic struggle by migrant workers for just compensation and respect. The fact that this was allowed to take place at all reflects a tacit approval by the Central Government in favor of the worker’s demands. In short, it was not so much the Nanhai Honda strike itself but the degree of publicity and support the strike received in the Chinese media that made it truly remarkable.

This is important to note because it was precisely this publicity that lent confidence to other workers in the auto industry and throughout the country at large. Honda’s decision to raise the wages of Nanhai employees by ¥500 per month (around a 33% increase) and the publication of this information in various Guangdong newspapers established a standard by which other Honda workers could measure their own grievances. The proximity of auto parts factories in the Pearl River Delta allows for word of mouth to function as a rudimentary form of communication between enterprises. As a result, copycat strikes erupted throughout the industry. Although the Chinese press was ordered to stop reporting subsequent strikes, Hong Kong and Western media were able to provide information on these strikes for the various Chinese internet forums which sprang up in response to the struggle. In this way, labor unrest was able to spread to at least eleven other factories in the auto industry.

I went down to the Pearl River Delta toward the end of July, after the last reported strike had ended. In addition to meeting with workers and various labor NGOs, I was able to spend a day walking around the industrial district of Xiaolan. Xiaolan is the manufacturing town in Zhongshan where the Honda Lock workers went on strike. Gated factory complexes, many employing over 10,000 workers, ran endlessly along the industrial district’s main strip. About a third of the vehicles I saw on the road were shipping trucks. And I was told that workers who are not native to Xiaolan—and therefore have no residence permit—make up sixty percent of the population.

From June 9th to June 18th, Honda Lock workers in Xiaolan went on strike in defiance of management. Like Nanhai Honda, Honda Lock was one of the few strikes where workers demanded the reelection of union officials. Unlike the Nanhai strike however, management decided to take a hard-line stance and workers were forced to retreat from many of their original demands. After six days of struggle and three days of waiting,9 workers at Honda Lock finally settled for a meager ¥200 pay increase and an ¥80 housing subsidy per month. This puts Honda Lock on a par with only the Toyota Gosei strike in Tianjin in the minimal amount of concessions won. The strike was described to me rather candidly by one worker as “a failure.” Demands for union reelections were never seriously addressed, as they were at Nanhai. Instead, workers were told that “the company has no authority over such matters.” This seems incredibly two-faced being that Honda Lock is a joint venture with thirty percent ownership held by the Xiaolan government! On the other hand, that is precisely why the strike had so much difficulty succeeding.

Such attempts to voice more overt political demands are in need of some clarification. As far as we know, calls to restructure enterprise-level unions were put forth at Nanhai Honda, Honda Lock, and Denso. However, this was misinterpreted by many foreign journalists as calls for fully independent unions. There is an important distinction here. The only legal union in China is the All China Federation of Trade Unions (ACFTU). Though nominally an independent union, in reality the ACFTU acts as a quasi-governmental organization. Enterprise-level unions are very often chaired by CCP cadre and (or) management. However, the right of workers to reelect enterprise union officials is protected under Chinese labor law. As Anita Chan pointed out in her article on the strikes, there is a significant difference between demanding a restructuring of the factory union and the right to establish a union independent of the ACFTU.10 Workers who expressed this demand therefore were acting within the purview of their legal rights. Unfortunately, such demands constitute much less of a political challenge than what was presented in the foreign press.

Another area in need of clarification is the question of why the strike wave was largely confined to Japanese-owned enterprises. Though some commentators speculated that this was related to some lingering resentment toward the Japanese,11 in actuality the strikes had nothing to do with nationalism. A better explanation is that auto industry workers simply became more aware of their bargaining power as a result of the victory at Nanhai. This then emboldened workers affiliated with Honda to push for similar demands.

A second possible explanation is that strikes occurring in Japanese factories received unbalanced coverage in the media and, in reality, were proportionally somewhat less than they appeared to be. Journalists have better access to information from Japanese firms than they do from either Chinese firms or the local Communist Party. In addition, many newspapers would be more interested in Chinese labor unrest within the formidable Japanese auto industry than within some other sector. It is thus possible that the strike wave was much bigger than what was reported. This point is supported by the findings of the ITUC/GUF report as well as the numerous hints of unrest taking place outside the auto industry that were scattered throughout Western newspapers. Though it seems safe to say that the majority of disputes did occur in Japanese-owned auto parts plants, the strike wave was by no means exclusive to this grouping.

Finally, Japanese lean production techniques certainly played a role in the ability of workers to force demands on management.12 Lean production is a cost-cutting strategy based primarily on just-in-time delivery of parts and the subcontracting of low-tiered workers. An assembly worker I spoke with from the Nanhai Honda factory was very conscious of not only the importance of factory interns in saving labor costs to the company but also the pivotal role of his assembly division within production. “The whole factory looked to us for leadership; cause when we stop, they stop,” he recalled. Though workers seemed unaware that lean production techniques are a trade mark of the Japanese auto industry, some obviously understand that certain ways of organizing production are more vulnerable to disruption than others. This knowledge no doubt strengthened workers’ confidence in their own bargaining power and may be another reason why so many Japanese auto parts factories were targeted.

On the whole, the strike wave of May, June, and July was an overwhelming success. Despite minimal concessions awarded to Honda Lock and Toyota Gosei, all other factories for which there is information won considerable pay increases. Not only that but pay increases increasingly rose from the ¥500 won at Nanhai Honda, to the ¥800-¥900 won at Denso, to the high of ¥980-¥1420 awarded to Atsumitec workers. Although demands to restructure factory unions largely fell on deaf ears, workers from Nanhai Honda went ahead with reelections of their union chairman on September 1st.13 In addition, the strikes seem to have given those in favor of union reform the upper hand in Guangdong province.14 While the latter may mean little to rank-and-file workers, it is a testament to the threat autonomous worker’s struggles—particularly those within the auto industry—present to the stability of the “communist” regime.

Honda and the Auto Industry in China

Honda moved production to China in 1992. It began as a joint venture in cooperation with the state-owned enterprise Dongfeng Motor. Though initially involved in making motorcycle parts, Honda eventually turned its focus to auto parts production and assembly. As part of China’s attempt to protect domestic industries, the government requires foreign firms investing in the auto assembly sector to establish 50-50 joint ventures with Chinese firms. This however does not apply to firms involved in component parts production.15 Over time, this led to a situation where Honda shifted a huge percentage of its auto parts production to China and to Guangdong province in particular. Though now promoted as a profit maximizing strategy, Honda today has the highest percentage of core parts coming from locally sourced suppliers—many of them Honda subsidiaries—of any foreign automobile enterprise operating in China.16 Having so many factories concentrated in one region needless to say makes Honda more vulnerable to large-scale industrial unrest. This may be another reason why strikes in Honda factories were so pervasive.

A second area of vulnerability which workers were able to take advantage of is the technical division of labor between factories. As witnessed at Nanhai Honda, Fengfu Honda, Denso, and NHK Spring (all component parts factories) the downing of tools brought production to a halt at affiliated assembly plants. Because of the way the Japanese auto industry is structured, component parts are supplied directly to assembly factories on a regular, if not daily, basis. There are no storage warehouses for parts to sit in and lay idle. Such techniques are known as “just-in-time” delivery systems (JIT). They were pioneered by Toyota in the 1980s. Though saving on production costs, they are also highly vulnerable to disruption at the point of supply and shipping. During the strike wave, Chinese workers learned quickly how disruptions of this kind attract media attention and enhance their bargaining power.

Both the local sourcing of component parts and JIT delivery systems are integral to the Japanese auto industry’s strategy of increasing output while keeping down labor costs. These are known as “lean production techniques.” As mentioned earlier, an important aspect of lean production is the subcontracting of workers from lower tiers of production. This means separating the workforce into essentially two groups—skilled and well paid core workers on the one hand and unskilled, underpaid, and temporary base laborers on the other. In China, this strategy was broadly adopted within the auto industry during the late 1980s and early 1990s.17 Although designed to improve flexibility without laying off elderly workers, this subcontracting system creates a hierarchy of labor which is incredibly effective at undermining worker’s solidarity. During the Nanhai strike, Honda management made repeated attempts to divide interns from formal workers by appealing to the acute grievances of the interns. At one point students from the interns’ schools were even sent to the factory to convince interns, who constituted one third of the workforce, to settle for management’s offer.18 Fortunately, at Nanhai such attempts were unsuccessful.

According to some analysts, a tiered labor system within the Japanese auto industry in China is becoming increasingly harder to maintain.19 In order to sustain current rates of productivity, firms are being forced to cut into the relative security of core workers, pushing them into the lower tiers and deskilling them in the process. While this obviously lessens the bargaining power of labor within the market, it also helps to dismantle workforce hierarchies and therefore should increase worker solidarity. This trend may have been in evidence at Honda Lock where workers were primarily unskilled. On the one hand, Honda Lock was very effective in taking a hard-line position against employees seen as replaceable. On the other hand, workers showed a fair degree of solidarity and were infuriated by management’s repeated attempts to hire strike breakers and force workers to chose between a pitiful ¥100 wage increase or being fired.

Although the central concern of the strikes was to secure higher wages and bonuses, Chinese autoworkers—and assembly workers in particular—are generally paid a reasonable wage. Working conditions in auto assembly plants are also decent, though this is less true of component parts factories. In recent years however autoworker salaries have slightly decreased while wages in other manufacturing sectors have increased.20 This seems to suggest that the strike wave had more to do with maintaining respectable wages relative to other industries than to material want in an absolute sense. With that being said, it is important to note that only one of the factories that went on strike was an assembly plant,21 all other factories were component parts suppliers and affiliates. This would suggest that grievances among workers from auto parts factories—where work is likely to be less skilled, less well paid, and conditions less satisfactory—are generally greater than those of workers from assembly plants.

While Honda and Toyota suffered tremendous profit losses thanks to the strikes, in this instance Chinese autoworker demands for increased wages inadvertently converged with the aims of the central government. The CCP’s 12th Fifth Year Plan (2011-2015), scheduled to be passed this fall, recognizes the importance of raising wages as a share of GDP. If China’s economy continues to grow at current levels of investment, her production capacity will eventually outstrip global demand. Thus, it is necessary for China to move from an export driven economy to a more balanced model based on greater domestic consumption. Wages will play a key role in helping to increase this consumption. Following the resolution of the Nanhai strike, both the Shenzhen government and the Beijing Municipal Government announced they were raising local minimum wage by ten percent and twenty percent respectively.22 Since January of this year, over half of China’s provinces have declared similar increases in the minimum wage. Thus, while workers were in no way manipulated by the CCP to go on strike, their calls for partaking in a greater share of the wealth were no doubt met with sympathy by certain factions within the government.

The Chinese economy is fueled by the sweat of cheap migrant labor. These laborers are generally born and raised in the countryside where income from agriculture can barely support a family. As a result, they move to the cities to look for work. However, as formal residents of the countryside they cannot enjoy the social welfare benefits awarded to urban residents. They are thus effectively an underclass and are often treated as such by people from the city. Migrant workers in China currently number over 210 million.23 Statistics from 2005 indicate that migrant labor comprised 57.5 percent of the Chinese industrial sector and 37 percent of the service sector for that year.24 In the Pearl River Delta however this percentage is much higher.

Migrants in the Pearl River Delta divide into roughly three categories. Around ten percent are actually urban workers, often former employees of the State Owned Enterprises. These migrants tend to be older, skilled workers and have usually received a decent education. The other ninety percent of migrant workers are from the countryside—thirty percent being farmers and sixty percent being former students. It is often suggested that because migrant workers from the countryside own farmland and plan to return to it in the future they are less likely to get involved in serious and protracted labor disputes in the cities. While this generalization may be true of older migrant workers who know how to farm, it is certainly not the case with former students from the countryside. Young workers, fresh out of high school and vocational college, form the majority of migrants in the Pearl River Delta. These workers not only lack the skills to engage in agriculture, but are often unable to be supported by the family farm. In addition, they see a farmer’s life as a considerable step backward in light of the education they have received. Former student workers thus form a peculiar group whose long-term interests are bound to the city yet who are unable to obtain the social benefits of urban residents.25 It was precisely this group of workers that showed its teeth so ferociously during the strike wave.

During my visit to the Pearl River Delta I had the chance to sit down with a migrant worker who had participated in negotiations at Honda Lock. Originally working in the paint division, the man had resigned from his position at Honda on the second day of negotiations out of fear for the safety of his family. As his kids ran around just a few feet away, he told me the story of how the strike proceeded and the brief role he played in negotiations.

In many ways Mr. Chen26 is not typical of the majority of workers at Honda Lock. Though he grew up in the Hunan countryside, Mr. Chen had been working in the Pearl River Delta since 1992. He was older than most of his coworkers, having already married and had kids. Prior to quitting his job, he had been employed in the paint division at Honda Lock. As a skilled worker, Mr. Chen enjoyed considerable respect within the factory. He received decent pay and was well treated. Because of the respect shown him, when the strike broke out he was chosen to represent his division in negotiations. This however caused problems for him almost immediately, as he now became identified as a “leader.” His phone was tapped and management tried on several occasions to either intimidate him or buy him off. Fed up with negotiations and fearing for his safety, Mr. Chen resigned from of his position at Honda and moved his wife and kids to a different town.

A few days after quitting his job, Mr. Chen was contacted by a stranger pretending to be an old childhood friend. Speaking in Hunanese dialect, the stranger insisted on meeting up for a beer. Although Mr. Chen refused, the man later approached him on the street and forced him to a restaurant where a lawyer representing Honda Lock was waiting. As Mr. Chen related the story, over dinner he was offered five years pay and a promotion if he would return to Honda and convince workers to settle for a ¥100 pay increase. He refused.

Mr. Chen’s involvement with the strike was fairly short-lived. He told me he had originally struck because he thought wages were unfair. However, he became frustrated during negotiations when management refused to budge from their low offer and many workers were demanding wages higher than what he thought the company could reasonably afford. Mr. Chen mentioned that after receiving word of the strike at Nanhai, he got together with others to calculate worker’s wages as a percentage of company income. The Honda Lock workers were later able to use this information as a reference when they began negotiations with management.

My conversation with Mr. Chen also shed some light on the structure of “workers representative councils” and their role within negotiations. Because all strikes in China are essentially wildcat strikes, firms operating in China have developed certain procedures to take when confronted with the need to bargain collectively with workers. At Honda Lock, management requested each of the eleven divisions to write down their demands and elect a representative to present them. Mr. Chen had been a worker in the paint division and was chosen as one such representative. Prior to the first round of negotiations, the eleven representatives were told they had thirty minutes to discuss worker’s demands, narrow them down to a short list, and present the list back to each division for approval. After all demands were approved, the eleven-member “workers representative council” was invited to begin talks with management.

One thing that stands out immediately is the degree to which management was directing the process of negotiations. Although the structure of the “workers council” was fairly democratic and seems to have adequately represented worker’s demands, neither the organization nor the procedure was the result of workers’ self-initiative. Much of Mr. Chen’s description was verified by a different worker I spoke with as being true of the situation at Nanhai Honda as well. This would suggest that it might take some time before Chinese workers grasp the liberating potential of a radical labor movement self-organized from below.27

A Workers Movement in China?

The right to strike was removed from the Chinese constitution in 1982 in response to the example set by the Solidarity movement in Poland. Today, eight-teen years later, the same fear still resonates within the government. Though the recent strike wave may have received the sympathy of some circles within the CCP, this is almost certainly because political demands were kept within the established legal framework. The desire to prevent a radical workers movement from developing in China is one of the main concerns behind keeping GDP growth above the eight percent per year mark. It is also behind the growing drive towards union reform.

Over the past few years, the ACFTU has begun shifting its focus from enterprise-level negotiation and arbitration to industry-wide negotiations.28 The recent strike wave has only helped this process further along and it is pushing other changes onto the agenda as well. Proposals to make enterprise unions less financially dependent on employers have been heard coming from several quarters. In addition, there has been discussion of strengthening democratic management of enterprises and in Guangdong even reinstating legal protections for striking workers.29 While this may represent an important break through in reforming the ACFTU, in the long run it will lead only to co-optation and the further stabilization of capital. A true labor movement will be built on the trial and error of the worker’s themselves or it will not be built at all. Let us hope that the recent strikes have served as a process of politicization that will help sow the seeds of a future workers movement.

Timeline

Nanhai Honda

Nanhai transmissions factory in Foshan, Guangdong.
strike from May 17th to June 4th.
stopped production at four Honda assembly plants:
1 at Zengcheng (Guangzhou), 2 at Huangpu (Guangzhou) on May 25th, 1 at Wuhan on May 27th.30
total of 2,000 workers employed; peak of 1,900 on strike;31 665 workers (1/3rd) are interns.32
strike caused by two Hunanese workers who walked off the job.33
demanded salaries be raised by ¥800 (about 75%), additional year-end bonuses, an agreement that workers would not be punished and would be compensated financially for the strike, plus a restructuring of the factory union.34
received ¥500 (about 33%), plus regular cash bonuses and other demands.35

Fengfu Honda

Fengfu exhaust systems factory in Foshan, Guangdong.
strike from June 7th to evening of June 9th.
stopped production at two Honda assembly plants:
1 at Zengcheng (Guangzhou), 1 at Huangpu (Guangzhou) on June 9th.36
total of around 500 workers employed;37 between 250-300 on strike.38

Honda Lock

Xiaolan lock factory in Zhongshan, Guangdong.
strike from June 9th to June 18th.
total of around 1,500 workers employed;39 peak of 1,700 on strike (discrepancy in statistics);40 unskilled, low education, 1/2 women, no dormitories.
strike caused by security guards assaulting workers either for planning industrial unrest41 or for wearing name tag improperly.42
demanded salaries be raised from ¥930 to ¥1600 (¥900 to ¥1700 or 89%43 ), this was lowered on May 15th to ¥1200 and housing subsidy of ¥400-500;44 double pay for overtime; punishment for security guards who had assaulted workers; restructuring of the factory union; and agreement that workers would not be punished.45
received ¥200 pay increase and ¥80 housing subsidies.46

Honda IV

Wuhan Auto Parts Alliance in Wuhan, Hubei
strike from June 17th to June47
240 workers on strike.48
demanded pay increase of ¥800.49

Nihon Plast

partially owned by Honda and Nissan (supplies steering wheels and airbags)
strike from June 17th to June
500 workers on strike50

Toyota Gosei I

Toyota Gosei Starlight Rubber and Plastic Co. (compact car door components and other parts) factory in the Xiqing Economic Development Zone, Tianjin
strike from June 15th to evening of June 15th.51
total of around 800 or 82752 workers employed53 (discrepancy in statistics); 1,000 workers on strike (discrepancy in statistics).54
did not stop production at other plants
demanded salaries be restored to 2009 levels after dropping 50% in early 2010.55

Toyota Gosei II

Toyota Gosei in Dongli Development Zone, Tianjin
strike from June 17th to June 19th.56
total of 1,300 workers employed;57 1,700 workers on strike (discrepancy in statistics).58
demanded salaries be raised from an average of ¥1500 to ¥1800 (about 20%).59
received ¥200 pay increase (about 13%).60

Japan’s Denso

Denso Corporation in Nansha Guangzhou, Guangdong (supplies fuel injection equipment to Toyota and Honda)61
strike from June 21st to June 24th.62
total of 1,100 workers employees;63 300-600 workers on strike;64
stopped production at a GAC Toyota factory in Nansha on June 22nd65
demanded salaries be raised from ¥1,100-¥1,300 to ¥1,800-¥1,900;66 a restructuring of the factory union; dormitory air conditioners; and an agreement that workers would not be punished for the strike.67
received ¥800-¥900 pay increase68

Japan’s NHK Spring

NHK-UNI Spring Co. in Huangpu Guangzhou, Guangdong (supplies suspension springs and stabilizers for Honda, Toyota, Nissan)69
strike from June 22nd to evening of June 24th.70
stopped production at two Guangqi Honda factories and one Nissan factory:
1 at Zengcheng (Guangzhou), 1 at Huangpu (Guangzhou)71 ; 1 Nissan at Guangzhou (half production)72
demanded salaries be increased from ¥1200 to ¥1700; and year-end bonuses be increased ¥1200 to ¥6800.73

Honda V

Honda Assembly plant
strike from June 30th to July 1st.74

Atsumitec Auto Parts

Atsumitec Auto Parts in Nanhai Foshan, Guangdong (supplies gear sticks to Dongfeng Honda and Guangqi Honda)
strike from July 12th to 21st75
total of 200 workers employed;76 170-180 workers on strike77
demanded salaries be raised from ¥1070 to ¥1570;78 an apology from management for its conduct during a confrontation with workers; and an agreement not to lay-off workers for two years.79
caused by management’s firing of 90 workers80 or by managements announcement of changes in worker’s shifts, cutting overtime hours and increasing the work load.81
received a pay increase from ¥980 to ¥1420 (45%), plus two month bonus if plant runs at a profit, and ¥250 monthly living allowance.82
(switches and ignitions keys for Honda, Ford, BMW)
strike from July 21st to evening of July 21st83
total of 700-800 workers employed, 400-500 workers on strike84 demanded salaries be raised from ¥1270 to ¥1770 (40%)85

From www.insurgentnotes.com

• 1 “Nanhai bentian fugong, gongren qude jubuxing shengli” (Nanhai Honda Returns to Work, Workers Win a Partial Victory), Chinanews. June 2, 2010.
• 2 At least a dozen strikes were reported to have taken place within the auto industry between May and July, though it is highly likely that many more occurred—both inside and outside the auto industry—than were reported. See the timeline below.
• 3 International Trade Union Confederation/Global Union Federation.
• 4 IHLO, “A Political Economic Analysis of the Strike in Honda and the Auto Parts Industry in China.” at IHLO.org. July, 2010, pp. 19-20.
• 5 Ching Kwan Lee, Against the Law: Labor Protests in China’s Rustbelt and Sunbelt. University of California Press, 2007, p. 5.
• 6 Ibid., p. 163.
• 7 Report of Chinese Labor Science Studies, 1997-1999Against the Law: Labor Protests in China’s Rustbelt and Sunbelt. University Of California Press, 2007, P. 174.
• 8Fiona Tam, Mimi Lau, “Shutters Slammed on Reporting of Strikes,” South China Morning Post. June 12, 2010.
• 9 Many workers agreed to return to work on June 15th while negotiations dragged on until the evening of June 18th.
• 10 Anita Chan, “Labor Unrest and the Role of Unions,” China Daily. June 18, 2010.
• 11 Keith Bradsher, “A Labor Movement Stirs in China,” New York Times
• 12 For a discussion of lean production techniques see: Beverly Silver, Forces of Labor: Workers’ Movements and Globalization since 1870. Cambridge University Press, 2003, pp. 66-74.
• 13 This information was verified by a worker from Nanhai Honda.
• 14 Luisa Tam, “Guangdong Blazes Path on Collective Bargaining,” South China Morning Post, July 27, 2010.
• 15 IHLO, “A Political Economic Analysis of the Strike in Honda and the Auto Parts Industry in China.” at IHLO.org. July, 2010, p. 4. In addition, China requires that forty percent of auto parts used by assembly factories (which are necessarily joint ventures) be produced locally, by either foreign or domestic firms.Ibid., p. 3.
• 16 Ibid., p. 4.
• 17 Zhang Lu, “Lean Production and Labor Controls in the Chinese Automobile Industry in the Age of Globalization,” ILWCH,
• 18 Wei Le, “Nanhai bentian tichu di san ge tixin fang’an” (Nanhai Honda Presents a Third Wage Adjustment Offer), Caixin Online
• 19 Zhang Lu, “Lean Production and Labor Controls in the Chinese Automobile Industry in the Age of Globalization,” ILWCH,
• 20 Ibid., pp. 6-7.
• 21 See the timeline below for the fifth Honda strike.
• 22 David Barboza, “More Honda Labor Trouble in China,” New York Times. June 9, 2010.
• 23 Xinhua News Agency, “China’s ‘Floating Population’ Exceeds 210m,” China Daily, June 27, 2010.
• 24 Ching Kwan Lee, Against the Law: Labor Protests in China’s Rustbelt and Sunbelt. University of California Press, 2007, p. 6.
• 25 This information comes from a discussion the author had with the Shenzhen labor NGO Honghuacao.
• 26 Although the interviewee no longer works for Honda Lock and was not overly concerned with protecting his anonymity, I have nevertheless chosen to refer to him by the pseudonym Mr. Chen.
• 27 This is of course true throughout much of the world and is by no means peculiar to China.
• 28 Ronald C. Brown, Understanding Labor and Employment Law in China. Cambridge University Press, 2010, p. 48
• 29 “ACFTU Pushes Forward on Collective Bargaining and Democratic Management,” International Law Office, September 8, 2010.
• 30 Wang Duan, “Bentian zai zhongguo si jia zuzhuangchang tingchan” (Four Honda Assembly Plants in China Stop Production), at Caixin Online. May 28, 2010.
• 31 David Barboza, “Workers in China Accept Deal, Honda says,” New York Times. June 4, 2010.
• 32 “Nanhai bentian fugong, gongren qude jubuxing shengli” (Nanhai Honda Returns to Work, Workers Win a Partial Victory), Chinanews. June 2, 2010.
• 33Ibid.
• 34 “Bentian ti di san fen tiaoxin fang’an, gongren jixu tinggong” (Honda Presents a Third Wage Adjustment Offer, Workers Continue to Strike), Southern Weekly. May 31, 2010.
• 35 David Barboza, “Workers in China Accept Deal, Honda Says,” New York Times. June, 4 2010.
• 36 Will Clem, Mimi Lau, Choi Chi-yuk, “Hundreds Clash as Labour Strife Widens: Worker Unrest Spreads to Yangtze River Delta,” South China Morning Post. June 9, 2010.
• 37 Tom Mitchell, Justine Lau, Robin Kwong, “Protests Pose Challenge for Beijing,” Financial Times. June 9, 2010.
• 38 Will Clem, Mimi Lau, Choi Chi-yuk, “Hundreds Clash as Labour Strife Widens: Worker Unrest Spreads to Yangtze River Delta,” South China Morning Post. June 9, 2010.
• 39 Mimi Lau, “Honda Hit by Strike at Third Factory, More Industrial Action as Earlier Dispute Ends,” South China Morning Post. June 10, 2010.
• 40 Keith Bradsher, “Workers at Chinese Honda Plant March in Protest,” New York Times. June 10, 2010.
• 41 Mimi Lau, “Honda Hit by Strike at Third Factory, More Industrial Action as Earlier Dispute Ends,” South China Morning Post. June 10, 2010.
• 42 Keith Bradsher, “Workers at Chinese Honda Plant March in Protest,” New York Times. June 10, 2010.
• 43Ibid.
• 44Choi Chi-yuk, “Hundreds Hold Out for Better Pay at Honda, Some Staff Make Concessions and Return to Work,” South China Morning Post. June 15, 2010.
• 45 Mimi Lau, “Honda Hit by Strike at Third Factory, More Industrial Action as Earlier Dispute Ends,” South China Morning Post. June 10, 2010.
• 46 Ng Tze-wei, Choi Chi-yuk, Verna Yu, “Toyota Hit Again As Pay Claims Escalate, Strikes a Release of Pent-up Demand,” South China Morning Post. June 19, 2010.
• 47Ibid.
• 48Ibid.
• 49Ibid.
• 50 John Chan, “More Strikes Erupt in China’s Auto Industry,” World Socialist Website. June 21, 2010.
• 51 Reuters, “Second Strike Hits Toyota Supplier,” South China Morning Post. June 18, 2010; Associated Press, “Toyota is Latest Car Maker Hit by Strike in China,” New York Times. June 17, 2010; “Strikers Seal Deal at Toyota to Resume Work After Pay Hike,” China Daily. June 21, 2010.
• 52 Li Fangfang, “Strike at Toyota Parts Supplier Ends Quickly,” at China Daily. June 18, 2010.
• 53 Associated Press, “Toyota is Latest Car Maker Hit by Strike in China,” New York Times. June 17, 2010.
• 54 “Strikers Seal Deal at Toyota to Resume Work After Pay Hike,” China Daily. June 21, 2010.
• 55Ibid.
• 56Ibid.
• 57Ibid.
• 58Hiroko Tabuchi, “Walkout Closes Another Toyota Supplier in China,” New York Times. June 18, 2010.
• 59 “Strikers Seal Deal at Toyota to Resume Work After Pay Hike,” China Daily. June 21, 2010.
• 60 Ibid.
• 61 Reuters, “New Strike at Supplier to Toyota, Honda,” South China Morning Post. June 22, 2010.
• 62 Peter Symonds, “More Strikes Hit Auto Plants in China,” World Socialist Website. June 26, 2010.
• 63 Reuters, “New Strike at Supplier to Toyota, Honda,” South China Morning Post. June 22, 2010.
• 64 Mimi Lau, “Toyota Production Hit by Supplier’s Strike, Workers Down Tools at Plant that Makes Fuel Injection Equipment and Demand Pay Rise,” South China Morning Post. June 23, 2010; Mimi Lau, “More Car Parts Workers Walk Off the Job, A Japanese-owned Component Plant in Guangzhou is the Latest to be Hit by Strike Action,” South China Morning Post. June 24, 2010.
• 65 Hiroko Tabuchi, “With Strike, Toyota Idles Auto Plant in China,” New York Times. June 22, 2010; Mimi Lau, “Toyota Production Hit by Supplier’s Strike, Workers Down Tools at Plant that Makes Fuel Injection Equipment and Demand Pay Rise,” South China Morning Post. June 23, 2010; Mimi Lau, “More Car Parts Workers Walk Off the Job, A Japanese-owned Component Plant in Guangzhou is the Latest to be Hit by Strike Action,” South China Morning Post. June 24, 2010.
• 66 Reuters, “Labour Strife Halts Toyota, Honda Plants,” South China Morning Post. June 23, 2010.
• 67 Mimi Lau, “More Car Parts Workers Walk Off the Job, A Japanese-owned Component Plant in Guangzhou is the Latest to be Hit by Strike Action,” South China Morning Post. June 24, 2010.
• 68 Peter Symonds, “More Strikes Hit Auto Plants in China,” World Socialist Website. June 26, 2010.
• 69 Reuters, “Labour Strife Halts Toyota, Honda Plants,” South China Morning Post. June 23, 2010.
• 70 Agencies, “End in Sight for Toyota Strike, Unrest at Nissan,” South China Morning Post. June 25, 2010.
• 71 Reuters, “Labour Strife Halts Toyota, Honda Plants,” South China Morning Post. June 23, 2010; Mimi Lau, “More Car Parts Workers Walk Off the Job, A Japanese-owned Component Plant in Guangzhou is the Latest to be Hit by pager Strike Action,” South China Morning Post. June 24, 2010.
• 72 Agencies, “End in Sight for Toyota Strike, Unrest at Nissan,” South China Morning Post. June 25, 2010.
• 73 Mimi Lau, “More Car Parts Workers Walk Off the Job, A Japanese-owned Component Plant in Guangzhou is the Latest to be Hit by Strike Action,” South China Morning Post. June 24, 2010.
• 74 Reuters, “Honda Plant Halted Over Labour Strife,” South China Morning Post. July 09, 2010; “Honda Assembly Plant Resumes Production After Two-day Strike,” South China Morning Post. July 10, 2010.
• 75 Reuters, “Honda Strike Ends After 45pc Pay Rise,” South China Morning Post. July 22, 2010.
• 76 Reuters, “Striking Foshan Workers Demand Apology,” South China Morning Post. July 16, 2010.
• 77Reuters, “New Strike Hits Honda Parts Supplier,” South China Morning Post. July 15, 2010; Mimi Lau, “Foshan Factory Strike Enters Fourth Day,” South China Morning Post. July 16, 2010.
• 78Mimi Lau, “Foshan Factory Strike Enters Fourth Day,” South China Morning Post. July 16, 2010.
• 79Reuters, “Striking Foshan Workers Demand Apology,” South China Morning Post. July 16, 2010.
• 80 Ibid.
• 81Mimi Lau, “Foshan Factory Strike Enters Fourth Day,” South China Morning Post. July 16, 2010.
• 82Reuters, “Honda Strike Ends After 45pc Pay Rise,” South China Morning Post. July 22, 2010.
• 83Reuters, “Omron Workers Down Tools for Better Pay,” South China Morning Post. July 22, 2010.
• 84Reuters, “New Strike Hits Guangdong Factory,” South China Morning Post. July 21, 2010.
• 85 Ibid.

The class struggle in Bangladesh is fought at a consistently high level and concentrated in the ready made garment (RMG) sector, the country's dominant industry(1). Mainly unmediated by trade unions, struggles frequently assume an explosive character. In Part 1 we give some idea of the content and extent of these struggles - followed in Part 2 by some historical background.

Part 1

Chronology of some high points of class struggle since 2006
The events listed below are only a small selection from incidents occurring on a regular basis in the garment sector. For a large selection of articles covering disturbances over the past four years, see; http://libcom.org/tags/bangladeshi-garment-workers . See also a 15 min. video; http://libcom.org/history/video-machinists-against-machine-bangladeshi-garment-workers-struggles

Strikes are generally sparked by either middle-management/supervisor brutality or non-payment of wage arrears. Workers walk out and march to picket out neighbouring factories. Roads are often blocked and barricaded. Cops and paramilitary forces are used against workers and things often turn violent; security forces are indiscriminate in their methods and as they invade workers' slum areas adjacent to industrial zones this can draw in the wider community; strikers' demonstrations often become mass riots attacking factories and vehicles. So workers' protests have a tendency and potential to overspill into a larger class confrontation.

Women do participate in street protests. But despite a predominantly female workforce, evidence of the remaining deeply patriarchical traditions of Bangladesh and their divisions of labour can be seen in news footage of garment worker riots; violence has been the almost exclusive act of males. (A few recent examples suggest this may, however, now be beginning to change.)

May-June 2006; the Dhaka explosion
At certain times the generally high level of struggle reaches a peak. In late May and through June of 2006, there was an explosion of fierce class conflict in the Bangladesh garment industry. To illustrate the scale of events: around 4000 factories in Dhaka went on wildcat strike, 16 factories were burnt down by strikers and hundreds more ransacked and looted, pitched battles were fought with cops and private security forces in workplaces and workers' neighbourhoods, main roads were blocked. Casualties include 3 workers shot dead, thousands injured, several thousand jailed. The Government eventually felt compelled to bring in the Army to restore 'order'. With hundreds of thousands participating, it was a working class revolt that spread beyond the workplace and generalised to involve the wider working class community.

The revolt began on Saturday 20th May in Sripur in the Gazipour district of Dhaka. 1,000 garment workers gathered at FS Sweater Factory, refusing to work until 3 arrested fellow workers were released from custody. The factory bosses locked the striking workers in the factory, cutting the power and water supplies. Eventually, the sweltering heat proved too much and by 11 am the workers fought their way out, then gathered on the Dhaka-Mymensingh highway. Now joined by locals, they barricaded the highway for 6 hours and fought pitched battles with the cops. One person was killed and 70 others, including cops and journalists, were injured. The revolt then rapidly

"spread to more factories as more workers were picketed out and the industrial areas of Dhaka were shut down by a generalised strike. Workers took the revolt from the industrial suburbs, where factories were now being looted, into the capital city itself, destroying cars and attacking commercial buildings. Mass demonstrations demanded an end to repression, release of arrested workers, higher minimum wages, weekly time off, overtime pay for extra work, public holidays, payment of wages due etc."

Years of accumulating resentments boiled over into a month of mass unrest with repeated clashes and attacks on bosses' property.

Although trade unionism is legal, garment bosses have consistently refused to recognise or tolerate trade unions. But in the absence of normal union mechanisms, previously marginal union-type groups (with little or no real influence on workers' struggles) were quickly drafted in as negotiators on behalf of workers. A new minimum wage was agreed (along with other improvements), but it was inadequate, soon made irrelevant by inflation and only patchily implemented.

For a detailed article on the events see; http://libcom.org/news/article.php/bangladesh-garment-revolt-140706

The fire next time
The recurring use of arson by workers must be put in context;

"Health & Safety regulation are routinely ignored by management and are hardly enforced by government (many politicians have business interests in the industry); factory fires break out on a bi-monthly basis. Most are smaller incidents with regular injuries but fewer deaths, but over 240 workers have died in major fires since 1990. [...]

Many garment workers will have experience of fires in the workplace, many will have sustained injuries, lost friends and workmates to them - and all know that this is due purely to bosses' greed and negligence. The fairly regular use of fire by garment workers in their struggles against their employers must be understood within this context. Garment workers have often burned down factories in retaliation for non-payment of wages, lockouts or management brutality.(1) Many garment workers are malnutritious due to low income, living hand to mouth. Arson is a readily available means of hurting the bosses and depriving them of something when they refuse to pay; and there is certainly a poetic justice in the fact that those forced to live with a constant fear of fire at work can also utilise it as a weapon against their exploiters." http://libcom.org/news/death-traps-work-home-fire-poor-bangladesh-10032010

Jan 2007; A state in a "State of Emergency"
After months of conflict between the two main parties - the Bangladesh National Party (NBP) and the Awami League (AL) - as they squabbled over the details of rules and procedures for the General Election, a military-led caretaker government was put in place in January 2007. It's likely this move was encouraged or even proposed by foreign diplomatic pressure;

"Events leading up to the emergency are widely seen as having been orchestrated by the military, which acted after the UN threatened it with the loss of its lucrative and prestigious peacekeeping duties if flawed elections went ahead.
The day after the emergency was declared, former central bank governor Fakhruddin Ahmed was installed as head of a new caretaker government." (Bangladeshinfo.com, May 6 2007)

Over 100,000 were arrested in mass arrests during "anti-corruption purges" targetting the business and political communities. Strikes and demonstrations were banned, but by May garment and other workers had ignored the ban and again begun to assert themselves against the bosses with wildcat strikes, street protests and clashes with police. (See; http://libcom.org/news/jute-workers-attack-union-leaders-bangladesh-amid-wider-unrest-17092007 and http://libcom.org/news/garment-workers-struggles-escalate-again-bangladesh-23092007)

Sept 2008; the "Ghost Panic"
The calorific intake of ready made garment(RMG) workers is deficient, causing stunted physical development. With income reduced by static wages and rising costs of basic foods, malnutrition has become so widespread that in 2008 some workers were reported to be hallucinating in a delirious state during long shifts. A wave of mass hysteria is said to have spread through RMG factories where workers reported ghost attacks - hallucinatory experiences based on the symbolism of the prevailing religious and cultural beliefs and superstitions. Psychologists labelled the 'ghost panic' as 'collective obsessive behaviour' or 'mass sociogenic illness' and attributed it to stress, overwork and malnutrition.

The so-called 'ghost panic' in factories first surfaced after a section of workers vandalised Diganto Sweater's factory in Gazipur, following rumours of the deaths of a few workers as a result of 'ghost attack' in a toilet of the factory. Production in the factory remained suspended for four days as workers went on a rampage, damaged factory property and blocked the roads for hours.
In May this year, vandalism triggered by ghost phobia forced a factory in the Chittagong Export Processing Zone to suspend production for two days. At least 10 other garment factories have come under attack in the last two months in Gazipur alone after the spread of almost identical news or rumours that workers fainted in factory toilets and some of them even died.
The latest incident occurred at Pandora Sweater Factory on the Joydevpur road intersection on September 5, three days after workers vandalised Diganta Sweater and clashed with law enforcers in the same area.
Five workers of Diganta Sweater claimed that they saw 'witches' before they fainted inside factory's toilet. They were taken to a nearby clinic where physicians found that none of them had sustained any injury.
'They fainted because of weakness. I found that their blood pressure and heart beat was too low,' said Abdur Rahman, chairman of Sheba Diagnostic Hospital. He said that all the patients were cured after initial medical treatment. The hospital and some 80 other clinics have become used to get patients with such symptoms in Gazipur which has a concentration of apparel factories.
He said his hospital treated, on an average, 100 garment factory workers suffering from anxiety-related illness every month. 'Poor garment workers suffer mainly from malnutrition and anxiety, which make them weak and vulnerable to nervous breakdown,' said Rahman.
He said the stories of ghosts were either fabricated or hallucinatory. (New Age, Sep 13 08)

In at least one factory a religious exorcism rite has been performed.

One explanation of the 'ghost panic' may lie in the fact that so many reports place the 'sighting' of the apparition in the factory toilets. In the present climate of intense class conflict a worker is surrounded by openly hostile forces in the factory - and only protected by the solidarity and presence of fellow workers. Exhausted and malnutritious, they feel the threatening presence around them even when alone in the toilet - leading to paranoid hallucinations. Also, the toilet is where many actual attacks on workers by factory management and security staff have occurred, so the feelings of vulnerability and paranoia are not without reason.

While RMG workers' working and living conditions are undoubtedly bad enough to destroy workers' health, it is hard to gauge the wider truth of these strange events - what may have been true in some factories may have then spread as a running joke among workers (and been swallowed whole by gullible media and doctors always on the lookout for a new phenomena to categorise); an ironic excuse from striking workers smashing up bosses' workplaces - 'It's not our fault - you've driven us mad!'.

For further information; http://libcom.org/news/bangladesh-militarized-factory-visions-devouring-demons-capital-15092008 (Surprisingly, considering its positive discussion of the class struggles of garment workers, this article - containing phrases such as "...half starving wage slaves worked to exhaustion - yet still bravely maintaining a high level of autonomous class struggle outside of any union control..." was taken from libcom website and, to the surprise of the author, quickly published in a national Bangladeshi newspaper (The Bangladesh Today) and on the front page of its website.)

Jun 2009; 50,000 on the streets and 50 factories burning
In late June a dispute over pay and sackings in the suburb of Ashulia led to police shooting dead a garment worker. Trouble quickly spread to other Dhaka factories;

"On the outskirts of Dhaka, the capital city, in the industrial zone; workers' rioting and demonstrations yesterday escalated to new heights. As thousands of workers gathered in the morning, at 10am a group set off towards the nearby Dhaka Export Processing Zone where many garment factories are located. Police blocked their way and fierce fighting began - in the pitched battle police use of teargas and rubber bullets left 100 workers injured.

Other workers soon joined the protesters and informed them that work was continuing as normal at the Hamim Group factory complex. Twenty thousand workers began to march towards the complex. As the numbers of protesters in the area swelled to 50,000 the security forces were simply overwhelmed; the Dhaka District Superintendent of Police said; "An additional 400 policemen stood guard in front of the major factories. We tried our best to disperse the crowd, but they were too many and too fierce.”

[...] The workers split into smaller groups and stormed the complex at around 10.15am. They sprinkled the buildings with petrol; a sweater factory, three garment factories, two washing factories, two fabric storehouses ... over 8,000 machines, a huge quantity of readymade garments, fabrics, three buses, two pickup vans, two microbuses and one motorbike were all reduced to ashes.

The crowd was thinking strategically. Once the buildings were ablaze some workers returned to the highway and blockaded the road; consequently, the fire services were unable to reach the blaze for several hours until 3.30pm - by which time the buildings were burnt to the ground.

Meanwhile, groups drawn from some of the other 50,000 workers and participants (undoubtably other sympathetic non-garment workers and slum dwellers would have been drawn in) roamed the area and attacked and vandalised another 50 factories and 20 vehicles. Thick black smoke could be seen across the city."

http://libcom.org/news/short-fuse-50000-workers-streets-50-factories-burning-bangladesh-30062009

July 2010; Rage over the wage
At the time of writing, a new minimum wage has finally been set after long tripartite negotiations of government, bosses and (largely self-appointed) labour leaders;

"Dhaka, capital city - last Friday morning (30th July), the day after the wage announcement ; in the Gulshan, Banani, Kakali, Mahakhali and Tejgaon areas of the city thousands of workers streamed onto the streets and began blockading the main highways with burning tyres. Police responded with teargas, truncheon charges and water cannon (the water is mixed with an indelible dye to aid catching demonstrators). But, heavily outnumbered, the cops could not contain the workers and the protests spread outwards. Making the link between their class status and the contrasting concentrations of wealth in the city landscape, workers were quite specific in their targets; as well as attacking garment factories, 200 businesses were targetted. In an unusual development that shocked many, the wealthy Gulshan Avenue neighbourhood - close to the diplomatic zone and embassy area of Baridhara - was invaded by 5,000 workers who smashed up offices, banks and shops. Media and TV offices were also attacked. "Gulshan police chief said the protesters had targetted the area's high-end shops." http://libcom.org/news/rage-over-wage-04082010

In the following days clashes continued; thousands of workers fought police, blocked roads, attacked and looted factories and forced hundreds of others to suspend operations, attacked hundreds of businesses, shopping centres and banks. Police arrested workers and raided offices and homes of those union leaders who refused to accept the deal. (The majority of labour leaders accepted the deal; see further comments on trade unions in Part 2.)

"The continued labour unrest and disruption in the garment industry - alongside infrastructural problems of energy supply shortages that regularly interrupt maximum productivity - are worrying both foreign buyers and local suppliers. [It has rarely been mentioned that the new wage structure only applies to the 'woven' sector - but not to the RMG knitwear sector.] The narrow national economic dependency on a single export industry's ability to deliver competitive rock-bottom prices and reliable fast delivery times means garment workers still have considerable weaknesses to exploit in the class struggle. The government and employers may finally - after years of hinting at it whenever labour unrest reaches a certain peak - begin to allow full trade union representation in the sector. But the majority of labour leaders, having now been courted to play the role of giving legitimacy to the miserable settlement, may have lost more than they've gained. The state and bosses could easily again break their promises on union recognition - and, as they continue their struggles, the most militant workers will not look kindly on the unions' class collaboration and meek acceptance of the poor wage offer." (Op. cit.)

After several days of disturbances, a massive deployment of security forces in the industrial belts along with sweeping raids and arrests have, for the moment, quietened the unrest. But, with little resolved, the antagonism is set to continue.

* * *

Part 2

Some historical background of Bangladesh and the garment industry
The region of Bengal is known to have been a trading centre with active trade routes and shipping ports for over 2000 years. It produced both high quality raw cotton, cloth and clothing for hundreds of years; from the 16th century on, the European aristocracy came to prize Dhaka muslin as the finest textile in the world. With the decline of the Mughal empire British imperialism beat off its rivals and the East India Company established its rule in the 1750s. Policies were imposed that favoured the emerging British textile industry; by a protectionist system of tariffs Bengal was forced to only supply cheap raw materials and leave finished articles to be produced in the "dark satanic mills" of early British capitalism. This economic restructuring, being imposed upon communities of relatively prosperous artisan producers, brought impoverishment and forced relocation from agriculturally desirable areas to previously uninhabited flood-prone areas.

In 1947 India won independence from the British Empire. In response to religious and ethnic tensions Muslims were given a separate nation-state homeland of Pakistan. This was comprised of two distinct territories, West and East Pakistan, separated by a thousand miles of Indian territory.

The two regions had quite different cultures, languages and traditions and these were reproduced within the new state boundaries. West Pakistan's political and economic structures were dominated by merchant and bureaucratic classes developed under British rule to service, supply and administrate the colonial regime. The West therefore became the political and economic centre of Pakistan, while the East remained a predominantly agricultural producing area. The Islamic cultures of the the two regions were also quite different; in the East the older pre-Islamic Bengali culture - though still strictly patriarchal - cushioned against the harsher interpretations of Islamic code.

"In many ways, the impetus for an independent Bangladesh was a logical byproduct of the 'decade of development' inaugurated under the regime of Ayub Khan and cited as a model of capitalist success by the international planning community. Development policy in the Pakistan era identified economic growth with the creation of an industrial base. To finance this, the government followed a deliberate policy of fostering economic disparity, by diverting the surplus generated in the agricultural sector into the hands of a small class of entrepeneurs based in West Pakistan. The rationale for this strategy was summed up in a succint fashion by one of the US advisors to the Pakistan Planning Commission: 'Great inequalities were necessary to create industry and industrialists ... the concentration of income in industry facilitates the savings which finance development.'"(2)

These imbalances created growing resentment in the East, which eventually led to the very bloody War of Independence in 1971. Led by a leftist faction in the Eastern section of the Army, a decisive intervention by Indian troops secured victory for the East and led to the establishing of the nation-state of Bangladesh.

From the very beginning, the "pro-Islam" segments of Bangladeshi society and of the army had sympathies for Pakistan and opposed the independence of Bangladesh in the name of Islamic unity. The Jamaat-e-Islami (the main Islamicist party) leadership was at the forefront of mass atrocities on behalf of the Pakistan army on the eve of Bangladeshi independence. (It is only now, almost 40 years later, that war-crime trials are beginning.(3))

Identities
Assumed identities can be varied and complex in Bangladesh - and most stem from one's defined relationship to the 1971 Independence War. The lines drawn through Bangladeshi society by that war are still deep divisions today. For some, the national victory is seen as a victory for the Bengali culture embracing diversity and tolerance - in the face of the continued threat from Muslim fundamentalists who resent the split from their fellow Pakistani Muslims. Depending on emphasis, there are various ethnic, national and religious identities composed of different measures of cultural Bengali, national Bangladeshi and/or religious Muslim combinations or oppositions. (The other smaller religious and pre-national indigenous/tribal self-identities do not concern us here.) These oppositions embody contending views as to what kind of society Bangladesh should be and are contested at various levels, both politically and culturally.

The internal exile of the left and ideological proxy wars
During the War of Independence there was a left wing element within the army and politics. After the coups of the mid 70s and the resulting repression, the Bangladeshi left was forced to disperse - of those remaining active, many went into NGOs or cultural propaganda work. A few tiny Trotskyist and Stalinist groups now remain, mainly student-based with little connection to the working class. Some parties also have their allied 'union' groups - but these 'unions', despite aspirations, rarely, if ever, function as workplace representatives.

The NGOs promote micro-credit loan schemes for small business activities, partly as a means of encouraging independence from large landowners in rural areas and for greater economic and social independence for women. Funding is provided to teach and implement small-scale improved farming techniques, co-operative or individual household workshops and subsequent distribution networks etc. They also sometimes act as a type of proxy trade union by offering legal and welfare advice in cities. They have often used traditional cultural drama and folksong forms in village meetings to spread their liberal ideology of cultural tolerance and entrepeneurial micro-capitalist activity.

On the other side of the ideological battleground are the Saudi Arabian-financed Muslim NGO groups who campaign for fundamentalist values and a traditional submissive role for the poor and women in particular (some have also been linked to terrorist activities).

The more than three million Bangladeshi urban female garment workers with a relative economic independence are, for the fundamentalists, particularly unacceptable evidence of the corrupting influence of modern society. For these reasons they have sometimes physically attacked NGOs, unions and the projects they sponsor.

This ideological divide manifests across various political and cultural issues. The most recent election winners, the Awami League (AL), are considered a more liberal and secular party (by Bangladeshi standards, though historically just as involved in corruption) than their Bangladeshi National Party (BNP) opposition, who have a recent history of electoral alliances with fundamentalist groups (though the AL have themselves on occasion flirted with religious alliances).

Enclosures
After Independence, various Aid and Planning agencies appeared in Bangladesh; from the West, via the IMF, came subsidies for landowners to move into mono-culture and cash crops for Western markets. This took land away from tenant farmers who farmed for subsistence or for local markets only. With more modern imported farming techniques applied - which were also ecologically destructive and created dependency on Western-supplied fertilisers, non-reproducing seeds etc(4) - rural unemployment grew. This was a new form of enclosures against the peasantry, similar to those European countries had suffered in earlier centuries.

* * *

Emergence of the RMG industry and the female worker
At the same time as these changes in the rural agricultural economy and its gender relations were occurring, the Western economies were also influencing urban industrial development. The Multi Fibre Arrangement (MFA) was introduced in 1974 as a means of controlling the increasing imports to the West from developing countries in Asia and South America. Quotas were allotted to various countries, but the poorest countries - including Bangladesh - were excluded from quota limits. This led to "quota hopping" whereby quota-free countries became attractive to entrepeneurs from quota-restricted nations. The combination of low start-up costs and a quota-free environment - as well as government incentives - encouraged local and foreign investment in the Ready Made Garment (RMG) industry.

The industry grew rapidly from the 1970s as exports expanded across the global market; the RMG sector now contributes around 80% of the country's $18 billion export earnings and employs about 40 per cent of the country's industrial workforce; around 3.5 million people, 85% of them women. Most are young, officially from 14 years upwards (but younger children often work as unofficial 'helpers' for minimal wages). The majority are young women, with a working lifespan of perhaps 20 years, after which their productivity is said to decline - for reasons such as failing eyesight and other physical degenerations, often linked to the malnutrition widespread among garment workers.

Thousands of young women heading for the garment factories were a new and, for some, shocking sight on the city streets. In the early days of the industry the clerics preached sermons outside the factories against this new female 'transgression' and distributed cassette tapes of the sermons. Wild rumours spread of the consequences of allowing men and women to occupy the same workplace. In fact the factories were ideally suited to utilising female labour under existing gender relations; secluded from public view and with behaviour strictly monitored (and often segregated) to maximise productivity and allay fears, the concerns of male relatives of female workers were largely overcome (helped by the added income) and the industry quickly expanded. For married couples this also often changed work roles in the home; men were obliged to, for the first time, take a share of domestic chores to keep the home functioning.

Yet even as capitalist development changes gender relations in this way it does so partly by utilising the existing gender divisions. In the early days of the industry men were employed, many recruited from among the traditional tailoring artisans. But their general indiscipline and consequent low productivity meant that garment bosses began to employ increasing numbers of women; factory bosses explain this preference as due to Bangladeshi women being more docile in temperament than men(5). This is only a reflection of the gender roles and cultural conditioning of the wider society, and in the fact that women have few other economic choices, so are more likely to stick at the job. As a female garment worker explained;

'You see, as women, one of our wings is broken. We don't have the nerve that a man has, because we know we have a broken wing. A man can sleep anywhere, he can just lie down on the street and go to sleep. A woman cannot do that. She has to think about her body, about her security. So the garment factory owner prefers to hire women because men are smarter about their opportunities, you train them and they move on. Even when he compares a small boy and an older girl, he will think, "She's only a girl, she can't wander too far away."' (6)

Challenging purdah tradition
As inheritance traditionally passes through the male line, women's reproductive powers have been jealously guarded as a protection of family assets. Under Islamic rules of purdah (literally 'curtain' or 'veil') women in town and country were expected to stay in the home unless accompanied by a male guardian in public (as is still common in countries such as Saudi Arabia). Traditional village morality determined that women were rarely allowed to work outside the home, so they were limited to gardening and handicrafts such as making fishing nets, spinning and basket making. As unemployment grew and agricultural wages entered a long term decline after Independence, women began - out of both economic necessity and desire for greater independence - to challenge these restrictions. (The country's series of 1970s post-independence disasters - floods, famine and bloody political coups - also considereably dislocated traditional gender roles and forced more self-reliance on many women due to their loss of male protection and support.) Some began working outside, initially quite discretely where possible; others were encouraged to set up village craft or agricultural co-operatives by Aid agencies; some moved away to the towns seeking work - many into factory work in the garment industry and a life in the teeming city slums.

The fact that women make up at least 85% of the garment workforce reflects some dramatic recent social changes. From the 1960s the dowry system shifted its balance of power - whereas the groom's family had traditionally paid a dowry, among wealthy families it now became an obligation for the bride's family to do so. This shift gradually filtered down to become the norm among all classes. For poor families this meant female children became an added burden - not only were their earning capacities limited, now each required a dowry and marriage became a net drain on family wealth. (These are added reasons for the migration of many young women from village to city garment factory; by sending money home, they can transform their economic role from a burden to a family asset.)

The practice of a woman giving a "dowry" or gift to a man at marriage is said to have had its origins in the system of streedhan (woman's share of parental wealth given to her at the time of her marriage). As a woman had no right to inherit a share of the ancestral property, streedhan was seen as a way by which the family ensured that she had access to some of its wealth. There is no clear proof as to when this practice was first started in India.

What began as gifts of land to a woman as her inheritance in an essentially agricultural economy today has degenerated into gifts of gold, clothes, consumer durables, and large sums of cash, which has sometimes entailed the impoverishment and heavy indebtedness of poor families. The dowry is often used by the receiving family for business purposes, family members' education, or the dowry to be given for the husband's sisters. The transaction of dowry often does not end with the actual wedding ceremony, as the family is expected to continue to give gifts. http://www.experiencefestival.com/a/Dowry/id/464788

Women can be easily divorced and abandoned in Bangladesh, left destitute with their children. The garment factories became a lifeline both for abandoned women and those young females who sought to avoid being at the mercy of male dependency and many of the patriarchal limitations that go with it. They were also an opportunity for poor families to add to their income.

* * *

Trade Unions admit "no control" ... but desperately seek it
The struggles against the extremes of exploitation in the RMG industry have a long history and their combativity and violent nature are unsurprising, considering that the Bangladeshi garment workers are estimated to earn the lowest industrial wages in the world. The class struggle and the forms it takes has developed largely autonomously in the industry, with little institutional mediation. This has contributed to the intensity and explosive character of garment workers' struggles; as a possible solution to the unrest there have been repeated calls to institute full trade unionism in the factories. When disturbances reach a certain peak new promises are made to allow trade union activity, but as unrest subsides most factory bosses maintain their refusal to concede to allowing union representation.

"The trade unions have always been denied any effective role in the garment sector and so have little influence over the workforce or abilities as mediators of labour relations;
Dozens of trade unions in the readymade garment (RMG) sector are hardly in any position to resolve recurrent labour unrests, as they have no control over workers at factory level due to inactivity of most workers' unions, observed trade union leaders.
According to some leaders, at present there are more than 28 registered trade unions and more than 13 unregistered trade unions in the RMG sector.
Of the 200 registered workers' union units at factory level, only 15 or so are active, the trade union leaders claimed.
As a result, the central trade union leaders do not have any proper means of intervention in the wake of any labour unrest, although the leaders are meant to play a major role in resolving labour unrest.
During the recent incidents of unrest, garment workers attacked many factories, but the trade union leaders could not communicate with the workers due to the absence of active workers' union units.
[...]
"We know we have a lot of responsibilities in the wake of any unrest in the industrial sector. But, sometimes we feel helpless as we have no control over the workers," said Amirul Haque Amin, secretary general of the National Garment Workers Federation (NGWF). (Daily Star, Sep 14 08)" http://libcom.org/news/bangladesh-militarized-factory-visions-devouring-demons-capital-15092008

The stubborness of employers to deny for so long trade union rights seems an overall strategic weakness; the granting of basic employment rights and an acceptable minimum wage would presumably give greater stability to the sector and the increased costs be offset by a reduction in stoppages. Introduction of official trade union negotiating procedures would also be likely - as it is designed to do - to some degree at least, take initiative away from self-organising workers and their often spontaneous wildcat actions and put it in the hands of union bureaucrats who would tend to dissipate and fragment the present high level of class struggle by channeling it into long drawn out official procedures.

The outsourcing of particular tasks by larger factories to smaller ones is common, such as button holing and other finishing. (Textiles are a flexible 'limp' material, so mechanisation possibilities of many productive aspects have been limited.) The various supply lines of the industry that make up the diverse parts of the division of labour in RMG production range from fly-by-night operations quickly set up with a few machines and a small workforce to hi-tech factories employing thousands. Therefore, at the lower levels of the supply chain - where low operating costs, casual employment and fast delivery of orders are crucial to turning a profit - conforming to health & safety regulations and other legal and financial obligations that trade union recognition would bring appears unattractive to garment bosses. Yet the granting of the recently refused Taka 5,000 (£48/€58/$71) minimum wage increase would add relatively little to production costs, which could easily be absorbed by larger producers, buyers, retailers and consumers;

"Media reports on the garment situation analysis indicate that minimum wage rate for garment workers will hardly hinder the profit margin for the apparel export. The pay rise means 1.0-3.0% increase in garments products. The pay increase constitutes highest 9.2% of total garment export during 2009-10 financial year, when average profit margin was 8.0-10% of export value. According to World Bank economic report, RMG exports nearly doubled in last five years from $6.4bn. to $12.5bn. in financial year 2010." (thefinancialexpress-bd.com - Aug 10 2010)

Yet international buyers for global retail chains exert continual pressure for low prices and in recent statements have expressed no willingness to absorb the cost of wage rises, but only to help factories 'increase productivity'.

Another reason for the long reluctance of successive governments to encourage trade unions and to enforce workplace regulations is that many politicians are investors in the garment trade. In recent statements by the Labour Minister the government now appears to believe - despite continued reluctance of employers - that trade unions are a desirable mechanism for mediating and controlling labour unrest. The issue is whether unions can tame the prevailing mode of struggle of workers and replace its intensity and spontaneity with the formalities of long drawn out bureaucratic and legal procedures. The working class must be dispossessed of its present direct control of its own struggles and domesticated into accepting the alienation of its class power, its passing to a union bureacracy - otherwise unions will be an irrelevancy for capitalism.

"If the union reform is implemented, will it work? Certainly the institutionalising of certain health and safety measures (deaths in factory fires are common, as are many occupational illnesses) as well as legal powers to enforce a living wage that is actually regularly paid would be popular among workers. But this depends on the garment bosses and the state showing a willingness to both grant reforms and then actually enforce them - which has never been the case so far. Promises have repeatedly been broken on these issues - and if there are no concessions on offer to win through union negotiation on behalf of workers, then unions will remain as largely irrelevant as they are today. (Another factor is that unions have often been as corrupt as most other political institutions in Bangladesh and have often been merely instruments of the political goals of one of the main political parties.) The unions have to try to establish credibility and take representative control of a workforce that has, over the past 25 years, shown itself consistently capable of a high level of self-organisation and solidarity. It is possible that the well-established current forms of mass struggle - regular wildcat strikes that then picket out neighbouring factories, roadblocks, riots and attacks on bosses' property - will prove hard to overcome." http://libcom.org/news/3-dead-garment-workers-clashes-unions-promised-new-role-04112009

The labour leaders who accepted the recent minimum wage deal have quickly begun to show their true colours;
"the majority appear to not even be garment workers themselves. They are reported as having been cherry-picked by the government for the negotiations. But some workers' reps were happy to give the settlement the appearance of legitimacy and to accept the offer on the workers' behalf;

Nazma Akter, president of Sammilito Garment Sramik Federation, a platform of 40,000 garment workers, welcomed the announced minimum wage at Tk 3,000 for the entry-level workers. (Daily Star, Aug 1st 2010)

Akter, a former garment worker who has gained a foothold on the career ladder of NGOs and international lobbying has previously been happy to collaborate with garment bosses and publicly lie to deny any workplace abuse of garment workers(1). The National Garment Workers Federation(2) also accepted the offer. Both Federations have condemned violent protests by garment workers and the NGWF have, absurdly, denied worker involvement. http://libcom.org/news/rage-over-wage-04082010

Yet it is reported that, as thousands of garment workers rejected the minimum wage, fought the police and state repression - and in the midst of raids on union offices and arrests of union leaders who refused to condone the miserable wage offer - the NGWF leader is happy to publicly accept the wage deal, to condemn workers' violence and (like a good union bureaucrat) to call for the arrest of workers who actively oppose the deal. The stupid claim that workers aren't involved is a lie, as proved by numerous daily media and police reports of worker unrest and arrests;

Emerging from a tripartite meeting, held at Bangladesh Garments Manufacturing and Exporters’ Association building late in the evening, National Garments Workers’ Federation convenor Amirul Huq Amin said they did not differ with the new wage structure. [...]
‘The workers are not involved in the on-going violence in the apparel industry,’ Amirul Huq told reporters after the meeting He called for identifying and punishing those involved in the recent incidents of violence. http://www.newagebd.com/2010/aug/02/front.html#3."

The NGWF has had past contact with Western anarcho-syndicalists and, more recently, the US Industrial Workers of the World. It has also worked closely with Western NGOs and charities (eg, War On Want). Despite its reputation as a more grass-roots garment workers group it is now clearly jockeying for position with rival bodies to try to 'own' the role of representation of garment labour by impressing the state with what a good cop it can be. Attempting to give validity to a starvation wage settlement and calling for state repression against militant workers and rival unions is a sign of the strength of their ambition.

Charities for liberal and regulated forms of exploitation
NGOs lobby for factories to conform to "compliance" guidelines setting minimum standards for pay and conditions and seek co-operation with Western retailers on these issues. Western multinationals are keen to protect their corporate image by trying to avoid public association with '3rd World sweatshops'. But much compliance is a fiction, aided by employers keeping model compliant workplace areas - that don't represent typical working conditions - solely for compliance officer inspections; two sets of books are often kept showing wage payments higher than really paid; workers are forewarned of inspections and told how to behave, health & safety equipment is temporarily improved etc.

Western NGO's and charities highlight the terrible wages, working conditions and slum housing of garment workers. But they primarily portray them in emotive humanitarian terms as passive victims who only acquire some agency to act in their own interests through the intervention of Western NGO schemes and their lobbying for legal reforms. So the militant class struggles of garment workers are rarely mentioned for what they are - class conflict - but only as tragic and regrettable consequences of an insufficiently regulated industry and 'unethical' consumerism. This ignores the double-edged character of garment workers; while they suffer from extreme exploitation as wage slaves, they are are far from simply passive victims.

The neo-Dickensian "dark, satanic mills" - its relevance for us?
The emergence of such class conflict is a symptom of shifting relations and functions in the global marketplace. The restructuring of Western economies - partly in response to the high levels of class struggle in the 1960s and 70s - moved much manufacturing to the '3rd World' to take advantage of its cheaper labour costs. As the ruling class used unemployment, outsourcing and relocation to change and outmaneouvre the traditional industrial proletariat of the West it created a new industrial proletariat in the East. The Bangladeshi working class is both archaic and modern. Archaic in the sense that its conditions of life often resemble those described by such as Engels in his "The Condition of the Working Class in England in 1844" - terrible insanitary overcrowded slum housing, malnutrition and adulterated food, brutality and extreme overwork in the factory, strong resistance by bosses to trade unions and factory legislation, the state using military repression against strikes and demonstrations etc. But modern insofar as it functions as the recently proletarianised labour power of an export-orientated outsourcing economy (of finished goods, rather than the colonial-era export economy of raw materials) that has been used as a replacement for much Western manufacturing.

"This generation of garment workers is much more literate and politically aware than their predecessors," said Alam [a political scientist]. "They have grown up in the slums not the villages and know that they need to be united and to demonstrate in the streets to realise their aims." (Guardian - 30 June 2010)

The garment workers were combative since the early days of the industry - but the younger generation of today is more assertive. Unlike their parents, who were mostly migrants from rural villages, many of today's young city-bred workers are more literate and more aware of the contradiction between their supposed legal rights within bourgeois democracy and the reality of their situation; this emergent working class has progressively formed a culture of solidarity within itself, as a mode of existence, that counterposes its own class power to its exploiters. It is entirely normal for whole factories to quickly stop work and picket out neighbouring workplaces when conflicts arise. The conflicts sometimes generalise beyond the workplace when the nearby residential slum areas - home to many garment workers and dependents - are also drawn into the conflicts.

Information is lacking in how RMG workers organise their strikes and agitations; perhaps partly because the workers must deal with repression and blacklisting by organising some things secretly - but also presumably because the high-pressure intensity of exploitation in factory conditions mean it takes little for resentments to ignite and spread. So this description (in a business magazine representing the major multinationals operating in Asia), of a wave of strikes during 2005 in Japanese-owned factories in China's Dalian Special Economic Zone, seems to be just as applicable to events in Bangladesh:

"Although the workers apparently do not have leaders, they develop an organizing strategy without a head. Because the workers have widely shared interests and a sense of shared suffering, they react to subtle signs. Workers explained that, when they are dissatisfied, it just takes a handful standing up and shouting 'Strike!' for all the workers on the line to rise up as if in ovation and stop working."

Is there any great revolutionary potential within these struggles? The more 'classic' traditional conditions of the newly emerged industrial proletarians in the export economies of Bangladesh, China, Vietnam, Cambodia and elsewhere - with often weak mediating institutions and traditions (unions, workplace rights legislation etc) - suggests that the workng class will continue to fight fiercely against the extremes of exploitation they face there. If one had to say where the conditions for development of such a radical potential seemed most favourable, it would seem to be in this region. But such developments would take the form of expanding local and international organisational solidarity - not of leftist groups seeking to dominate by assuming leadership of workers' struggles, but as a development of the existing self-organisation of workers themselves.

Leftist and unionist attempts at recuperation and control through their bureaucratic representation of struggles will be one obstacle workers everywhere must confront. But while the state resistance to radicalisation will be in the form of blunt repression when necessary, wage pressure and workers struggles in the East will presumably also continue to bring some level of concessions we've known in the West under social democracy (factory legislation, minimum wage, union recognition, social security benefits etc). Even with the decline in that 'social wage' in the West, it will probably be a long time (if ever) before any socio-economic equilibrium meeting point would be reached. So the 'global nature of the working class' is more wishful than actual right now - the often neo-Dickensian Eastern conditions don't generate struggles readily applicable or inspiring to Western conditions.(7)

But, for some Asian countries, this function within the global economy has possibly its economic limits; for Bangladesh to develop further economically it would need to develop a substantial internal consumer economy - but this requires paying considerably higher wages, which then may threaten its competitive edge in the global clothing market. (China appears better placed to overcome this contradiction, given the massive size of its potential internal market and its global investment strategy(8).) The continued divisions within the Bangladeshi ruling class - originating in the conflicting loyalties taken in the 1971 War of Independence - mean that the political elite remain, so far, too fractured to easily implement any long-term economic development strategies beyond the stand-alone RMG industry.

The consequences of restructuring industry to the East has left the Western working class still largely searching for new cohesive forms of struggle suitable to confront this restructuring. But after 25 years of, largely, retreats in the West, these struggles of the East do remind us that today the class struggle can still be made an undisguised central focus in society; and that the 'social question' of relative class power can still be contested by a militant self-organised class struggle.

NOTES
1) We don't have space here to discuss other non-RMG struggles occurring among, eg, jute, mining and transport workers (see; http://libcom.org/news/river-transport-strike-paralyses-bangladesh-14052010) - nor the Phulbari August 2006 anti-mining movement, significant for it's sheer scale and combativity, almost a local insurrection where 30,000 protesters seized control of a town against a proposed open-cast mine project (see; http://libcom.org/news/bangladesh-unrest-bhulpari-mining-garment-industry-310806 and http://libcom.org/news/bangladesh-phulbari-mining-garment-industry-010906).
2) Naila Kabeer - Subordination and Struggle: Women in Bangladesh; New Left Review 168, 1988.
US advisor's quote cited in Richard Nations, 'Pakistan: Class and Colony, NLR 68, pp. 3-26.
3)

The geopolitical dimension of internal feuds within the Bangladesh army is related to the India-Pakistan rivalry in South Asia. From the very beginning, the "pro-Islam" segments of Bangladeshi society and the army had sympathies for Pakistan and opposed the independence of Bangladesh in 1971. The JI [Jamaat-e-Islami Islamicist party] leadership was at the forefront of mass atrocities on behalf of the Pakistan army on the eve of Bangladeshi independence. When the secular Hasina returned to power in January, she implemented a bold initiative to seek war crimes prosecutions with UN assistance of the JI figures who spearheaded the killings in 1971.
(Asia Times, 3 Mar 09)

4) See article here; http://libcom.org/news/a-world-food-crisis-empty-rice-bowls-fat-rats-16042008
5) An RMG boss explains;

"Why women? Because men smoke, drink, talk a lot, disturb everybody ... they are very vociferous, demand holidays, they have tough friends ... We want as little talk as possible on the machines ... That is something women are prepared to do.
Men in groups will immediately start agitating for more pay ... Women listen better and they don't talk back. Men won't take instructions or accept authority easily. Women are cheaper because they have fewer choices - in terms of physical location of work and in terms of their physical ability to do different kinds of work." (Naila Kabeer - The Power to Choose - Bangladeshi Women and Labour Market Decisions in London and Dhaka; Verso, London, 2000.)

6) Naila Kabeer - The Power to Choose ... op. cit.
7) But bear in mind that migrant workers are Bangladesh's second largest export (mainly across Asia and the Gulf states) and foreign currency earner after RMG products. So knowledge and forms of struggles at home will to some extent be spread by these channels; see, for example - http://libcom.org/news/bangladesh-migrants-export-class-struggle-07082008 .
8) Some observers are claiming that rising labour costs due to strikes in China are an opportunity for smaller RMG-producing countries in Asia to increase their market share (the same observers also sometime lament that foreign buyers are wary of the Bangladeshi industry's reliability due to continual labour unrest). But China is rapidly expanding its economic empire, which may eventually move it away from RMG exports, or at least lead it to outsource to where labour is even cheaper;

"Why would the Chinese government push some of its labor- and energy-intensive industries to move to special economic zones in Africa, even as the U.S. Congress bans the U.S. Agency for International Development from financing any activities that could relocate the jobs of Americans overseas? Because Chinese planners want industrialists at home to move up the value chain. Polluting industries such as leather tanneries and metal smelters are no longer tolerated in many Chinese cities. And as the world economy recovers from the recent economic recession, wages and benefits will resume rising in China's coastal belt, as they had been before the crisis. Some factories will move further inland, but others will go offshore, closer to both the sources of and the markets for raw materials.

The early stages of industrialization might bring pollution, low wages, and long workdays, especially if the Chinese zones are successful. But like China's resource-backed loans, the planned economic zones promise to provide African countries with some things they very much want: employment opportunities, new technologies, and badly needed infrastructure. This is an opportunity for African states to ride into the global economy on China's shirttails rather than remain natural-resource suppliers to the world." (D. Brautigam - Jan 2010; http://www.foreignaffairs.com/articles/65916/deborah-brautigam/africa%E2%80%99s-eastern-promise )

Source; originally written for & published by Insurgent Notes no. 2, October 2010 - http://insurgentnotes.com/

Our aim here is to analyze in brief the recent Tekel worker struggles in Turkey at the level of national economy. The Tekel strikes which began on 15 December 2009 and ended on 26 May 2010 was the result of an ongoing privatization process which had been in effect since 1980.1 In 1999, through “an IMF restructuring program, privatization continued at a more accelerated pace and came to a peak through the application of Article 4/C, of Law No. 657 enacted by the ruling Justice and Development Party (AKP).”2 What started out as demands by the Tekel workers grew into strikes as the AKP government rejected any concessions. In taking such a firm stance as the government had, the strikes multiplied in their participation as well as intensity, which culminated into forming a brief tent commune in the middle of Ankara, the capital of Turkey. Police and other security forces were eventually dispatched to quell the striking workers, whose violent confrontation led a few of the workers to question the nature of the police in a class society.3 These strikes were important in the sense that contrary to the prevailing Huntingtonian paradigm, which asserts that the dominant conflict in contemporary society is based upon cultural and religious divisions, such a paradigm is inefficient in explaining one of the largest strikes in modern Turkish labor history. In Turkey, where the working class is deeply divided4 along such lines, the Tekel workers managed to overcome these internal divisions when confronted with unfavorable changes in the existing material conditions.
Tekel, which translates to “monopoly” in Turkish, has its origins as a Franco-German company specializing in tobacco production.5 After the 1923 Izmir Economic Congress, which established corporatism as the newly-formed economic policy of the Republic of Turkey, the new Republican ruling class nationalized many private foreign companies. In February of 1925,6 Tekel along with other companies, passed under state-control. The factories are scattered throughout the country, particularly along the Black Sea cities of Samsun and Tokat, which are majority Sunni Turk and in the southeastern cities of Bitlis, Malatya, and Adıyaman, where both Sunni and Alevi Turks as well as Sunni and Alevi Kurds are present. In 1999, under orders from the IMF, the Turkish agricultural industry was to be subjected to deregulation.7 With the rise of the neoliberal AK Party in November 2002, the pace of globalization increased dramatically in Turkey, and by December of 2003, “[s]everal Tekel plants were sold to MEY, a national consortium for $292 million.8 In the following years since, the company was resold to several other international holding companies such as the Texas Pacific Group ($900 million)9 and as of February 2008, British American Tobacco ($1.72 billion).”10 BAT managed to acquire “six factories, which employed 15,313 workers. Only one out of the five factories was to remain operational, the rest were closed down, displacing some 12,000 workers.”11
On 14 December 2009, the Tekel workers struck in reaction to Article 4/C of Law No. 657, a labor law which was previously applied to professionals who worked in the public sector on a contractual basis, was extended to public employees whose workplaces were being privatized. This offer was proposed as an alternative to the Tekel workers who had otherwise quit or found work elsewhere. However, 4/C included included several conditions, which the workers had to accept, such as:
Ceding the right to organize.
Accepting a sharp decline in wages
The elimination of severance pay and health benefits.
Workers would be allowed to work for 10 months without any guarantee of job security and alotted two sick days within this time period.
Workers would be forbidden to work a second job during these 10 months.
Employers would have the power to dimiss their employees at any time.12
The results of BAT’s purchase of Tekel in combination with the newly-enforced 4/C resulted in confrontation between the workers and a government they once firmly supported. For many of Tekel workers, the dismissive response from the current Prime Minister Recep Tayyıp Erdoğan was met with greater hostility and to an extent disappointment. As Fuat Karlıkaya, a worker from a Tekel plantation in Tokat explained, “the majority of my work friends voted for AKP. Now they are very regretful. Remember, many of my friends who wear the headscarf are participating in the strike.”13 AKP, many of whose members were formerly part of the now-defunct Islamist Welfare Party (Refah Partisi), which was the ruling party in 1996-97 until the military had threatened to oust them from power, attracts many working class votes through its use of religious rhetoric and promotion of conservative values. As the protests escalated in January of 2010, it became apparent that AKP was not interested in brokering any favorable terms to the workers. As Erdoğan notoriously said in response to the growing unrest: “[The workers] just sit there doing nothing.”14
Following orders from the ruling government, the police used a variety of brutal methods to break the mounting resistance of workers, such as tear gas, pepper spray, water cannons, clubs and mass arrests. In one instance, “workers escaping tear gas were forced into a nearby lake, where the police subjected them to water cannons in the middle of winter.”15 This however, did not deter the workers from responding in kind. Part of what made the Tekel strike particularly notable was strength and extent of the resistance. News reports of workers conducting hunger strikes or what they called “death fasts” were widespread and the establishment of a tent commune on Sakarya Street where the workers gathered lasted for about 40 days.16 Free of the “meddlesome trade union bureaucrats, workers were able to discuss amongst themselves and sympathizers began to rethink their initial perceptions about socialism.”17 In one instance, the Tekel workers living in the commune were “joined by an additional 30,000 workers who spontaneously showed up to express their solidarity.”18 Yet after more deliberations by the government, one of the last radical acts which occured during the strike was the occupation of the Istanbul branch office of Türk-İş, the largest labor union confederation. In May, approximately 200 workers stormed the union’s office and hung slogans outside of the building Istanbul office of Türk-İş, the largest labor union confederation, and “hung slogans outside of the building in support of the 40 hunger-striking workers.”19
The results of the strikes resulted in little material gains however, as the work period was extended from 10 to 11 months and their salaries increased by about 80 Lira.20 The most significant victory by the workers was the application of Article 4/C to the Constitutional Court, the highest judicial authority in Turkey. Today, the struggles have formally ended, yet the outcome of this court trial could trigger further protests if the demands of the workers are not satisfied.
In our estimation however these gains were greatly outweighed by the overcoming of pronvincialism, racism and religious bigotry which had been (and still is) present among the working class in Turkey. Ramazan Ercan, one such worker who had taken part in the protest, remarked that differences between easterners and westerners in Turkey diminished. “A worker from Samsun said that ‘I had a different opinion of Easterners. And I said that I also had a different opinion about those from Samsun. The state does such a thing that everybody becomes an enemy of each other. When you get to know each other, you understand that our fate is the same.”21 Or, as Mustafa Alacalıoğlu, another worker put it: “There are no differences between Kurds, Alevis, Sunnis and Turks. We have no party.”22

• 1On 12 September 1980, a CIA-backed right-wing military coup led by General Kenan Evren overthrew the existing government and began the process of privatization of state-owned manufacturing facilities in Turkey.
• 2 Erinç Yeldan, “Awakening of the Proletariat in Turkey,” Sendika.org 30 January 2010. 16 August 2010.
• 3In one revealing part of a group interview conducted by Express magazine, two of the workers said the following: Fadıl Elçi: “The police attacked us with [tear] gas, but the blame should be put on those who gave the order. Except the police officer is also part of the people. If he were to disobey [orders] they would fire him.” Ramazan Ercan: “Fadıl, besides the rich man’s son would never be part of the police. But the police who had come forgot their class.” “Sömürgelerdeki köleler gibiyiz,” Express 01-15 January 2010, Issue No. 1: 19.
• 4 Turkey is divided along two broad ethnic and confessional lines, which are Turks v. Kurds and Sunni Islam v. Alevism.
• 5 Stanford J. Shaw, History of the Ottoman Empire and Turkey: Volume II, Reform, Revolution and Republic: The Rise of Modern Turkey 1808-1975 (Cambridge: Cambridge University Press, 1977), 506; 233.
• 6 Ibid., 506.
• 7 Erinç Yeldan, “Awakening of the Proletariat in Turkey.”
• 8 Ibid. Yeldan notes that the produced stocks of the plants which had been sold were valued at $126 million.
• 9Ibid.
• 10 Ali Berat Meric and Thomas Mulier, “BAT bids $1.72 billion to Win Turkey’s Tekel Auction,” Turkishjournal.com, 22 February 2008. 16 August 2010.
• 11 İzgi Güngör, “Turkish experts divided over Tekel privatization dispute,” Hurriyet Daily News and Economic Review, 1 February 2010. 16 August 2010.
• 12 Tolga Korut, “Tekel Workers Have Final Say for End of Resistance,” Bağımsız İletişim Ağı (BIAnet.org), 24 January 2010, 16 August 2010.
• 13 “Ağaç bile kaderine hükmetmeye çalışır,” Express 01-15 January 2010, Issue No. 1: 17.
• 14 “Boş boş oturuyorlar” in Turkish.
• 15 “Polis tekel işçilerini göle doktu,” Taraf, 18 December 2010, 24 August 2010.
• 16 Sungur Savran, “The Tekel Strike in Turkey,” Center for Research on Globalization (Globalresearch.ca), 17 March 2010, 22 August 2010.
• 17Ibid.
• 18Ibid.
• 19“Tekel işçileri Türk-İş’i işgal etti,” CNNTürk, 25 May 2010, 6 August 2010.
• 20 Labor activist Yunus Öztürk, telephone interview regarding on Article 4/C of Law No. 657. 16 August 2010.
• 21 “Sömürgelerdeki köleler gibiyiz,” Express, 19.
• 22 Ibid., Express.

Kevin Anderson’s Marx at the Margins is a very good and very important book. I hope to do it at least partial justice. But the book needs to be read; reading a review will not suffice to appreciate or understand its depth and breadth. The book is finely written and Anderson goes to considerable lengths to provide readers with background information to be able to make sense of what might be otherwise obscure matters.

Anderson’s argument is based on a careful and comprehensive reading of the writings of Marx (and, to the extent necessary, Engels) on:

1. The history, economics and politics of societies and nations outside Western Europe (but including Ireland),
2. Movements of national liberation, as in Ireland, Poland and India, and
3. The relationship between ‘race’ and class in countries such as England and the United States.

Anderson draws upon his extensive knowledge of the full body of Marx’s writings, including those that have still not been published in any language. (In an Appendix, he provides an especially illuminating account of the publishing history of Marx’s works, including the Marx-Engels Gesamtausgabe (MEGA), the just over twenty year old international effort to collect, edit and publish all of Marx’s writings in a manner undistorted by narrow political interests. The total number of planned volumes for MEGA is 114; just over fifty had been published as of the date of this book’s publication).

Anderson convincingly demonstrates that few of the commonplace observations about the limitations of Marx’s ideas when it comes to matters other than the exploitation of labor by capital or the accusations that Marx was guilty of Euro-centrism (as articulated by critics such as Edward Said) can withstand careful scrutiny. His core argument about the eventual subtlety, sophistication and universality of Marx’s work, involving numerous historical periods and political situations, is built upon a fairly straightforward claim—that Marx changed his mind over the course of almost forty years of committed intellectual and practical work. He acknowledges that, in their early writings (including The Communist Manifesto), Marx and Engels emphasized the ways in which capitalist development battered down all ancient customs that stood in the way of progress—while, at the same time, they denounced the pain and suffering that such development inflicted on all who came in its way. Furthermore, and worse, they subscribed too easily to the common prejudices of their time when it came to matters such as the nature of the Slavic, Indian and Jewish peoples.

While Anderson always provides contexts within which to judge what the two revolutionaries wrote (such as the profoundly reactionary character of the Russian state and its domination of the Slavic peoples), he makes no attempt to obscure matters. He includes the following examples:

• In 1849, writing about Eastern Europe, Engels said that, “except for the Germans, the Poles and the Magyars (Hungarians), ‘all the other large and small nationalities] are destined to perish before long in the revolutionary world storm. For that reason they are now counter-revolutionary’ (49). He went on to predict, ‘the disappearance from the face of the earth not only of reactionary classes and dynasties, but also of entire reactionary peoples. And that too is a step forward’ (49). In the same article, Engels suggested that the Slavs had never really had a history of their own.
• On a number of occasions, Marx made especially derogatory comments about the Jews—in both published and unpublished documents. In the 1845 “Theses on Feuerbach,” Marx criticized Feuerbach for having a notion of praxis that was ‘defined only in its dirty-Jewish [schmutzige-judischen] form of appearance’ (51). Anderson also comments that, while “On the Jewish Question” provides valuable insights, it is marred by “extremely problematic comments on Jews” (52).
• In 1853, in an article published in the New York Tribune, Marx suggested that India had been more or less frozen in time. The traditional village system had ‘transformed a self-developing social state into never changing natural destiny and thus brought about a brutalizing worship of nature …’ (52).

At the conclusion of the Tribune article, Marx managed to do something that would attract the ire of Edward Said a hundred and twenty-five years later; he quoted Goethe—specifically, a stanza from West-Eastern Divan, a poem about Timur, who conquered Delhi in 1398. The stanza reads:

Should this torture then torment us
Since it brings us greater pleasure?
Were not through the rule of Timur
Souls devoured without measure?

Said seized upon Marx’s quoting of Goethe as proof positive that Marx shared all of the traditional condescending views of the Orient and that, ‘in article after article he returned with increasing conviction to the idea that even in destroying Asia, Britain was making possible there a real social revolution’ (17). Anderson methodically takes apart Said’s claim by pointing out that the literary critic had failed to notice the ways in which Marx had used the same Goethe stanza to sarcastically highlight the self-satisfaction of various ruling classes in the crimes they perpetuated against the European working classes—including an 1855 newspaper article on the economic crisis in England, his 1861-63 economic manuscripts, and in volume I of Capital (17-20). In addition, Anderson argues that Said simply had either not read or not understood Marx’s later writings on India (even as early as later that same summer of 1853) where he increasingly emphasized his disgust with British rule, his sympathies for Indian independence and his support for Indian revolts.

As Marx studied varied societies more intensively, he came to reconsider some of his earlier views on countries such as India, Russia and China.1 Four aspects of his evolving views are especially important—

1. The survival of communal forms in late 19th Century societies (societies as varied as the Indian, the Russian and the Native American) suggested that it might not be necessary for all countries to be dragged through the squandering of human life that capitalist development required in order to arrive at a higher stage of social organization 2 ;

2. there was no single path that the various countries of the world had been on prior to capitalist development—there were, of course, similarities but it was essential to appreciate the differences;

3. There is no single path that countries will follow even after their encounter with capitalist realities;

4. There is a complex, and reciprocal, relationship between the development of revolutionary possibilities in the advanced and “backward” countries.

Marx was increasingly interested in understanding the ways in which movements of opposition to colonialism might make a direct contribution to the renewal of revolutionary movements in the capitalist metropolises and the ways in which the workers’ movements might advance the cause of freedom from national oppression.

Anderson eventually concludes that, in spite of the continued survival of indigenous communal forms in Africa, Asia and Latin America today, these survivals can probably no longer represent an alternative way forward:

… none of these are on the scale of the scale of Russian or Indian communal forms during Marx’s day. Nonetheless, vestiges of these communal forms sometimes follow peasants into the cities and in any case, important anticapitalist movements have developed recently in places like Mexico and Bolivia, based upon these indigenous communal forms. On the whole, however, even these areas have been penetrated by capital to a far greater degree than was true of the Russian or Indian village of the 1880s. Marx’s multilinear approach toward Russia, India, and other noncapitalist lands is more relevant today at a general theoretical or methodological level, however. (245)

At the heart of this methodology is an insistence on specific concrete analyses. In 1890, Paul Lafargue, Marx’s son-in-law, wrote about his memories of Marx. He commented directly on his manner of thinking and working:

He saw not only the surface, but what lay beneath it. He examined all the constituent parts in their mutual action and reaction; he isolated each of these parts and traced the history of its development. Then he went o n from the thing to its surroundings and observed the reaction of one upon the other. He traced the origin of the object, the changes, evolutions and revolutions it went through, and proceeded finally to its remotest effects. He did not see a thing singly, in itself and for itself, separate from its surroundings; he saw a highly complicated world in continual motion.3

Much of the writing Anderson examines was produced during the very years when Marx was formulating the most theoretically abstract elements of his critique of political economy (reflected in the Grundrisse and the three volumes of Capital), when he was also an active journalist (Anderson notes that Marx’s journalism accounts for five full volumes in the Collected Works, MECW) and when he was a leading political thinker/activist, on issues such as Polish rebellions against foreign domination and the American Civil War, within the emerging First International.4

Anderson provides what I thought were fascinating glimpses into Marx’s daily life; he was not the only agitator in the family. Perhaps my favorite passage in the entire book is the following account of the Marx family’s participation in a London demonstration on October 24, 1869 demanding amnesty for Irish prisoners, written by Marx’s daughter Jenny:

In London the event of the week has been a Fenian demonstration got up for the purpose of praying the government for the release of the Irish prisoners. As Tussy [Eleanor/another daughter] has returned from Ireland a stauncher Irishman than ever, she did not rest until she had persuaded Moor [Marx], Mama and me to go with her to Hyde Park, the place appointed for the meeting. This Park, the biggest one in London, was one mass of men, women and children, even the trees up to their highest branches had their inhabitants. The number of persons present were by the papers estimated at somewhere about 70 thousand, but as these papers are English, this figure is no doubt too low. There were processionists carrying red, green, and white banners with all sorts of devices, such as “Keep your powder dry!,” “Disobedience to tyrants is a duty to God!” And hoisted higher than the flags were a profusion of red Jacobin caps, the bearers of which sang the Marseillaise—sights and sounds that must have greatly interfered with the enjoyment of the portwine at the clubs. (134-135)

If, one day, some film maker finally gets around to making a biopic about Marx, I sure hope that he or she finds a way to picture Marx and the family amidst those demonstrators—maybe even capturing Marx’s unrecorded complaints about how bad the speakers were (even though he probably couldn’t hear them). It appears that Marx was glad that he had gone and that he had, characteristically, noticed something important. Two days later, he spoke to the General Council about the demonstration and said, “The main feature of the demonstration had been ignored, it was that at least part of the English working class had lost their prejudice against the Irish” (135).

Each dimension of Marx’s life and work penetrated the others. In November of 1864, Marx had written about the origins of the International:

In September the Parisian workers sent a delegation to the London workers to demonstrate support for Poland. On that occasion, an International Workers’ Committee was formed. The matter is not without importance because … in London the same people are at the head who organized the gigantic reception for [Italian revolutionary Giuseppe] Garibaldi and, by their monster meeting with [British Liberal leader John] Bright in St. James’s Hall, prevented war with the United States. (67)

The English working class had been forthright in opposing any English intervention on the side of the Confederacy in the US Civil War—even though the Northern blockade of shipping of cotton from the South was leading to a collapse in the English textile industry, thereby resulting in the losses of many jobs—a solidarity that Marx celebrated. Hard as it is to imagine these days, those English workers were prepared to support the cause of abolition even though such support resulted in their own immiseration. A far cry from the sad spectacle of the 1980s when American anti-apartheid organizers insisted that their efforts to disinvest from the South African economy would not adversely affect the pensions of American workers—indeed, they insisted that they would be opposed to any disinvestment that adversely affected those pensions. It was a long climb down from the heights of the 19th Century.

In his “Inaugural Address” to the International, Marx argued that the callous hypocrisy and complicity of the ruling classes in the suppression of the Chechens (yes, they were being oppressed by Russia then too) and the Poles and their all but open support for the Confederate States in the Civil War ‘have taught the working classes the duty to master themselves the mysteries of international politics. … The fight for such a foreign policy forms part of the general struggle for the emancipation of the working classes’ (67).

At times, the International, under Marx’s clear influence, functioned as if it was the foreign affairs ministry of the global proletariat. In December of 1864, the General Council of the International wrote to Abraham Lincoln to congratulate him on his re-election. The address was delivered to Charles Francis Adams, the American minister to Britain. Anderson quotes the following extended excerpt:

We congratulate the American people upon your re-election by a large majority. If resistance to the Slave Power was the reserved watchword of your first election, the triumphant warcry of your re-election is, Death to Slavery. From the commencement of the Titanic-American strife the working men of Europe felt instinctively that the star-spangled banner carried the destiny of their class. … The working classes of Europe understood at once, even before the fanatic partisanship of the upper classes for the Confederate gentry had given its dismal warning, that the slave-holders’ rebellion was to sound the tocsin for a general holy crusade of property against labor, and that for the men of labor, with their hopes for the future, even their past conquests were at stake in that tremendous conflict on the other side of the Atlantic. Everywhere they bore therefore patiently the hardships imposed on them by the cotton crisis, opposed enthusiastic ally the pro-slavery intervention, importunities of their betters—and, political power of the North, allowed slavery to defile their own republic; while before the Negro, mastered and sold without his concurrence, they boasted it the highest prerogative of the white-skinned laborer to sell himself and choose his own master; they were unable to attain the true freedom of labor or support their European brethren in their struggle for emancipation, but this barrier has been swept off by the red sea of civil war. The working men of Europe feel sure that, as the American War of Independence initiated a new era of ascendancy for the middle class, so the American Anti-Slavery War will do for the working classes. (110)

While the American minster declined to meet with a delegation from the International, he did transmit the letter to Lincoln. And Lincoln responded:

Nations do not exist for themselves alone, but to promote the welfare and happiness of mankind by benevolent intercourse and example. It is in this relation that the United States regard their cause in the present conflict with slave-maintaining insurgents as the cause of human nature, and they derive new encouragement to persevere from the testimony of the workingmen of Europe that the national attitude is favored with their enlightened approval and earnest sympathies [emphasis added]. (111)

In the letter to Lincoln, Marx had highlighted the debasement of white American workers by their support for slavery and white supremacy and the key role that abolition would play in opening up the landscape for broader struggles. When it came to the relation of the English workers to Ireland and the Irish workers among them, he had the same approach:

I have become more and more convinced—and the thing now is to drum this conviction into the English working class—that they will never do anything decisive here in England before they separate their attitude towards Ireland quite definitely from that of the ruling classes, and not only make common cause with the Irish, but even take the initiative in dissolving the Union established in 1801, and substituting a free federal relationship for it. … Every movement in England itself is crippled by the dissension with the Irish, who form a very important section of the working class in England itself. Letter to Kugelmann, 1869. (145)

But approval and support did not require the abandonment of enlightenment. Two years earlier, Marx had been sharply critical of a bombing outside a London jail holding Irish prisoners. The bomb had exploded in the wrong place and killed a dozen residents in a nearby neighborhood. Marx immediately wrote to Engels:

The latest Fenian exploit in Clerkenwell is a great folly. The London masses, which have shown much sympathy for Ireland, will be enraged by it, and driven into the arms of the government party. One cannot expect the London proletarians to let themselves be blown up for the sake of Fenian emissaries. Secret, melodramatic conspiracies of this kind are, in general, more or less doomed to failure. (130)

Marx had indeed figured many things out and far too much of what he thought and wrote was never available soon enough to revolutionaries in the years since his death—whether we’re talking about the early philosophic manuscripts, the break-through notes of the Grundrisse, the multiple editions of Capital, or the ethnological notebooks of his last years. Much of what we had not seen is now recovered and Anderson has provided an indispensable re-introduction to the great revolutionary. There is much more to write about and think through but my hope is that this review provokes many to read the book and to become part of conversations about its relevance to pressing issues of this day, such as the form, content and meaning of political Islam (in all its various shades) and the continued inability of far too many leftists to understand that simple defiance of the United States (in the manner of Hugo Chavez or Mahmoud Ahmadinejad) does not have anything to do with the establishment of an emancipated society anywhere.5 Marx’s vision and his dreams were, over the course of his life, increasingly universal ones. They need to be brought to life once again.

• 1It is beyond the scope of this review to summarize Anderson’s accounts of Marx’s extensive studies, in the last years of his life, of places as varied as Russia, Indonesia, Algeria, and Latin America. What is worth mentioning is that Marx thought they were important enough that he neglected the editorial work on the revisions of Capital in their favor.
• 2For a wonderful appreciation of Marx’s late understandings of Native American societies and their political implications, see Franklin Rosemont’s “Karl Marx and the Iroquois.”
• 3http://www.marxists.org/archive/lafargue/1890/xx/marx.htm
• 4A good selection of Marx’s newspaper writings is available in Dispatches from the New York Tribune: Selected Journalism of Karl Marx, edited by James Ledbetter. New York. Penguin: 2007
• 5 Recently, an especially deplorable scene took place in New York when representatives of various “progressive” or even “revolutionary” groups met with Ahmadinejad after his appearance at the UN to denounce American imperialism. It is of no use to suggest that those who attended should be ashamed of themselves—they have made it clear that they are no longer able to have such sentiments. For a celebration of the meeting, see U.S. progressives meet with Iranian President Mahmoud Ahmadinejad.

July 2010

Barcelona

…Our journal continues to come out once a year. We are suffering from the same paralysis which affects the rest of the population in dealing with the crisis. In my opinion, the generalized awareness of the gravity of the crisis has left people perplexed and paralyzed. There are also positions on the left which deny the gravity of the crisis and attribute it to a deliberate exaggeration by the government in order to frighten the population. Without denying an element of truth in this, this attitude expresses a resistance to accepting the reality of the crisis.

Underlying this attitude is the consciousness which says, in spite of everything, “we are doing OK” or that we can tighten our belts without the conditions of life undergoing a dramatic deterioration–which is the case for a fair number of people. Thus the people most affected are the lowest strata of the wage-labor population and, particularly, the immigrants, who were attracted to Spain by the growth of the past fifteen years and who, like so many Spaniards, fell into the trap of mortgages to buy places that they now cannot afford.

Many of them already have to rely on food banks and public assistance to survive, but on the whole, at least for now, the situation is not dramatic. The family structure, moreover, is a safety cushion for young people, and the state has mechanisms of containment (social assistance, subsidies) which, however miserable they are, also keep the deterioration of living conditions under control. With this margin of maneuver, the government is reckoning it can maintain social peace.

The so-called majority unions, the CCOO and UGT (Comisiones Obreras and Union General de Trabajo, loosely tied to the (Stalinist) “United Left” and the Social Party respectively) are totally institutionalized and their negotiations have as their sole purpose the maintenance of their position inside the state apparatus, at the expense of demands on behalf of all workers. In fact, the reform of the labor law, which has dominated public debate in recent months, is of scant importance, if we keep in mind the profound changes in the labor market, and is something that was worked out years ago with the consent of the unions.

The so-called alternative unions have neither power nor any perspective; they are trapped in a narrow vision of trade unionism at a time when the current situation has gone beyond the possibilities of any ordinary trade-union response.

C.V.

August 2010

Mexico City

…The political situation of the workers’ movement in Mexico is zero or less than zero. Mexico is undergoing, politically and socially, a very deep collective depression, whose outcome I can’t foresee: either toward the collapse of any alternative and an indefinite lapse into barbarism, (the usual thesis of the ICC—International Communist Current—which would seem to be gaining plausibility; for example, yesterday two men, hung and mutilated, turned up under a bridge near where I was walking in Cuernavaca, which used to be the paradise of American artists and retired people) or else towards a chaotic explosion (which is also already underway).

Whatever else you hear from other Mexicans, to the effect that the situation in Mexico is not so bad, (like that imbecile who told you that the 2006 elections were not stolen), is nothing but farce. Mexico has sunk into fear, simulation and escape from its reality, and the intellectuals (who are they?) are nothing more than the most pestilent and putrefied part of this collapse.

What happened at Cananea [Editor’s note: the three-and-a-half-year copper strike in northern Mexico crushed by a police and army assault early this summer] is unbelievable. IT HAS NOT BEEN COVERED OR FOLLOWED UP BY ANYONE: FORGET ABOUT THE TRADITIONAL NEWSPAPERS, NOT EVEN BY THE ‘ALTERNATIVE’ PAPERS OR MEDIA. This is the reality.

According to the latest news I have, it seems that a judge has ruled in favor of the strikers, saying that they can re-enter the premises…I don’t understand what is happening…

Yesterday I received the bulletin of the dissident fraction of the ICC on the fucking “proletarian political milieu” and on the eternal and useless discussion of whether or not the ICC or other groups could be salvaged. NOT ONE SINGLE MENTION OF THE CANANEA MINERS.

Nicolas Santibanez

Related articles

• Grupo Mexico controls Cananea, union fights on (reuters.com)

Insurgent Notes No. 3 appears (in mid-March 2011) in the midst of a social ferment that portends the regroupment necessary to confront, at last, the ongoing attack on the world working class of the past four decades. The creation of extra-union “interprofessional committees” in the French movement of last fall, the riots in London in December against massive budget cuts in the U.K., the revolt sweeping the Arab world from Algeria to Bahrein, and the recent Bolivian general strike against Morales are so many signs that the “bad old days” are ending. It was high time.

Centered as we are in the U.S., we take special note of the month- long mobilization in Wisconsin in response to the all-out attack on public unions and collective bargaining rights there. Hence our first two articles, by Loren Goldner and S. Artesian, deal with the Madison movement and the historical backdrop to it, both in Wisconsin history and in the empire of the billionaire Koch brothers, who are prominent among the forces financing the charge against U.S. public employees.

On a similar theme but offering a more general overview, John Garvey takes up the question of the crisis of education in the U.S.—the crisis of the reproduction of labor power—and the way in which teachers’ unions have generally stood in the way of attempts to deal with it. Dealing yet again with the public sector, Henri Simon offers an analysis of the crisis of the pension system in France as a backdrop to the important movement against pension reform there last fall.

Finally, as part of our ongoing polemic against the ideologies of the complacent left, we present two articles of a more historical and theoretical nature. S. Artesian begins his planned series offering a critical examination of Marx’s theory of ground rent, and Loren Goldner analyzes the authoritarian and fascist origins of “anti-imperialist” ideology in the interwar period, using the example of the Bolivian MNR.

–The Editors

(Editor’s Note: The following article generated sharp debate in the IN editorial board because of its discussion of the race/class dynamic in the Wisconsin movement. We welcome responses from readers on this and any other controversial points.)

Insurgent Notes takes heart from the fact that, nine months after our first issue, governments in two countries (Tunisia, Egypt) have fallen, a third (Libya) is teetering on the brink, and masses have gone into the streets in Algeria, Yemen, and Bahrein. A February general strike in Bolivia, in response to further austerity, put paid to the myth of the “socialism of the 21st century” of Morales. Last fall, extra-union inter-professional committees appeared in the mass movement in France against Sarkozy’s public sector pension “reform”, and in December in Britain, working-class youth led the rioting against David Cameron’s massive budget cuts there. When we used the subheading (in Insurgent Notes No. 1, for “The Historical Moment That Produced Us”) “1789-1848-1870-1905-1917-1968-20??” even our guarded historical optimism did not allow us to foresee that 2011 could well be the next in the sequence. We are hardly so brash as to claim influence on these developments; we merely felt the early winds of the emerging tempest, and aspired, and continue to aspire, to be part of it.

Now, as we prepare IN No. 3 for publication, this seemingly global contagion has been extended in the biggest U.S. working-class mobilization in forty years in the American heartland of capitalism, in Madison, Wisconsin.

Whatever else may happen in the near to medium future, events have shown that the past four decades of class warfare (in the U.S. above all) in which only one side—the capitalist class–was fighting—have come to an end.

This hardly means that the institutions which safeguard and reproduce the system have been overthrown, however much they must stretch themselves to keep up with the daily-unfolding reality. In Tunisia and Egypt, “caretaker governments”, politicians, parties and trade unions are working overtime to put an acceptable face on a revamped social arrangement to channel the popular movement, and above all the working class, into calmer waters.

Let us look, then, at the balance of forces as they are shaping up in Wisconsin. Forty years of unrelenting propaganda, chipping away at the post-1945 Keynesian dispensation in the U.S., have prepared this moment, when capital aims at turning its long war of attrition into a rout.

There can be little doubt that powerful forces have designated 2011 as the year for a showdown with public sector unions—state and local– in the U.S., and these forces clearly see Wisconsin as a national test case to be repeated elsewhere, as soon as possible. These forces, propelled and financed by the likes of the infamous Koch brothers, want to use the momentum of the past year’s hard right advance (Tea Party, etc.) against Obama’s “socialist” policies (most notably the health care “reform”, written by the insurance companies) to deliver a knockout blow to what they see as the last standing obstacles to their unrestrained “free market” feeding frenzy. They see their plan to abolish public sector collective bargaining, even after the anointed spokespersons (Democrats, union officials) of the opposing side have already whimpered their assent to “shared pain” in various budget cuts, as a 1-2 punch that will simultaneously allow them a free hand in ridding the state of whatever remains of public services, and also deprive the Democratic Party of a major source of its funding, the public sector unions.

For forty years, during which income disparities in the U.S. reached and then surpassed those of the pre-1929 period, the ideologists of the “free market” (promoting of course their agenda for the proper use of state power to get their snouts deeper into the public trough) , the wealthiest people in the U.S., who control the system at every level, have quite succeeded in demonizing “elitist” “special interests” highjacking the common good. “Special interests” have included at different times black people, Latinos, women, or gays, but no “special interest” has drawn right-wing venom like what remains of the organized labor movement. (Recall, for example, the Wall Street Journal’s apoplectic response to the mildly successful 1996 UPS strike.) Meanwhile, that labor movement has declined from 35% of the work force at its 1955 peak to 12% today, with only 8% in the private sector. Such a decline, expressing first of all a hemorrhaging of decently-paid and stable unionized jobs through a combination of outsourcing, casualization and capital-intensive development, is one important factor in creating the gap between working conditions in the public and private sectors. Contemporary propaganda aimed at whipping up support for right-wing populist rage never mentions that public employees as a whole appear “privileged” today only because millions of other workers have been so beaten down for so long. (That the unions in both the private and public sectors, trapped in their ostrich-like parochialism, have never lifted a finger over the past 40 years to address this reality, nor do they do so today, is a problem to which we will return.)

Linked to this unending hurty-gurty about “special interests” has been a similar, droning one-note song about the stagnant, slothful state and “big government”, as if these benighted souls did not know that it was “big government” that saved capitalism from the precipice in the 1930’s depression. While we at Insurgent Notes have no use for the capitalist state, from an entirely different point of view, we note the same distortion of reality in right-wing propaganda, ignoring such statist phenomena as the Manhattan project or the Tennessee Valley Authority, not to mention the role of the state in the economic rise of Asia (Japan, South Korea, Taiwan and now China) since the 1960’s, or finally the statist-protectionist (Hamiltonian) origins of U.S. capitalism itself (from which the Asians got the idea, via Germany). But of course the real targets of such muddying of the waters are such “entitlements” as widely-popular Social Security and Medicare. The “free-market” ideologists never mention the parasitical HMOs as a significant reason for spiraling health care costs and hence further state deficits, nor debt service (to fully-protected investors) on those deficits, nor the trillions spent (more recently) on war in Iraq and Afghanistan, not to mention the multi-trillion dollar bailout of the banks after 2008 and the resulting ongoing bonuses of the hedge fund and securitization crowd. The beneficiaries of such largesse are of course not “rent-seekers”, but the state civil servant retiring on $19,000 a year or the destitute people in the slums left behind by de-industrialization, surviving on disability or Social Security and Medicare are, for the right, precisely that. Hundreds of pinhead PhDs in grey suits spend their days at the American Enterprise Institute, the Cato Institute or the Peter Peterson Institute putting the proper spin on statistics and propaganda to perpetuate this distortion of reality. All of this, moreover, is supposedly argued on behalf of the beleaguered “taxpayer” (and all this funded by the class in society that pays a smaller percentage of its income in taxes than any other), as if most “taxpayers” are not precisely the ordinary working people who benefit (mostly) from public education, transportation, health care, housing and various other services.

Finally, the mainstream “free market” propaganda is silent about the fact that, without “big government” and its massive deficits since ca. 1970, (financed to a significant extent by foreign holders of Treasury bills) their system would have collapsed long ago. A real implementation of a program of “small government” and balanced budgets as advocated by Milton Friedman and his ilk (who, for example, will pay for U.S. military and intelligence operations in 110 countries?) would promptly replace the 1970-2008 “hidden depression” with something qualitatively surpassing the post-1929 depression in scale and scope.

Enough said, for now, about the 40-year propaganda war by which the right has set the stage for the escalation of class war in Wisconsin, after having seemingly won the ideological high ground in significant sectors of American society, and the buzzwords (big government, the beleaguered taxpayer, “elitist” special interests, entitlements, rent-seekers, spiraling health care costs) that have passed for many into almost unchallenged self-evident truths as a result. To anyone likely to be reading Insurgent Notes, most of the preceding is quite well known. The propaganda war of the right, as part of the real one, has been powerfully abetted by the ideological disarmament of the “left”, for the most part hypnotized by its Keynesian/ Social Democratic assumptions and thereby blinded to the real crisis in production and reproduction which began long ago, and thus incapable of effectively countering the fog of lies set down by the ideological carpet-bombing of the right.

We are of course much less concerned with charging through an open door in a fairly well-known critique of the right and hard right than with assessing the strengths and weaknesses of the left as they have been taking shape in the ongoing confrontation at Madison, and first of all because some of those weaknesses mirror the ideological fog of the right.

We naturally begin by expressing our delight at the return of class struggle in the American heartland on a scale not seen since the early 1970’s, and with a mobilization far surpassing such notable but isolated and losing struggles as the Hormel (P-9) strike in the same area (Austin, Minnesota) in 1985-1986, or the even longer “three strikes” (in both senses of the term) in Decatur Illinois in 1993-1996. The scale of what has been transpiring in Wisconsin since mid-February reflects the scale of the crisis of U.S. and world capitalism today, far graver than either in the 1970’s or the 1990’s (even though it is an extension and deepening of the selfsame crisis, a point we cannot elaborate here).

A brief rehearsal of the (again, broadly known) “facts” is also in order. Riding the wave of the brain-dead right-wing populist backlash (“Big Government Keep Your Hands Off My Medicare!” went one particularly eloquent slogan) in the November 2010 elections, Scott Walker and the Republican Party took over the governorship and both houses of the Wisconsin state legislature on a program built around “creating jobs”. No sooner were they ensconced in power than, borrowing a page from Naomi Klein’s Shock Doctrine, they gave major tax breaks to the wealthy and to corporations, and then, invoking a state deficit greatly exacerbated by those very same tax breaks, attempted to ram through legislation, not merely imposing slash- and- burn cuts in social services of all types, but also enabling the state government to privatize at whim without the slightest public oversight, and, adding insult to injury, effectively abolishing collective bargaining rights for public employees. (The bill was not rushed through only because 14 Democrats in Wisconsin’s upper chamber left the state to prevent the quorum necessary for certain passage of the bill by the Republican majority. The bill was ultimately passed on March 10 in the absence of the Democrats, by further legal maneuvers. Walker and his minions intended to achieve their pillage by stealth and shock, but they were shocked in turn by the unleashing of a statewide, regional and ultimately national mobilization that (as of this writing) led to an ongoing occupation of the state’s Capitol Building and repeated mass demonstrations, in freezing weather, of between 70,000 and 100,000 people (culminating—to date—on March 12), and support demonstrations in fifty states. (The movement had been launched almost immediately in response to the legislative launch of the bill in a rolling strike wave that that shut down schools throughout Wisconsin.) Demonstrations on this scale had not been seen in Madison since the Vietnam War, 40 years ago. And we can measure the distance from that era by noting the far greater presence, in the current mobilization, of a broad swath of the organized labor movement, which was cool or downright hostile to the movement of the late 60’s/early 70’s. This time it’s for keeps.

Everyone on both sides understands that this is for keeps. We cannot know if the Koch brothers and the national Republican command central which is closely monitoring events (with an eye to trying the same tactics elsewhere, most immediately in Ohio and Indiana) specifically chose Wisconsin as their preferred test run. On our side, there is a palpable whiff of “Tahrir Square” in the obdurate persistence of masses who come, day after day, to demonstrate and occupy with the idea of outlasting Walker and his cohorts. But Wisconsin and America are not Tunisia or Egypt, because here, unlike those doddering gerontocratic dictatorships with no popular base when the crunch came, the U.S. is still in the midst of a surging right-wing populism that positively admires what Walker is attempting, and wishes to emulate it at the first opportunity. This permits the right to reach out demagogically to the very same private sector workers it has steamrollered in the past, referring to the supposedly privileged lifetime jobs of public employees, not subject to “competition” and “market forces”, with their benefits, health plans and supposedly Rolls Royce pension plans, which have become “unsustainable” by (among other things) the very erosion of the tax base that has resulted from downsizing nearly everyone else and from one of the most regressive tax structures in the “advanced” capitalist world, (advanced mainly in senescence). In other states, these same attacks are carried out by Democrats such as Jerry Brown (California) and Andrew Cuomo (New York), abetted by the very unions that financed their 2010 elections. (Mainstream propaganda rarely mentions that many state and local pension funds are in trouble because of massive losses in “AAA”-rated junk in the 2008 meltdown; “toxic assets” from Wall Street were reimbursed at 100% in the U.S. government bailout, the toxicity was dumped on the states and municipalities, and the famous “taxpayer”—ordinary working people—winds up paying in higher taxes and with lower or even disappearing pensions.)

Having expressed our unequivocal enthusiasm for the mobilization in Wisconsin, we sense that this movement, as the first confrontation in what certainly will be a national issue in coming months, is in its very early stages. Madison, the state capital where the movement is focused, is also a liberal university town where, like Cambridge (Mass), or Ann Arbor (Michigan), or Berkeley (California), some palpable afterglow (albeit diminished) of the Sixties still lingers. (A fair number of those who lived through the Sixties there are still there, and have been in the streets.) It is the capital of a northern Midwestern state where, as in Minnesota or North Dakota, a northern European (Scandinavian and German) Social Democratic and a native-born prairie populism deeply marked the political culture, most notably associated with the name of Robert La Follette, however attenuated those currents may be today. Some in the crowds at the massive weekend demonstrations waved a number of American flags and even sang the national anthem or “God Bless America”; not our style, but we know well that the IWW on occasion (as in the great Lowell Massachusetts Strike of 1912) did the same, attempting to take that symbolism away from the capitalists and their state. We surmise that many, perhaps most of the demonstrators were disillusioned Obama supporters, some of whom may still hope (God help them) that he will come out in clear support of their movement. The Wisconsin Police Assocation (11,000 members) has, like prison guards (who are members of AFSCME), indeed supported the movement, and the laid-back, even jovial relations between the demonstrators and the police strikes us as another manifestation of a movement in its early stages. We cannot imagine the NYPD or the LAPD, dealing with the occupation of public buildings by young blacks and Latinos in similar circumstances, being so relaxed when similar cuts hit home elsewhere, as they will. Widespread talk of defending the “middle-class” way of life also strikes us as an American ideological muddle that must be overcome.

(Many of the cops and prison guards are former blue-collar workers or potential workers who never made it to the working class. Jay Gould famously remarked long ago that he could hire one half of the working class to kill the other half, and American capitalism in recent decades has amended that to hiring part of the working class to incarcerate another part.)

We also note the apparent overwhelmingly white (judging from on-line photos and videos) composition of the movement, at least in Madison itself. We doubt the significant black population of nearby Milwaukee, not to mention of nearby Chicago, would be so sanguine about the presence of police and prison guards in any movement it chose to join. (Wisconsin has routinely ranked at or near the top of states for the rate at which it locks up blacks compared with whites. In Dane County, where Madison is, nearly half of black men between the ages of 25 and 29 residing in the county are either incarcerated or under court-ordered supervision. Black men there are 21 times more likely to be incarcerated than white men.) The Wisconsin movement has to date toed a fuzzy line between legality and illegality (it occupied the Capitol building, and finally evacuated it when asked to do so by the police, and a teacher sick-in has amounted to a wildcat strike, strongly supported by student walkouts). But when this movement, or similar movements elsewhere, have to cross the line of illegality and shut things down, law enforcement personnel will either have to break with their roles as police and prison guards or else will turn on the movement, under orders.

We mentioned at the outset the crucial role of institutions that must sustain and refurbish the status quo. Here we speak of course of the unions and of the Democratic Party, both of which desperately want to sign on to some version of Walker’s budget cuts, if only he will stop short of abolishing collective bargaining. Jesse Jackson and Rich Trumka—to how many losing causes have they given the kiss of death over the decades?—flew in to work the crowds with their demagogy. Michael Moore flew in on March 5th to give a rousing populist speech that never once mentioned capitalism and invoked the U.S. constitution. The Democratic politicians in hiding in Illinois were apparently in daily touch with “reasonable” Republicans in the state senate, hoping thereby to get Walker to throw them the bone that will allow them to return and proclaim victory. Randy Weingarten, president of the American Federation of Teachers (AFT) flew in for the day and advised the movement to cede to all the proposed cuts, then flew out again.

This whole show by the duly-appointed left-wing guardians of the status quo hardly means that the masses of the mobilized rank-and-file, who started this movement by walking out (led by high school students) almost as soon as the bill became known, share these craven, threadbare illusions. It does seem that a majority is willing to give in on wages and benefits, but not on the indispensable right to collective bargaining, which if nothing else means some modicum of protection on the job from harassing supervisors, and the right to tell such supervisors to shove it without being unceremoniously fired on the spot. Giving so much ground from the get-go is in our view not the best strategy, but we certainly support whatever minimal protection union membership provides day to day on the job.

We sincerely hoped that the movement in Wisconsin would succeed in stopping Walker’s bill. But win or lose, the national movement it has unleashed must understand that this is still, on a greater scale, the kind of defensive struggle that the American working class has for the most part lost, going back to the early 1970’s. At some point, these defensive struggles have to go on the offensive. People involved in them, and those who will be joining them, have to realize that the situation we are in provides no room for any stopgap solutions. The world crisis of capitalism is not about greedy, reckless Wall Street bankers or the machinations of the Koch brothers or tax breaks for the rich or two-bit local politicians trying to balance budgets; these are, in different ways, deepening symptoms of a crisis in capital accumulation that started 40 years ago. From here on out (and for a long time already) there can only be stopgap victories on the way to taking economic and political power away from the capitalists: in short, a social revolution. The movement in Wisconsin might like to recall Scott Walker and restore the status quo ante, but that status quo ante was already one of long-term grinding down of working people that finally has come for its pound of flesh from the previously (somewhat) sheltered public sector. There is no going back.

Individual sectors, even as large as public employees in the U.S., have to reach out to all those who have been ground down over the past forty years. Any working-class movement worthy of the name embraces the interests of the most oppressed, and that today includes the 15-20% of the U.S. population currently unemployed and increasingly foreclosed into homelessness, the casuals and temps, the harassed immigrant workers both legal and illegal, the millions of marginalized youth, white black and Latino, and the three million people in prison. We know very well that not every struggle that erupts can immediately enlist all such people, but a “climate” must be created in which that universal outreach—what we might call a “class for itself” orientation– is understood as a necessity, much as such a climate existed, for a few years, in a less extreme situation, in the 1960’s. No reformism is possible today, and those who do not yet recognize that nothing can change for the better without changing everything–a social revolution–will have to do so. That means, for starters, running off the Democratic Party and the trade union bureaucrats, the Jesse Jacksons and Rich Trumkas and Michael Moores, whose job is to refurbish empty populist rhetoric about the “rich”. That means understanding that such figures will talk as far to the left as the situation requires because they understand, as much of the Wisconsin movement may not, that in a rapidly polarizing situation the ultimate issue is power and control. (We do well to remember that, in the midst of the Minneapolis general strike of 1934, the local Democratic Party Congressman proclaimed himself a revolutionary socialist.)

The coming months, from the Middle East to Wisconsin, Ohio, and Indiana, will undoubtedly be decisive.

1. In 1854, the US Congress passed the Kansas-Nebraska Act. The act, advertised as a compromise, was in fact a capitulation. The law proclaimed not equality, but the power of slave labor over free labor, and the power of slaveholders over the old order of the republic. The law embraced the spread of slavery into the territory purchased from France in 1803, thus annulling the Missouri Compromise, and allowing for the admission of new slave states to the Union.

For 35 years, the old parties of the North, whose vision and existence never extended beyond that of a merchants’ republic, had been accommodating to the slaveholders’ autarchy, presenting itself, and to itself, every capitulation as a compromise. In 1854 the capitulation to the slaveholders could no longer be disguised. The old parties represented only those interests opposed to capital’s free access to “free labor.”

In that same year, thirty people met in a schoolhouse in Ripon, Wisconsin for the purpose of creating a new political party. This party was organized around a simple principle—that political compromise with a system that enslaved human labor was intolerable.

One hundred and fifty seven years later, that same party founded in that same state is still attempting to make amends for the wild idealism of its youth when it dared to oppose the emancipation of the laborers to the plantation class’ claim to ownership, to property in the laborers themselves.

2. In 2011, having selected the incompetent former county executive of Milwaukee County to be the new governor of Wisconsin, our recidivist/arsonist/deconstructionist/liquidationist bourgeoisie submitted their shopping list of bills to the governor, Scott Walker, for introduction into the legislature.

Walker, as county executive of Milwaukee County, had proven himself a loyal, obedient, belligerent, and oblivious errand boy for the liquidationist bourgeoisie. He had not, however, shown himself to be a competent county executive. Indeed, competence is not now, nor has it ever been a requirement for those handling the public money in government. Ideology is ever so much more effective when it comes to getting done, or not done, the things the bourgeoisie pay to have done and not done.

As county executive, Walker had been a master of incompetence; the apotheosis of ineptitude; the ideologist of decay, collapse, and pettiness that is currently called “privatization” and “outsourcing,” “balanced budgets,” and “entrepreneurship.

From public transit to mental health, from prisoner transport to courthouse to security, from medical assistance to custodial services, Walker uniformly proposed reducing the county’s fiscal and operating responsibility. Raising prices while reducing service was his basic approach when and where he could not accomplish the same thing by outsourcing and privatizing the work. Under the guise of balancing the budget and restraining taxes, Walker shirked the local responsibilities for providing social services, either awarding the tasks to private contractors, advocating the state government assume responsibility, and/or simply neglecting the need for improvements. This is the business acumen that the bourgeoisie requires at the highest levels of its government; that the bourgeoisie makes others pay for, secure in the knowledge that the return on this anti-investment is greater than any its class could obtain by actually satisfying a human need.

The truth of the obsolescence of modern capital accumulation is made painfully clear in the deliberate and instinctual incompetence of its selected government officials. Value admits no other need save the accumulation of value. Value denies, opposes, and attacks need. Value isn’t about squeezing blood from a stone; it’s about turning flesh into dust through malign neglect.

3. The bills introduced into the Wisconsin legislature in 2011 read like love letters exchanged among a ménage a trois of Ayn Rand, Alan Greenspan, and Milton Friedman. These sonnets to the higher organic rate of capital decomposition included:

–advancing the date of certain tax refunds to employers

–increasing the number of enterprise zones where employers may claim additional tax credits

–increasing tax benefits to employers hiring additional employees

–increasing the income tax exclusion on capital gains

–awarding grants to manufacturing associations for marketing and advertising

–more tax credits for business

–additional enterprise zones

–repealing the requirement that police motor vehicle motor stops be audited for racial profiling

–more tax credits for business

–prohibiting the state’s Department of Natural Resources from requiring cities to provide continuous disinfection of drinking water

–increasing investors’ tax credits

–eliminating the right of a school district resident to challenge the use of a race-based nickname, logo, mascot, or name for a school team

–more tax breaks

–expanding the arena for, and easing the requirements on, the establishment of charter schools, the costs of which will be funded by reducing the general appropriation for public education

And of course these bills are just probes, raids, tests, and diversions to the real attack, to the deep battle envisioned in Assembly Bill 11 “an act introduced….at the request of Governor Scott Walker.” The [unamended] bill:

… limits the right to collectively bargain for all employees who are not public safety employees (general employees) to the subject of base wages. In addition, unless a referendum authorizes a greater increase, any general employee who is part of a collective bargaining unit is limited to bargaining over a percentage of total base wages increase that is no greater than the percentage change in the consumer price index. This bill also prohibits municipal employers from collectively bargaining with municipal general employees in matters that are not permitted under MERA [Municipal Employment Relations Act].

… requires an annual certification election of the labor organization that represents each collective bargaining unit containing general employees. If, at the election, less than 51 percent of the actual employees in the collective bargaining unit vote for a representative, then, at the expiration of the current collective bargaining agreement, the current representative is decertified and the members of the collective bargaining unit are nonrepresented and may not be represented for one year.

… also allows a general employee to refrain from paying dues and remain a member of a collective bargaining unit.

… provides that the employee required contribution rate for general participating employees and for elected and executive participating employees must equal one−half of all actuarially required contributions, as determined by the Employee Trust Funds Board. For protective occupation employees, the bill provides that the employee required contribution rate must equal the percentage of earnings paid by general participating employees.

…provides that an employer may not pay any of the employee required contributions under the WRS [Wisconsin Retirement System] or under an employee retirement system of a first class city or a county having a population of 500,000 or more.

… provides that the employer may not pay more than 88 percent of the average premium cost of plans offered in the tier with the lowest employee premium cost.

[provides]…For the remainder of 2011, however, beginning in April 2011, the bill provides that state employees, as well as employees of public authorities created by the state, who work more than 1,565 hours a year shall pay $84 a month for individual coverage and $208 a month for family coverage for health care coverage under any plan offered in the tier with the lowest employee premium cost; $122 a month for individual coverage and $307 a month for family coverage for health care coverage under any plan offered in the tier with the next lowest employee premium cost; and $226 a month for individual coverage and $567 a month for family coverage for health care coverage under any plan offered in the tier with the highest employee premium cost.

UW System graduate assistants and teaching assistants must pay half of these amounts. Employees who work less than 1,566 hours a year are required to pay the same amount for health care coverage during 2011 that they were required to pay before the bill’s effective date. The bill further provides that a local government employer who participates in the local government health insurance plan offered by GIB may not participate in the plan if it intends to pay more than 88 percent of the average premium cost of plans offered in any tier with the lowest employee premium cost.

… requires GIB to design health care coverage plans for the 2012 calendar year that, after adjusting for any inflationary increase in health benefit costs, reduces the average premium cost of plans offered in the tier with the lowest employee premium cost by at least 5 percent from the cost of such plans offered during the 2011 calendar year. GIB must include copayments in the health care coverage plans for the 2012 calendar year and may require health risk assessments for state employees and participation in wellness or disease management programs

… requires the secretary of employee trust funds to allocate $28,000,000, from reserve accounts established in the public employee [emphasis added] trust fund for group health and pharmacy benefits for state employees, to reduce employer costs for providing group health insurance for state employees for the period beginning on July 1, 2011, and ending on December 31, 2011

[provides] the governor may declare a state of emergency if he or she determines that an emergency exists resulting from a disaster or the imminent threat of a disaster. This bill authorizes a state agency to discharge any state employee who fails to report to work as scheduled for any three unexcused working days during a state of emergency or who participates in a strike, work stoppage, sit−down, stay−in, slowdown, or other concerted activities to interrupt the of operations or services of state government, including specifically purported mass resignations or sick calls. Under the bill, engaging in any of these actions constitutes

just cause for discharge. [Note: former employees may be discharged for resigning.]

If the other legislation proposed for enactment comprises the love letters of Greenspan, Rand, and Friedman, then this act, this omnibus deconstruction and unreconciliation act, represents the pre-nuptial, the post-nuptial, and the last will and testament of that cluster fuck called capitalism.

4. So the party born in Wisconsin, that found slavery an intolerable burden to the advancement of human welfare had come full circle, finding human welfare an intolerable burden to the advancement of slavery.

Education, medical care, mental health, security for young and the elderly—any and every facet of what are most properly called the conditions of social reproduction [human beings being human precisely to the degree that they are social, do provide for the welfare of all]—is to be abolished by these new anti-abolitionists.

“I’ve seen future,” said the state’s chief incompetent executive, “and it’s right here,” he said pointing with his left hand to his right hand that was under the table, performing the secret libertarian handshake with the brothers Koch, the brothers of Koch Industries, those entrepreneurs extraordinaire, who made their money the old fashioned way, by inheriting it.

And so begins the fifth decade of the bourgeoisie’s assault on the living standards of the working class. The assault has gone on for so long that many have no memory of there ever being a time when the bourgeoisie were not engaged in such attacks; had not made Hobbes Leviathan their Gideon bible, placed in every hotel room, every abattoir, every MBA program, every prospectus offering securities that may or may not perform as anticipated; had not counted [literally] on the spread of misery and privation through cruise missiles, structured investment vehicles, capital flight, and that old time religion—driving the price of labor below its cost of reproduction.

It is an offensive that has gone on for so long that the offenders grow ever more nostalgic for their salad days of the second decade of the offensive, the decade of that pomaded but empty-headed empty suit, Ronald Reagan.

Walker, his stocking nailed above the fireplace, eagerly awaited Santa David and Santa Charles sliding down the chimney, helping themselves to the Wisconsin milk and Nabisco ‘Nilla wafers he had so thoughtfully spent the public money contracting a private caterer to supply, and delivering their goody bags of personal political contributions to the Scott Walker is the new Ronald Reagan Cosmetic Surgeons/Spin Doctors Stem Cell Recombinant DNA Makeover Fund [“Piece of cake,” said the head doctor, “We’ve been cloning sheep for years.”].

Walker imagined himself a Reagan, that is to say he imagined himself a man without imagination, he thought himself a man without thoughts. He pretended to be a man who was already a pretender.

The Wisconsin Democrats elected to the state senate proved that their greatest and only contribution to class struggle is their disappearance from the scene. Hiding out in the deep forests around Rockford, Illinois, the Democrats, who were not opposed, mind you to the attack on the workers’ living standards, just opposed to the attack on the right of workers to maintain membership in unions while under attack, the Democrats prevented the gathering of a quorum in the state senate, thus preventing the Republicans from conducting the important business of transferring wealth from the pockets of the workers, and from the public treasury, to the private accounts of their bankers and bankrollers.

The message from Wisconsin was broadcast far and wide: Class struggle begins where the Democrats leave off and just plain leave.

Meanwhile on the southern edge of these United States in the state of Alabama, hundreds of white people, good Republican church-going white people, wearing their favorite uniform in their favorite color, Confederate and in battle grey, gathered to wave the flag of the slaveholders’ rebellion and celebrate the 150th anniversary of the inauguration of the single greatest traitor in US history, Jefferson Davis.

History holds something for everyone, but it seems it holds the most for the cynic and the fool, each acting in a play written by the other for the amusement of both. The party of Lincoln, a party born embodying the inseparability of the cause of union from the cause of emancipation had come to worship at the feet of slaveholders, secessionists, the anti-Unionists who were now the inspiration for its own anti-unionism.

After years of living the lie of “don’t ask, don’t tell,” the bourgeoisie had stepped boldly out of its closet, dressed in the white sheet and wearing the white camellia of the nightrider, the terrorist.

It was almost a most perfect world. Ignorance was its strength, slavery was its freedom, and treason was its patriotism.

Here in Wisconsin and Alabama, just two of fifty states, representing less than four percent of the US population, on public display were two-thirds of the makeup of American democracy: dolts and terrorists. Missing only were the looters. But they were there, they were everywhere, and in more than spirit.

5. The brothers Koch worked their way up the ladder of corporate America by climbing on their father’s knees as young boys. Upon the father’s death, they took over the control of an enterprise based on energy [oil refining was the source of their father’s triumph], and built it into a conglomerate with operations in minerals, ranching, fibers and polymer, forest products, process and pollution control equipment, polymers, fibers, chemicals, commodity trading, and finance.

It hasn’t all been a bed of roses for Koch Industries, as the conglomerate and its units seem to display a certain inability to abide by the laws of the country in which it is incorporated, the United States of America. While the American Enterprise Institute, that busy beehive of ideological advocacy endorsing the mythology of “invisible hand” laissez-faire capitalism refers to CEO Charles Koch as “The Principled Entrepreneur,” it is apparent that the principles themselves are not quite that ingrained in the business activities of Koch’s corporations—or if they are so ingrained, the principles themselves are not exactly principled.

In March 2000, the US Environmental Protection Agency announced:

Koch Petroleum Group (Koch), which operates a refinery in Rosemount, Minn., was sentenced on March 1 to pay a $6 million criminal fine and pay an additional $2 million in remediation costs to the Dakota County Park System in U.S. District Court in Minneapolis. This is the largest federal environmental fine ever paid in Minnesota. The defendant was also ordered to serve three years probation. Koch previously pleaded guilty to violating the Clean Water Act (CWA). Koch admitted that it negligently discharged aviation fuel into a wetland and an adjoining waterway. Even though Koch was aware of the problem, it did not develop a comprehensive plan to recover between 200,000 – 600,000 gallons of released fuel until June 1997. In addition, the establishment of the system to recover the fuel destroyed a portion of the surrounding ecosystem and wildlife habitat. In a separate offense, Koch dumped a million gallons of wastewater with high ammonia content on the ground between November 1996 and March 1997 and also increased its flow of wastewater into the Mississippi River on weekends when Koch did not monitor its discharges. These actions allowed Koch to circumvent the weekly monitoring and reporting requirements of its wastewater discharge permit. The case was investigated by EPA’s Criminal Investigation Division, the FBI and the Minnesota Pollution Control Agency and was prosecuted by the U. S. Attorney’s Office for the District of Minnesota.

In November of 2000, CBS News reported:

… that [Bill Koch, brother of Charles and David stated] Koch Industries engaged in “(o)rganized crime…”

“It was – was my family company. I was out of it,” he says. “But that’s what appalled me so much… I did not want my family, my legacy, my father’s legacy to be based upon organized crime.”

Bill Koch says that his brother Charles made a fortune stealing oil. Much of it from beneath Indian reservations and federal lands – places like national forests. Oil under federal lands belongs to the public. Koch Industries was the middleman – buying oil from the government at the well – then selling it to refineries. Bill Koch says that the company took more oil than it paid for by cheating on measurements.

A gauger measures the volume and the quality of the oil that his company is buying. The buyer leaves his measurements behind on what’s called a “run ticket.” It’s an IOU to the well owner.

“What Koch was doing was taking all these measurements and then falsifying them on the run sheets,” says Bill Koch. “If the dipstick measured five feet 10 inches and one half inch, they would write down five feet nine and one half inches.”

That may not sound like much, but Bill Koch says that it added up. “Well, that was the beauty of the scheme. Because if they’re buying oil from 50,000 different people, and they’re stealing two barrels from each person. What does that add up to? One year, their data showed they stole a million and a half barrels of oil.”

In a written statement, Koch blames its problems on Bill Koch – calling him a “disgruntled family member” who has waged a “personal vendetta through lawsuits and the media against his brothers’ company.”

But in December 1999, the jury found that Koch Industries did steal oil from the public and lied about its purchases – 24 thousand times. The oil theft conviction was a heavy blow, but the troubles of Koch Industries don’t stop there. If the company was fattening its bottom line through theft – there is also evidence Koch was pinching pennies on safety and environmental protection – cutting costs with disastrous results.

But wait, that’s not all:

Former EPA administrator Carol Browner announced in 2000 that she was hitting Koch Industries with the largest civil penalty in the history of the federal Clean Water Act: a $30 million fine.

She said, Koch Industries spilled over 3 million gallons of crude oil in six states

Koch pipelines make up the largest oil and gas network in the nation. The EPA complaint targeted more than 300 oil spills, some poisoning fisheries and drinking water.

In a statement, Koch Industries claims that it has spent a billion dollars on environmental improvements and reduced leaks by 96 percent. The company urged us to look at its record at the federal Office of Pipeline Safety. We did and discovered that Koch’s records at OPS look good. But we also found that OPS doesn’t cover more than half of Koch’s lines – including the lines that leaked.

And there’s still more:

“They don’t care for any loss of human life. Like I said, it was the buck that counted for them,” says Danny Smalley. He had the extreme misfortune of living near a Koch Industries underground pipeline that ran through Texas. In August, 1996, Smalley was home with his daughter Danielle and her friend Jason Stone. Danielle was packing to leave for school the next day – the first person in her family to go to college.

She and Jason started smelling gas. It was butane, pouring from a corroded Koch Industries high pressure pipeline, 200 yards from their home. Jason and Danielle set out in a pickup truck to find help. But their truck set off the butane, and caused an explosion.

Danny Smalley filed suit against Koch Industries. His attorney, Ted Lyon, says the investigation exposed a pattern of negligence and coverup involving the pipeline known as Sterling One. Lyon describes the pipeline as like “Swiss Cheese.”

Koch is require by law to ensure that its vast pipeline system is protected from corrosion in two ways. The pipe must be wrapped in a protective coating. And, once in the ground, an electrical current is applied all along the pipeline – a technique that inhibits corrosion.

“If you don’t have the current and you don’t have coating, you have a big problem. And that’s what happened in this case. And the sad thing about it is, they knew it,” says Lyon.

Federal investigators blamed the explosion on Koch’s failure to adequately protect the line. Koch industries told us the fatal explosion is the only incident of its kind in the company’s history. Still, in 1999, a jury found Koch Industries guilty of negligence and malice.

“They admitted to me if they had done things the way they should have, my child and Jason would still be alive,” says Danny Smalley.

“They said, ‘We’re sorry Mr. Smalley, that your child lost her life and Jason lost his life.’ Sorry doesn’t get it. They’re not sorry. The only thing they looked at was the bottom dollar. How much money would they lose if they shut the pipeline down. They didn’t care, all they wanted was the money.”

“Koch Industries has a philosophy that profits are above everything else,” says Bill Koch.

And still more:

August 2001 Update

In May, 2001, Bill Koch and Koch Industries announced a legal settlement of all their disputes, effectively putting an end to the two-decade family feud. The settlement calls for Koch Industries to pay $25 million in penalties to the U.S. government for improperly taking more oil than it paid for from federal and Indian lands. About a third of it goes to Bill Koch or bringing the lawsuit.

Koch industries has faced other troubles with the government since the original broadcast in November. In April, Koch’s Petroleum Group was fined 20 million dollars after it released huge amounts of cancer-causing benzene from a Texas refinery and then tried to cover it up.

In July, 2001, thestatesman.com of Austin, Texas reported:

CHARLOTTE — Oil made many Texans rich. It’s also killing grass and polluting creeks at the Hindes Ranch.

The beef and dairy operation 35 miles south of San Antonio is crisscrossed by gathering lines — pipelines no more than 8 inches wide that carry crude oil and natural gas from production fields to larger lines feeding refineries and other collection points. The decades-old gathering lines at the Hindes Ranch have sprung hundreds of leaks during the past 15 years, said Bob Hindes, who owns and operates the ranch.

Hindes has photographs to back up his claim. You can also tell by the dozens of brown patches, some of them 60 feet long, amid the grasses and wildflowers.

“It makes a mess,” Hindes said. “The ground’s real soaked with salt water and oil. The grass won’t grow for years. We’ve had spills that would run half a mile down the creeks.”

The ranch’s oil rights were sold off before Hindes bought the land, and the out-of-state oil producer is not required by any law, regulation or government agency to meet safety or environmental standards on rural gathering lines.

The federal Office of Pipeline Safety does not regulate such lines. Nor do many state pipeline agencies, including the Texas Railroad Commission. Gathering lines in urban areas, by contrast, are subject to regulation by the federal and state pipeline agencies.

Federal officials estimate that there are more than 200,000 miles of rural gathering lines. That would be enough to reach three-fourths of the way to the moon. Texas alone has 43,000 miles of such lines.

The General Accounting Office, the investigative arm of Congress, warned lawmakers 23 years ago that incidents involving rural gathering lines were on the rise and that regulation was warranted. Lawmakers and regulators have declined to act despite mounting evidence of the hazard.

For example, Koch Industries Inc. had more than 300 spills into water supplies in six states from 1990 to 1997, mostly from unregulated gathering lines, according to the U.S. Department of Justice.

“We discovered that 80 percent of the spills were caused by corrosion,” said Michael Goodstein, a senior attorney for the Justice Department, which with the State of Texas prosecuted Koch under the Clean Water Act.

The company had a better record with its larger-diameter, regulated lines, Goodstein said.

A 1998 Railroad Commission investigation of Koch’s pipeline system in Texas reached a similar conclusion. It found that gathering lines accounted for a third of Koch’s Texas mileage but nearly two-thirds of what would have been considered safety violations if the lines were regulated.

The problems the commission found included testing and documentation deficiencies, as well as shortcomings in corrosion protection, line marking, protection of valves against vandalism and other matters.

The staff of Texas’ Sunset Advisory Commission, a legislative panel that reviews state agencies, recommended last year that the Railroad Commission regulate rural gathering lines.

A report by the sunset commission staff reached an unusually blunt conclusion: “State regulation of pipelines does not adequately protect the public.”

The Railroad Commission opposed the recommendation, and the Legislature declined to compel the agency to regulate rural gathering lines.

The environmental and safety risks posed by the lines, which operate at low pressure in generally isolated areas, do not warrant the dramatic increase in funding that would be needed to regulate them, said Michael Williams, chairman of the Railroad Commission.

“We don’t have a real history of gathering lines breaking, exploding or posing a danger to ground water,” Williams said. “That doesn’t mean it’s never occurred.”

Hindes isn’t the only rancher with problems. The Texas Land & Mineral Owners Association says more and more landowners are discovering leaks as gathering lines age.

“There’s no pressure-testing of these lines,” said Doug Beveridge, secretary of the association and vice president of minerals for the King Ranch, which covers an area in South Texas larger than Rhode Island. “There’s no requirement for the type of steel they put into these lines. No one even knows where they are. We’ve wondered forever for our ranch — where are all the lines?”

In June, 2003, the US Department of Commerce announced:

Acting Assistant Secretary of Commerce for Export Enforcement Lisa A. Prager announced today that a $200,000 civil penalty has been imposed on Flint Hill Resources L.P. – formerly known as Koch Petroleum Group, L.P. – of Wichita, Kansas to settle allegations that the company exported crude petroleum from the United States to Canada without the required U.S. Government authorization. The Commerce Department controls the export of crude petroleum to any foreign destination to protect the domestic supply.

The Commerce Department’s Bureau of Industry and Security (BIS) alleged that between July 1997 and March 1999, Koch Petroleum committed 40 violations of the Export Administration Regulations by exporting crude petroleum to Canada on 20 occasions without the required export licenses and Shipper’s Export Declarations. Acting Assistant Secretary Prager noted that in determining the amount of the penalty, BIS gave consideration to the facts that Koch Petroleum voluntarily self-disclosed the violations, stopped exports of oil once the violations were discovered, and enhanced its export compliance program.

BIS administers and enforces export controls for reasons of national security, foreign policy, nonproliferation, anti-terrorism, and short supply. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations.

In December 2006, the EPA announced the following resolution of violations by a subsidiary of Koch Industries:

Anchorage, Alaska. – December 12, 2006) The U.S. Environmental Protection Agency (EPA) announced today that Flint Hills Resources Alaska, LLC (Flint Hills) has agreed to pay $15,867 for alleged federal Clean Air Act (CAA) emergency planning violations. Flint Hills operates a refinery near the City of North Pole, Alaska.

EPA alleged ten separate violations of the CAA including: failure to establish procedures for reviewing and updating the Company’s emergency response plan, and failure to establish procedures for informing the public and local emergency response agencies about accidental releases of flammable substances.

As part of the settlement with the EPA, Flint Hills has agreed to correct all alleged violations, pay the penalty and spend at least $60,000 on a Supplemental Environmental Project (SEP) involving the purchase of two hazardous substance spill response trailers and one incident command post trailer for the Fairbanks/North Star Borough.

“Flint Hills needed a better management system to ensure that their emergency procedures were continually updated and also needed a way to inform the public about accidental releases,” said Kelly Huynh, EPA’s Risk Management Plan (RMP) Coordinator. “The program is designed to protect public health and the environment in the event there is an accidental release of hazardous or flammable substances.”

The federal Clean Air Act, Section 112(r), requires the development of a Risk Management Program and submittal of Risk Management Plans for all public and private facilities that manufacture, process, use, store, or otherwise handle greater than a threshold amount of a regulated substance(s). Flammable gases and toxic chemicals, such as ammonia and chlorine, are covered by the program.

The Risk Management Program requires the development of an emergency response strategy, evaluation of a worst case and more probable case chemical release, operator training, review of the hazards associated with using toxic or flammable substances, operating procedures and equipment maintenance. These requirements are in place to protect the public from the accidental release of flammable gases and toxic chemicals.[/i]

In April 2009, the US Department of Justice reported after self-auditing and voluntary reporting of violations by Koch subsidiary Invista:

WASHINGTON— Invista will pay a $1.7 million civil penalty and spend up to an estimated $500 million to correct self-reported environmental violations discovered at facilities in seven states, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today. The company disclosed more than 680 violations of water, air, hazardous waste, emergency planning and preparedness, and pesticide regulations to EPA after auditing 12 facilities it acquired from DuPont in 2004.

“This settlement is a significant achievement, as it will reduce air pollution in numerous communities, and demonstrates the United States’ commitment to ensuring that all facility owners come into compliance with environmental requirements,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This settlement reflects an effective use of EPA’s audit policy and the value of companies performing audits and working with the United States to correct violations found at their facilities.”…

The settlement resolves violations disclosed under Invista’s corporate audit agreement with EPA. Invista conducted 45 separate audits of environmental practices and compliance at facilities located in Seaford, Del.; Athens, Calhoun, and Dalton, Ga.; Kinston, N.C.; Camden, S.C.; Chattanooga, Tenn.; LaPorte, Orange, and Victoria, Texas; and Martinsville and Waynesboro, Va.

As part of its corrective action requirements agreed to in the settlement, Invista will install pollution control equipment to treat air pollutants at its Seaford, Del.; Camden, S.C.; Chattanooga, Tenn.; and Victoria, Texas facilities. The company has also applied for applicable air and water permits, has installed adequate secondary containment for oil storage areas, and has notified state and local emergency planning and response organizations of the presence of hazardous substances.

To ensure continued compliance and minimization of the benzene wastes generated at the Victoria and Orange, Texas facilities, Invista is required under the settlement to either upgrade control equipment or make major changes to its processes used to handle these wastes. EPA estimates that these actions will reduce air emissions of benzene by more than nine tons annually and eliminate 25 to 750 tons per year of benzene from wastewater.

The emission reductions resulting from correcting these violations will result in estimated annual human health benefits valued at over $325 million, including 30 fewer premature deaths per year, 2,000 fewer days/year when people would miss school or work, and over 9,000 fewer cases of upper and lower respiratory symptoms.

Invista is a multi-national manufacturer of a wide range of polymer-based fibers, including Lycra, Stainmaster, and Coolmax…

The states of Delaware, South Carolina and the Chattanooga-Hamilton County Air Pollution Control Board in Tennessee have also joined in today’s consent decree and will share portions of the civil penalty with EPA.

The consent decree, lodged in the U.S. District Court for the District of Delaware, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.htm

Certainly, the bourgeoisie can find no person more capable of articulating the principles of enlightened entrepreneurship, the practical benefits to all of society of private enterprise, the negative consequences of government regulation, the impending loss of creativity, independence, freedom, productivity embodied in the socialization of the means of production thanthat this CEO of an industry group that has been such a leader in the social responsibility of that most perfect of nature’s creations, the corporation.

Politically, of course, the brothers Koch have been active spreading the gospel by way of spreading the money, funding the Cato Institute, the Heritage Foundation, and Americans for Prosperity, where the banner headline on the website reads “Stand With Scott Walker.”

Koch Industries, when it isn’t paying out millions to settle environmental health and safety violations, has a Political Action Committee that certainly has stood with Walker. The PAC provided $43,000 to Walker’s gubernatorial campaign and a token amount of $1 million to the Republican Party Governors Association.

David Koch, co-owner and executive vice-president of Koch industries is a former Libertarian Party candidate for US Vice-President. Like his brother, he is a strong backer of the teabagger party.

A well-known philanthropist, David Koch is the guiding spirit behind the American Museum of Natural History’s so perfectly named David H. Koch Dinosaur Wing.

History does hold something for everyone.

6. The British, who have more experience than most in suppressing rebellion and revolt, in pre-empting, canalizing, and throttling class struggle with the garrote of electioneering, legislation, and trade union accommodation, compromise, capitulation, are very proud of their parliament. “It’s our substitute for civil war,” the parliamentarians will tell you.

Sooner or later history accepts no substitutes. The threatening and dangerous fact is that in the United States, the bourgeoisie realized this before, and has prepared itself for the combat of class struggle better than the workers, including those demonstrating in Madison.

The vanguard dinosaurs of the bourgeoisie, these once-crackpot-now-prophets of Jack-the-Ripper’s “invisible hand” capitalism have no allegiance to their prior forms of political organization.

“Parliaments? Bi-cameral legislatures? Representative government? Popular votes?” laughs our ruling dolts, thugs, thieves. “Who needs them? They cost too much. They are so inefficient.”

“Independent judiciary? Equal justice under the law? You thought we were serious about that?”

The arsonist/monetarist bourgeoisie don’t know Hegel, but they do know that form is mutable; the form is evanescent. It’s the content that counts. It’s the substance that matters. It’s necessity that rules.

That content is private property; the ownership of the means, conditions, and products of labor. That substance is the substance of accumulation. The necessity is precisely the destruction of the very forms once essential to accumulation, profit, expanded reproduction of capital. That necessity is the necessity of capital to drive the price of labor below the cost of its social reproduction.

The workers engaged in this struggle will need to move beyond, outside, and against their old forms of organization. To the extent that the clash in Wisconsin remains a struggle for unions, for collective bargaining, for “rights;” to the extent that the clash does not become a movement for new, open, class wide organizations beyond unions; organizations linking employed, unemployed, pensioners, students, migrants, private sector, public sector, temporary, permanent, insured, uninsured in bodies of collective power with the ability, desire, need to confiscate the revenues and income of the state, and seize the property of those financing the attacks on living standards —to precisely that extent the Kochs, the Walkers, the ideologues of decrepit capitalism will impose their necessity.

S.Artesian

February 27, 2011

At the moment, there are bitter struggles going on over continuing school failures, testing policies, budget cuts to schools and colleges, layoffs, school closings, class sizes, and the establishment of charter schools. There is also an increasingly sharp debate emerging between proponents of what I will refer to as the “new education reform” and a growing multitude of opponents. In those contexts, I’ve been worried that it would be way out of synch to be publishing an article that is primarily concerned with long-term trends and their manifestations in the everyday realities of educational institutions (and vice versa—the production of long-term trends by everyday practices)—especially to the extent that some of what I believe reflects rather badly on the routine practices of teachers, schools and unions. I am not interested in providing any ammunition to those forces that obscure every assault against the well-being of teachers with claims to be acting on behalf of the children.

But I decided to continue down the road I had been travelling on—in the hope that what I have to say might alert some of those involved in various struggles (teachers, parents, community activists) about the profound dangers associated with defending what we might consider to be education as usual. I am aware that an already quite bad situation could be made much worse if forces on the right emerge victorious but, at the same time, I’d like to insist that the bad that we have must be seen by all as indefensible. And furthermore a defense of the existing state of affairs will not get us anywhere that we should want to go.

A recent court case in Los Angeles illuminates the situation. In January, a judge ruled that the seniority rights of teachers employed in the Los Angeles Unified School District would not be fully honored in the case of layoffs—in spite of those rights being enshrined in both the local collective bargaining agreement and state law. Judge William Highberger ruled against the suit brought by the United Teachers of Los Angeles and approved an agreement between the ACLU of Southern California, the state of California and the school district which would shield 45 of the district’s lowest performing schools from layoffs. The ACLU had based its argument on the situation that had resulted from the last round of layoffs at three poorly performing middle schools which have had high rates of teacher turnover and, therefore, few teachers with the years of seniority that would protect them from layoffs. As a result of layoffs in the past two years, more than half of the teachers at the three schools had lost their jobs; in one school, the percent of teachers laid off was over 70% and, in another, almost the entire English department and all eighth grade teachers were laid off. As a result of those layoffs, many of the classes have been taught by a succession of substitute teachers with little connection or commitment to the schools. At the same time, more successful schools in wealthier parts of the city lost far fewer teachers. The ACLU had argued that this disproportionate impact represented a denial of the constitutional right of students enrolled in the three schools to a quality education. Not surprisingly, the union had argued for the sanctity of the seniority principle and pointed out the need to address the real causes of failure at the affected schools. It has promised to appeal the decision. Perhaps needless to say, one thing that the union apparently did not consider was that the actions of its members, protected by the union, had very much to do with failure in those schools. In general, the forces of the organized left, mostly but not all Trotskyist-minded, have rushed to the defense of the union’s position. I’d suggest that if we begin and end where the United Teachers of Los Angeles begins and ends, we will remain trapped in a vicious circle.

Canary in a Coal Mine

Let me begin with the big picture. In an illuminating book, Global Decisions, Local Collisions, Dave Ranney has examined the fairly devastating impacts of the collapse of manufacturing in Chicago starting at the end of the 1970s:

In the late 1970s, I lived and worked in Southeast Chicago.
At the time, the neighborhood was a vibrant, mixed-race, working
class community of solid single-family homes and manicured lawns.
Its economic anchor was the steel industry. U.S. Steel Southworks,
Wisconsin Steel, Republic Steel and Acme Steel employed over 25,000
workers. Southeast Chicago was also teeming with businesses that
used steel or that sold products to the steel mills: steel
fabrication shops, industrial machinery factories, plants that made
farm equipment, and railroad cars. There were also firms that sold
the mills industrial gloves, shoes, tools, nuts and bolts and
welding equipment. The commercial strip had retail stores, bars and
restaurants. Many of these, like the steel mills, were open
twenty-four hours a day, seven days a week.
……
During the 1980s, the Chicago steel industry collapsed and
took down with it much of the related industrial and service economy
that depended on it. Both Wisconsin Steel and U.S. Southworks
eventually closed. Republic Steel was bought out by a conglomerate
and was greatly downsized. Steel jobs in Southeast Chicago declined
from about 25,000 workers to less than 5,000 in a decade. And the
decline in manufacturing extended far beyond steel. The Chicago
metropolitan area suffered a net loss of 150,000 manufacturing jobs
during the 1980s. People’s lives were torn asunder in the wake of
massive layoffs. Divorces, alcoholism, even suicides were on the
rise. Industrial unions were decimated and union membership
declined throughout the United States. The new jobs created in the
wake of this decline paid far less than the jobs that had been lost.
Many were temporary or part-time and usually lacked benefits like
health care. Workers taking these jobs no longer made enough to
live on. So they worked two or sometimes three jobs to make what
they had previously made at one. Many of the dislocated workers
never worked again. The struggle over civil rights in the workplace
and within the union was over because the workplace itself no longer
existed.

Although Ranney modulates his nostalgia for Chicago’s lost world by acknowledging the historical significance of racial discrimination (that resulted in constricted job opportunities and lower wages for Hispanics and African-Americans) and the struggles against those discriminatory practices in workplaces and unions, he suggests that something very important had been lost:

Not only were the community and its economy vibrant, there
was a system in place that looked to future generations. The mills
and many of the related firms had strong unions. Through the union
you could get your children into the steel mills to learn a trade or
get a well-paying job that would allow them to save and go on to
college.

In passing, I’d suggest that this notion of a link to the future is a very important one and that its frequent absence in contemporary life, as a result of the devastation visited upon the productive workforce and the long painful decline in working class living standards, has a good deal to do with what I interpret as a withdrawal from both intellectual and political engagement on the part of many. At the same time, as evidenced by the recent events in Northern Africa and the Middle East, the return of people who thought that they had no future to the stage of history should not be discounted.

Fast forward to the middle of the 1990s and listen to the words of Ms. Sparks, a sixth-grade teacher who had grown up in Chicago, in all likelihood in the same neighborhood that Ranney described, and had returned to teach in the elementary school she had attended:

I am from streets with buildings
that used to look pretty.
From safe walking trips to
Mr. Ivan’s family grocery store,
where now stands a criminal sanctuary.
I am from a home and a garage
Illustrated with crowns, diamonds,
upside-down pitchforks, squiggly
names and death threats.
I am from a once busy, prosperous
and productive community;
where the fathers and mothers
earned a living at the steel mills,
And the children played
Kick the Can and Hide and Go Seek
Until they could play no more.
I am from here.

[reprinted in Organizing Schools for Improvement: Lessons from
Chicago]

The destruction of the world that Ranney and Ms. Sparks remember and its consequences have not received the attention they deserved. Indeed, it seems like we have simultaneously managed to lose the past and the future.

The wave of Chicago factory closings was a canary in the coal mine moment. It signaled the emergence of a new era in American (and world-wide) social and economic life–an era characterized by:

• factory closures and plant transfers to lower-waged
  locations;
• outsourcing;
• the development of finance as a major source of profits (even
  for industrial firms);
• the elimination of millions of jobs;
• a rise in part-time or temporary jobs as primary employment;
  the depopulation and physical destruction of cities (such as
  Detroit and Baltimore);
• gentrification in many urban neighborhoods and the rise in
  political importance of the social groups formed by that
  gentrification;
• severe decreases in unionization rates in the private sector;
• lowered wages and benefits in the private sector;
• extensive technical innovation in communication,
• transportation and production–resulting in still more job losses;
  the increasing commodification of the satisfaction of all
  sorts of human needs (such as care for the elderly and the very
  young and the maintenance of households) and an accompanying
  proliferation of low-waged, on or off-the-books, service jobs; and
• the establishment of credit (at either normal or usury
  rates) as an indispensable way of life for many members of the
  middle and working classes.
  And perhaps, as a result of it all, it was characterized by the
  sucking out of the life blood of the collective spirit of the
  American working class.

The Solution of All Solutions?

It also resulted in an enhanced focus on educational failure as the cause of a wide array of social maladies–such as poverty, discrimination, unemployment, low wages and social despair. The Alliance for Excellent Education, a not untypical advocacy organization, pointed out the negative impacts it associated with what it believed was an education “crisis”:

… high school dropouts face long odds of landing a
good-paying job in the ultra-competitive job market of the
twenty-first century. In addition, they are generally less healthy,
die earlier, more likely to become parents when very young, more at
risk of tangling with the criminal justice system, and are more
likely to need social welfare assistance (see
http://www.all4ed.org/node/13/print).

Conversely, educational achievement was portrayed as the solution of all solutions—especially to what was seen as the worsening position of the United States in the world economy. In most policy accounts, this new emphasis on education was seen as all but inevitable, and indeed cause for celebration, since the country had shifted to a knowledge-based economy and it was no longer possible for individuals to earn a living by the sweat of their brows. They now needed skills and credentials—at least a high school diploma but, increasingly, a credential beyond high school and they were advised that the reason why people could not find and keep good jobs is that they lacked the skills they needed—there was a “skills mismatch.” Therefore, education was more important than ever—it was up to individuals to acquire the “human capital” that would make them qualified for employment in what is routinely characterized as a global competitive economy.

Efforts are continually made to help people understand the dollar value of a diploma or a degree—usually claiming that bachelor degree holders would earn a million dollars more over a lifetime than someone with a high school diploma. This differential was, of course, seldom placed in the context of the massive shift of wealth that has taken place in the larger society and is, for all practical purposes, simply urging individuals to compare themselves to other members of the broad working classes and to pursue an individual strategy for relative improvement. As I observed in an article in the first issue of Insurgent Notes, the enormous increase in enrollment in higher education over the past four decades provides convincing evidence that workers have, at least on the surface, become convinced of the usefulness of education as an individual strategy in replacement of even modest collective efforts through trade unions.

Recently, in an interesting turn, President Obama has asked every young American to “commit” to at least one year of education after high school so that America can win in the global sweepstakes. So, where individuals were previously advised to get better educated so that they could advance themselves and their families, the president wants them to do it for the country. This rhetoric has become all but completely dominant in educational policy circles. It is long overdue for a serious challenge.

Let’s be real. The reason why there are so few well-paying jobs and jobs with secure benefits is that employers made every effort to eliminate those kinds of jobs and have mostly succeeded—with the partial exception, now being directly challenged, of jobs in the public sector. While there may have been a good deal of personal malice and greed involved in those employer calculations, there was no need for such motives. The logic of profit was more than sufficient. At the bottom of the desperate drive for profit is the still hard to believe transformation of production from what was already a quite advanced stage in the 1960s and early 1970s. A current example from automobile production illuminates the current state of affairs. Hyundai, the Korea-based auto manufacturer, has built an assembly plant in Montgomery, Alabama. It’s not unionized but it pays good wages by Montgomery standards—about $20/hour and a good deal of overtime. The plant employs 3,000 assembly workers and produces 300,000 cars a year. At that rate, it would only take about 150,000 assembly workers to produce cars at the highest annual level ever recorded in the US. What’s true for Hyundai and the automobile industry is true for many other firms and many other industries—the ongoing and increasing application of scientific/technical knowledge to production has made human labor less and less necessary. What it also means is that companies engaged in production have too much capacity—those with capital to invest are in a bind—if they invest more in production, they might very well profit less. Therefore, they look elsewhere.

Let’s look more closely at skills and credentials. Almost all of what are imagined to be unskilled or low-skilled jobs (such as those in factories) actually require a good deal of skills (see Kusterer, Know How on the Job and Rose, The Mind at Work). But, in the dominant narratives, the skills of individuals who do all sorts of manual labor are belittled and denied (as retrospectively have been the skills of the industrial workers who made American manufacturing the envy of the world). Ranney tells a revealing story:

During a television debate in the early 1990s, that I had
with an economist in the employ of Citicorp she talked about the
tragedy of her family—mother, father, brothers and sisters—who
had all been autoworkers in Detroit. We were debating the merits of
the North American Free Trade Agreement (NAFTA) and a simultaneous
proposal then before Congress to raise the minimum wage. She was
for NAFTA and against raising the minimum wage. The tragedy of her
family, in her view, was not that they had lost their jobs as
General Motors and Ford shifted production to
low-wage/high-productivity plants in Mexico or that they were forced
to take low-wage jobs that didn’t pay enough to live on. The
tragedy was that the high pay that they had received as autoworkers
in the past had destroyed their jobs and undermined their incentive
to get more education, which would have made them more competitive
in today’s world.

There’s another, somewhat contrary, narrative which suggests that the era of American prosperity and global domination was the result of American success in educating its people and that the decline in educational achievement (as compared to other countries) is the reason why American dominance is at risk. And indeed, high school completion rates grew from about 10% of the population at the turn of the 20th Century to about 50% in the early 1940s and then up to almost 80% by the late 1960s—although those national averages obscure regional and racial/ethnic variations. Large
increases in postsecondary enrollment and completion did not occur until after World War II. It seems more likely that increases in educational achievement accompanied, but did not necessarily cause, American prosperity in the 1950s and 1960s.

The achievements of industrial production had a great deal to do with the power of workers’ collective labor on the assembly line and the application of scientific/technical knowledge related to the technologies of the time that was produced by relative handfuls of engineers and other technical staff. The workers’ skill and knowledge mattered a great deal but the skills and knowledge they used were not acquired in schools. Often enough, workers had other
intellectual and cultural interests, even ones that could be applied to production, but those who ran the factories were not interested in hearing about them (see Watson, “Counter-Planning on the Shop Floor”).

What about credentials? Hiring practices in what might be considered the primary labor markets effectively exclude large
numbers of people from consideration for better-paying jobs because they lack credentials—adversely affecting those who have been least successful in schools. This is in spite of the fact that there is frequently little evidence that what’s been learned during the acquisition of the credential has much to do with successful job performance or even with the more effective acquisition of technical skills (see Collins, Credential Society ). By way of example, individuals were once able to become nurses by completing a one-year program at a nursing program sponsored by a hospital; then they were
required to complete an associate’s degree and now, there is considerable pressure on nurses to have a bachelor’s degree. (To the best of my knowledge, there is not a single non-degree nurse preparation program in New York City).

Let’s put two and two together. The civil rights victories of the 1950s and 1960s initiated a process, uneven to be sure, to end legally sanctioned race discrimination. But, the election of Barack Obama notwithstanding, it is evident that black, and many Hispanic, individuals and communities live in deeply oppressive circumstances rooted in high rates of unemployment and low incomes. There has been a lot of handwringing as well as lots of vicious drivel about why this is so. But it should be clear that the combination of credential inflation, massive educational failure, especially in
black and Hispanic communities, and the elimination of millions of industrial jobs, has all but guaranteed the reproduction of a racially stratified society.

Credential inflation and the parallel effort to insist upon meritocracy as the proof in the pudding of a color-blind society also had effects beyond the black and Hispanic communities. In the last forty years, a wide divide has opened up between the elite colleges and universities and the rest of higher education. That divide is manifest, for example, in the different experiences of the relatively small number of kids who are competing for slots in the relative handful of elite institutions—where the defining experiences are demanding high school coursework, lots of college visits, high quality SAT prep, lots of AP classes, a dozen applications, stretch schools and safety schools, and early admission and early decision, frequently challenging college courses, high rates of degree completion and prospects of admission to prestigious graduate programs or professional schools. For the great majority of kids who are headed for the non-selective institutions (both public and private, and four-year and two-year), the typical experiences include uneven high school coursework, frequently ineffective SAT prep, applications to a handful of colleges unguided by a good sense of
what might be a good match, bewildering placement processes upon admission, high rates of remediation, courses narrowly focused on employment goals, low rates of graduation and increasingly uncertain employment prospects for those who do graduate. Perhaps needless to say, the two different roads are clearly marked with signs—the first for the children of the wealthy and the professional classes and the second for just about everyone else.

Failure and Its Discontents

Although they are familiar enough, let me cite a few of the basic indicators of educational failure in America:

About 70% of students entering ninth grade are reading below
expected proficiency, according to the National Assessment of
Educational Progress (NAEP).
In 1969, 77% of high school students graduated but by 1997,
the graduation rate had fallen to 65.7%. By 2004, it had gone back
to about 70% but then started dropping a bit. In other words,
almost one third of high school students drop out.
About 70% of high school graduates continue on to enroll in
college; about 25% of those who enroll in four-year colleges need at
least one remedial course; and about 60% of those who enroll in
community colleges need at least one; but only about 30% of those
required to take remedial courses successfully complete all of them.
Only about half of students enrolled in public four-year
colleges earn a degree and only about 30% of those enrolled in
community colleges do so—within six years of entry.

In virtually every case, black and Hispanic students do even worse. According to NAEP results, more than 85% of black and Hispanic eighth graders read below grade level; only 55% of Hispanic students and 51% of black students graduate from high school in four years; only 20% of Hispanic graduates and 23% of black graduates are considered ready for college; and many fewer blacks and Hispanics attend or graduate from college.

These failures, or other versions of them, are continuously cited and, interpreted within the contexts of global competition and US decline, they have been driving the last couple of decades of education reform—pushed forward by policy organizations and a host of foundations. At the same time, they have also featured prominently in what is frequently characterized as social entrepreneurialism, a movement of sorts that is grounded in elite colleges and universities, and manifested in such projects as Teach for America and an array of charter school organizations, such as the Knowledge is Power Program (KIPP). Virtually all of the projects associated with this movement emphasize the notion that the leading ideas should primarily come from those who are unburdened with the beliefs and customs of those with many years of experience in schools. The trend has also been accompanied by the increased involvement of all sorts of financial industry folks in bankrolling school reform projects, such as the Harlem Children’s Zone. In spite of all the talk and much of the effort, it increasingly appears that the new reforms have not yielded consistent gains. Higher test scores are increasingly found to be based on student performance on predictable tests with cut points set far below what had been expected; high school graduation rates have increased but the majority of graduates are not deemed ready for college.

There is one other not so small thing—many millions of American students were, and still are, effectively disengaged from the institutions that are trying, with more or less intelligence and more or less integrity, to educate them—that might have a lot to do with the ineffectiveness of the reforms. How and why they become so disengaged is an important matter. There is a good deal of give and take in everyday schooling. Students often enough perceive their classes as really boring and, for sure, a lot of them probably are. But there are classes where the nature of the material requires both prior learning and sustained attention. If students have not more or less mastered what they previously should have and find themselves unable to do much of the work at hand, a claim that it is boring is a lot easier for them to handle than an admission that they can’t do it. And if it’s perceived to be boring, then there’s not much reason to try to struggle with the material to see if it can be understood; once again, failing because you didn’t try is a lot easier to handle than failing in spite of trying. This way of thinking about student failure has sometimes been called “learned helplessness.”

But there’s another part of the story related to student disengagement that is more directly connected to the bigger picture painted above and it’s of special relevance to kids in middle school (typically, grades six to eight) and high school. It is generally taken to be the case that middle schools are far less successful than elementary or high schools–student performance on various assessments frequently decline during middle school but students do somewhat better in high school. Middle schools appear to be an educational black hole. One of the most frequently cited explanations for the shortcomings of middle school is the significance of raging hormones among younger adolescents. Although I am no expert on hormones, I find that explanation a bit simplistic since, if hormones make some kids act out, they probably should be making all kids act out and thereby interfere with effective schooling all over the place. But that’s not the case. By way of counter-evidence, middle schools in good suburban school districts routinely do quite well, as do handfuls of somewhat selective middle schools in large cities. So far as I know, they are not administering anti-hormonal medications.

I think that a more useful explanation is the recognition that children of middle school age (12-14) are increasingly able to recognize and interpret what is going on around them and to develop a more or less realistic assessment of what their life prospects are and they begin to act on the basis of those assessments. A realistic assessment is one that’s going to be grounded in children’s perceptions of what’s going on in their immediate and extended families, their neighborhoods and, of course, the schools they have attended and are attending and, very importantly, where they think
they stand in terms of what they have learned and what they need to learn. What kids know and understand is almost always limited by the simple fact that they’re kids—they have limited experiences. It’s hard enough for most kids to figure out what’s going on within their families, let alone about the ways in which events beyond their family or neighborhood are shaping their lives. But that doesn’t mean that they don’t notice things—their mom or dad, who finished high school but can’t get a regular job; their older brother or sister who started community college but dropped
out; their cousin who’s spent time on Rikers Island (a New York City jail) who got his GED while he was waiting for trial. And the kids put things together! And when you put things together from the bad end of the American educational dream, it starts to look like a bad dream. So, maybe you don’t believe in the dream so much!

Once again, this perception is not limited to black and Hispanic kids. The handwriting is visible on the wall for lots of white kids who attend ordinary high schools and colleges that produce failure more often than success. The dream is not doing so well in their lives either.

A good deal of what has gone on and is going on in lots of schools, especially in schools in cities with large numbers of black and Hispanic students, is terribly disheartening—a lot of kids haven’t learned very much (specifically, they haven’t learned to read and write very well and they have not really learned arithmetic or elementary algebra); they find themselves increasingly frustrated as they progress through the grades, whether or not they have been left back; way too many of them (mostly boys) have been referred to special education, through the more or less routine functioning of
evaluation processes that are all but pre-set to result in certification of students being in need of special services (and
being excluded from regular classes); and lots of them have been subject to suspensions for violations of school rules—some serious, some not, and many ambiguous—where the most appropriate response should have been an effort to simply figure out what was going on in a child’s life.

Let me emphasize that last point—children are being judged according to criteria that should not be applied to children.
Children make mistakes: they act inappropriately; they sometimes act quite badly. It is the responsibility of adults in schools to stop them from acting inappropriately or badly; to explain why they should not have done what they did; to describe what the consequences might be if they act inappropriately or badly again; to insure that parents and guardians are fully informed, and never to hold a grudge against children for what they have done. However, that’s not what happens—far too often, kids who misbehave are portrayed as demons and monsters. Lest readers think I exaggerate, I took this
from a recent teacher’s post on the web page of the Independent Community of Educators (ICE), a leftish rank and file opposition group within the UFT, the teachers union in New York City, which I first came across on a Chicago-based teachers’ web page:

The Logical Truth: Through no fault of his own, if Dr. Martin Luther
King taught in a “rough” school and was given up to 150
students, many highly disruptive, disrespectful and emotionally
disturbed that told him to “Shut the F… up or I’ll kill your
mother,” and these students refused to do any work and
subsequently failed Standardized Tests, Dr. King would be branded
publicly as a Bad Teacher, Bum, Dead Beat and the like by the DOE
and newspapers.
( http://iceuftblogspot.com/2011/02/overwgelming-controversies-defame-nyc.html )

I don’t think that guy should be anywhere near kids. But what I think is an even bigger problem is that an opposition caucus in the UFT or an oppositional educational group in Chicago thinks it’s all right to post his rants. One friend, upon reading an earlier version of this article, was puzzled that I felt that it reflected so badly on the teacher in question. Perhaps I let too much of my own experiences in schools get in the way of clarity. Look back upon the quote—the teacher says that many of the 150 students were “highly disruptive, disrespected and emotionally disturbed,” that they
cursed and threatened and that they “refused to do any work.” He did not say those things about a child or a few children; he said it about many of them. It seems evident to me that he simply cannot escape from his convictions that black kids are mostly hopeless—and let’s be clear about this, the “rough school” is a school with black kids, in light of the sarcastic invocation of Martin Luther King. It is hard to imagine that he could ever be an effective (let alone thoughtful or considerate) teacher in a classroom with black youngsters—especially youngsters who have not done well in school.

I am not suggesting that such a character is representative of all teachers in struggling schools. Indeed, there are many
extraordinarily dedicated and very hard-working teachers who are thwarted in their efforts by patterns of unproductive student behavior, especially in schools where the leadership does not take an active role in developing policies and practices that lead to children behaving in ways that are appropriate for learning environments.

If we think about what goes on in classrooms as consisting of a complex interaction between what teachers ask children to do, what children do, how they are responded to, how they interpret the response, and how they subsequently act, I think we can relatively easily imagine a situation where kids start acting in ways that are probably really quite opposed to their own best interests as learners—meaning that they get to school late, they skip school entirely, they don’t do the work they’re asked to do, they create disturbances in their classrooms, they challenge and disrespect their teachers and their classmates, they do little homework. Often enough, the kids don’t seem able to distinguish between the
teachers who disrespect them and the ones who are exhausting themselves in trying to do the right thing. Not exactly a recipe for academic success! But, at the same time, the students remain ambivalent—if you ask them, they will usually insist on how important a good education is and how they want to be successful in school—there are very few student opponents of education at the level of articulations. But there are more than a few at the level of everyday actions. As in many other situations, actions can come before articulations and can even be at odds with those articulations.

What Should Educators Do?

Teachers and other educators should be prepared to act beyond the simple defense of their interests as workers. On the outside, it demands an unequivocal commitment to stand in solidarity with the people who live in the communities where they teach when community residents take steps to address issues of concern (such as police abuse or violence) and not just when those issues coincide with the interests of workers in the schools—as in the case of school closings.

And on the inside, teachers must take collective responsibility for two things: 1) documenting and challenging the ways in which school policies and practices adversely affect some students (such as those being referred to special education and those being subjected to disciplinary proceedings), and 2) enhancing the quality of teaching that’s provided to children. The real problem with teaching in schools (and colleges, for that matter) is not that there are lots of really bad teachers; the overwhelming majority of teachers are not lousy. But, at the risk of over-simplifying matters, let me suggest that far too much teaching (including some of the teaching that I’ve done) is probably not good enough. I would
characterize it as teaching guided by common sense and over-relying on telling students what they should know; but as Eleanor Duckworth memorably wrote, “Telling is not teaching and remembering is not learning.” Much of what even young children have to learn is the result of a remarkable set of human inventions—such as the alphabet; a place-value based number system; written texts in multiple genres. Unlike what is commonly assumed, what is basic
(such as the alphabet) is often times not easy. Teachers need to be sophisticated interpreters of the achievements that provide the essentials of a powerful education and astute observers of human development, not people blinkered by a whole set of commonsensical prejudices.1

Their work is made much more difficult because of the failures that have come before. Teachers in the upper elementary grades, middle schools, high school and even colleges are faced with a daunting challenge to find effective ways of engaging students in learning grade-appropriate material and, at the same time, to enable them to acquire skills that they should have already learned. Very few teachers are able to figure it out on their own—they need access to
sophisticated learning theories, to numerous examples of effective practices and to more skillful practitioners. There are, I believe, more than enough raw materials for the assembly of effective educational institutions but they are not as consistently well used as they need to be. The current assaults on teachers make the possibility of effective
and equitable education less likely—even though they’re being conducted in the name of excellence and equity. There’s a cruel irony to the fact that a president who cannot recognize tyrants in the Middle East nonetheless feels completely qualified to recognize the failures of teachers at Central Falls High School in Rhode Island and to endorse their mass dismissal.

I’d suggest that there has not been an adequate articulation of a genuinely radical alternative to the prevailing ideas. There have been a number of more or less unhelpful approaches—including diversity training and multi-cultural education, a focus in schools of education on matters of democracy and social justice, an insistence that the behaviors associated with poverty are the key contributors to educational failure, and (in spite of its popularity with many on the left) a Paolo Freire-inspired liberatory education. My reasons for describing these approaches as unhelpful are multiple
and I should emphasize that they are not all of a piece.2

However, most of what might be considered left voices are inadequately attentive to the specificities of the ways in which
failure is produced and reproduced in schools and all but completely inattentive to the large scale realities that I’ve described above. And finally, the unions and the various grass roots and oppositional groups active within them have failed to embrace a politics of solidarity with the children they teach and the communities they teach in. The activists may rail against the betrayals of the union leaders when those leaders maneuver to come to an accommodation with
school superintendents, mayors and governors while maintaining their own power, but effective opposition will require a more fundamental break with the common sense of trade union activity and educational practice.

The inability of those perspectives to generate effective solutions has a great deal to do with why many dedicated educators and community advocates have been led to make common cause with an assortment of external actors (including powerful foundations and influential policy groups) in order to address the most pressing issues of educational inequality and failure. As a result, they have found themselves being pulled along in support of the “new education reform” including its reliance on policies and practices that they do not necessarily support—such as test-based
accountability, test-based teacher evaluation, merit pay, and an excessive reliance on school closings. Those approaches are now the currency of the education policy realm and the common sense of the Obama administration’s education policies.

A Different Approach

In the article thus far, I have relied upon fairly traditional ways of assessing educational achievement or its absence. Those measures are revealing only up to a point. What they effectively leave out is any sense of how impoverished the goals and accomplishments of American education are in light of what they should be. In all likelihood, the great majority of American students are being provided with an education that will leave them ill-equipped to understand, interpret or act to change the world they and their children will be living in. At the end of their formal schooling, even for those who are apparently most successful, they will know precious little of history, literature, science, philosophy or politics. While I would not overstate the point, it may very well be that one reason why students invest so little in their learning is that so little of genuine substance is being presented to them.

The recent renewal of mass political activity around the world and just now making an appearance in the United States might provide new reasons for disengaged and disaffected adolescents to become re-engaged with serious study so that they might acquire the skills nd knowledge they need to become full-fledged participants in those events. It would be an especially welcome side effect of the return of politics.

I began this essay by reviewing some of the devastating consequences of the widespread deindustrialization that began in the 1970s. What needs to be kept in mind, however, is that the United States still has the greatest manufacturing capacity in the world—even after all those jobs were shipped overseas. But the manufacturing process is now increasingly organized by the application of scientific knowledge and, as I noted about the Hyundai plant in Alabama, less and less reliant on human labor. The potential implications of this development were foreseen by Karl
Marx:

Labour no longer appears so much to be included within the
production process; rather, the human being comes to relate more as
watchman and regulator to the production process itself. …. No
longer does the worker insert a modified natural thing [i.e. a
tool—my insert] between the object and himself; rather, he inserts
the process of nature, transformed into an industrial process, as a
means between himself and inorganic nature, mastering it. He steps
to the side of the production process instead of being its chief
actor. In this transformation, it is neither the direct human
labour he himself performs, nor the time during which he works, but
rather the appropriation of his own general productive power, his
understanding of nature and his mastery over it by virtue of his
presence as a social body—it is, in a word, the development of the
social individual which appears as the great foundation-stone of
production and of wealth.

The “social individual” is the very well educated individual. Marx anticipated that the kind of advanced education that had been and, to a great extent, remains available only to a minority would become something available to all individuals–once people had access to the free time which would be made possible by automated production. The German critical theorist, Iring Fetscher, attempted to articulate, in very broad terms, what might be the essential dimensions of the kind of knowledge individuals would need:

As many members of society as possible must become familiar with science; and An end must be put to the isolation of individuals from the creative collective subject which alone is capable of coming to dominate the material conditions of human existence, rather than being dominated by them in the form of a totality subsumed by capital.

It is evident that we remain dominated by our circumstances. But the goal of the whittling away of the distinction between manual and intellectual labor that Marx anticipated can and should become the starting point of our thinking about the kind of education we want to provide for our children. If we start not from the goal of acculturating most children to the demands of an economy which promises only to make things worse, but from the goal of preparing all children to live in a world worthy of human beings, we will find a very different kind of education reform to advocate for. It will have some things in common with some parts of current reform efforts but it will go beyond and transform them.

References

Anthony S. Bryk, Penny Bender Sebring, Elaine Allensworth, Stuart
Luppescu, and John Q. Easton. Organizing Schools for Improvement:
Lessons from Chicago. Chicago: University of Chicago Press, 2010.

Randall Collins. The Credential Society. New York: Academic
Press, 1979.

Eleanor Duckworth, “The having of wonderful ideas” and
other essays on teaching and learning. New York: Teachers College
Press, 2006.

Iring Fetscher. “Emancipated individuals in an emancipated
society: Marx’s sketch of post-capitalist society in the
Grundrisse,” in M. Musto, Karl Marx’s Grundrisse: Foundations
of the critique of political economy. New York: Routledge, 2010.

Ken Kusterer. Know-How on the Job: The Important Working
Knowledge of “Unskilled” Workers. Boulder: Westview Press.
1978.

Karl Marx. Grundrisse: Foundations of the Critique of Political
Economy. Hammondsworth: Penguin, 1973.

David Ranney. Global Decisions, Local Collisions: Urban Life in
the New World Order. Philadelphia: Temple University Press. 2003.

Mike Rose. The Mind at Work: Valuing the Intelligence of the
American Worker. New York: Viking Penguin. 2004.

Bill Watson, “Counter-Planning on the Shop Floor,” in Radical
America. Vol. 16, No. 3. Somerville: May-June 1982. Available at

• 1Although it is far beyond the scope of this essay, the work of the
  Russian psychologist, Lev Vygotsky, is one of the best places to start thinking about these matters.
• 2I hope to write a follow-up to this article, tentatively titled “The
  Politics of Pedagogy and the Pedagogy of Politics,” in a future issue of Insurgent Notes that will explore these matters.

In France for more than fifty years, everyone, whether they worked or not, had the right up until now to a minimum old age benefit at 65 years old. This right, independent of income earned elsewhere, is matched with add-ons depending on health, number of children, etc. Additionally, if someone’s income didn’t reach a minimum level, this basic pension can be supplemented with housing aid, transportation, etc. and if needed, at the local level with other financial benefits.

Everyone working a large part of his or her adult life reaches retirement with a pension set higher than this minimum. All social classes have the right to a basic pension, including the non-wage earner, because setting up a retirement fund is legally mandated (sometimes contractual, becoming legal). This general situation however conceals widely varying differences in circumstances. If non-wage earners relying on legislative guarantees are excluded along with the administrative agencies collecting and managing benefits independent of the State for them, the retirement system for the working becomes extremely complex.

Depending on their occupation, all wage earners come under the control of:

• The general system: most private sector wage-earners draw from the Caisse Nationale d’ Assurance Viellesse de la Securitie Sociale, whose benefits are matched by compulsory supplements specific to each economic sector. Right now, for a worker having worked from 20-60 years these two retirement funds together add up to around 70% of salaries.
• State workers (which includes most teachers) whose retirement is specifically paid directly by the State.
• “Special programs” whose conditions are by and large more favorable than the general retirement system for certain classes of workers like local government officials and workers in essential economic sectors nationalized in the past like mining, energy and railroads or specialized sectors like the national theatres or notary clerks.

The legal and financial administrators of the general system are State appointed but the system’s management is independent and jointly run by the bosses’ and labor unions (in the beginning the latter were elected but became bureaucratized with the introduction of union stipends). For the complementary or special retirement funds, the management rules depend on the sectoral agreements. They are managed according to rules, whether elective or bureaucratic, made part of these union benefits too. In principle the management of most retirement funds, whether general, special or supplementary, is done by distribution, that is to say that receipts of 50-50% contributions from both employers and employee are prioritized to pay current pensions. Nevertheless, all these funds must invest their surplus into financial markets, making them subject to capitalization. For accounting and financial reasons (often because of privatizations), the special sectors which functioned like those of state workers as a direct service by the employer, have been forced to create separate funds acting like other retirement funds.

The General Reduction in Labor Costs

This point has been part of a wider longstanding attack on these special sector retirement plans that in past years – and now – are at the center of conflicts over retirement plans. It is an important issue in the current struggle because the beneficiaries of the special retirement plans (notably in energy and transportation) work in key economic sectors and, by taking action, can paralyze economic activity across the country. There were memorable strikes in 1953 and 1995 that forced the government to back down from changing these special plans.

It is true that these particular pension schemes offer benefits superior to those of the general plan. Successive governments have tried to use this fact in trying, in the name of ‘equality’, to align these special sector plans (and those for government workers too), with the general pension plan. In fact, these attempts had nothing to do with any improvement but acted only as a smokescreen for the general tendency of capital tied to social insurance to complete making cuts in legal benefits, lowering all incidental wage related costs and financing of all the pension plans. This is an especially complicated situation not only because of the reactions of workers affected, but also because of the multiple interests involved:

[List]

Economic: Bosses look to reduce their own contributions and the financial sector tries to take over individual investments.

The unions: Retirement questions are only one element in reconsidering the unions’ role in systemic mediation in managing the work force.

Political: Although tangled up in a web of scandal and corruption, the current government is making pension reform a central point of its “politics of change.”

What is usually called “the attack on retirement” is nothing but an expression on the French level of the world-wide tendency to ward off the global fall in the rate of profit by both increasing productivity and cutting labor costs. This systematic and global attack develops under intensified capitalist competition between the multinationals and states that still make up the framework for financial activity.

In the European Union (EU), for a long time this pressure has been displayed by the transfer of production to European countries with lower labor costs and sometimes semi-non-existent social expenses, which has led on one hand to changing working conditions (lower wages and social guarantees, rising insecurity) and restructuring production and distribution.

For the past two years, the crisis has accentuated these tendencies. On the other hand, helping these businesses stay competitive in various ways by exempting them from social or fiscal expenses have helped lower their production costs in France. Together, these factors, imposed directly or indirectly by the crisis of capital, have produced growing shortages in the many organizations providing social benefits because their income has shrunk while their expenses increase. This was especially obvious in all the pension organizations, whose shortfalls worsened more because of increased life spans.

Besides, for the special plans affecting specifically defined groups from national industries, political and economic changes like sub-contracting cut back the number of active workers while increasing the number of retired. This imbalance was especially obvious, for instance in the case of mines since hardly any mines are open in France because global competition forced them to shut down while numbers of ex-miners continue to collect pensions paid with ‘special case’ funds. Another example is the national railroad company, SNCF, which severely downsized its workforce through subcontracting and by using many outside workers not covered by statutes. SNCF’s pension funds see the number of retirees increase with receipts based on lower salaries.

All these pension funds, whether general or special case, have no other alternative but to appeal to the State or to borrow to finance the deficits, which increases total State debt. To the economic pressure of competition aggravated by the crisis is added the pressure from the European Union which, to stabilize the Euro, requires reducing State debt in the community. Thus, in France, as in other member states, this obligation to cut back State expenses especially those concerning public debt, which the pension system is an important part. To that is added another indirect strategy–that of capital as a whole, looking to expand into the public sector to find both sources for financing as well as for profit.

A Systematic Attack On Deferred Income

Certainly, the extension of lifespan is a basic factor in the pension problem (life expectancy in France has risen from 66 years in 1950 to 80 years in 2010) while for different reasons, working life has been lessened by 8 years. In 2010, 1.5 active workers could be counted for every retiree. This situation is imposed regardless of financial arrangements for pensions because the whole system relies on the same basic methods. The main problem is above all financial and comes up whatever the system used: who is going to pay for pension services? Labor or capital, on which side does the surplus value go? This is not an insolvable problem especially considering the surplus value extracted from the large growth in workers’ productivity.

Recent surveys carried out with workers have shown that most are so dissatisfied with work that they prefer to be able to keep the present time-frame for exiting the workforce, even if it means increasing their own costs or leaving with a reduced pension. But such solutions, which would also involve a contribution from employers, doesn’t fit in with the general tendency to reduce the part of surplus value going to wages for the benefit of capital. Both employers and government strongly oppose them and these alternatives aren’t addressed by the unions.

The core of the present debate over pension reform thus unfolds almost exclusively over technical details. This is the terrain chosen by capital: discussions on liabilities and demands from the union federations that don’t see the whole picture but only these tangled procedural details which spread great confusion. Excluding the individual calculations for those approaching retirement, no one can say for sure what his or her future will be, except the certainty of having to work longer to get a reduced pension compared with former expectations. It isn’t possible in this article to describe in detail all the manipulating these technical facts are subjected to; we list here only a few:

[List]

Age, where previously confusion set in between the legal minimum for retiring (65 years which must be extended to 67 to get full retirement benefits) and the possible age of retirement (under certain conditions, notable reduced retirement, 60 years which must be raised to 62.)

Length of work history, that is, the contribution estimated by the number of trimesters granting right to full retirement without reducing benefits proportionately. From 150 trimesters (37 and a half years), this time period was regularly raised and now exceeds 40 years.

The base salary used for calculating retirement varies with the time considered. Right now, it is the average salary of the 20 “best” years, which is a step backwards compared with the past. For now, there is no question of touching it.
These reforms, being discussed now before parliament, not only affect the general system, but will eventually adjust civil servant pensions and the special plans, which will be aligned to the outcome of the general system.

What should be remembered from all the pronouncements is that capital and the government habitually manipulate the complexity of the retirement system, avoiding the mistake of frontal attacks that have unleashed strong movements of struggle and forced reversals on specific points. A united struggle over this issue though seems hard to realize because of the variations in individual situations.

Who opposes the present retirement reforms?

Before answering, a few words have to be said about the French union federations. These federations can be characterized by:

• Important legal protections safeguarding union activity inside companies, mandatory participation in many internal committees often elected (enterprise committees, personal delegates) and many joint committees managing most social benefits, sick leave, retirement, training, and work-related disputes or in national consulting bodies (Economic Council). Besides what is considered legal income, the unions can also receive many types of grants from the State or local government.
• A very small membership, altogether fewer than 10% of active workers, almost non-existent in certain sectors like retail or small businesses, which makes union functioning dependent on legal protection.
• Union pluralism, with no less than seven “recognized” national federations (that is to say, beneficiaries of various degrees of legal protections), which on the one hand leads to administrative complications which capital wants very much to get rid of and, on the other hand, to competition which doesn’t make forming unified movements easy.

Reform and any changes to it now run through this specifically French union situation which is also an unspoken part in the confrontations around retirement.

If you pay attention to the government – union negotiations and to movements against pension reform, there aren’t any independent resistance movements now. The union federations remain the only mediators along with the government and the demonstrations with the “days of action” and even the one day general strikes against pension reforms are entirely organized by the union federations either separately or together.

The demonstrations against pension reform hide growing resistance against the global capitalist offensive

In France, there is a cult or routine around demonstrations, which are more acts of political pressure than a direct expression of class action. The demonstration is a weapon in the hands of the unions because they are almost the one ones able to organize significantly across the whole country.

Government and the unions clash over how many demonstrators it takes to act as a de facto thermometer of social tension, shifting the balance to union leaders in negotiating with the state. But there should be no delusions about this number. Generally, such demonstrations are coupled with a “day of action” which doesn’t really represent a strike but gives leeway to workplace union branches in organizing protest in the workplace. The numbers don’t necessarily come from large numbers of workers actively taking part. It’s well known the union federations can, if they judge it necessary to apply political pressure, “mobilize” everyone on-the-job having a legal right to “non-productive” paid time off. If necessary, others can be added for whom the trip or tweaking of the 35 hours law let them demonstrate without loss of pay1

The demonstration is a substitute for the strike but it only has political character without socially affirming class struggle.

Despite this, the issue of demonstrations should be considered from another angle. If the union federations are a way to channel a movement and eventually exhaust it by repetition, which leads to disaffection and the movement’s death, this can also have the opposite effect: a wider participation than was predicted. The nature of these actions can even reveal a much broader current which itself goes past the apparent objective of union demands.

This was the outcome at the time of the last demonstrations of September 7, 2010, which were meant to be similar to the prior ones against pension reform. Not only did Paris bring out more participants than the previous actions (hard to estimate, probably several hundreds of thousands) but parallel actions held in provincial cities regrouped more participants than the actual number of employed workers in the city. This characteristic shows the protests against pension reform contained a more general: they conveyed wider social discontent which couldn’t be expressed because of the official demands but which took advantage of the opportunity to surface.

The unity of the union federations in the call to demonstrate further testifies to the extent of this hidden current of social discontent. The federations’ discomfort about what follow-up to give to this Sept. 7 demonstration shows well that they are afraid of a growing movement that could escape their control. Union leaders openly expressed such fears and they planned, even though the question of reform was being discussed in parliament, of scattered actions and a new day of September 27th identical in spirit to the preceding national demonstrations. This showed the unions had no intent of promoting large-scale actions, knowing well the reform will be adapted in the end and that their political games with the government will only let them demand adjustments in details. Their actual role now, objectively or not, is well within the line of the union function: to be effective agents when capital has need to resolve its ongoing problems and, eventually, the guard dogs of the proletariat. No one can say, on the actual state of affairs in France, how the class struggle will compel them to reveal their true character.

• 1 What is called “the RTT strikes” resulted from applying the thirty-five hour per week law which let workers collect off days which they can take throughout the day notably to take part in demonstrations during working hours without losing pay.

1. I could start off by saying “Marx has some problems in his analysis of ground-rent.” However, it’s not exactly the case that Marx is wrong in his analysis of the derivation of ground-rent or in his calculations of the comparative rates of ground-rent. It’s more that Marx misses a few things, a few important things; he misses the transformation of British agriculture that underlies the fluctuations in ground-rent and the fluctuations in agricultural commodity prices. It’s more that he takes Ricardo’s and others’ assertions about the availability of land, the “insatiability” of demand, about the “natural” fertility of land as not just accurate, but eternal. Does Marx do this as a matter of regard for Ricardo? Of faith? Of expediency so he can get to what he really wants to discuss, which is not really ground-rent at all? Beats the hell out of me, almost literally, which upon reflection means I need to change what I want to start off saying.

So… so after thinking about it for a little bit, I want to start off by saying that I have some problems with Marx’s analysis of ground-rent. He misses a few things, a few important things, like the transformation of English agriculture; like the transformation of English landlords; like the transformation of the social relations of production which rent does not cause, but which rent serves. Some things, some really important things, he doesn’t miss.

And more than that, I think various mis-apprehensions of Marxism, and mis-analyses of advanced capitalism stem from the ambiguity in Marx’s analysis of ground-rent. Normally, I could start that off by identifying Lenin’s theory of imperialism as an example; Lenin’s and others’ theories of rentier capitalism as another example; the various theories according to which monopoly has transcended the law of value for capitalism as an example; the theories that have US capital as a monopoly capital, and/or a financial hegemon extracting tribute, extracting rent, from

a) Other developed capitalisms

b) Other less developed capitalisms or

c) Both;

Through either

a) Artificial inflation of prices for its highly processed (large value-added) goods or

b) currency manipulation or

c) Both,

as an example. And all those examples, I would identify as so wrong, so transparently “left” recapitulations of the capitalists’ own mythology of “having finally, seriously, this time we’re sure, once and for all we have conquered the business cycle” mantras that it makes me laugh. I could start off by saying that. But only later.

2. We know how Marx engages with these categories of rent, capital, wage-labor, value. He engages through opposition and the opposition is elaborated through critique. Marx begins his critique of ground-rent when he begins his critique of capitalism. In the Economic and Philosophic Manuscripts of 1844 Marx launches his initial probe into the complexities of ground-rent. We see Marx establishing the characteristics, the determinants in and of rent that will occupy him for the next 25 years. We get fertility, the relation of rent to population, the ever-present and always unrealizable demand for food, and the landlord and rent as obstacles to both the industrial capitalist and the development of industrial capitalism.

In the first manuscript, we have Marx telling us:

(5) While, thus, the landlord’s interest, far from being identical with the interest of society, stands inimically opposed to the interest of tenant farmers, farm laborers, factory workers and capitalists, on the other hand, the interest of one landlord is not even identical with that of another, on account of the competition which we will now consider.

I’m not about to disagree with the accuracy of Marx’s characterization of the landlord as all that is petty, venal, and vicious in human history, however much I think those attributes are better applied to the nuclear family. If the landlord isn’t the sum total of cynicism, avarice, pettiness, dishonesty and brutality in all of human history, then he or she still comes close. And close does count.

However, Marx’s claim that the landlord stands inimically opposed to the interest of the industrial capitalist is indicative of the ambiguity that persists throughout his analysis of rent.

Marx regards rent as the way in which:

…property in land realizes itself economically, that is produces value. [Capital, Volume 3, Chapter 37 “Transformation of Surplus Profit into Ground-Rent]

Rent is the means by which land produces value. Except it isn’t because the land doesn’t produce value. Ground-rent is the mechanism by which labor in agriculture manifests its transformation from the supplier of surplus-product and into the source of surplus value. Marx says, but does not pursue as much in Theories of Surplus Value, Part 2:

…the very existence of rent is feasible because the average wage of the agricultural laborer is below that of the industrial worker. Since, to start with, by tradition (as the farmer turns capitalist before the capitalists turn farmers) the capitalist passed on part of his gain to the landlord, he compensated himself by forcing wages down below their level…Surplus-value can be increased, without the extension of labour-time or the development of productive power of labour, by forcing wages below their traditional level. And indeed this is the care wherever agricultural production is carried on by capitalist methods…Here then we already have a potential basis of rent since, in fact, the agricultural labourer’s wage does not equal the average wage. This rent would be feasible quite independent of the price of the product, which is equal to its value.

Ground-rent is the capitalization of land; its organization as a means of production for exchange rather than a means of consumption.

Still, this transformation, this capitalization of land is stymied, incomplete, and necessarily so. Capital does not encounter land, at least not in Europe, in either its “natural” state, or in its “commodity” condition. Capital encounters landed property as encumbered by the pre-existing relations of production. Capital encounters land as constrained by a form of private ownership that is at once archaic and powerful.

Ground-rent then is a bit more than just the capitalization of land. It is capital adapting, and adapting itself to, feudal property that is refracted through the lens of market exchange and market value.

Even in, especially in, the most advanced capitalist country in Europe, capital is confronted with the obstacle of its own uneven and combined development.

Marx’s target is not this uneven and combined development. His target is not ground-rent as the preservation, extension, and dissolution of the archaic relations of production. His target is not the part ground-rent, and landed property play in the reproduction of capital. His target is not the part ground-rent plays in driving the social differentiation, the class relations, which accompany and signify the transition to capitalism.

Marx’s target, more than anything else, more than anyone else is David Ricardo.

3. For Marx, Ricardo is the best bourgeois political economy can produce; a figure of profound analytic capabilities and severe shortcomings, like capital itself. Ultimately Ricardo is constrained by the power of his own analysis. Ricardo’s examination of the economic categories of capitalist production begins with, requires, and reproduces the excision of those economic categories from the social relations of production that give the categories life. At its end, Ricardo’s analysis substitutes ideology for history.

Next to bayonets, cruise missiles, and beehive rounds, ideology is the bourgeoisie’s sharpest tool. Ideology tells the bourgeoisie exactly what they want to hear: There was a history. History has come to its end. The circumstances surrounding the birth of capital, the origin of the bourgeoisie, are not immortal, but rather completely natural. Capitalist markets are nature’s way of organizing humanity. There was creation. Capital is the crown of creation.

Landed property, as capital confronts it, is not so natural, but the political economist regards economic categories of landed property, and rent as excised from their social relations. To the political economist ground-rent is a-historical. For the English political economist, the origin, function, movement, and result of ground-rents in the period 1794-1815 versus the period 1500-1550 are immaterial. Ground-rent by any other name is ground-rent, and is an obstacle to the accumulation of industrial capital.

Marx is in hot pursuit of Ricardo, and in this hot pursuit he is inclined to allow, repeat, and even accept Ricardo’s less-than-historical critique of landed property and ground-rent. Marx is not doing this for the purpose of exposing the inadequacy of Ricardo’s critique. Before Marx begins his own critique of Ricardo’s theory of ground-rent, it’s as if Marx feels he needs to defend Ricardo’s “natural/unnatural” a-historical conceptualization of ground-rent in order to achieve his real objective. That objective is the rescue and recovery of the labor theory of value from the equivocation, the qualification and disqualification it suffers in Ricardo’s analysis of rent.

So we have Marx repeating Ricardo’s “materialist basis” for ground-rent: The supply of fertile land is limited. The supply is limited by “natural” conditions as the “more fertile” land is the land occupied; as “less fertile” land is always brought into cultivation as the population grows. The supply is limited by the social relations in that landlords monopolize the land.

Ricardo maintains, and Marx accepts, that not only is land of inferior quality brought into cultivation as the population expands, but also that proportionately less productivity gains are realized with successive applications of additional capital to the same plots of land. In Capital, Volume 3, Chapter 37 Marx writes:

That Mr. Lavergne is not only familiar with the economic achievements of English agriculture, but also subscribes to the prejudices of the English tenants and landlords, is shown on page 48:

“One great drawback attends cereals generally … they exhaust the soil which bears them.”

Not only does Mr. Lavergne believe that other plants do not do so, but also believes that fodder crops and root crops enrich the soil:

“Forage plants derive from the atmosphere the principal elements of their growth, while they give to the soil more than they take from it; thus both directly and by their conversion into animal manure contributing in two ways to repair the mischief done by cereals and exhausting crops generally; one principle, therefore, is that they should at least alternate with these crops; in this consists the Norfolk rotation” (pp. 50, 51).

No wonder that Mr. Lavergne, who believes these English rustic fairy-tales, also believes that the wages of English farm labourers have lost their former abnormality since the duties on corn have been lifted.

The Norfolk four-course rotation was no fairy tale, and the ability of clover, legumes, etc. to fix nitrogen in the soil is no myth. As Mark Overton writes:

The effects of the rotation were to increase yields of grain and to allow much higher stocking densities. These effects are modeled in Table 3.19 which demonstrates convincingly that the Norfolk four-course could indeed have been responsible for unprecedented changes in both crop and livestock productivity and output…

Partly because the integrated mixed-farming systems comprised so many mutually dependent components their evolution took time. Hence the long lag between the appearance in England of clover, turnips and other components of the Norfolk four-course system and the perfection of the system itself, whose widespread diffusion must be dated to the first half of the nineteenth century. Nevertheless there can be no doubt of the superiority of the new system at whose root quite literally lay the improved management of soil nitrogen. This of course was not the farmer’s intention, since the chemistry was unknown to them. Their concern was with fodder. Sowing grass leys focused attention on the range and suitability of grasses that could be grown and so clover was selected…; turnips were an alternate source of fodder. Once grown, and integrated into arable rotations, their probably unintended outcome was an increase in overall output. Although systems such as the Norfolk four-course rotation increased output of both stock and crops their major contribution maybe have been that optimum output occurred with a larger proportion of arable crops than under a system of permanent grass and permanent arable. The much increased amounts of manure from more efficient fodder crops, and the rotational use of crop residues, allowed this substantial increase in grain area, while still maintaining, or even boosting, yields. [Mark Overton, Agricultural Revolution in England, p. 117, 120-121, Cambridge University Press, 1996]

So here’s my point, what I would have said first, if I didn’t have to provide the background: Marx, in his pursuit of Ricardo, fails to comprehend exactly what Ricardo failed to apprehend: the revolution in English agriculture, the revolutionary increase in output and yield between 1750 and 1850. This failure is not so much a case of Marx failing to see the forest because of the trees as it is the case of Marx failing to see the deforestation because of the tree farms.

4. For Marx, the transformation of agricultural, the capitalist transformation of agricultural that actually operates through rent just isn’t the issue, and that’s a shame. This is the only instance in Marx’s writings, that I know of, where Marx actually adopts the position, the attitude, and the analysis of an economist, in essence abstracting the economic categories from the historical relations, and the historical development, that produce the economic category.

Ground-rent, for Marx, is the grand exception that is the proof of the rule of the law of value. Ground-rent will be the vector by which Marx, accepting the elements of ground-rent as Ricardo describes them, will prove how the apparent anomaly in the prices of agricultural commodities—where the less efficient producer, and the dearer product, set the market –actually validates the labor theory of value.

For Marx, following Ricardo, ground-rent exists as a transfer of value from industrial capital to the landlord. Rent is a deduction from profit, but not just from the profit of the tenant capitalist-farmer. Value moves, through the mechanism of price, from the superior productivity of industrial capital, and lower cost of industrial commodities, to the inferior productivity of agricultural capital and the higher cost of agricultural commodities.

Says Marx:

Incidentally, however the phenomenon of rent may be explained, the significant difference between agriculture and industry remains in that in the latter, excess surplus value is created by the cheaper production, in the former by dearer production. [Theories of Surplus Value, Part 2, Chapter 8]

So… ground-rent does not cause the higher prices, or the increase in price of agricultural commodities. The possibility for rent exists in those higher prices. The values of agricultural commodities are, like the values for all commodities, determined by the labor-time embodied therein as mediated by the time necessary for their reproduction. In agriculture, however, increased production necessarily entails, creates, an increase in the time necessary for the reproduction of any individual commodity. In agriculture, unlike industry, the expansion of production does not mean the relatively greater production of use-values with the same or proportionally less expansion of exchange-value.

In agriculture, the increased production does not reduce the socially average time necessary for reproduction and all of this occurs because demand is not satisfied.

Says Marx:

If the area of fertile land were enlarged or the fertility of the poorer soil so improved that I could satisfy demand, then this game would end. [TSV, Part 2, Chapter 8].

In The Poverty of Philosophy, Marx gives us the outline of Ricardo’s argument that he will use, and maintain, for his own examination of rent throughout his economic manuscripts, including volume 3 of Capital:

We have seen that, according to the Ricardian doctrine, the price of all objects is determined ultimately by the cost of production, including the industrial profit; in other words, by the labour time employed. In manufacturing industry, the price of the product obtained by the minimum of labour regulates the price of all other commodities of the same kind, seeing that the cheapest and most productive instruments of production can be multiplied to infinity and that competition necessarily gives rise to a market price – that is, a common price for all products of the same kind.

In agricultural industry, on the contrary, it is the price of the product obtained by the greatest amount of labour which regulates the price of all products of the same kind. In the first place, one cannot, as in manufacturing industry, multiply at will the instruments of production possessing the same degree of productivity, that is, plots of land with the same degree of fertility. Then, as population increases, land of an inferior quality begins to be exploited, or new outlays of capital, proportionately less productive than before, are made upon the same plot of land. In both cases a greater amount of labour is expended to obtain a proportionately smaller product. The needs of the population having rendered necessary this increase of labour, the product of the land whose exploitation is the more costly has as certain a sale as that of a piece of land whose exploitation is cheaper. As competition levels the market price, the product of the better soil will be paid for as dearly as that of the inferior. It is the excess of the price of the products of the better soil over the cost of their production that constitutes rent. [Poverty of Philosophy, Chapter 4, “Property of Ground Rent”]

Marx concludes the paragraph with what he regards as near insurmountable obstacles to the “parity” of industrial and agricultural production:

If one could always have at one’s disposal plots of land of the same degree of fertility; if one could, as in manufacturing industry, have recourse continually to cheaper and more productive machines, or if the subsequent outlays of capital produced as much as the first, then the price of agricultural products would be determined by the price of commodities produced by the best instruments of production, as we have seen with the price of manufactured products. But, from this moment rent would have disappeared also.

Yet, here is exactly the transformation imposed upon agriculture by capitalism, a transformation that finds its agents, in part, through the receivers of rent, the rent-seeking, profit-seeking landlords.

5. Marx certainly achieves his objective. He pursues Ricardo and brings him to ground [-rent]. The critique of Ricardo that Marx produces using ground-rent as a vector absolutely restores the integrity and viability of the labor theory of value.

The analysis of cost-price and the differentiation of cost-price from value establish the mediation through which the law of value must operate given the private ownership of the means of production. Marx demonstrates not only why prices deviate from values, but more importantly how the deviation of specific, individual, numerous prices from specific, individual, numerous values is the mechanism through which the law of value enforces itself. The analysis by Marx at one and the same time answers the “transformation question” before it is asked; embeds the labor theory of value as the center around which all of capital spins and morphs; proves that profit is derived from exchanging commodities at their values, but the profit so derived for any commodity is a distribution of, a proportion, a relation to the totality of value of all commodities.

Marx has climbed the ladder of Ricardo’s labor theory of value, and having done so, has no more need for ladders. The labor theory of value is firmly established at ground [-rent] level.

Here are the determining conditions of Ricardo’s theory of ground-rent, and Marx reproduces in and as his own in the critique of Ricardo: increased and increasing population; increased demand for agricultural commodities; inability of cultivated land to satisfy the demand for agricultural commodities; cultivation of less fertile lands; inability of new areas of cultivation and/or successive applications of capital to old areas to maintain or improve yields.

Marx certainly recognizes the weaknesses in Ricardo’s theory of the persistent, if not eternal, scarcity of agricultural output. We have Marx’s recognition of the feasibility of rent in the lower wage paid the agricultural laborer. We have Marx explaining how the new land brought into production is not necessarily less fertile, naturally, but that successive applications of capital are required to this new land to establish productivity equal to that of the already cultivated property. We don’t see Marx recognizing that his very recognition of this quality contradicts the assertion that successive application of capital produce declining returns.

We hear Marx telling us that if, in agricultural production, the machinery and constant capital inputs stood in the same ratio to the labor, variable capital as the ratio is industry, then rent would disappear:

If the mode of production changed in such a way that the ratio of variable to constant capital became the same as the average ratio in industry, then the excess of value over the average price of wheat would disappear and with it rent—excess profit. [Marx, TSV Part 2 “Herr Rodbertus. New Theory of Rent (Digression) {9} Differential Rent and Absolute Rent in Their Reciprocal Relationship. Rent as an Historical Category. Smith’s and Ricardo’s Method of Research”]

We don’t hear Marx analyzing exactly this trend in the development of capitalist agriculture, even though he writes:

In our view rent arises from an historical difference in the organic component parts of capital which may be partially ironed out and indeed disappear completely, with the development of agriculture.

But this is exactly the point where the historical analysis of rent, of its function in expanding the capitalist relations of production in agriculture, the capitalist organization of labor in agriculture should begin.

6. Ricardo’s study of ground-rent and price formation in agriculture is heavily informed by the dramatic price inflation in agricultural commodities in the period 1794-1815, the period of the anti-Jacobin and then Napoleonic Wars. In part, it was the military’s demand for agricultural commodities, and not just agricultural commodities, that drove the price inflation of these years.

This period is also the initialization period of the industrial revolution, when steam power was harnessed to the production of textiles; to the production of coal; and to the processing of grain.

The military’s requirements in the midst of this dramatic transition in the technical basis of production worked to the benefit of some, but not to the benefit of all. There was little or no benefit to the cottagers living in and around the villages and manors, who depended on rights of common for pasture, for maintaining production and productivity of their smaller, rented plots. There was no benefit to the commoners who rented almost no land for their direct production and relied almost completely on the common rights. There was certainly no benefit to the agricultural laborers. Between 1780 and 1810, real wages for agricultural workers declined by twenty percent.

For the most part, the dramatic price inflation and the subsequent climb in rents were driven by the number of poor harvest years, and the number of successive poor harvest years. Bad harvests were recorded in 1794, 1795, 1799, 1800, 1809, 1810, 1811, and 1812.

During this period of bad harvests, the population of England continued to grow, nearly doubling in the 1780 to 1806 period.

All the elements for the basis of rent are in place: population growth, inability of agriculture to meet demand, declining wages, apparent failure of successive applications of capital to maintain yield, cultivation of less fertile lands. Marx writes:

But apart from absolute rent, the following question remains for Ricardo:

The population grows and with it the demand for agricultural products. Therewith their price rises, as happens in similar cases in industry. But in industry, this rise in price ceases as soon as demand has become effective and brought about an increased supply of commodities. The product now falls to the old, or rather below the old, level of value. But in agriculture this additional product is thrown on to the market neither at the same price nor at a 1ower price. It costs more and effects a constant rise in market-prices and along with that, a raising of rent. How is this to be explained if not by the fact that ever less fertile types of land are being used, that ever more labour is required in order to produce the same product, that agriculture becomes progressively more sterile? Why, apart from the influence of the depreciation [of money], did agricultural products rise in England from 1797 to 1815 with the rapid development of the population? That they fell again later proves nothing. That supplies from foreign markets were cut off proves nothing. On the contrary. This in fact created the right conditions for demonstrating the effect of the law of rent as such. For it was the very cutting off of foreign supplies which forced the country to have recourse to ever less fertile land. This cannot be explained by an absolute increase in rent, because not only did the rental rise but also the rate of rent. The quarter of wheat, etc. rose in price.

It cannot be explained by depreciation because although this might well explain why, with greater productivity in industry, industrial products fell, hence why the relative price of agricultural products rose, it would not explain why in addition to this relative rise, the prices of agricultural products were continuously rising absolutely. Similarly, it cannot be explained as a consequence of the fall in the rate of profit. This would never explain a change in prices, but only a change in the distribution of value or of price between landlord, manufacturer and worker. [Karl Marx, Theories of Surplus Value, (Chapter IX) History of the Ricardian Law of Rent [6] Ricardo’s Thesis on the Constant Rise in Corn Prices. Table of Annual Average Prices of Corn from 1641 to 1859].

Marx is a bit over-zealous, but he is writing in his notebooks. If the price increases tell us something about the mechanisms of accumulation and apportionment, then the price declines also tell us something about accumulation and apportionment. In fact, it is Marx’s contention, at least for industrial capital and industrial commodities, that it is only in the totality of those changes in those prices, in that inflation and devaluation that the truth of accumulation and apportionment is manifested.

The correlation between population growth and price increase is a strong correlation, but it is not an absolute correlation. Again, Mark Overton in his Agricultural Revolution in England points out that there is a positive correlation between the rate of growth of the population in England and the rate of growth in prices:

It indicates a strong positive relationship from the 1540s to 1780s: the rate at which prices were growing followed the rate of population growth. But after the 25 year period starting 1781 the relationship changes: population growth rates rise to unprecedented levels [over 1 per cent per annum], but the rate of growth in prices starts to fall, from a peak of over 2 per cent per annum…Although population was growing, the agricultural sector of the economy was able to expand output to meet the additional demand, so that prices failed to rise so rapidly as they had done under pressure of demand in previous centuries. [emphasis added] …at the start of the eighteenth century English agriculture seemed unable to expand output significantly, but by the end of the century such expansion was well under way. [Overton, Agricultural Revolution in England, p.69-70]

As a matter of fact, after 1800 the correlation between population growth and rate of growth of prices turns negative, with the steady population growth rate of about 1.4 percent per annum coincident with a negative rate of growth of prices. This negative trend is reversed only when the rate of population growth declines after about 1825.

It’s not Ricardo’s fault that the poor state of English record-keeping regarding its agricultural revolution prevented him from recognizing that such a transformation had occurred. It’s not Marx’s fault that the English record-keeping and analysis of the record that did exist was still in a poor state at the time he undertook his critique. However, it is Marx’s “fault” that in his defense of the law of value, he abstracts, in his discussion of rent, that law from the social relations that it embodies and reproduces.

The law of value is not some deus ex machine, nor is it some divinitus machine. It is a law derived from the social relations of production. It is derived from and reproduces the relations of classes. It is a law containing and expressing the way society organizes its own reproduction. That organization is of time itself as the means of exchange. It is the conversion of time into labor-time; the conversion of labor-time into the production of values; it is the exchange of labor-time for value. The law of value is nothing but the reproduction of the conflict between labor and the conditions of labor. The core to that reproduction, to that law, is the dispossession of the immediate, direct, producers.

So if the law of value is not compromised by ground-rent but rather confirmed and expressed through ground-rent, and Marx most definitely proves exactly this, then ground-rent must be vehicle, a vector, a mechanism, a mediation for the realization of that core to the reproduction of value. Through ground-rent, the class renting out the ground, must be reproducing the social relation of value even to, especially to, the point of transforming itself as a class in the process, and in the relation, itself.

This transformation is exactly what ground-rent accomplishes. This transformation is exactly what ground-rent accomplishes painfully, acutely, chaotically in the inflationary period of failed harvests during the anti-Jacobin and then Napoleonic Wars.

7. So what is this revolution? What is transformation of English agriculture? And what about the period 1794-1815, what processes are quickened by and during this period of inflation? What is the legacy of this period?

First and foremost, the effects of the price inflation, the changes in land use, land tenure, rights of common are very different for different regions, and for different villages within the same region in England. Still there are trends, and the trend is our friend.

During this English “revolution,” the growth in agricultural yield outpaced the increase in new lands brought into cultivation. Jonathan Theobold in his paper “Agricultural Productivity in Woodland High Suffolk 1600-1850,” [from the Agricultural History Review available on the website of the British Agricultural Historical Society: www.bahs.org.uk volume 50, part 1, 2002. See note at end on how to access paper from this site] writes:

For example, figures show that although the area under grain grew by approximately 160 percent between 1670 and 1850, the total grain yield in this period increased by over 500 percent implying that land productivity was noticeably improving.

…in the 170 years after 1700 the agrarian economy of England was utterly transformed, and agricultural practice and productivity significantly improved. Overton noted in 1996 that ‘the magnitude of changes that occurred [in Norfolk between 1750 and 1850] were out of all proportion to those which had occurred during the preceding 500 years, and changes of similar magnitude were happening elsewhere’ in England.

Output exceeded, and by far, increases in arable acreage. Yields improved, but yield is a very “soft” measure of agricultural improvement, as one of the factors determining yield is the amount of land devoted to the cultivation of crops.

Liam Brunt in his paper “Estimating English Wheat Production in the Industrial Revolution,” [available at: http://www.nuff.ox.ac.uk/economics/history/paper29/29bruntweb.pdf] writes:

By 1771 the effect of crop rotation reached a peak because the average crop rotation featured a large proportion of turnips and a relatively small proportion of grain crops- so the wheat yield was correspondingly high. But as the price of wheat rose dramatically through the Revolutionary and Napoleonic Wars (1793 onwards) farmers grew a higher proportion of wheat and accepted a lower wheat yield per acre. In the post-war depression the proportion of wheat in the rotation shrank dramatically (thus improving yields) but thereafter increased in response to rising prices. Two aspects of this process need to be stressed.

First, the change in crop rotation was a rational response to temporarily high prices. The soil is effectively a ‘nutrient bank’ where the farmer can either make a deposit or a withdrawal. When wheat prices were temporarily high during the Napoleonic Wars it was optimal for the farmer to make a withdrawal (i.e. grow more wheat in the rotation) and run down the quality of the soil.

We see there is a moment that corresponds to Ricardo’s claim, and Marx’s endorsement of the claim, that successive applications of capital to the same land provide a declining rate of return in agriculture. But this moment is not a “natural event” but a market decision to apply capital in order to deplete the land of its potential, improved yield and output in favor of a compressed, reduced but more valuable immediate yield and output.

We see a possible moment that corresponds to Ricardo’s and Marx’s theory of increased agricultural prices due to the incorporation of marginal, less fertile land. There follows increased effort for increased production, theoretically, but at a higher price, practically. The marginal lands require more capital, more labor, more time to provide the yield and output of the land already in cultivation. The increased cost of this expanded production to meet the moment of insufficient supply or increased demand raises the average social cost of reproducing the total agricultural product. Again, however, this is a moment, a market decision, and not the permanent characteristic of agricultural production.

Says Brunt:

The point to note is that variations in total wheat output are much more sensitive to changes in crop rotation than changes in arable acreage. There are two methods of raising wheat output by 25 percent. Once option is to keep the same crop rotation and increase the arable acreage by 25 percent. This is clearly very costly because it involves a high fixed cost for bringing new land into production (even if the farmer simply ploughs up pasture land). Moreover since the new land is likely to be of lower quality it will require an acreage increase in excess of 25 percent… The second option is to keep the same arable acreage and grow 25 percent wheat instead of 20 percent wheat.

Marx’s claim that agricultural producers cannot multiply and reproduce their critical instrument, the land, at will and with the same level of productivity as the bourgeoisie can multiply their machines ignores the ability to bring fallow land into production, and to alter rotations.

Certainly the price inflation of 1790-1813 brought new lands, formerly marginal lands into production but neither massively nor quickly enough to determine the price of wheat. The weather conditions that limited the harvest by exacerbating the underlying low level of technology, in particular the poor drainage, of most English agriculture did act that massively and that quickly.

J.A Perkins, in his paper “The Prosperity of Farming on the Lindsey Uplands: 1813-1837,” [available on the BAHS website, volume 24.2, 1976] writes:

The high prices of cereal prevailing during the majority of the war years offered the prospects of a return to farmers for bringing the light soils of the Lindsey uplands permanently under the plough, to be cultivated with cereal and fodder crop rotations designed to raise the fertility of the soil and the profitability of farming in the longer term. To bring the land to a peak of fertility required a considerable investment of capital, which was largely borne by a tenantry occupying their farms without the security of leases, and which—although inflation during the war years reduced the time-span between investment and return—was not completely returned before a number of years had elapsed. The landlords provided the framework [emphasis added] for progress by financing the enclosure of the land and the relocation of farmsteads…Thereafter, the landlords mainly assisted their tenants by permitting a lag to exist between the level of farm rents and the productivity and profitability of farm. But the initiators of the agricultural revolution on the Lindsey uplands were the tenant farmers, and the overwhelming bulk of investment in the land from the turn of the 19th century consisted of tenant outlays.

In converting the land from pasture to permanent tillage the tenants had to expend a total of £ 8 to £ 9 per acre, of the equivalent of fifteen to twenty times the unimproved annual value of the land in the late 1790s…. the land had first to “pared and burnt,” by gangs of men….Next the land war “marled” or dressed with chalk at the rate of 80 cubic feet per acre to…counteract…the tendency of turnips grown on light soils to run to a taproot. Finally the process of reclaiming the land for tillage was completed by a dressing of 60 bushels of bones per acre on the initiating turnip crop in the rotation…..

…There were, however, important differences of emphasis between the farming of the wartime and that of the postwar years. Where previously the farmers had striven to raise output without according much consideration to costs, whose increase was retarded in the instances of rent and wages by custom and tradition, and whose general significance was eroded by inflations, after 1813 they were motivated to increase the productivity of labor and capital as well as the productiveness of land. After 1813, the prosperity of farming came to depend not only upon the farmer’s ability to increase the gross output of their farms, to maintain the level of their farm by means of a larger volume of produce, but also upon a lowering of costs per unit of output to maintain profit margins. Both of these objectives were achieved by the continued development of the farming system.

What we have here is half the story of the revolution in English agriculture, the story of increasing applications of capital providing increased output and demanding the modern measure of value, profitability.

No revolution is so benign as to simply be the product and the record of hardy, hard working entrepreneurs, conquering nature with drill and plow, overturning the soil inspired by their innate acquisitiveness. Revolutions, even those that don’t overthrow kings, tyrants, and classes; even those that don’t establish kings, tyrants, classes; even revolutions in the prosaic practice of agriculture involve more than just “improvement.” Within, and under, those indexes of output, yields, productivity—those measures of the change in the forces of production—are the measures changing the relations of production.

Within those measures that record, between 1700 and 1850, the 100 percent increase in sown arable acreage; that productivity of land doubled; of the 100 percent growth in labor productivity [Mark Overton, “Re-establishing the English Agricultural Revolution,” BAHS website, volume 44.1, 1996]; is the coded record of the transformation of the land and its products into capital, and the changes in the proportions of that capital to the labor it commanded. That code, when deciphered into its measures of capital and labor, tells us that improvement was a by-product of acquisition and accumulation.

The level of technology circumscribed by capital sets for the farmer an optimum scale of operations—an expanded area to be cultivated where the relationship between costs and benefits is optimized. This expanded area, this “new” land brought into cultivation is not “virgin” land of unknown fertility, existing at the edges of established agriculture, but the land cultivated by the cottagers, and small farmers who cannot afford the cost of enclosure and must sell or abandon the land. The expanded area is the “wastes,” the fens and moors and marshes utilized as resources for subsistence by cottagers, commoners, small farmers, hunters, artisans, day laborers, seasonal laborers. The “improvement” of agriculture is the attack on the right of common to tillage and pasture, to gleanings, to the folding of livestock. The expansion is the expansion of private property.

“The landlords provide the framework by financing the enclosure of land,” the major result of which was the increase in average farm size. J.A. Perkins writing again about Lindsey in “Tenure, Tenant Right, and Agricultural Progress in Lindsey 1780-1850” [BAHS website, volume 23.1, 1975 ] states:

In 1787, to take one example, the 2200 acres of land in the parish of Beelsby on the Wolds were divided between four farms of over 300 acres each, four small farms of between 10 and 40 acres each, and eight small holdings of from 3 to 9 acres each, which shared with two other cottages without land in the exploitation of the 70 acres of “Cottagers Pasture.” Thirty years later, the whole parish was divided into two large farms of 1,086 and 1,080 acres respectively.

The loss of rights to common, of access to the wastes, fens, marshes, all these made the market dependency of producers, big and small, more acute… and more desperate. The high prices of the Napoleonic War years seemed to provide relief, and prosperity, to the small farmers and the cottagers, as prices for their surplus product brought higher prices. However, the rising prices of inputs to production, of the means of subsistence, and the rising rents that the small farmers and cottagers had to absorb made them that much more market dependent, and that much less capable of withstanding any economic adversity such as reduced harvest due to poor weather. Subsistence required income. Income meant production for exchange, for the market.

And when income was not enough to provide for subsistence and rent? Then the direct producer, the smaller tenant, the commoners, the cottagers were dispossessed, and were left with only one thing of value to exchange in the markets, their labor-power.

And here we can see the social function of the price inflation of agriculture products, and the resulting high rents. Inflation is accumulation by almost, but not quite, primitive means. Landlords are the personification of that almost, but not quite, primitive means.

8. Enclosure effectively concentrated capital—land, buildings, implements, livestock, seed—into fewer hands, operating expanded acreage. Certainly the process was uneven, but the trend was the trend to larger farms cultivated “in severality”—without obligation to the community of producers, large, small, poor, and even landless.

The trend to larger farms was not confined to enclosed acreage but was the trend in both open and enclosed field farming. Enclosure, however, was the dominant response to increased market dependency. The effects of enclosure on the social relations of agricultural production were the “other half” of the agricultural revolution in England, transforming class relations from those of common right, common obligation, common allocation, and common service to those of private accumulation. With the transformation of the relations of land to labor there comes, necessarily, the “disappearance” of those who depended upon the common appropriation, on the reproduction of the common right. The disappearance is, of course, the transformation through dispossession of that class reproducing itself as private producers engaged in agricultural production through the common management, supervision, regulation of the source of surplus– landed labor.

J. M. Neeson writing in Commoners: Common Right, Enclosure and Social Change in England 1700-1820 [Cambridge University Press, 1993] concludes in his study of twenty-three parishes in Northamptonshire between 1780 and 1815:

We can summarize the findings on disappearance of landholders and decline of survivors’ holdings as follows: First: half of all landholders sold all their lands in enclosing parishes during the enclosure period, compared to only one quarter of those in open parishes. Occupiers sold as frequently as owners who let their lands; and tenants left the land at the same rate. The smaller the holding, the more likely was the sale of land….One exception to this rule seems to have occurred in forest parishes, where smallholders stayed on the land in greater numbers than elsewhere, perhaps encourage by continued enjoyment of common right.

Second: surviving landholders sold some of their land too, and tenants worked smaller holdings. One third of the remaining original landholders lost a significantly larger amount of their lands than would have gone to the tithe-owner for tithe compensation. In contrast only one eighth of open parish landholders lost land on this scale…. [p.239-240].

Thus, with the possible exception of parishes where pat of the old common-right economy survived, many smallholders sold all their land at enclosure and most sold some of it. Although there was no common parish experience, there was a common shareholder experience…

…it becomes that enclosure dealt small peasants a double blow, for not only did they lose common right, they lost land too. No argument about the rise and fall of classes can do justice to this effect of enclosure. Whether the English peasantry disappeared or not, the effect of enclosure on the last generation of open field peasants was profound. [p.242-243]

Open-field agricultural communities were no utopias for small proprietors, for small tenants, for cottagers, and commoners, but they were less market-dependent, less exchange-driven. The organization of production, the use of land and labor, was fundamentally opposed to the capitalization of agriculture.

Open-field agricultural practices were not less “efficient,” less “productive” than enclosed field agricultural practices. Much of the advance in crop rotation, land “conditioning,” and convertible husbandry had been developed on and incorporated into open-field cultivation without reductions in common rights.

Enclosure was first and foremost the reconfiguration of the relation of land to labor, of landed labor, institutionalizing profit and accumulation as the determinants of production. The reconfiguration of labor was not limited to the small holder of land but extended to the village. Destroying the common rights excluded the landless, the small-holding artisan, the craftsman from supplementing his or her income; from maintaining himself or herself as a small private producer insulated from the expanding market dependency. Destroying the common right also prevented the artisan, the landless, from presenting himself or herself as a casual wage-laborer, seeking wages only at various times and only as individual circumstances dictated.

Enclosure was not simply dispossession from land, from property, but the dispossession of labor from any direct attachment to the products of its own creation. It is the extended moment in English history that transforms production into production for exchange; where the market becomes the mechanism for subordinating labor to property by transforming land into capital.

In this historical transformation of the social relations of production, we can determine why it was that while modern capitalism begins its existence in the transformation of agriculture, the accumulation of capital proceeds more slowly in agriculture than in industry. We can even account for the different rates of capitalist accumulation and development among countries.

Those different rates have little to do with the “strength” of the landlords, the level of rents, the “diversion” of profits from the industrial capitalists and to the landlords through rents. That difference indeed has its origin, as Marx noted, in the fact that capital does not confront landed property in a “pristine” state, but in its pre-existing social organization. However, that condition is not the “one-sided” domination of the feudal lords. The social organization of agriculture in England was also the prevalence of the small-scale, “subsistence plus surplus” cultivators of open-field, common right land.

The more that small scale “subsistence plus surplus” mode reproduces itself, actually “fractalizes” itself, the more difficult is it for capital, and the capitalists, to establish the commercial relations of land to production, of labor to product, that can create and sustain the market. The more difficult it is to create those relations that can transform production into production for exchange, and exchange into accumulation.

Rent is no integument to that market relationship. On the contrary, rent is its hand-maiden. The rent-seeking, profit-seeking landlord, in the very process of rent-seeking, is transforming land into capital and, at the same time, doing away with class of landlords. After the wave of enclosures during and after the Napoleonic Wars, the number of landlords in some parishes of the English countryside was reduced by one-third, as landlords too sold out, and cashed in.

In the end, the revolution in English agriculture sets the stage for eclipse of those old tenets of ground-rent theories, where less productive land is always brought into cultivation, where demand can never be satisfied, where successive applications of capital provide reduced yields, and where excess surplus value accrues to the higher priced product, to the least efficient producer. In the end, the revolution in English agriculture sets the stage transforms agricultural production into the reproduction of capital and thus sets the stage for overproduction.

In his paper “Adjustments in Arable Farming after the Napoleonic Wars” [BAHS site, volume 28.2, 1980], A.R. Wilkes writes:

For twenty years after the Napoleonic War the response of England’s farmers to low wheat prices was to produce more. While some of the increase was obtained from higher yields, the major part came from vastly expanded acreages. This development seems to have taken place throughout the country. Although on some farms, it was a positive economic response…on many it represented the only possible response by farmers already growing wheat as their main crop. Such people were unable or unwilling to adjust to other types of farming, and they were forced increasingly to pin their hopes on the traditional rent-payer, often at the expense of good farming. This pattern did not change until the mid-1830s.

9. Capital accumulates so much faster in industry than in agriculture for the very reason, in part, that Marx identifies as being the basis for rent—the lower average wage paid to agricultural labor in comparison to the wage paid to industrial labor.

Accelerated accumulation in industry is precipitated by the higher wages paid to urban workers who cannot supplement their own subsistence through access to common rights in agriculture. Consequently, the source of industrial capital, the wage, and the wage alone as the source of reproduction of the laborer consistently pushes against the capitalists’ need to restrain costs.

Capital attempts to resolve this tension by aggrandizing greater wage labor through proportional expulsion—by reducing the amount of time of the working day required for the reproduction of the workers’ wages. The expulsion requires the substitution of the inanimate, insensate, machine—the application of increasing amounts of fixed capital to the production process.

The fixed component only transfers its value, its cost to the capitalist, piecemeal, incrementally in the value of the individual product. The ability of fixed capital to amplify accumulation exists solely in its ability to reduce the time of production of the commodity, which also reduces the amount of value transferred from the machinery to commodity. The capitalist has no choice save to operate the fixed capital on the largest scale, running continuously, ceaselessly.

No such continuity of production is possible in agriculture practiced on the small scale, limited by subsistence, circumscribed not only in space by area, but in time, by its very seasonality, disrupting the continuing of production, extending the lag between production and product.

Only through expansion of the area for cultivation, through dispossession of the small producer, can capital in agriculture begin that process leading to accumulation. In this, the trajectory of capital, rent is not the barrier, it is the facilitator. Rent launches capital.

S. Artesian

December 29, 2010

Part 2 will examine rent and “natural resources”- and the suitability of rent as an explanation for price fluctuations in a representative natural resource like… oil.

Note: How to access papers from the BAHS website.

1. go to www.bahs.org.uk

2. in the left margin, click on Agricultural History Review

3. on the new screen click on “search and read past articles from the Review…”

4. on the new screen click on “to search an index to articles with links…”

5. Scroll to volume in which the paper appears and click.

Abstract

The following recounts the evolution of the core pre-MNR intelligentsia and future leadership of the movement and its post-1952 government from anti-Semitic, pro-fascist, pro-Axis ideologues in the mid-1930′s to bourgeois nationalists receiving considerable US aid after 1952. The MNR leadership, basically after Stalingrad, began to “reinvent itself” in response to the impending Allied victory, not to mention huge pressure from the U.S. in various forms starting ca. 1942.

However much the MNR purged itself of its “out-of-date” philofascism by the time it came to power, I wish to show it in the larger context of the top-down, state-driven corporatism that developed in key Latin American countries in this period, specifically Argentina, Brazil and (in a different way) Mexico through the Cardenas period.

The following is a demonstration that, contrary to what contemporary complacent leftist opinion in the West thinks, there is a largely forgotten history of reactionary populist and “anti-imperialist” movements in the underdeveloped world that do not shrink from mobilizing the working class to achieve their goals.

This little-remembered background is all the more important for understanding the dynamics of the left-populist governments which have emerged in Latin America since the 1990’s.

Introduction

The following text is a history and analysis of the fascist and proto-fascist ideologies which shaped the pre-history and early history of the Bolivian MNR (Movimiento Nacional Revolucionario) from 1936 to its seizure of power in 1952.

Friends and comrades who know of my brief (two week) visit to Bolivia in fall 2010 have generally been expecting the text to be a critique of the contemporary government of Evo Morales and the MAS (Movimiento al Socialismo). That was in fact part of my intention in going there, but the enormity of the task, the brevity of my visit and my experiences there began to alter that plan after I returned to the U.S. My momentum in writing about the present was also undercut by the discovery of the excellent articles of Jeffery Webber on Morales’s neo-liberal economic policies since coming to power, based on much more in-depth research and a much longer involvement in Bolivia itself than mine, saying more or less exactly what I intended to say, and more1 . Finally, in past writing about different countries (e.g. Portugal, Spain, Korea) an indispensable aid has always been finding “my crowd” in such places, and while I met many excellent people who gave freely of their time and knowledge, this did not occur in Bolivia.

But the impulse behind the direction the article finally took lies deeper. Long ago I was deeply influenced by the book of Jean-Pierre Faye, Langages totalitaires (published in France in 1972, and still outrageously not translated into English) which describes the “oscillation” between the elements of the far left and the far right in Germany between 1890 and 1933 (personified in the figure of Karl Radek), the “red-brown” crossover between nationalism and socialism that ultimately produced …National Socialism and its more radical spinoff, the National Bolsheviks. These various “Trotskyists of Nazism” (such as those most famously associated with the “red” wing of the Nazi Party led by the likes of Ernst Roehm and Gregor Strasser) were massacred by Hitler’s SS along with hundreds of others on the “Night of the Long Knives” in 1934. (Faye hints briefly in an afterward at a “National Bolshevik” moment in Bolivia, though in the 1970’s, not in the period leading up to the MNR revolution of 1952.) There was the further enticing hint of the very same Ernst Roehm’s two-year presence in the Bolivian Army High Command in the late 1920’s, which in fact turned out to confirm my early working hypothesis in spades. Finally, I noticed that even the best treatments of the early MNR founders gave short shrift to their fascist moment.

Lacking access to “my crowd” in Bolivia (if it in fact exists), I had to fall back on books and whatever discussions came up. Almost immediately I encountered what would be a main, and troubling, theme of the trip: the apparently widespread belief that Marxism, class, capitalism and socialism were “Eurocentric” concepts, to which the “plurinational”, “pachakuti”2 higher synthesis of “European” and “Andean-Amazonian” cultures—essentially the ideology of the regime– was the real alternative. It seemed on further inquiry to be a local variant of the identity politics that had overwhelmed much of the Western left after the defeat of the upsurge of the 1960’s and 1970’s.

While this is indeed the ideology of the Morales regime and is articulated by staffers, foreign and local, of the swarm of NGOs from which the regime seems to have drawn many of its personnel, I first heard it from the intellectually-inclined manager of a La Paz bookstore, where I was buying volumes of the Trotskyist Guillermo Lora’s highly useful (if politically not fully reliable) history of the Bolivian working class. What was particularly troubling about this “discourse” (to use a loathsome word from contemporary faddish jargon) was the utter caricature of the West to which the indigenous side of the synthesis was counterposed. It was as if, in these people’s experience, 1950’s Soviet-type Zhdanovian “Marxism” was all they had ever encountered. Marxism was “linear” “developmentalist” and hardly different epistemologically from Newton and Descartes3 .

Octavio Paz once described Latin America as the “suburbs of history”, trapped for geopolitical reasons in something of a backwater. I would not want to exaggerate this, particularly since, in the law of combined and uneven development, today’s apparent backwater can be tomorrow’s cutting edge. But in conversations with militants in Bolivia and then Peru ( where I also spent a week in fall 2010) it emerged that almost no one had ever heard of Marx’s Ethnographic Notebooks, Rosa Luxemburg’s extensive writings on pre-capitalist societies (in her Introduction to Political Economy4 ), the Grundrisse (though it was translated into Spanish in 1972), Ernst Bloch, Korsch, Lukacs, the Hegel Renaissance in Marxism generally, I.I. Rubin, Bordiga, German- Dutch council communism, the Socialism or Barbarism group, Guy Debord, Camatte, Dauvé , CLR James or many other figures one could mention from the ferment in the West since the 1950’s. Rosa Luxemburg seemed little known, and even Trotskyism (the major current of the Bolivian working class from the 1940’s to the 1980’s) seemed to have been largely eclipsed by the perspective of “social movements” and pluri-nationality. (In Peru, the left is dominated by Stalinism and Maoism, with Trotskyism a poor third; the Shining Path movement is making a comeback with guerrilla action in the countryside and a significant urban base of supporters.)

Much could be said about this, and since I was little more (where Andean South America is concerned) than a better-informed-than- average tourist, I hesitate to press very far. In addition to the Aymara and Quechua majority, there are approximately 35 identified “ethnicities” in Bolivia, such as the Guarani in the Amazonian region. One Aymara woman in Cochabamba told me “yes, I was an anarcho-Marxist militant for a number of years, but then I realized that these were Eurocentric ideas”. When I countered, hoping to draw her out, that a large number of the Trotskyist miner militants from the 1940’s to the 1980’s had been Quechua or Aymara, she replied that, “yes, that was true, but up until recently the left never talked about it. For the left, they were just workers.”

Clearly the turning point in modern Bolivian history and the backdrop to this ideological turn was the gutting of the mines under the mid-1980’s neo-liberal regime, in which 80% of Bolivia’s miners were laid off and dispersed around the country5 . It was a rollback as great as Thatcher’s defeat of the British miners’ strike, at exactly the same time. Many of these miners did manage to re-establish themselves somewhat, particularly in the huge hard-scrabble exurb of El Alto, just above La Paz, where the 2005 gas war was centered and which was definitely strengthened by their earlier militant experience of mass struggle6 .

One sad reality of the trip, however, was the absence from Bolivia, while I was there, of Oscar Oliveira, by all accounts a central self-effacing rank-and-file leader of both (2000 and 2003) water wars. Prior to 2000, he had been a militant in a shoe factory. His book, Cochabamba!7 , contains his riveting account of the uprisings, which amounted to the constitution of a virtual soviet taking over the city and stopping the privatization of the local water works, a “social movement” that pulled in what seemed at times like almost the whole population. The savagery of the privatization law was such that, in addition to price increases sometimes amounting to 20% of family incomes, people with wells on their property were required to cap them, and it was illegal to trap rain water in a barrel.

Oscar Oliveira also made a scathing critique of the Morales government in August 20108 , having been declared an “enemy” by Morales two years earlier. In summer 2010, he decided to withdraw from political activity, apparently deeply demoralized. At the time, he was the head of the Federación de Trabajadores Fabriles de Cochabamba, an association of one hundred workplaces in the city. When he submitted his resignation for personal reasons, it was overwhelmingly rejected by the membership. At that point, Morales intervened, trying to get the MAS supporters in the organization to oust him. They refused, and instead the membership put Oliveira on a kind of leave of absence, welcome to return at any time. (He was apparently taking a personal trip to Europe.) Oliveira had refused Morales’s offer of a ministerial position and all other perquisites, preferring (unlike many key figures of the 2000-2005 struggles) to stay with the base.

Though I missed the chance to meet Oliveira, Cochabamba was nonetheless where I had one of the outstanding encounters of the trip. I was in a local bookstore with a cultural anthropologist I had met, and she pointed to a big book: “You should read this. It’s by a guy who broke with Morales even before he came to power”. This turned out to be the above-cited book of Filemon Escobar, who from the 1950’s onward was, with Guillermo Lora, the leading Trotskyist miner militant in Bolivia, where, as indicated, and unlike in all but a handful of other countries (Vietnam in the 1930’s and 1940’s, Ceylon (now Sri Lanka) up to the 1960’s) Trotskyism was the dominant current of the mass workers’ movement and Stalinism a miserable sect on the margins9 . (Stalinism in Vietnam, of course, was unfortunately not a marginal sect.)

I was fortunate enough to meet Escobar shortly thereafter. I had read a good deal of his book, and my aim was above all to hear from someone with such a rich experience as a Marxist militant in the Bolivian workers’ movement, over decades, how he had come to reject “Eurocentric” Marxism and embrace the “pachakuti”. Escobar did me the great favor of showing me all the “underground” books on the indigenous question written over the past century, to which the radical left had been deaf and indifferent, and a fair number of which I read upon returning to New York. There is in fact a lineage of indigenous writers going back 200 years to Pazos Kanki, an Aymara who translated Thomas Paine ca. 1810. Another key figure is Pablo Zarate Willka, who led an indigenous insurrection of considerable proportions in 1899, in the middle of a civil war between two factions of the white elite, which ended in defeat for the indigenous forces and Zarate’s execution (Willka is an Incan word meaning a kind of chief). Given my bent for uncovering German romantic populists and folklorists at the origins of authoritarian movements in developing countries10 , Escobar did me the further favor of putting me on to the foremost Bolivian ideologue of such a sensibility, Franz Tamayo (1878-1956), an unabashed admirer of Fichte with years of experience in Wilhelmine Germany. The discovery of Tamayo, and from such a source, was the true beginning of the text that follows.

One key part of the pachakuti ideology, in Escobar’s book and in the general movement, is the idea of “reciprocity”, apparently the key to the Aymara and Quechua communities. Explained in simple language, it seems to mean (as Escobar put it) that you eat before I eat, and in reciprocity you make sure that I eat. Somehow, it didn’t sound so different from the ethos of the primitive Christian communities. Similarly, shortly before his execution, Zarate Willka, (in a quote highlighted at the beginning of Escobar’s book) had said: “With great feeling I order all Indians to respect the whites (…) and in the same way the whites must respect the Indians”. Hard to disagree with, but a sentiment that one could have heard in any speech in the early civil rights movement in the U.S.

Closely tied to reciprocity in the indigenist ideology is the centrality of the ayllu, the pre-Columbian community that some have even elevated to assert that Incan society prior to the arrival of the Spanish was “communist”. Decades of debate raged in the past over this question, which seems to have ebbed away in the grudging recognition that the Incan empire, which barely established itself one century before the arrival of Pizarro, had in fact been expansionist, and had crushed and enslaved populations of previous dominant groups in the Andean region from what is now Ecuador to Chile.

The cultural anthropologist who put me onto Escobar had this to say about the survival of the ayllu:

“The structure of the ayllu with its traditional authorities still persists, but within a much smaller territorial space than it was the case in pre-Columbian times, in some areas of the highland regions of Bolivia, mostly in the altiplano, northern and southern Potosi, the western highlands of Cochabamba and a few places in Chuquisaca. In some cases, the ayllu has been reconstituted in areas where it had ceased to exist after the law of popular participation of 1994.

The main problem with Filemon´s (and others) idea of using the ayllu as the building block to develop an Andean version of socialism is that it highly romanticizes social relations within the ayllu and/or community as if these were horizontal and equal, denying the social differentiation that exists within them since pre-Columbian times. This differentiation may be minimal within very poor regions.”

In short, I found myself somewhere among the identity politics against which I had polemicized for some time, some Bolivian variant of the Russian peasant commune which fascinated Marx and Bordiga, and the “new Marx” emerging from previously unpublished (or unread) writings on cultures and movements on the margins of capitalism.11

My problematic, however, was populism as an anti-working class ideology and political reality. From the era (1930’s to 1950’s) of Peron in Argentina, Vargas in Brazil, or Cardenas in Mexico, nationalist populism as a statist, top-down movement, backed by the military, has turned a page. (The Bolivian MNR, in less developed circumstances where the military temporarily collapsed, presents a somewhat different dynamic.) The contemporary Latin American populism of Lula, Chavez or Morales is a “social movement” populism, much as, in Europe in the 1960’s and 1970’s, “worker self-management” replaced the older hierarchical unions as a form of working-class containment12 .

One thread in the following text is the German ideological influence in Bolivia, from the Fichtean Tamayo, who first posed the “indigenous question” in 1910, to the Spenglerian Carlos Montenegro, the foremost theoretician of the MNR’s “national revolution’ against “foreign” influences, including Marxism. The shift from Latin America’s authoritarian populism and corporatism, as it existed into the 1950’s, to the more supple “social movement” populism of today, calls to mind a parallel shift before and after 1945 in two German theorists of the so-called “Conservative Revolution” with complicated relations to Nazism, Ernst Jünger and Martin Heidegger. Jünger’s soldier-worker, the “storms of steel” on the Western front in the First World War, and technicist “total mobilization” of reality gave way after to 1945 to mythical musings about astrology as expessing “the need for metaphysical standards” and about “a revolt of the earth with the help of man”. The hardened 1920’s “decisionism” of Heidegger which led him into his involvement with the Nazi Party was replaced after World War II with poetic “Gelassenheit”, or “letting Being be”13 and studies in the “history of Being”.

This text, then, limits itself to the earlier, “Conservative Revolution” phase of Bolivian populist ideology, as it evolved from Franz Tamayo to Carlos Montenegro, and must necessarily leave the flowering the “Pacha Mama” (Mother Earth)/indigenist cover for the Morales-MAS neo-liberalism to others.

New York, February 2011

Few people on the U. S. and European left today remember the Bolivian Revolution of 1952. Fewer still are aware of its history, and above all of the early (1930’s, 1940’s) fascist origins of the MNR (Movimiento Nacional Revolucionario14 ) which it brought to power. The radical phase of the revolution was short enough, and its memory has faded, having been eclipsed for contemporaries by more recent developments in such countries as Cuba, Chile or Nicaragua. The rise and decline of the MNR, nonetheless, ranks with developments in Mexico (1910-1940) and Cuba (1958- ) as one of the most important Latin American revolutions of the 20th century.

Of all of these Latin American revolutionary movements, however, the Bolivian MNR stands out as a prime example of the recycling of proto-fascist and fascist ideologies of the interwar period in “progressive” “anti-imperialist” form after 194515 .

1. The Setting

Bolivia was and is, in the Americas, second only to Haiti in poverty. But much more than Haiti, it has been weighed down by the contrast between its rich endowment in raw materials (tin, oil, natural gas and, most recently, lithium) and the overall impoverishment of the country by foreign investment in those materials. Along with Peru, Bolivia inherits the complex and ongoing legacy of the pre-colonial Andean civilizations, present in its large Quechua and Aymara-speaking populations, as well as the thirty-odd smaller ethnicities in the Amazonian east of the country.

Remote, poor and landlocked as modern Bolivia may have been, its political and social evolution nonetheless fits the global pattern of the impact of German romantic populist nationalism in the process whereby conservative and fascist ideologies, initially spawned in Europe between 1870 and 1945, migrated to the semi-colonial and colonial world and were then re-imported by the Western left in suitably “anti- imperialist” guise.

Bolivia’s history, in the eighty years preceding the MNR revolution, was a rude awakening to the world market dominated by Anglo-American imperialism. Its political system, like most political systems in Latin America between the 1870’s and the 1929 world depression, was a restricted affair of two political currents, Republican and Liberal, both representing factions of the small elite which had wrested independence from Spain in 1825, and which was periodically elected, after 1880, by the narrow enfranchised sliver (2%) of the population. This elite in turn dominated the much larger mestizo and above all indigenous, overwhelmingly rural population which periodically expressed itself in local and occasionally national revolts, the fear of which shaped the elite’s unabashed racism16 .

One such failed nationwide indigenous revolt, associated with the name of Pablo Zarate (El Temible) (The Dreaded) Willka, took place in 1899, in the midst of a civil war (1898-99) in which the Liberals ended two decades of Republican domination and won control of the political system until 1920.

Republican or Liberal, the Bolivian elite hardly excelled in protecting national interests. Between 1879 and 1935, Bolivia lost a significant part of its national territory and its entire coastline in successive wars and conflicts with Chile (1879), Brazil (1903)17 and finally with Paraguay in the infamous Chaco War (1932-1935), the bloodiest engagement ever fought in Latin America in modern times and the real beginning of the ferment leading to the MNR revolution in 1952.

2. German Romantic Populism Comes to Bolivia

It is little appreciated today to what extent Germany, from the Kaiserreich to Nazism, influenced developments throughout the semi-colonial and colonial world, including Bolivia, prior to 1945. After its long-delayed national unification in 1870, and its stunning defeat of France (previously considered the dominant continental army) in the Franco-Prussian war of the same year, Germany began the long process of contesting Anglo-French and later American dominance in the world economy. Being itself, as a latecomer, largely excluded from the imperialist land grab of the 1870’s and 1880’s, and having been compelled, in its own struggle to unify, to shake up the European balance of power built on the fragmentation of the Germanic lands since 1648, Germany up to 1945 could plausibly present itself in many parts of the world, to nations and nationalist movements under the heel of the dominant imperialist powers, as a supporter of “national liberation”. Germany was, in that very real sense, the first successful “developing country”; its (initially) highly successful economic and military emergence made it a “model” for would-be developing countries everywhere, much in the same way that Japan (itself a star pupil of Germany) became such a model for Asia a bit later, and above all after World War II. But along with economic and military prowess, Germany increasingly attracted the attention of the semi-colonial and colonial elites with its stellar culture, a culture developed precisely in opposition to the dominant Anglo-French liberal paradigm from the Enlightenment onward. From Japan, Korea and China to the African Negritude movement, via the origins of Turkish and Arab nationalism, to the German immigrants and military advisors in Latin America, there is scarcely a part of the pre-1945 developing world that was untouched by attempts to imitate the “German model” in all its various dimensions.

In Bolivia, the 1880’s saw the founding of the first commercial houses for German immigrants. German-Bolivian trade took off in that period with the sale of German heavy machinery and locomotives in exchange for Bolivian rubber. While British finance capital, funding above all railway construction, was still dominant over Germany in Bolivia, the Krupp and Mauser arms producers were already selling weaponry to most Latin American armies, including Bolivia’s. Overall, from 1880 to 1920, Bolivia’s foreign trade was expanding greatly. German trade there surpassed France’s by 190018 . By the 1890’s, tin had replaced silver as Bolivia’s main export, and by the 1930’s the three largest “tin barons”, known popularly as “La Rosca” and quite detached from the real life of the Bolivian masses, were the core of the dominant oligarchy19 . In 1910, Bolivia was the world’s second producer of tin.

By 1900, German (mainly Prussian) military officers were training armies throughout Latin America, and with the well-known role of military elites in nation-building in the developing world, were often, along with trade and immigrants20 , the conduit through which broader German influence entered a specific country. Between the Franco-Prussian War and the outbreak of World War I, these officers repeatedly displaced French officers in training new armies, from Japan to the Ottoman Empire to Argentina, Chile and finally (after 1911) Bolivia. Some German-trained officers of the latter countries in turn trained armies in Peru and Ecuador. 1908 also saw the German-Bolivian Treaty of Friendship and Commerce.

Undoubtedly the most notorious German military adviser to the Bolivian Army, over a twenty-five-year period, was Gen. Hans Kundt , the commander of a number of German officers with colonial experience in such settings as Cameroon or the suppression of the 1900 Boxer Rebellion in China. In 1914, Kundt returned to Germany to play an undistinguished role in the First World War, after which he participated in the proto-fascist Freikorps and then in the failed 1920 Kapp Putsch against the newly-founded Weimar Republic, whereupon he had to leave Germany and returned to Bolivia.

Despite these German ties, Bolivia sided with the Western allies in the war, breaking relations with Germany in 1917, under the pressure of the U.S. and Britain, the major investors in Bolivian tin and also the major market for it. Kundt returned to La Paz in 1920 and became Minister of War, and would continue to deeply influence the Bolivian army until the debacle of the Chaco War. During his tenure there, Bolivia’s Revista Militar, the leading journal of strategy for the officer corps, was not accidentally dominated by Germanophiles.

3. A Bolivian Fichte: Franz Tamayo and the pre-MNR Tradition of Paternalistic Indigenism

German influence, in Bolivia as elsewhere, was hardly limited to the economic and military spheres. The first intellectual of the “cosmopolitan”, i.e. Anglo-French oriented Bolivian elite to pose the question of the indigenous majority, as least as a cultural program imbued with German romanticism, was Franz Tamayo. He was undoubtedly the foremost Bolivian intellectual and cultural figure of the pre-MNR generation. In his 1910 book, Creacion de una Pedagogia Nacional (first serialized in fifty-five articles in a newspaper) one of the most arresting formulations was: “What does the state do for the Indian? Nothing. What does the state take from the Indian? Everything.”21 Tamayo asserted that 90% of the energy of the Bolivian nation came from the indigenous majority and that instead of slavishly copying European models, Bolivia should put the Indian at the center of its culture and education.

Franz Tamayo (1878-1956), played in Bolivia a role somewhat similar to that, somewhat later, of Jose Carlos Mariategui in Peru (cf. below), although, in contrast to Mariategui, totally outside of any Marxist or leftist problematic. Tamayo was born into the latifundia class; his father, Isaac Tamayo, had published a sociological novel in 1914, Habla Melgarejo, which by some estimations contains all of his son’s later affirmations about the centrality of the Indian in Bolivian history and culture, and the elder Tamayo is considered by some to be the “true father of indigenismo in Bolivia”.

Franz Tamayo was a major literary, intellectual and occasionally political figure in Bolivia from from the early 20th century until his death. Like many men from the Latin American elite, he had spent years prior to World War I in England, France and above all Germany on the mandatory tour of the continent. (Unlike most such Bolivian men, however, his mother was Aymara, and Tamayo grew up bilingual in both Spanish and Aymara.) In Paris, he married a Parisian beauty of la belle époque and brought her back to live, incongruously, on his remote Bolivian estate. His major intellectual influences were Goethe, Nietzsche, the geopolitician Rätzel and above all Fichte. Like many similar figures from underdeveloped countries, he (like his father) pointed repeatedly to Japan as a model for such countries to follow, because it had (in his estimation) totally internalized what the West had to offer, while preserving its own culture.

Tamayo’s work consists more of poetry and other literary forms rather than political writings. The work Creacion de la Pedagogia Nacional22 , his main venture into social analysis, is a call for Bolivia to emerge as an indigenous nation, and was profoundly influenced by Fichte’s Speeches to the German Nation. From Fichte, Tamayo took the idea of “national will”; he denounced the Europe-addled “Bovaryism”23 of the Bolivian elite, with its pale imitations of Europe, saying rather that Bolivian education needed to prepare the youth for struggle, because “life is struggle, the struggle of interests, struggle on every terrain and of every kind”. Bolivia, in Tamayo’s view “had to eliminate the European and mestizo elements and make itself into a single indigenous nation.”24 The work is shot through with 19th-century Teutonic terms such as “life”, “force” and “race”. “National energy” required “fighters, not literati”. Tamayo saw Nietzsche as the philosophical negation of, in his words, “the poisonous books” of Rousseau. Fascinated as well by Schopenhauer, Tamayo similarly had no use for the world historical progress informing the outlook of Hegel.

Tamayo, for all his desire to escape from “Europe”, was totally a prisoner of late 19th century European race theory, in which biology was destiny; a race for him was

“a group from people possessing the same biological inheritance, identifiable by external physical characteristics, which have a definite relation in types of behaviour and which give rise to cultural differences.”25

Tamayo had no more use for any universalist outlook than today’s theorists of identity politics, who might at least blush at the biologist foundation of such a predecessor:

“The ideal of humanity! That is an unreality which never existed, except as a false and artificial product of French romanticism which nations have never practiced!”

and

“The human ideal, if it exists, is a preparation for the forces of the nation, not for an impossible Saturnalia of peace and universal concord, but in a recognition that everything is a struggle without truce, a struggle of interests, a struggle on every terrain and of every kind, in markets as on the battlefield.”26

In Tamayo’s paternalistic view, of course, the indigenous masses of Bolivia are not to be the protagonists of any struggle to throw off the weight of European culture:

“Who is to carry out this movement (for the overthrow of Spanish culture)…? It is not the Indian directly, but rather us, the thinkers, the leaders, the rulers, who are beginning to become conscious of our integral life and our real history.”27

Given his central role and his controversial views, there were obviously many reactions to Tamayo. In the view of one critic, Juan Albarracin Millan28 “Tamayo’s irrationalism, basically racist, posits ‘Bolivian man’ as the ‘new man’…With its insistence on the mystique of blood, race and soil”, in Albarracin’s view, “Tamayo’s orientation was not called irrationalism, voluntarism, vitalism or mysticism, but, quite the contrary, ‘indianista’. Tamayo was, in this view, ”anti-liberal, anti-democrat, anti-socialist and anti-masses.” Eduardo Diez de Medina, a writer and diplomat, cursed Tamayo for “his puerile adoration of Fichte, Nietzsche, Max Stirner, the Kaiser and Hitler.” and said that “only Adler, Jung, Scheler…or Freud could have understood Tamayo’s writings.”29 . For Augusto Cespedes, a major MNR intellectual and generally an apologist for the MNR’s early anti-Semitism and proto-fascism30 , said of Tamayo that “his mind admitted only an abstract national pedagogy suitable for an empty utopia…his condition (was that of) a latifundist, landowner and master of serfs.”31 . Guillermo Lora, the leading Trotskyist in Bolivia over decades, contrasted Tamayo to another figure of the elite, Bautista Saavedra (Bolivian president 1920-1925), saying that if the latter had not left his study and gone to seek the masses in the outlying neighborhoods, “he would have remained in the same position as Franz Tamayo, the poet, essayist and owner of haciendas and houses, forgotten in the midst of a flood of intellectual memories and dusty books.”32

Tamayo does not fare better in the critique of a major theoretician of indianismo33 , Fausto Reinaga34 . In Reinaga’s view, Tamayo soared in thought, “but always had his feet planted on the side of feudal exploitation”. After the 1952 MNR revolution, according to Reinaga, the “youth turned to Tamayo”, and the latter responded: “No revolution”. With his “black class hatred”, Tamayo opposed agrarian reform. He joined the “Rosca”, the oligarchy deposed in 1952, in calling the MNR “communist”. His work had been hailed in the publications of the Falange Socialista Boliviano (FSB), the authentically fascist current after World War II. After 1952, Tamayo had written “I had always considered communism to be the most terrible retrogression…”35 He had been, in Reinaga’s view, “the greatest enemy and detractor of the working class in Bolivia”; the working class for him was “la canalla”. In a speech to parliament in 1931, Tamayo had already said “We know that communism is an immoral doctrine, destructive of all principles, it is a human pestilence.”36 In the estimate of his most serious intellectual biographer37 , Tamayo’s reactionary outlook was closest to those of Burke and Maistre. Charles W. Arnade, whose book Historiografia Colonial y Moderna de Bolivia surveys the gradual discovery of indigenous reality in Bolivia’s long tradition of Eurocentric historiography, considered that Tamayo had pushed the “the racial themes to absurd extremes”.38

The assessment of Marcos Dumich39 , albeit theoretician of the Bolivian Communist Party, is no less harsh. He sees Tamayo as a healthy reaction to the early 20th century reactionary and cultural pessimist Alcides Arguedes, author of the 1909 book Pueblo Enfermo (A Sick People) but who then falls into talk of the “indigenous race”. In Dumich’s view, Tamayo opposed humanism, liberalism, scientism, and intellectualism, for which he substituted voluntarism and authoritarianism40 . Politically, Tamayo’s contempt for bourgeois democracy and his “heroic authoritarianism and grandiloquent nationalism” puts him on the ideological terrain of pre-fascism. In a 1934 speech, Tamayo denounced the Russian Revolution and called for a “strong hand against its Turano-Mongol nihilism”. “Tamayo”, for Dumich, “contributed to creating that emotional tone so hard and so necessary for the fascist currents.”

Tamayo, in fact, did not limit himself to theory and literary works. He intermittently intervened in politics throughout the period under consideration here. He founded the Radical Party in 1912, falling on the Liberal side of the intra-elite battle between Liberals and Republicans. Tamayo played a leadership role, becoming chancellor, in the disastrous Chaco War with Paraguay (1932-1935), and was then elected president in 1934 but prevented from taking office by the coup of 1935, while both his house in La Paz and his rural estate were burned to the ground. He had run at the urging of the proto-fascist, later pro-Axis secret military lodge Razon de Patria (RADEPA), and then had become the president of the Constituent Assembly in 1943 in the government of Villaroel, also a RADEPA member. Tamayo (who left political office in 1945) remained notably silent during the mini- civil war of August 1949, preparatory for the MNR revolution three years later, as a well as on the 1950 massacre of workers in the Villa Victoria district of La Paz. The MNR seriously considered him for their presidential candidate in the decisive 1951 elections, which began the immediate crisis prior to the 1952 revolution, but he was passed over for Victor Paz Estenssoro.

Tamayo’s Fichtean nationalism, then, based as it was on a racial affirmation of the “true” Bolivia rooted in the indio, was the kernel of what would become, in a more cultural but still highly Germanic form, the ideology of the “national revolution” against the “foreign” elite elaborated by Carlos Montenegro.

Charles Andrade’s study, reputed to be the first which brushed aside the white elite-centered historiography and unearthed the indigenous tradition, also places Franz Tamayo in perspective, while revealing the racism of much of the treatment of the indigenous question, for and against. Rene Moreno, the most important Bolivian historian of the 19th century, was a declared racist. Nineteenth-century historians generally were “a mixture of narrow provincialism and French intellectualism…they failed to understand the great social problems of their nation.41 The above-mentioned Alcydes Arguedes (1879-1946), another Francophile historian of the period, was influenced by reactionaries such as Le Bon, Gobineau, and Vacher de Lapouge, but was nonetheless “one of the fathers of Bolivian indigenism”.42 (He also was funded by the Patiño tin empire to write a tendentious multi-volume history of Bolivia.) Jaime Mendoza (1874-1939) was, for Andrade, “the first aristocrat who, without vacillation, demagogic intensions or pat phrases, proclaimed the potential equality of the Indians…he opposed changing the mode of life of the Indians, in the sense of subjecting them to Europeanization”43 . Mendoza’s book Factor geografico (1925) emphasized the Indians’ “love of the land” and thus, in Andrade’s view, “the cult of Pachamama was born”http://insurgentnotes.com/2011/03/anti-capitalism-or-anti-imperialism/ - footnote_anchor-44.44

Such, then, were some of the contending currents with which the Bolivian elite entered the global crisis ushered in by World War I and its aftermath, prior to the appearance, after 1928, of the future MNR generation.

4. Prelude to the Crisis of the Chaco War, 1918-1932

The period 1914-1945 was a period of violent reorganization of world capitalism, of the demise of the British world hegemon and the struggle for succession to world hegemony between the emerging contenders, Germany and the United States, a struggle which played itself out quite explicitly in Bolivia. It was also a period of transition, on a world scale, (to use Marx’s language) from the phase of “formal”/extensive to the “real”/intensive domination of capital45 .

After the First World War, Bolivia’s economy was hard hit by the 1920-21 world depression. With the end of war demand, the world tin price, and hence Bolivia’s tin exports, collapsed. It was at the same time a period of heavy foreign investment in the country’s public utilities and government securities. In 1920-21, Standard Oil of Bolivia was created, and Spruille Braden, a dominant figure in U.S. business and diplomacy in Latin America over the subsequent decades46 , negotiated the very advantageous sale of four million hectares of Bolivian soil to Standard Oil, a sale which would later inflame Bolivian nationalism before and during the Chaco War. With recovery after 1921, something of a new educated middle class emerged. German investment returned, carving out a spot behind U.S. and British interests in transportation and communication. In 1923, Wall Street banks floated the so-called Nicolas loan of $33 million, which refunded Bolivia’s state debt, taking 45% of government income for repayment47 . This was followed in 1927 with a $14 million loan from Dillon, Read. In the same year, Walter Kemmerer, a Princeton economist, spent three months in Bolivia as a consultant, ultimately outlining the “Kemmerer reform”, which proposed the U.S. Federal Reserve System as a model for the Bolivian Central Bank. Kemmerer also recommended tax reforms and a return to the gold standard. Kemmerer’s intervention was followed in 1928 by a new Dillon, Reed loan of $23 million. In 1929, Bolivian tin production peaked at an all-time record, a level never attained again and, given the country’s then-total dependence on tin exports, a serious problem over subsequent decades, as Bolivia was eclipsed by tin production in Malaya, Indonesia and Nigeria. On the eve of the world collapse in 1929, foreign debt was still taking 37% of the state budget, and government finance remained in deep crisis over the following decade.

Bolivia was, in short, a classic semi-colonial country, totally beholden to competing imperialist powers for finance and technology, and whose immense natural resources benefited primarily those foreign investors.

The Bolivian working class emerged in its modern form amidst all this economic turmoil, after an earlier period of the Proudhon-inspired mutualism widespread throughout Latin America prior to 1914. As happened in so many countries immediately after the war, a strike wave swept Bolivia in 1920, led by the railway workers, who called a general strike in January 1921. Tin miners had struck at the Catavi mines in August 1920, but their strike was crushed. Another general strike in La Paz in 1922 forced the government to concede, but the Uncia mining massacre of 1923 marked a pause in labor unrest.

Along with strike activity, as well as peasant ferment, a flurry of new left-wing organizations emerged. A (non-Marxist) Socialist Workers’ Party was founded in the fall of 1920, and a Socialist Party, with ties to the more developed Chilean workers’ movement, was founded in 1921. Later in the decade, the newly-created Third International began activity in Bolivia, from its continental headquarters in Buenos Aires48

In June 1929, the Comintern organized the Conference of Latin American Communist Parties in Buenos Aires under a Moscow flunky named Vitterio Codavilla. As this was the “Third Period” of “class against class”, the conference issued a call for the Stalinist version of a “worker-peasant govt.”(cf Lora, vol. XX pp. 230-231) Jose A. Arce, later the leader of the ill-fated pro-Moscow PIR (Partido de la Izquierda Revolucionaria) was among the among Bolivian representatives. . In 1927, Tristan Marof49 (1898-1979), an important left-wing figure over subsequent decades, helped found a Labor Party (Partido Laborista), the first self-identified Marxist party in the country. (For his troubles, Marof was exiled from the country for a decade.) In the same year, an indigenous revolt of 100,000 peasants in the Bolivian south was crushed, a revolt caused by rise in the price of land due to railroad construction and land seizures by landholders. Agitation spread for the eight-hour day, which was adopted in some sectors.

All this economic turmoil, worker and peasant ferment, and the proliferation of socialist and labor organizations (many ill-defined) had to have ideological repercussions, and by the late 1920’s a tumultuous mix including Marxism, nationalism and indigenism all reached the educated middle class, a ferment which would bear its ambiguous fruits after the Chaco War. In August 1928, the first convention of the Bolivian University Federation (FUB) took place50

The 1928 convention followed up on a 1921 international congress of students in Mexico City, where first-hand acquaintance with the Mexican Revolution was to be had. (Ferran Gallego, Los origenes del reformismo militar en America Latina: La Gestion de David Toro in Bolivia (1991). , where particularly the Cochabamba intelligentsia was swept up in discussions of the Mexican and Russian Revolutions, as well as the ideas of Peruvian Marxist Jose Carlos Mariategui51 . This agitation was also significant in that virtually all the major figures of post-Chaco radical politics came of age politically in these years. The deepening world depression after 1929 and looming Chaco War would provide the context for their emergence. The late 1920’s, in short, was the period in which Marxism of different varieties swept educated strata in Bolivia.

5. Mariategui and Marof Pose the Indigenous Question for the Left

Peruvian Marxist Jose Carlos Mariategui (1894-1930), was the first Latin American Marxist to underscore the problematic of the Andean indigenous population for socialism, and had a major impact in Bolivia as well as early as the late 1920’s Mariategui, in a short life, wrote hundreds of journalistic articles. His major work is a collection entitled Seven Essays for the Interpretation of Peruvian Reality. Mariategui was denounced by the Comintern in the Third Period as a “populist”, and denounced by the populists (of Haya de la Torre’s APRA party) as a Marxist.

Mariategui was initially formed by the leading Peruvian anarchist of the preceding (pre-World War I) generation, Manuel Gonzalez Prado, whose prominence was based on the early mutualist (Proudhon-inspired) phase of the Peruvian and Latin American workers’ movement ( which was more or less superseded by the global impact of the Russian Revolution). Mariategui traveled to Europe after the war and was in Italy during the factory occupations of 1920. It was in Italy that he most directly experienced the realities of the European workers’ movement. He is a tangle of influences, including Georges Sorel52 and surrealism. He founded the highly original journal Amauta (1926-1930), which propagated his theses at a time when the Peruvian elite was totally Europe-oriented, and both disdainful and fearful of the seemingly mute indigenous majority. He helped to found the Peruvian Socialist Party in 1928, so named precisely to demarcate it from Third International Communism as well as Haya De la Torre’s APRA.

In addition to Mariategui, a second figure on the Andean left who raised the indigenous question to prominence was the (above mentioned) Bolivian Tristan Marof53 , the nom de guerre of Gustavo Adolfo Navarro. Marof was an aristocrat who served as a diplomat in Europe from 1920 to 1926. He was expelled from Bolivia, as indicated, for pacifism during the Chaco War, and upon his return attempted to found a real Marxist party there. Marof, in Andrade’s view, wrote an unprecedented history of Bolivia, albeit with an “exaggerated interest in the Inca empire”, which Marof saw as superior to the present. For Marof as for Tamayo, the “Bolivian people were the Indians, and they were not sick but merely sad at the loss of their ‘great past’”54 . Marof figured prominently in a debate within Andean Marxism about the possible “communist” character of Incan society, a viewpoint that has faded away.

6. Bolivia and the South American Revolutions of 1930

In 1930, under the impact of the world depression, revolts and revolutions overturned the governments of Bolivia, Brazil, Argentina, Uruguay and Chile55 . These developments were the South American moment of the worldwide collapse of classical 19th-century liberalism in the depression decade, and in Bolivia, as in the other Latin American countries, this meant the impending defeat of the old oligarchic elite parties based on restricted suffrage, and the entry of the masses into politics56 . In the Bolivian case, with the return to power of the Liberals, this collapse and reshaping of the political, social and economic system stretched over more than two decades, as the Bolivian moment of the world transition to forms of social organization appropriate to the new “intensive” form of accumulation.

During these developments, the German military presence had continued apace.

Over the course of the 1920’s, General Kundt had imposed more and more discipline on the military. Faced with instability and revolt, the Republican Hernan Silas government (1926-1930) became more and more dependent on the army, and hence on Kundt. In 1926, Ernst Roehm, the founder of Hitler’s stormtroopers, was invited to Bolivia as a military adviser and arrived there in 1928, along with a number of other far-right military personnel from Danzig, who had been demobilized by the Treaty of Versailles. The Liberal overthrow of the Bolivian government in June 1930 was a revolt from the right, placing in power Daniel Salamanca, after which Roehm briefly joined the Bolivian General Staff, though Hitler recalled him to Germany months later. In the upheaval, Kundt’s house was attacked by a mob because of his association with Silas. Other German officers supported the rebels.

In January 1931, the Liberals consolidated their mandate in a landslide electoral victory (once again within the restricted suffrage). In the same year, Bolivia became the first Latin American country to suspend payments on its foreign debt during the depression decade. In March 1931, Salamanca took office as president. The Trotskyist57 militant and intellectual Lora commented on this development: “Our greatest liberals may have had a few democratic ideas in their heads, but their very existence was based on the servile labor of the peasants.’58 Almost immediately, in April 1931, Salamanca was confronted with a general strike, centered in the postal and telephone workers, and managed to suppress it.

7. The Chaco War and the End of the “Old Regime” of Elite Politics

For years, Bolivia and Paraguay had fought minor skirmishes on their vague shared border in the Chaco, a huge and very sparsely populated area of jungle, desert and shrub land in Bolivia’s east. Disputes have continued ever since the Chaco War about the ultimate reasons for the conflict, which cannot be settled here. During and after the war, the great majority of Bolivians believed it was provoked by Standard Oil, backed by Argentina and/or Brazil, for reasons such as the desire for an outlet to the sea. Serious historians such as Herbert Klein dispute this59 . Whatever the case, Chaco War fever initially helped Salamanca to divert domestic passions away from his abysmal failure to deal with the economic crisis. In May 1931, he pushed for military penetration of the Chaco just as he was unleashing massive repression of May Day demonstrations around the country. In early 1932, the Bolivian Parliament debated a “Law of Social Defense” allowing it to exercise “legal dictatorship”, also denying the right to unionize and to demonstrate. A government roundup of leftist intellectuals ensued. Nonetheless, at the same time, there was growing anti-war sentiment in the labor movement, culminating perhaps in a major demonstration in Cochabamba on May 19th, but, according to Lora, many leftists also capitulated to war hysteria.60

Salamanca pushed for war in the Chaco, confident of victory. Bolivia had twice Paraguay’s population61 , and superior armed forces. What the Bolivian elite did not reckon with was the huge incompetence revealed by the general staff, the extremely hostile terrain (many more troops died of thirst and disease than from combat) and the rapid demoralization of the front line troops, who were in their overwhelming majority indigenous draftees pulled from remote villages without the slightest idea of what the war was about.

In 1932, General Kundt, having fled after the overthrow of the Silas government in 1930, returned to Bolivia with full powers as commander-in-chief in the Chaco War, after Bolivia’s initial defeat at Boqueron provoked a clamor for his reinstatement. Kundt’s popularity was heightened by a growing fascist influence on middle-class youth, a number of whom had studied in Germany during the rise of Nazism. In addition to economic ties to Germany, cultural clubs and colegios (high schools) spread the growing appeal of authoritarianism and fascism in Europe62 . Be this as it may, Kundt, who was seemingly committed to a cumbersome strategy of position, was definitively ousted after another defeat at Campo Via.

All in all, Bolivia lost 60,000 men in the Chaco War, and Paraguay lost 40,000, by the time Bolivia agreed to an armistice in 193563

Foreign officers and technicians were present on both sides; White Russian veterans were commanders on the Paraguayan side, Chileans and Germans were advisers on the Bolivian side. . Deserters had been shot in droves, and leftists protesting the war were intentionally sent to the front lines to be killed there. Thousands of Bolivian troops perished from thirst when logistic lines were interrupted by incompetence and neglect. The peace negotiations, overseen by representatives from the U.S., Argentina, Chile and Brazil, dragged on until 1938, and ultimately awarded Paraguay territory that doubled its size. The economy was reeling under accelerating inflation.64 By 1935, the traditional Bolivian Liberal and Republican parties of the tin barons had been totally discredited, never to recover in their old form. The social ferment unleashed by the Chaco debacle turned Bolivian society upside down. In that ferment, fascist, corporatist and socialist ideologies battled for dominance in a chaotic and highly fluid postwar situation.

8. Intermezzo on Corporatism in Latin America

The collapse of elite liberal and republican parties in southern South America, under the impact of the post-1929 world depression, as well as the rise of increasingly radicalized workers’ movements, as often more anarchist than socialist, required the ruling classes of Argentina, Brazil, Uruguay and Chile to fundamentally remake their political systems if they were to retain power. This transformation was the Latin American moment of the worldwide proliferation of statist regimes of different types in the global restructuring of capitalism then underway. Earlier immigration to southern South America from Spain, Italy and Germany made crisis responses in Europe significantly present, to different degrees, in the debates over how to accomplish this. The Primo de Rivera dictatorship in Spain (1923-1930) with its definite corporatist overtones, fascism in Mussolini’s Italy, and, a few years later, Nazism in Germany all came into play as references for the new era of mass politics. These forces were received somewhat differently in the less urban, less industrial countries of the Andes such as Bolivia and Peru, with their large indigenous populations. Yet, in Bolivia, perhaps in the long run the model most studied was the Mexican Revolution (1910-1940), particularly its left-corporatist phase under Cardenas after 1934. But this came later, after the Bolivian “movimientistas” were compelled, by the Allied defeat of the Axis in World War II, to shed their infatuation with the Italian and German examples.

Let us look, then, at some of the 1930’s developments in neighboring countries, confronting the dilemma, for the capitalist class, of organizing top-down statist forms of working-class containment, or of facing the prospect of a bottom-up working-class revolt that could not be contained:

“…In the Brazil of 1930, for instance, it was clear that the ‘social question’ could no longer be left entirely to the police to deal with…the proletariat was a significant presence in the cities. Not only was it a proletariat; it was in a very disturbing sense an a organized proletariat with an impressive history of protest, strikes, demonstrations…one of the possible ‘courses of action’ of the new regime in relation to the urban proletariat was to give them some crumbs, so as to get their souls in exchange. The ‘welfare state’ was about to be born in Brazil: its midwife was the Ministry of Labor, which was set up in 1930.”65

And:

“…the basic finding of such an analysis (is): the fundamental effect of the labor laws has been…to make it extremely difficult for the working class to organize effectively and autonomously for political action…The very fact that the government changed its approach toward the working class (from repression to inducements plus repression) contributed to partially annihilate the ability of the working class to answer the renewed waves of repression with corresponding countermeasures such as strikes and public demonstrations.”66

In his section on “Corporatist Control of the Working Class” the author sums up:

“The legal framework of labor relations established by Vargas, and left practically intact up to present-day Brazil, is based on three structures: the syndicates, the labor courts, and the social insurance system.”67

A few years later, a similar dynamic brought forth the same responses in Mexico, in the culminating (Cardenist) phase of its revolution:

“What was decisive in this change in the conception of revolutionary politics was not merely recognizing the working masses as its central element, but especially being disposed to convert them once again into an active element in the service of the revolution, of course, in the best imaginable way: by organizing them, and organizing them for something close to their hearts: their demands.”… “There is no doubt that the revolutionaries (here the author refers to the Cardenistas-LG) had rediscovered the master key to mass politics: organization.” .68

Finally, in Argentina from 1943 to 1950, the same drama was played out again, in the emergence of Peronism:

“…At the very moment in which the masses were mobilized politically…they were being co-opted into a corporatist project led by a nationalist sector of the armed forces…Peron’s overall labor strategy was now becoming clearer, as were his words in 1944 when trying to reassure Argentina’s employers:

‘…It is a grave error to think that workers’ unions are detrimental to the boss…On the contrary, it is the best way to avoid the boss having to fight with his worker…It is the means to reach an agreement, not a struggle. Thus strikes and stoppages are suppressed, though, undoubtedly, the working masses obtain the right to discuss their own interests at the same level as the employers’ organizations…That is why we are promoting trade unions, but a truly professional trade unionism. We do not want unions which are divided in political fractions, because the dangerous thing is, incidentally, a political trade unionism.’

Peron never deviated from this essentially corporatist vision of social affairs and his ‘revolutionary’ image in a later period…was never reflected in practice.”69

9. The Post-Chaco Crisis in Bolivia: Corporatism, Fascism and Socialism in Contention

With this general framework as it developed in other parts of Latin America, we now turn to the complex process of ferment unfolding in Bolivia, in reaction to the Chaco debacle.

As early as 1933, the Legion of National Socialist Veterans (LEC) was founded, though it defined itself as a political party only in 1936. Its program called for “national socialist action”.70 Some German immigrants had organized a National Socialist party after Hitler’s triumph in Germany in 1933. Elections in 1934 put an end to Salamanca’s bankrupt presidency, but a coup led by Jose Luis Tejado Sorzano prevented Franz Tamayo from taking office and set the stage for military government.

On the left, 1934 saw the formation of the POR (Partido Obrero Revolucionario), the Trotskyist group which would play a highly influential role from the late 1940’s onward71 . Also formed immediately after the war was the Confederacion Sindical de Trabajo Boliviano (CSTB). One intellectual influenced by Trotskyism, but more accurately described as a centrist for his career of overtures to bourgeois parties72 , was (the above-mentioned) Tristan Marof, whose book La Tragedia del Altiplano had made the case that the Chaco War had been fought to obtain an oil port for Standard Oil and to defend Standard Oil’s four million hectares against Dutch Royal. Throughout the country, innumerable “socialist” clubs were formed. War-weary youth were reading the post-World War I antiwar classics of Remarque and Barbusse. A Partido Republicano Socialista identified with “evolutionary socialism” and flirted with the Italian fascist idea of corporatism73 . In 1935, the South American Bureau of the Comintern established the Provisional Secretariat for the Communist Groups in Bolivia, with the aim of unifying disparate groups into a Communist Party. The Bureau denounced the peace negotiations then underway in Buenos Aires and called for a peace without annexations and without conquest, and for the abolition of Bolivia’s external debt. It further called for the formation of Quechua and Aymara republics, and, in keeping with the Comintern’s new global line, for a Popular Front.

Other veterans were sympathetic to the nationalism of Carlos Montenegro, one of the core future pro-fascist founders of the MNR. Perhaps most important of all for the subsequent decade, a group of Chaco junior officers, many of whom had been trained in Germany and in Mussolini’s Italy, and who had then spent serious time in Paraguayan POW camps, founded the secret military “lodge” called Razon de Patria (RADEPA), centered in the Escuela Superior de Guerra in Cochabamba74 , clearly committed to fascist ideas. Its subsequent influence, up to 1946, would be second only to that of the MNR which, in 1936, existed only in embryonic potential in the overall ferment.

10. “Military Socialism”, 1936-1940: The First Dress Rehearsal for the MNR Revolution

On May 17 1936, Tejada Sorzano, who had ousted Salamanca two years earlier, was himself overthrown in a coup by two Chaco war heroes, Colonels David Toro and German Busch, initiating the ten-year period (1936-1946) in which European, and above all Italian and German fascist influence in Bolivia would contest hegemony with the “sellout’ democracy” (democracia entreguista, selling the country out to foreigners) oriented to the U.S., Britain and, of course, the Bolivian oligarchy itself.75 (During the war, Busch had risen to prominence by leading the “great defense of the Camiri oil fields”.) The Toro-Busch coup began a four-year experiment they called “military socialism” which, along with the further military government of Gualberto Villaroel (1943-1946) would have an important impact on the development of the MNR (itself founded in 1942). Because of its secret character, it is not always possible to identify the influence of the RADEPA junior officers in the successive regimes, but there is no question that they were a serious presence.

Adolf Hitler had assumed power in Germany in January 1933, to the general enthusiasm of most of the German-speaking immigrants in Bolivia. Throughout the ensuing twelve years, until the defeat of the Third Reich, Germany’s main thrust into Latin America would be economic and, secondarily, through espionage, although the propaganda wars on both sides often exaggerated the real German presence. Hitler’s Finance Minister Hjalmar Schacht in August 1934 imposed strict barter on Germany’s foreign trade, on a bilateral basis76 , and a German trade delegation went to South America later that year. While the delegation did not go to Bolivia, it was definitely interested in Bolivia’s extraordinary mineral wealth. The Reich’s Foreign Ministry, on the other hand, wanted “no political ties” to Bolivia.

The Toro-Busch period was the first real political expression of the post-Chaco attempt to remake the bankrupt Bolivian political and social system, in general revulsion at the traditional parties controlled by the tin magnates, echoing the parallel regime crises in Brazil, Mexico and Argentina mentioned above. As Herbert Klein put it77 : “Thus after fifty years of struggle, the civilian party system was overturned by a reawakened military establishment.”. In this development, the ideology of “anti-imperialism” was at its peak. Neither Toro nor especially Busch were sophisticated political figures, and the whole period evidenced serious eclecticism, generally of a corporatist kind. Mussolini’s Italy was, for purposes of reorganization, more of a model than Nazi Germany, if only because it was older and more formed. (Toro’s ambassador to Germany did express admiration for German National Socialism, and Oscar Moscoso, the Defense Minister, was also a Nazi sympathizer.) Toro announced his regime as “state socialism”, and for the first time, in keeping with world trends, a “right of the State”, (in contrast to the old liberal constitutionalism theoretically founded on the individual) was articulated. On other occasions, the Toro regime called itself a “syndicalist state”.78 Carlos Montenegro, whose later book Nacion y coloniaje (1953) would be the quintessential statement of MNR nationalism (cf. below), had been a co-conspirator in the coup79 . The government was also supported by labor and by the Legion of Chaco War Veterans (LEC). The LEC formed the Frente Unico Socialista and called for “authoritarian nationalism”. Toro created state-controlled “functional syndicates”; these had the official support of the Socialist Party, which wanted them to be anti-communist80 . When the syndicates proved a failure, Toro tried to fashion a “state socialist party”. The new regime saw the meteoric rise of young officers, among them members of RADEPA. This “military socialism” never took up questions of latifundismo or of the indigenous masses, and its main base of support was the urban middle class. From Italian fascism, “military socialism” took over mandatory unionization, a corporate type of regime in parliament, mandatory worker savings plans, a social security system, and state-subsidized food stores. It established the first Ministry of Labor with the first worker minister, as well as the first Ministry of Indian Affairs in Bolivian history. The Ministry of Labor in particular was attacked for “creeping radicalism”; it became notorious for hiring (self-designated) Marxists. The ministers of Foreign Affairs and of Hacienda were from the Socialist Party and were pro-corporatist81 . On May 25 1936, the Toro government announced its “fifty-two points of action”, including compulsory unionization. The Toro and Busch regimes, with all their pro-worker rhetoric, were confronted with a number of general strikes in the 1936-1939 period, led by the miners and railroad workers.

11. The MNR in Embryo

The true nucleus of the future MNR was the daily newspaper La Calle, founded in 1936 by a group around Victor Paz Estenssoro (1907-2001), who dominated MNR politics into the 1980’s, and all the major “movimientista” intellectuals such as Augusto Cespedes (1904-1997), Carlos Montenegro (1903-1953), and Jose Cuadros Quiroga (1908-1975)82 . La Calle became an organ for German fascist propaganda and virulent anti-Semitism83 , and as of 1938, used only German news services; Augusto Cespedes himself called it the “megaphone” of the MNR, and decades later said La Calle was “almost fascist” in the years after the Chaco War. Jose Cuadros Quiroga, the most outspoken anti-Semite in the group, excelled in writing catchy, sarcastic headlines that made La Calle a popular broadsheet, in contrast to the staid press controlled by the tin barons. According to Guillermo Bedregal Gutierrez, (Quiroga’s) “philofascist and anti-Semitic streak was a ‘fashion’ of the time. There was great German influence in Bolivia and Quiroga felt that ‘it was important to be anti- Semitic as an element of popular agitation’.”84 (This takes on particular significance because it was Quiroga who, in 1942, wrote the founding program of the MNR, in which these fascist echoes were still present). La Calle was pro-Republic in the Spanish Civil War which erupted in July 1936, but the La Calle team was “awed” by early German and Italian successes in World War II85 . Quiroga apparently wrote most of the anti-Semitic articles86 . For the group around La Calle, German Busch loomed as a saviour of Bolivia. Paz Estenssoro, who proved to be the greatest political survivor of all the founders, never wrote for La Calle, but did write for the weekly named (appropriately) Busch, edited by Montenegro, which was founded during a brief period when La Calle was suppressed.87 It was an elite group, condensing the ferment of the period. The fourteen founders included three future presidents, and ranged ideologically from socialism and Marxism to totalitarian tendencies such as those of Cuadros and Roberto Prudencio88

La Calle was eloquent about its political options, on the subject of early Trotskyist influence in Bolivia, with headlines such as “Trotzkyite (sic) Loud-Mouths Bring Anarchy to the FOT”, “Will We Be Governed by Deserters?”; Another article “called for an ‘iron fist’ to ‘purge the country’ of the ‘red extremism’ of ‘adherents of the Third and Fourth Internationals’”.89

Echoing the developments in Brazil, Argentina and Mexico described earlier, La Calle supported “the renovation of union structures”. But this renovation could not be limited to such structures but must rather “make concrete the institutionalization of the regime in a Corporative State” and give special significance to the “disciplinary function of syndicalism extended as a factor of social cohesion more than as an instrument for the defense of class objectives.” 90

12. Crossover of Fascist Rhetoric and Left-Corporatist Policy Measures in “Military Socialism”

The 1936-1940 period of “military socialism” was a maelstrom of ideological, foreign policy and organizational ferment which might be considered the first blush of the future MNR forces’ attempt to position themselves, in response to a whirlwind of both domestic and international pressures, not the least of them German Nazism. It is necessary to follow them in some detail, to navigate the flood of ideologically-motivated propaganda coming from all sides.

In January-February 1936, Montenegro (who was very close to Busch) and Augusto Cespedes had founded the Partido Socialista, which in Herbert Klein’s view best articulated the “national socialist” perspective91 . The “national socialists” in 1936 had been influential enough, as indicated, to get Toro to propose the corporate model and forced unionization under state control. For Klein92 , Toro articulated “in essence and in its most articulated form” the “philosophy which the small group of politically conscious and advanced young officers proposed for the regeneration of national life…some of whom had received some type of training in Italy in the late 1920’s and early 1930’s.” Toro in fact issued a harsh anti-communist decree to appease the oligarchy, but it was stopped by Waldo Alvarez, the Minister of Labor. The radicals at the Labor Ministry were adamantly against the corporatist proposals and demanded worker independence. Their opposition in fact ultimately ended these plans.

In late June 1936, Toro and Busch created an all-military regime. Elias Belmonte Pabon, a founder of RADEPA and (whose Nazi sympathies were, in Guillermo Lora’s view, “beyond question”93 ), was Minister of the Interior in the new cabinet. Belmonte had worked with Ernst Roehm during the latter’s stay in Bolivia, and Busch sent him to Germany as a diplomat94 . Other RADEPA members were send to Italy. Militants from another far-right group, the Estrella de Hierro (Star of Steel) were also in the Busch government.95

El nacionalismo en Bolivia de la pre y posguerra del Chaco (1910-1945 (2006), Pedro Silveti Arce in his Bajo el signo de la Barbarie (1946) argued that the Mariscal Santa Cruz had ties to the Chilean GOS (Grupo de Oficiales Selectos), the Argentine GOU (generally known as the Grupo de Oficiales Unidos), and the Paraguayan Ferente de Hierro, in a general mouvance of the South American extreme-right of the period.

The broader social context was increasingly tense. A strike wave began in early 1936 and by May it has evolved into “greatest strike movement that Bolivia had ever experienced.” There was intense discussion of the proposed mandatory syndicalization in the labor movement. Some parts of the left saw Toro’s labor policy as more fascist than socialist96 . In early July , the radicals in the Ministry of Labor formed the ANPOS (Asemblea Nacional Permanente de Organizaciones Sindicales)97 . In Guillermo Lora’s estimate, the ANPOS “one of the most important creations of the leftists connected to the Ministry of Labor” (who) “wanted to transform society from above”; it ultimately had an ephemeral existence. This conception, in which “worker associations recognized by the Ministry sent their delegates to the meetings”, with the authority of the state “recognizing” different organizations of society, reflects the essence of corporatism.

The Busch-Toro regime in its first weeks pushed ahead with its plans for “military socialism”. On July 6, it issued a decree on mandatory work by all. Chaco veterans were to be reincorporated into their previous jobs within twenty days. Henceforth, anyone without employment papers (carnet de trabajo) would be declared “unemployed” and liable to be enrolled in state labor brigades. Companies were called upon to make their labor needs known to the state. Lora98 saw this as forced labor expressing a “totalitarian, i.e. fascist-oriented” mentality, apparently inspired by Mussolini . Mass demonstrations took place in support of the Ministry of Labor and compulsory unionization. Toro in a speech in late July declared himself “in favor of a corporative state” and for a “regime of trade-union association identified with the organs of power and political representation.”99 As in Brazil, or Mexico, or later Argentina,

“…the National State, as the definitive successor to the oligarchic State prior to the Chaco War, would replace class conflicts by a division of productive functions, in which contradictions would give way to integration within a development project directed by the State.”100

On the day after the mandatory labor decree, Toro issued a Ley Organica de Petroleos to curb speculation and concessions to the foreign exploitation of Bolivia’s oil. Two weeks later, on July 24, this was followed by a decree creating the Banco Minero. On August the decree on mandatory unionization was issued.101 According to the decree, unions would henceforth “will be under the ‘permanent protection and control’ of the socialist government and were ‘incorporated into the state mechanism’. Employers and workers, following the Italian syndicalist model, would be in the same union. According to Lora, “In practice…it fell to the Ministry of Labor to organize the unions and to administer them in all times and circumstances”.102 This fit into a broader plan of the government “to mobilize the entire active population for an intensive program of production”.103

In November 1936, the First National Congress of Workers took place, and debated the creation of a Confederacion Sindical de Trabajadores de Bolivia (CSTB) oriented to the left parties. By this time, however, Toro had moved to the right and appointed a leading lawyer for the Hochschild mining interests104 to the Ministry of Labor, while the radicals were removed from the Ministry. As Klein put it105 “A mixed syndicalist-corporatist state grafted on to the old political party system was contemplated”.

Further steps along such lines followed on Dec 21 1936, with the creation of the Yacimientos Petrofileros Fiscales Bolivianos (YPFB- Bolivian State Oil Deposits), a prelimary step to Toro’s historic nationalization of Standard Oil in May 1937. This expropriation of a major U.S. firm was unprecedented in Latin America, a full year prior to the better-known nationalization of oil by the Cardenas regime in Mexico. Further, the government regulation of the tin industry, initially a temporary measure during the Chaco War, was made permanent106 . In the wake of this rapid flurry of decrees and state takeovers, the Toro- Busch government came under fire from the right by the tin interests and from the left by various Marxists. Bolivia’s statist measures were followed by similar steps in Argentina, Brazil, Chile, and Uruguay. In “military socialism”, of course, the Bolivian Army continued to account for 37% of the government budget.

On July 13 1937, German Busch unseated Toro as sole military ruler. Busch viewed himself as champion of the May 1936 general strike. Toro had never lost labor support or persecuted the radical left, but he had lost the support of fascist107 and reformist-minded junior officers around Busch. In some of his immediate measures,

Busch closed state-subsidized food stores and rolled back some other controls of the previous year. (He also allowed Tristan Marof to return to Bolivia after ten years in exile.)

Once consolidated in sole power, Busch in November 1937 recommended an expansion of the earlier Labor Code (Codigo de Trabajo), itself (by some estimates), influenced by the Italian Carta di Lavoro and the Nazi Arbeitsfront108 . In reality, however, mandatory syndicalization never took hold. Klein summarized the period as follows109 : “In the four years of military socialism the basis of the old parties had definitely rotted away…in the end, the left emerged as the dominant factor in political life.” In March 1939, in recognition of this shifting ground, a Concordancia of the three traditional political parties was formed110 , in which the pre-1930 parties were forced to recognize the end of old system and become (in Klein’s estimate) “class-conscious representatives of oligarchy”.)

13. Influence of the Mexican Revolution

A further important development during the period of Busch rule was the March 1938 constitutional convention. The proceedings reflected the impact, among others, of the Mexican Revolution111 , just then reaching its left-wing limits under Cardenas. The new constitution demarcated itself from its liberal predecessors, with their orientation to the individual and to private property, by a corporatist emphasis on state-recognized professional or occupational organizations, and anticipated further elaboration after 1952. It was accompanied by a new property law pushing social ownership. It proposed agrarian reform, legalization of the ayallu (the pre-Hispanic rural commune, still in existence in some regions), and the nationalization of the mines (though this was ultimately rejected). It forced a regroupment of traditional parties from the pre-Chaco period. The regime decreed (in principle) free universal education and the creation of rural education centers for the highland indigenous population112 .

March 1938 also saw the complete triumph of the Frente Unico Socialista in elections. Carried along on this momentum, the (in Klein’s view) “extremely radical” constitutional convention of 1938 amounted to “a vital turning point in Bolivian history”113 . It repealed the 1880 liberal constitution, and developed “social constitutionalism” (a concept first elaborated for Latin American purposes by the Mexican Revolution). Property, previously conceived in individual terms, was redefined in function of the state. (This recentering of constitutionality on the state, and its legal recognition–and enforcement by compulsion of such recognition–of different bodies, from property owners to professional associations to labor unions, is the essence of corporatism.) The convention was also influenced by European radicalism and socialism as well as by 20th century indigenism, articulated by figures like Mariategui and Tamayo. It approved worker participation in profits, and proclaimed the function of the state as the provision of social welfare.

A few months later, again showing the continental projection of the Cardenas phase of the Mexican Revolution, the Confederacion de Trabajadores de America Latina (CTAL) was founded in Mexico City. According to Lora114 , “it had a huge influence on the Bolivian trade union movement” and had a practical influence in shaping the character and of the (Stalinist) Confederacion Sindical del Trabajo Boliviano (CSTB). Later, during World War II, the CTAL was controlled by the Stalinists, headed by the notorious Mexican Stalinist and trade union bureaucrat Lombardo Toledano115 .

14. Attempted Implementation of a Schachtian System of Currency Controls and Managed Trade; Labor Regimentation

The intensifying geopolitical struggle between Germany and the U.S. was hardly absent from Bolivian developments in the late 1930’s, as this social radicalization was deepening. By 1938, Germany accounted for 17% of Bolivia’s foreign trade.

The German foreign trade boards, for their part, wanted to exchange railroad equipment for Bolivian raw materials under Schacht’s new system of managed trade. Standard Oil was waging a major campaign for compensation for the Toro nationalization of its Bolivian assets, and Busch told the Germans he “didn’t want much to do with Americans” given this standoff. The United States was making efforts through the Pan-American Union (which it dominated) to counter German influence.

In April 1939, German Busch proclaimed himself dictator. While the Bolivian ambassador in Washington declared that that the Bolivian government and Bolivian people felt no sympathy for Nazi or Fascist ideology, Busch moved closer to the Third Reich116 .

One anomaly in the last two years of “military socialism” (1938-1940) was Bolivia’s unique policy, for the world at that time, of open admission of European Jewish refugees. The result was the arrival of between five and ten thousand Jews, mainly from Germany and the German-speaking areas of Central Europe. The purpose of the policy was to promote agricultural development of Bolivia’s remote and nearly-empty eastern hinterlands, for which the largely middle-class professional population of Jewish immigrants were exceptionally unsuited. By the end of World War II, most of these immigrants moved on to other countries, but their presence, and difficulties of assimilation in a country where they could neither speak Spanish well nor use their professional skills, also fed the anti- Semitism of La Calle, which found its way into the first program of the MNR in 1942 (cf. below Section 16).117

In May 1939, however, the Busch regime issued a new Labor Code providing for greatly improved working conditions, effectively the most lasting change of his years in power118 . The Code’s first article excluded agricultural laborers, i.e. the masses of peasants. It was protectionist, setting a maximum of 15% of foreign workers in any given workplace. It provided for worker-employer unions, and granted the right to strike under government control, and also the employers’ right to lock-out and imposed mandatory arbitration.

Guillermo Lora elaborates further119 :

“(the decree) …in reality was a document worked out during the presidency of Col. Toro, when Waldo Alvarez was Minister of Labor and organized discussions in commissions created for that purpose. Organized workers participated in those discussions. This reality deflates the legend that Busch imposed the Labor Code from one day to the next on a working class that had done nothing to deserve it. There is a visible international, and particularly Mexican, influence on the Bolivian law…The approval of the Labor Code had enormous political repercussions. It confirmed the workerist (obrerista) character of the new government and Busch was automatically transformed into the knight errant of the popular movements. This enthusiastic support allowed the regime to acquire an unexpected political stability. The Chaco hero, even though he had issued no equivalent measure for the nationalization of oil, was identified by friend and foe as a caudillo of the left. The Labor Law and other measures adopted by the government even propelled a considerable number of Marxists to join the ranks of the unconditional supporters of Busch…the bulk of the masses and not a few Marxists considered this body of laws to be synonymous with socialism…Many authors of treatises and other exegetes wrote about the Busch Code and almost all of them are convinced that, especially in a backward country such as Bolivia, the exploited can be liberated by social legislation…(the philo-Trotskyist university professor Alberto Cornejo) finds a presumed identity between the labor code and the Transitional Program of the Fourth International…Cornejo fancies that the struggle for serious social legislation is nothing less than the Gordian knot of revolutionary activity.”

As Lora said: “State socialism, far from abolishing the principle of private property, would limit itself to modernizing it, giving it the content of a social function.”120

Along with all this labor ferment and legislation, Busch imposed a great increase in the taxation of mines. When the tin mine owners from Comite Permanente de Mineros forced the government to abolish special taxes and foreign currency requirements, Busch responded in June 1939 with a Schacht-type system of currency controls. The decree required the mandatory handover of all foreign currency from mineral exports to the central bank, citing Germany, Russia, Spain, as well as Argentina, Brazil and Chile as antecedents. This measure increased state revenues by 25%.

The Bolivian representative in Berlin announced Bolivia’s intention to withdraw from the International Tin Pool and put the Banco Minero in charge of tin exports, creating a state monopoly. The Germans saw this as an opening through which the Reich could acquire all Bolivian mineral production in exchange for mining equipment121 . In July 1939, the Reich representatives in Bolivia, Walter Becker and Horst Koppelmann, were asked to reorganize German-Bolivian trade through the centralization of the ASKI marks122 in the Central Bank, thereby obtaining all Bolivian mineral products (above all tin) in exchange for ASKI marks, and to sign a treaty, a “Convenio Comerical de Pagos” on all credit transactions between the two states123 . Bolivia, like other countries which entered into these barter agreements with Nazi Germany, was flooded with cameras, Bayer aspirin and ASKI marks124 .

Busch then nationalized the Central Bank, and Alberto Ostria Gutierrez, a pro-Anglo- American diplomat, resigned from the government in protest at the drift of economic policy. On the same day German emissaries signed a preliminary protocol with the Ministry of Foreign Relations ; in it, Germany and Bolivia agreed to give Reich-Credit-Gesellschaft and the German Bank of South America the regulation of trade in ASKI-marks. The protocol also anticipated a five-year treaty under which Bolivia would sell all products to Germany for ASKI marks (with some exceptions for tin). The last part of agreement proposed oversight of Bolivia’s Central Bank by a mixed commission of Bolivians and the “German Minister in Bolivia”. It also established the role of the Reichsmark and it reserved for Germany the right to use 50% of its “creencias de compensacion” (i.e. ASKI marks) in the purchase of Bolivian tin. The U.S., Britain and Japan attempted to exert counter-pressures, but six days later the two German banks signed an agreement with the YPFB, the state oil company, agreeing to help Bolivia in oil industry development. Walter Mehring, “the special plenipotentiary of the YPFB “ and a German citizen, was ordered to sign an agreement with the two German banks. Four million marks were slated for equipment in exchange for oil and raw materials.

This flurry of activity marked the high point of German-Bolivian commercial relations in the 1936-46125 period, but the anticipated exchanges never materialized and served more to focus U.S. attention on these developments; up to this point, the U.S. had been more interested in the Bolivian-Paraguayan negotiations in the wake of the Chaco War, which dragged on until 1938, and which had taken precedence over concerns about Bolivian “military socialism”. The German envoys ultimately left Bolivia empty-handed.

15. The Tin Barons Return to Direct Control of the State, 1940-1943

“Military socialism” in Bolivia came to an abrupt end on August 23, 1939, with the (apparent) suicide of German Busch. There were widespread popular doubts that his death was indeed a suicide and many suspected that Busch had been assassinated by the tin barons and their “superstate”.126 . Indeed, Busch was not replaced by Baldivian, his vice president, but instead a special commission convened to install General Carlos Quintanella as provisional president until April 1940. Quintanella promptly overturned the Busch decree on foreign currency and in late 1939, issued a modified decree suited to the wartime situation127 .

Bolivian politics following the death of Busch entered a new period of the restoration of the oligarchy’s power, in suitably modified form with an open orientation toward the emerging Allied side in the Second World War and a simultaneous right-wing shift on the domestic front. As early as September 1939, a rapid falloff in Bolivian-German trade took place as Bolivian trade with the U.S. eclipsed it. The German presence in Lloyd Aereo Boliviano was eliminated128 .

The new period represented by the 1940-1943 presidency of Enrique Peñaranda, following the Toro-Busch period of “military socialism”, marks a shift of the pendulum away from previous pro-fascist foreign policy and left-corporatist appeals to the working class, and toward a pro-Allied international stance combined with a hardening of the regime’s relationship with workers and peasants. The pendulum would swing again after Peñaranda’s ouster by the coup of December 1943, ushering in the 1943-1946 return to the previous Toro-Busch dynamic, naturally modified for wartime conditions, under Villaroel. Following Villaroel’s overthrow and lynching in July 1946, the pendulum swung back again, and hard, in the repressive “sexenio rosquero129 ”, the six-year period leading up to the MNR revolution, in which the tin baron “superstate” returned to power with a vengeance, before being definitively overthrown in 1952. Hence it is necessary, as heretofore, to follow this crossover between international pressures and domestic developments in detail130 . From 1940 onward, when the U.S. turned its attention to Bolivia as the sole tin producer in the world not under Axis control, the U.S. and Britain engaged in a propaganda barrage depicting the emerging MNR as “Nazi-fascist”, and increasingly intervened in domestic Bolivian politics. After the war, during the “sexenio rosquero”, it was pointed out with some irony that under Bolivian “fascism”, workers were urged to unionize and peasant questions were at least theoretically addressed, whereas in “democratic” (read: pro-Allied) phases, workers and peasants were repressed and massacred. In the decade before the outbreak of the Cold War in 1948, “Nazi- fascist” was the epithet of choice reserved for anyone who opposed American interests, thereafter being replaced by “communist”.

Beginning with its founding in 1940, the PIR (Partida de la Izquierda Revolucionaria- Party of the Revolutionary Left) emerged as the most influential self-designated Marxist party in Bolivia, with a pro- Soviet and an indigenous faction. The main personality of the PIR, Jose Antonio Arze131 , was not, however, (at least in Lora’s view), a “sectarian Stalinist”. In the absence of any established Communist Party in Bolivia, the PIR functioned effectively as the local pro-Stalinist party, and followed the Soviet line as faithfully as any CP elsewhere. From the time of Nazi Germany’s attack on the Soviet Union in June 1941 to the outbreak of the Cold War, the PIR so aggressively depicted critics of the Allies, whether from the MNR or the Trotskyists, as “Nazis”, that it wound up in a close alliance with the tin baron superstate, ultimately even involving itself (in 1947) in bloody repression of workers. This abject pro-Allied, pro-“democratic” stance of the PIR so totally discredited it in the eyes of the Bolivian masses, especially the working class, that the party’s mass support of 1940 simply evaporated by 1950, when it shrank to a miserable sect. This self- destruction of the PIR (hardly unique among pro-Soviet political parties in the 1940’s) was an important factor in the emergence of Trotskyism as the dominant current in the Bolivian working class in the late 1940’s and beyond132 . During the war, the MNR was pro-Axis, at least until U.S. pressures (and the imminence of German defeat) forced it to moderate its tone; the marginal Falange was pro-Axis throughout133 .

Thus on Apr. 12,1940, Enrique Peñaranda was elected president, ending the provisional rule of Quintanilla and re-establishing the tin baron superstate’s direct influence in the government. The 10,000 votes (out of 56,000 total) for Jose Antonio Arze, the PIR leader, were the real shock of the elections, particularly given the elite character of the enfranchised 2%. Peñaranda’s priority of reorienting Bolivian foreign policy to the U.S. ran into the obstacle of Standard Oil’s ongoing clamor for compensation for the 1937 nationalization of its assets.

Alberto Ostria Gutierrez, who had resigned under protest from the Busch regime, was back in charge of diplomacy. He claimed to have forced Washington to back down on the oil issue in exchange for full cooperation in the war effort134 .

In this new period, moderate left, middle-class intellectuals were anti-U.S. and influenced by fascist ideology135 . The pro-German and pro-Italian “national socialists” were in favor of the nationalization of basic industries, above all the tin mines. In Klein’s view, it was in their interest to foster a radical mine labor movement”136 and the time was indeed propitious; in October 1940 there were wildcats in the mines and a major railroad strike.

16. The “Nazi Putsch”; Peñaranda Fights to Retain Social Control; the U.S. Begins to Eclipse Germany in Bolivian Domestic Politics

The new dispensation under Peñaranda was accelerated by the so-called “Nazi putsch”. A letter was published in Bolivian newspapers on July 20, 1941, ostensibly naming Bolivian attaché Elias Belmonte in Berlin and the German ambassador in La Paz in a plot for a Nazi takeover in Bolivia. Though the letter was actually a caper of British intelligence services137 , it gave the Peñaranda government all the pretext it needed for harsh repression of those associated with the Toro-Busch years. The German ambassador was expelled from the country, German and Bolivian Nazis as well as MNR activists were jailed, the Italian contractors in Cochabamba were expelled, La Calle was shut down, and Carlos Montenegro was also jailed for four months.. Up to that time, the MNR had been the loudest critic of compensation to Standard Oil. The “Nazi putsch” also solidified the working alliance between the PIR, now (after the German invasion of the Soviet Union the previous month) in its anti-fascist “Democratic Front” with the Rosca oligarchy. The military, however, never completely eliminated the nationalist younger officers who oriented to Toro-Busch military socialism, which would be important in the subsequent (1943-1946) Villaroel period.

Not all went smoothly for the new right-wing course; in September and October 1941, Siglo XX miners and railway workers struck and won a 20% pay increase, and Ostria Gutierrez was forced out in controversies over the sales of minerals and the compensation questions. Nonetheless, by late 1941 the U.S., seriously in need of tin, enrolled Bolivia in its Lend-Lease program. After Pearl Harbor (December 1941) the Peñaranda government issued a pro-U.S. statement, froze German and Japanese assets, and agreed to $1.5 million in compensation for Standard Oil138 . In late January 1942,

Bolivia broke diplomatic relations with Germany and expelled more German citizens.

The left parties did make big gains in the spring 1942 elections, in which the MNR also participated for the first time. But the Peñaranda government issued its infamous State Security Decree (Decreto de Seguridad de Estado), banning organizations with “international ties”, no doubt aimed at sympathizers of Germany and Italy. In June, Bolivia joined the Allied forces in the world war, and under this pressure the MNR began to take its distances from Germany. One early spur to this realignment was the Economic Cooperation Agreement with the United States, which had resulted from the Inter-American Conference in Rio de Janeiro139 and the report of the U.S. government’s Bohan mission. The agreement provided $15 million for oil prospecting, highway construction and funding for the Bolivian Development Corporation (Corporacion de Fomento Boliviano-CFB), which would play a major role after the 1952 revolution. (Critics pointed out that the sum provided hardly made up for Bolivia’s sales of tin and wolfram to the U.S. at below world market prices.140 )

17. Fascist Overtones in the Founding of the MNR

The MNR was founded on January 25, 1941 (and more formally on June 2, 1942), with the La Calle intellectuals such as Montenegro, Cespedes, Paz Estenssoro and Cuadros Quiroga providing the main inspiration. One historian141 called it a “uniquely Bolivian blend of nationalism and socialism, but never outright fascism”. Augusto Cespedes, much later, agreed with Ostria Gutierrez that there was more than a whiff of Nazi influence in the founding program, but went on to say that it was the “fashion” (sic) of the time142 . Another author143 later asked Cuadros Quiroga, who drafted the program, about the anti-Semitism in the original document of the MNR; the latter replied that it was due to (the Jewish tin baron) Hochschild. Cuadros Quiroga referred to the “sinister figure of the Jew Mauricio Hochschild…the pontiff of palace machinations.” In Cuadros Quiroga’s view, anti-Semitic sentiment was widespread in Bolivia at the time, but he claims that after the Holocaust he himself gave it up. For him, Hitler was seen in Bolivia as an “alternative formula to bourgeois and oligarchic democracy.”

In Cuadros Quiroga’s “Principles and Action of the National Revolutionary Movement”, the 1942 founding document of the MNR, the following points are enumerated144 : 1) against false “entreguista”, or sell-out (to foreigners), democracy; 2) against the pseudo-socialism of a new exploitation. On the latter point, the document continues: “we denounce as anti-national any possible relationship of the international political parties and the maneuvers of Judaism.” It concludes with a call for the “absolute prohibition of Jewish immigration, as well as any other immigration not having productive efficacy”. And finally, 3) a call for “solidarity of Bolivians to defend the collective interest and the common good before the individual interest”, possibly a direct translation of the Nazis’ “Gemeinnutz vor Eigennutz”145

It is enlightening to read some attempts to contextualize the collective views of the early MNR leaders, written decades later by MNR sympathizers. Walter Guevara Arze, in his 1988 book calling for a renewal of the movement, and commenting on the torrent of pro-Allied propaganda calling the MNR “Nazi”, wrote: “…unfortunately some texts of the party which confused the struggle against imperialism with support for Nazi-fascism appeared to justify, at a certain moment, this absurd accusation…to this we have to add the declarations of some officers who believed, more or less sincerely, that this was the position most beneficial for the country…”146

Guillermo Bedregal, in a massive study of Victor Paz Estenssoro, the most visible political face of the MNR over decades, writes that in 1939, World War II

“…gave rise to great expectations and obvious sympathy for the impressive military victories of Germany. Some people therefore believed that the matter was summed up in a twofold idea: the history of humanity, after capitalism and communism, was entering into a national-proletarian, national-peasant phase, whose paradoxical emergent form was then represented by European “fascisms” (sic), and some were convinced that the advent of the new era had as its precondition the triumph of the Axis in the world war…Many young Bolivians believed in the European victory of the Axis and in a peace that might be favorable for the Indo-American peoples…Latin America had never had any problems with German hegemonism or attempts at domination…To this we have to add the important influence of political developments in Brazil and in Argentina…(such as) an anti-U.S. politics enriched by the emergence of the syndicalized workers’ movement of the “descamisados” of Eva and Juan Peron…the founding opposition of the MNR was driven by great passions and also great disinformation. No one, until the final defeat of Nazi Germany, knew about the existence of the famous concentration camps…Sympathy, there was; disinformation, I repeat, there was in spades.”147

(Presumably the crushing of all organizations—parties, unions–of the German workers’ movement as well as all other parties of the center and the right, concentration for enemies of the regime, 200,000 political refugees before the outbreak of the war, the Nuremberg Laws on racial purity, the expulsion of Jews from public life and the Kristallnacht had been insufficient reasons for skepticism.)

Guevara Arze and Bedregal are at least willing to face up—to some extent–to these currents for what they were. Consider, then, the attempt of Eduardo Arze Cuadros, in his 2002 book148 (dedicated to…Jose Cuadros Quiroga) to finesse the same questions in a far more laudatory view of the early MNR. For Arze, the critics (presumably Marxists) who see the key struggle as “class against class”, in opposition to the MNR’s insistence on the “nation against imperialism”, are “Eurocentric”. He makes virtually no mention of the existence of RADEPA. In his chapter on La Calle, he invokes only its support for the Spanish Republic, and makes no mention of its pervasive anti-Semitism. After this whitewash of La Calle, Arze goes on to say that Bolivian anti-Semitism in this period has been “decontextualized”. Sinking further into quicksand, he continues with a priceless passage:

“…other objective elements of analysis of the period, such as the observable fact of the demographic and political gravitation of “semitism” (sic) to the city of New York, the neuralgic point of the grave world crisis of 1929 and the principal headquarters of capitalist finance, (…) can underscore the objectivity of an association of big international finance capital with semitism (sic) in a nation which had just emerged from a serious defeat in a regional war and which was then involved, almost without wanting it, in a new conflict…”149 .

With apologists such as these, the early MNR hardly needs critics.

18. The Catavi Mine Massacre Opens the Door to U.S. Domestic Intervention

While the MNR was making its entry into Bolivian politics, the labor situation under Peñaranda was spinning out of control. In late September 1942, the unions issued demands at the Catavi mine owned by Patiño; two weeks later railroad strikes erupted.

The strike wave intensified through November and December, until on December 21/22 hundreds of assembled workers and their families were machine-gunned by the Bolivian military at the Catavi mine150 . The massacre became an international issue; the U.S. ambassador had called the strikers “Nazi saboteurs”, and Peñaranda later visited the U.S., where he was warmly received in the Roosevelt White House. The two major U.S. union federations, the AF of L and the CIO151 , as well as the U.S. State Department, sent the Macgruder Commission to investigate, including Robert J. Watt of the AF of L and Martin Kyne of the CIO, culminating in a devastating portrait of labor conditions in Bolivia, published by the ILO. In Guillermo Lora’s view152 , the commission was mainly a probe to set the stage for U.S. aid. Such a bloodbath, in the most important source of tin for the U.S. war effort, had to be a major concern, and with forthcoming aid the U.S. began its serious intervention into Bolivian domestic politics. Indeed, in April 1943, then-U.S. Vice President Henry Wallace visited Bolivia, and in August 1943, the U.S. Congress held hearings on the massacre. (Wallace was quickly marginalized in dealings with Bolivia by the more conservative Secretary of Commerce Jesse Jones, who had directed ties to the Rosca. The Patiño mines also established their corporate headquarters in Delaware to acquire the status of an American company.) In addition to tin, the U.S. wanted Bolivian quinine, tungsten, zinc, lead and rubber. From 1942 to 1945, Bolivia’s tin production and the tin price did rise, but Mariano Baptista Gomucio argued that the fixed price during the war cost Bolivia $670 million, more than all U.S. aid to Bolivia into the 1960’s153 .

19. The Villaroel Regime, 1943-1946: Second Dress Rehearsal for the MNR Revolution

The Catavi massacre also made possible something of a national political debut for MNR leader Victor Paz Estenssoro, who denounced it and strongly supported the strike, even though the MNR at that point was an urban middle-class party with no particular link to workers. Six months later, in July 1943, Paz went to Buenos Aires, where a pro-Axis group of military officers, including Col. Juan Peron, had just come to power in a coup; Paz announced that he wanted a similar revolution in Bolivia.

The regime, though rapidly losing its grip on power, declared war on the Axis on December 4, 1943. It was of little avail for Peñaranda, who was overthrown in a coup led by RADEPA and the MNR on December 20, marking another swing of the pendulum back in the direction of the pro-Axis, corporatist “military socialism” of three years earlier154 . The new head of state was Major Gualberto Villaroel, a member of RADEPA. His was the first Bolivian government to rule without at least one faction of the tin barons. Villaroel’s Minister of Public Works and Communication was Col. Antonio Ponce Montan, who had undergone German military training and was a great admirer of the Third Reich155 . The new government was immediately recognized by Argentina, which itself would only declare war on Germany in March 1945156 . One adviser of the chancellery was Dr. German Quiroga Galdo, a former professor of International Law at the heavily fascist-influenced Escuela de Guerra in Cochabamba, who in January 1944 made a speech calling for Bolivian support to the Axis. The cabinet included four officers from RADEPA and three leaders of the MNR, Augusto Cespedes, Carlos Montenegro and Victor Paz Estenssoro. According to Klein157 , the “MNR backed Paz Estenssoro rather than the extreme fascist wing represented by Carlos Montenegro158 and Augusto Cespedes.” Cespedes, however, did become the General Secretary of the Junta del Gobierno, while Paz Estenssoro became Minister of Economics. Paz Estenssoro had apparently met with Peron the night before the coup in Buenos Aires159 , where he had spent the previous months160 . Paz placed “all the most rabidly anti-Semitic and fascist MNR members in the government.”161 The MNR broadsheet La Calle became the official newspaper of the regime. German residents of Bolivia worked with the new government, Bolivian students went to study in Germany, and Germans were incorporated into the Bolivian police force.162

The international situation, however, was quite different from the Toro-Busch years, and within weeks of taking power, the Villaroel government had been forced to recognize the inevitability of an Allied victory in the war and to seek a new relationship with the United States. The U.S. and eighteen other western hemisphere countries refused to recognize the Bolivian regime. In May 1944, Bolivia, then, formally declared war on the Axis, and expelled Germans and Japanese citizens from the country. The United States sent its ambassador, Avra Warren, to La Paz, where the Bolivian government handed over to him 81 Germans and Japanese considered to be “dangerous”. The U.S. also agreed to buy tin at above the world price to assure price stability163 .

The Stalinist PIR demanded an explanation for the presence of Nazi elements in the Villaroel government; the U.S. refusal to recognize the junta forced it to drop the more extreme MNR leaders and by July 1944 to completely remove MNR members altogether. Montenegro and Cespedes had left under this US pressure, with Montenegro becoming Bolivian ambassador to Mexico. Despite this departure of the main pro-Axis figures from the government, the RADEPA-MNR alliance lasted throughout the Villaroel period. In part in frustration at its ouster, the MNR intensified its turn to the labor movement.

Power was also taking its toll on RADEPA. Although Villaroel, increasingly in need of U.S. aid, had made efforts to purge his government of the ostentatiously pro-Axis members of the MNR, RADEPA (of which Villaroel was, it will be recalled, a member) was in the course of increasingly acting (apparently) on its own. It kidnapped Jewish tin baron Mauricio Hochschild and held him for several weeks; once released, Hochschild left the country, never to return. In July 1944, RADEPA was involved in the failed attempt on the life of PIR leader and vocal Villaroel opponent Jose Antonio Arze. Most serious, however, were the executions of ten anti-Villaroel politicians and military officers in Chuspipata in November 1944164 . These executions, attributed to RADEPA, set off a political crisis that brought the MNR back into the government.

Argentina, for its part, had maintained relations with Germany until January 1944, and many Argentina nationalists remained strongly opposed to the break when it came. The United States sent a warship to Montevideo as a warning against any Argentine attempt to aid Bolivia; Argentina at this time was trying to form a pro-Axis bloc in the Pan-American Union. To counter this trend, the U.S. in December 1944 sent Nelson Rockefeller, newly-appointed Assistant Secretary of State for Latin American Affairs, to negotiate with Juan Peron. In these negotiations, Peron agreed to crack down on Axis spies, property, and propaganda in Argentina; for its part, the US agreed to drop all economic sanctions and to sell Argentina military equipment.

20. Further Left-Corporatist Measures Under Villaroel

All these international realignments and reshufflings of the Bolivian government, however, hardly prevented ongoing ferment on the domestic social front. Strikes were rocking the countryside. Villaroel, to the extent possible, tried to relink with the “military socialism” of the Toro-Busch years. In keeping with those corporatist precedents, the Villaroel government accepted the organization of the a national miners’ union, the Federacion Sindical de Trabajadores Mineros (FSTMB), and decreed the abolition of the “ponguage”, the unpaid domestic labor for landowners that peasants were forced to perform. (This decree however remained a dead letter.) It announced plans for rural schools and began work on a rural labor code. In May 1945, it organized a national conference of indigenous peoples, attended by 1,500 delegates. The conference drew up 27 demands, most of which were ignored. The landlords paid no attention to Villaroel’s decrees, unleashing severe repression in the countryside, including attacks on schools and teachers.

The FSTMB became the biggest union in the country, under its leader Juan Lechin, who would be in the MNR government after 1952 and who was the key link, as shall be seen, between the MNR and the Bolivian Trotskyists165 . The founding congress took place in June 1944 and was backed by the MNR and Villaroel to counter the influence of the PIR in the labor movement166 .

In April 1945, Villaroel and his Economics Minister Paz Estenssoro ostensibly restored the Busch decree of 1939 on foreign exchange controls167 but its requirements on submitting income from foreign trade were not as extensive as the earlier decree. A month earlier, at the Chapultapec Conference in Mexico City, Paz had confronted the U.S. about its unfairly low payments for Bolivian tin.

The end of World War II did not ease the pressure on the Villaroel government168 . On Feb 24, 1946 Juan Peron was elected president of Argentina and took office in June. Peron’s honeymoon with the Argentine working class from 1945 to 1950 undoubtedly had an influence on the evolution of the MNR, whose top leaders (along with many refugees from RADEPA) would spend the 1946-1952 “sexenio rosquero” in exile in Buenos Aires. An MNR delegation did attend Peron’s inauguration. The significance of these links, such as they were169 was Peron’s attempt, well after the war, to organize a Latin American “third way” against both the U.S. and Soviet blocs, beginning with the major countries of southern South America. Nonetheless, along with the clear impact of the Mexican Revolution and its institutions on the MNR, Peronist corporatism was definitely another influence.

Some solution to the ferment of the working class was clearly needed; the March 1946 3rd congress of the FSTMB marked a “fundamental turn of the miners to the left.”170 The press of the Stalinist PIR press spoke darkly of the “fascistization” of the miners, and other critics talked of a possible “anarcho-syndicalist” deviation.

On July 14, 1946, however, Villaroel was overthrown in a popular revolt and lynched along with some of his aides in the Plaza Murillo in front of the parliament building in La Paz. The PIR had played a major role in the mobilization that preceded it, as well as the forces of the tin baron (Rosca) “superstate”. In subsequent revolutionary mythology, the murder of Villaroel would be converted into a major reactionary act and he would join the Bolivian revolutionary pantheon. Carlos Montenegro (in Mexico City at the time) in a posthumous work blamed the coup on “occult maneuvers” by the Rosca and lawyers for Standard Oil. The top leaders of the MNR and RAPEDA fled to Buenos Aires, and hundreds more members of both organizations were imprisoned. Thus the 1936-1946 period of alternating pro-Axis populist and pro-Anglo-American anti-worker regimes ended in six years of harsh repression and the swan song of the tin baron superstate, in which the MNR, from exile, would evolve into its mature form for the revolution of 1952.

21. Carlos Montenegro

Before entering into a discussion of the dark repression of the “sexenio rosquero”, the MNR in exile and finally of the 1952 revolution, it is important to analyze “the” book which defined MNR nationalism, by one of the key founders we have followed through this narrative, Carlos Montenegro (1903-1953). The book, published in 1953 as Montenegro was dying in exile, too sick with cancer to participate in the revolution, was Nacionalismo y coloniaje (Nationalism and the Colonial Period). In it, we can see the continuities and discontinuities of the MNR generation, relative to such earlier figures as Franz Tamayo.

We recall Montenegro’s key role in the post-Chaco nationalism of his generation, his collaboration on the important MNR broadsheet La Calle, his conspiratorial role in the coups of Toro (1936) and Villaroel (1943), his close relationship with German Busch, his imprisonment after the “Nazi coup”, his ministerial portfolio (Agriculture) in the first Villaroel cabinet, his reassignment as ambassador to Mexico under U.S. pressure, and finally his Argentine exile during the “sexenio rosquero”.

Nacionalismo y Coloniaje is one long polemic against the “anti-Bolivianist element of our historical culture”, a counterposition of the “foreign” elite and the “true” Bolivian masses, above all the mestizos. Quoting Oswald Spengler, Montenegro refers to the elite as “literate people who learned to read but not comprehend”171 . Montenegro argues that Bolivian history has been written by those imbued with a “complete lack of intelligence about the past…condemning it with the ideas, prejudices and customs of the present…(in this optic) the historical panoramic of Bolivia appears as nothing but a vision of horror.”172 Bolivian journalism as well, from its 19th-century origins, showed a “sudden and absorbing fever for foreign culture…an impassioned surrender to modern spiritual foreign colonization.”173 After 1879 and the loss of Bolivia’s entire Pacific coastline to Chile, “Bolivia was dispossessed of the very sense of itself”. Hilarion Daza, a military figure associated with the debacle, represented “blood foreign to the nation”; he fled to Parisian exile and became a symbol of “the spiritually foreign”, the personification of “the anti-Bolivian…the child of the colonialist spirit which the domination of the learned and the rich draws its inspiration.”174 By contrast, the most powerful personalities of our history…Jose Ballivian and de Linares, belong by their origins to the lower classes.”175

In his last writings in exile, Montenegro made an extended attempt to delineate the MNR from any taint of Marxism. He argued that Bolivia had had neither feudalism nor capitalism, but rather a comprador class in the service of world empire. Bolivia was therefore colonialism and the servitude of the indio. The Bolivian Revolution was thus “anti-colonial”, in the interests of all classes. The MNR was a mass party, expressing the alliance between classes. For the left parties, the contradiction was between bourgeoisie and proletariat, whereas for Montenegro it was between colony and nation.

Montenegro, like Tamayo before him, attracted comment and hostility from many quarters. The Trotskyist Guillermo Lora pointed to the xenophobic rhetoric of La Calle and its “indisputable Nazi derivation”176 ; for Lora, Montenegro denounced “all internationalism” with his “messianic nationalism” and “adulation of the lower classes”177 . Montenegro “tells us that ‘Bolivianidad’, as the force which modeled the independent state, resided and resides in the vast social stratum of mestizos…”. In 1952, for Lora, “the masses destroyed the feudal-bourgeois state apparatus which the MNR, proclaiming the general interests of the non-existent national bourgeoisie, hurried to reconstitute, as a state totally submissive to the imperialist metropole…It is this which exposes the conservative and not merely Spenglerian178 , subjective and reactionary criticisms of Montenegro’s perspective…(for Montenegro) “…’Bolivianidad’, ‘nationality’ and the anti-foreign are synonymous with nativism.”179

Juan Albarracin Millan, in his book Geopolitica Populismo (1982), argues that “Montenegro transposes this Spenglerism to the field of Bolivian history, through the dualism of nation- coloniaje, orienting that history in the direction of Indoamericanist populism, posing as the axis the Bolivian mestizo…Montenegro, a populist ideologue, underscores the untameable masses as the historical root of the nation, counterposed to the “chola” oligarchy.” In Albarracin’s view, “going from the racial to the social analysis was not easy; it was the hardest task of Bolivian sociology. The actions of people were seen by racism in accordance with color, bone structure, language, etc. Social analysis demanded an explanation of the place occupied by people within the social structure.” For Albarracin, the main characteristic of Nacionalismo y Coloniaje is “its undifferentiated use of race and class in the concept of the people. The mestizo and the Indian class move hand in hand into populism.”180 . “Montenegro calls his theory ‘Indoamericanism’, following Haya de la Torre and, moreover, Spengler. In the concept of the ‘people’ Montenegro telescopes his national thesis on race with the populist theory of the alliance of workers, peasants and the middle classes. This particularity of coupling race and people is the weak thread that Montenegro follows, at times toward racism and at other times toward populism…Montenegro is…the key figure of Bolivian sociological irrationalism…Montenegro’s key concepts are “Bolivianidad”, counterposed to all other types of nationality; the “antipatria”, or everything opposed to the untameable vision of the National Revolution; “genetic history”, or history as a concept of biological maturation through which a new culture emerges against the decadent West…”181

Coming from another angle, a later critic says of Nacionalismo y coloniaje: “In this rewriting of history, the actual anti-colonial content of Indian struggles was erased and replaced by a nationalist narrative…By the early 1940’s, indigenous struggle was treated as one more current leading to national independence… In the early 20th c. there was an uncanny silence about…the great insurrection and civil war that consumed the Andean highland in the late colonial period.”182

The ultimate political message of Montenegro’s work, then, is this alliance of all “national” classes against the “foreign” elite, ultimately the Rosca of the tin barons. In an essay published posthumously in 1954, he reiterates: “Thirty years of the diffusion of communist theories and fifteen years of similar activity by fascism-Falangism never aroused the slightest interest by the national majorities, whose pronouncement in favor of the MNR…underscores their conscious difference from the sham revolutionary ideals of European origin…Let us proclaim the struggle against oppression and foreign conquest and against its favorite instruments, the international finance companies, the secret groups, the venal middlemen and the armed mercenaries…”183

In short, the “advance” of Montenegro over Tamayo is the half-step out of the latter’s early 20th century German romantic race theory to a conflation of race and nation in a populist-nationalist multi-class ideology more suited to the modernization of the Bolivian state, which the MNR would undertake after 1952. The rhetorical excesses of La Calle or the frankly fascist echoes of Cuadros Quiroga’s 1942 MNR program are trimmed away, but the core, irreducible, anti-universalist “Bolivianess”, counterposed to everything “foreign”, (a counterposition which could have been borrowed wholesale from Fichte), remained to drown the Bolivian masses in the corporatist-statist project of the MNR in power.

21. The “Sexenio Rosquero”

In the immediate aftermath of the overthrow of Villaroel, the new right-wing government hunted down members of RADEPA and the MNR. Hundreds of members of both organizations were jailed and sometimes killed; thousands more were forced underground. The United States granted recognition to the new regime within weeks, and U.S. allies in the Americas followed suit. The MNR leaders—Paz Estenssoro, Cespedes, Montenegro—fled, as indicated, to exile in Peronist Argentina. (During those years of exile, Cespedes and Montenegro managed to work as journalists for La Prensa, a pro-Peronist newspaper.) They arrived in the midst of the “Blue Book” campaign of the U.S. embassy, led by the notorious (aforementioned) Spruille Braden, depicting Peron, Villaroel and the MNR as “Nazi”. Peron was in the midst of his honeymoon with the Argentine working class, and also conducting a vigorous foreign policy aimed at creating an anti-American bloc in southern South America. Events forced the MNR, both in exile and underground in Bolivia, more and more into an orientation toward labor.

It was a propitious time for such a turn since, despite intense repression, the 1946-1952 period saw no falloff of worker and peasant ferment in Bolivia, starting with a number of general strikes. Villaroel’s end had turned him into a martyr of the left, and workers went into the streets chanting his name184 , which they associated with the gains they had made under his government.

More important still was the Extraordinary Congress of the FSTMB in Pulacayo in November 1946, called in response to this rising ferment. The congress adopted the famous “Theses of Pulacayo”, henceforth (in Lora’s words) “the Bible” of the Bolivian workers’ movement. The Pulacayo Congress marked the clear ascendancy of Trotskyist influence in the movement, given the abject capitulation of the (Stalinist) PIR to the Rosca during the war and after. The FSTMB and the Trotskyist POR formed the “Proletarian United Front”, which subsequently managed to score electoral successes in the repressive atmosphere.

Because the Theses of Pulacayo became so influential in subsequent Bolivian working- class history, it is imperative to present them in some detail185 . They were partly drawn from the Trotskyist Transitional Program, calling for a sliding scale of wages and hours, workers’ control of the mines, armed pickets and armed worker cadres. “We must not,” the Theses continued, “make any bloc or compromise with the bourgeoisie” and then called for “a proletarian united front” in contrast to “the fronts which petty-bourgeois reformists are constantly proposing.” After calling for a “Miners’ Parliamentary Bloc” to transform the bourgeois parliament into a “revolutionary tribune”, to “unmask the maneuvers of the bourgeoisie from within the chambers themselves”, the Theses spelled out their perspective:

“’Worker’ ministers do not change the structure of bourgeois governments. So long as the state defends capitalist society, ‘worker’ ministers become pimps for the bourgeoisie. The worker who exchanges his post of struggle in the revolutionary ranks for a bourgeois cabinet portfolio goes over to the ranks of traitors. The bourgeoisie invents ‘worker’ ministers the better to deceive the workers…

The FSTMB will never join bourgeois governments, because that would mean the most open betrayal of the exploited masses, forgetting that our line is the revolutionary line of the class struggle.”

S. Sandor John writes: “Then, however, the Theses veer away from orthodox Trotskyism, pointing to the time, six years later, when the FSTMB would in fact support “worker ministers” in the first MNR government in 1952. While calling the working class “the revolutionary class par excellence”, it went on to say that the coming revolution as “bourgeois-democratic”, though led by the working class rather than “progressive” sectors of the bourgeoisie:

“…those who claim we propose an immediate socialist revolution in Bolivia are liars…since we know quite well that objective conditions for this do not exist.” For an international perspective, “the Theses declared solidarity with North American workers…the U.S. is a powder keg which a single spark can set off.”186

As Sandor John put it, concerning the confusion spread about a bourgeois revolution made by the working class, pointed to the “fateful contradiction, played out in the ensuing years” of “the role its authors played in entangling this combativity with illusions in the nationalist party.”187

The “sexenio rosquero” was, in spite of ongoing repression, hardly a time of social peace. It was, on the contrary, a period in which the now-clandestine MNR steadily gained ground as the voice of workers and peasants. Rural uprisings persisted throughout the year. In late January 1947, steel workers were massacred in Potosi by troops under the orders of a PIR Minister of Labor188 . Still embedded in their “anti-Nazi” alliance with the Rosca tin barons, PIR militants participated in the killing,; although the PIR claimed it was merely fighting against the MNR and the Trotskyist POR, the party’s reputation never recovered. By 1950, younger PIR cadre were leaving to found an actual Bolivian Communist Party, of negligeable importance in the ensuing years189 . This PIR-Rosca alliance, dating back to the beginning of World War II, was one major factor in Bolivian Trotskyism’s ability to win hegemony in the working class. During the same period, Juan Lechin, leader of the FSTMB (although himself having never been a worker) and like Tristan Marof a centrist capable of using Trotskyist language when necessary, emerged as a broker between the MNR and the POR, a reality which would take on great significance in enlisting workers and other militants behind the MNR after 1952.

Despite its determination to use repression and outright terror to maintain control, the Rosca government of Enrique Hertzog was nominally committed to democratic forms and had to stage regular elections. The POR-backed Frente Unico Proletario had some success in the 1947 elections, a harbinger of things to come. Repression followed in May 1948 at the XX Siglo Mine, and in June, at the 5th Congress of FSTMB in Telamayu, Lechin, who had made a secret deal with the government, showed truer colors and led the charge against the POR. In the radicalizing climate, even the Falange (FSB) had to adopt workerist language. In the May 1949 elections, the MNR elected eleven deputies. Mass demonstrations and mass repression followed. Large numbers of MNR supporters were again in prison. But under the pressure of increasing instability, Hertzog resigned the presidency, and was replaced by the aristocrat Mamerto Urriolagoitia. He had hardly assumed power when in August-September 1949 a mini-civil war of 20 days erupted between MNR supporters attempting a coup and the forces of the government, with the government gaining the upper hand by the aerial bombardment of some cities190 and afterward putting hundreds of MNR militants in a concentration camp on the Isla Conti in Lake Titicaca. Again in May 1950, the government responded to a general strike with the bombing and shelling of the La Paz working-class neighborhood of Villa Victoria.

The last act of the Rosca, however, was at hand. As a snapshot of the social reality underlying this chronic instability, it should be kept in mind that as of 1950, 0.7% of property owners in Bolivia had 49.6% of the land while people owning less than 1000 hectares were 93.7% of the population, with 8.1% of the land191 . 0.1% of the population controlled 68% of mining, 100% of the railroads, and 26% of finance capital.

The February 1951 elections opened the end game for the Rosca with a landslide victory for Paz Estenssoro (still in exile after five years192 ) and the MNR. There was of course no question of accepting these results, and three months later, in May, a military junta took over. A deadlock ensued that would only end with the April 1952 revolution. “Abandoning traditional fascism and economic orthodoxy,” wrote Klein, “the MNR moved to a totally revolutionary position”193 , meaning a no-holds barred commitment to the overthrow of the Rosca regime (though hardly revolutionary in the socialist sense)194 .

22. The 1952 Revolution and After

“…in the same way but at a different stage of development, Cromwell and the English people had borrowed for their bourgeois revolution the language, passions and illusions of the Old Testament. When the actual goal had been reached, when the bourgeois transformation of English society had been accomplished, Locke drove out Habbakuk.”
- Marx, The Eighteenth Brumaire

Thus did Marx describe the way in which fulsome ideological excess serves to midwife an ultimately banal result. One could say of the Bolivian MNR that by the time it succeeded in overthrowing the Rosca and pushing through its corporatist nationalizations and half-baked agrarian reform, massive U.S. aid drove out its earlier infatuations with Mussolini, Hitler and, on a different register, Peron.

The Bolivian Revolution of April 1952 began initially as another coup attempt by the MNR, similar to the failure of 1949. The coup had the tentative support of General Seleme of the Carabineros and of the Falange, but the latter backed out at the last moment. Even the much-reduced Bolivian Communist Party (attempting to demarcate itself from the debacle of the PIR) supported the MNR by 1951. Fighting lasted three days in La Paz; at first the government seemed to have the upper hand but the intervention of armed workers turned things around. The Bolivian army simply collapsed, and suddenly the MNR found itself in power on the basis of the armed Bolivian working class, which had hardly been its intention. Fortunately for the MNR, the ideology of the “national revolution” whose emergence we have followed throughout, as best articulated by Carlos Montenegro, dominated worker consciousness long enough to permit the re-establishment of a state apparatus and the requisite “special body of armed men”.195 In this endeavor, the MNR had no small help from the both the FSTMB and especially from the COB (Central Obrera Boliviana) and its leader Juan Lechin. Lechin had created this broader confederation in the heady first week of the revolution, and in its first years the COB was not merely a union grouping but in fact the organization of a broad swath of social groups, of which the miners of the FSTMB were the backbone196 . Coming up behind these mass organizations, but weighing significantly in the overall balance of forces despite its smaller numbers, was the Trotskyist POR of Guillermo Lora and Edwin Moller, which ended up providing a far-left cover for the establishment of the new state.

Paz Estenssoro and other top MNR leaders returned in triumph from their Buenos Aires exile, met by rejoicing throngs. These throngs had not caught up with the MNR’s refurbished rhetoric, however, and were chanting “Down with the Jews” at Paz’s first public appearance197 . Before leaving Argentina, Paz had also affirmed that the MNR was “completely anti-Communist”198 .

The four main reforms introduced on the momentum of the MNR’s early mass support were 1) nationalization of the mines of the three tin barons, but with full compensation amounting to $22 million 2) universal suffrage, decreed in July 1952 3) land reform and 4) abolition of the hated ponguaje and other quasi-feudal practices in the countryside. All this occurred within the framework of the revamping of the Bolivian state, with important corporatist overtones. It should be kept in mind that Peronism had just achieved its second electoral triumph in Argentina in November 1951, and that a Peronist- style government under Ibañez would be elected in Chile in November 1952199 . In this regional context, Peron’s ongoing attempt to create a South American “third way” would exert its pull on Bolivia under the MNR during the latter’s brief glory days200 . The MNR Revolutionary Committee in fact included Col. Sergio Sanchez, who became Minister of Labor and who was known as “Peroncito” or the “Bolivian Peron”. According to Beatriz Figoll201 , Argentina provided arms for the MNR uprising, though Paz Estenssoro was alienated by Peron’s tendency to use him to advance Argentina’s interests. (Peron also backed Ibanez, who had been a dictatorial president of Chile from 1927 to 1931, who had been close to Chile’s Nazi movement in the 1930’s, and who was supported by the small vestige of the Chilean Nazi party in the 1951 election.

To this end of rebuilding the state, the regime’s first move toward nationalization required tin exports to be processed by the state-controlled Banco Minero, with all foreign exchange earnings having to be converted by the Banco Central202 ; this was effectively the reinstatement of German Busch’s attempts at controls in 1939. The U.S., for its part, had controlled tin prices from 1945 to 1949, and stymied the International Tin Committee. The outbreak of the Korean War and insurgencies in then-British Malaysia and in Indonesia had run the tin price up to $2 per pound, strengthening the posture of the MNR. At the time of the revolution, tin miners were 3.2% of the work force, producing 25% of GNP, which in turn accounted for 95% of Bolivia’s foreign exchange income.

A larger context conditioning the new Bolivian regime’s relations with the hemispheric hegemon, the U.S., was the international atmosphere of crisis in the early years of the Cold War. In 1952, the U.S. was bogged down in the Korean War, the regime of Mossadegh in Iran was preparing to nationalize British oil assets there, and the Arbenz government in Guatemala was moving on U.S.-owned United Fruit. (The Arbenz regime was the first country to grant recognition to the MNR government.) With many fires to put out, the U.S. could ill afford another open counter-insurgency in the developing world. Instead, building on the ties established with Bolivia going back to 1942203 and the orchestrated outcry over the Catavi massacre, followed by commissions of enquiry, aid, and agreements on the tin price, the U.S. opted for entrapping Bolivia and its immense natural resources204 with aid aimed, not surprisingly, at strengthening the most pliable elements in the MNR. The MNR, for its part, jumped into this trap with both feet and by the late 1950’s Bolivia was receiving more U.S. aid per capita than any other country in the world. After Dwight Eisenhower’s 1952 election as president, his brother Milton Eisenhower visited Bolivia on a fact-finding mission, and in Washington, the Bolivian ambassador Victor Andrade (who had served earlier under Villaroel) convinced the Eisenhowers that the Bolivian nationalizations had nothing to do with communism (as was in fact the case).

There was of course great pressure in the working class for nationalization (without compensation) and after five months of deliberations by a commission devoted to the issue, this took place in October 1952, with compensation of $22 million. It affected only the large mines, and left small and medium-size mines in private hands. The nationalization also involved a corporatist type of “workers’ control”, but (in contrast to e.g. the workers’ councils and soviets of the German and Russian revolutions after 1917) in collaboration with the managers of the COMIBOL (Corporacion Minera de Bolivia). As Dunkerley put it, “a key component of the revolution was in the process of being managerialized.”205 The COMIBOL was effectively a holding company; it had 30,000 employees with ownership of most mineral production, as well as medical centers and railroads. Decrees in April and June 1952 required the COMIBOL to rehire workers laid off during the “sexenio rosquero”.

As Labor Action commented at the time:

“The nationalization of the mines has been decreed, but not according to the program and wishes of the majority of the workers. The nationalization bill provides for indemnity to the proprietors if they pay all taxes and back debts to the government. Of course, the question is purely theoretical, since the government has no money, and hence will not pay The Central Obrera had demanded workers’ administration, administration of the mines by workers’ committees elected by general meetings of all workers, and a national committee to be elected by all mine committees. But the government, while accepting the principle of workers’ control formally, has passed a bill which creates a Corporation Minera Boliviana as a great state mining trust in the place of the three private capitalist corporations. In the new trust the representatives of the workers are in a minority, and are to be nominated by the government.

In this bureaucratic form, workers’ control has been transformed into control over the workers.”206

The tin barons of the Rosca were down but not out, and from exile they conducted a massive propaganda campaign designed to present the MNR and its nationalizations as “communist”. Patiño, Hochschild and Aramayo, who had long been shifting assets abroad, hired the New York public relations firm Nathanson Brothers to convince the U.S. government, Congress and the “public” of this, ultimately in vain. The Rosca’s propaganda machine put out disinformation on the danger to foreign technicians and their families, and quoted such technicians to the effect that nationalization would ruin the mines207 . The Rosca hired U.S. Senator Millard Tydings of Maryland to trumpet their cause in Congress; Tydings threatened to stop the U.S. purchase of Bolivian tin, but he died shortly thereafter. The U.S. State Department issued calls for full compensation. The Rosca campaign was countered by the services of Gardner Jackson, a politically moderate worker-intellectual whose activities in the U.S. labor movement dated from the Sacco-Vanzetti campaign of 1927. (In fact, most sympathy in the U.S. for the MNR came initially from the labor movement.)

Further complicating matters for the MNR was the fall of world tin prices from $1.21 to $0.70 per pound as the Korean War wound down in 1953, costing Bolivian $20 million in income in that year, and bringing the Bolivian state to the verge of bankruptcy; nationalization had in effect saved the mines from such a fate. In the same year direct U.S. aid to the regime began, and the Chinese Revolution was causing the world price of tungsten and wolfram to rise.

The nationalized mines faced multiple problems quite apart from the international campaign of the Rosca and the fall of tin prices. Friction arose between engineers and workers in the management of the mines, and labor leaders and military officers filled the vacuum. The COMIBOL in fact became a refuge for retired military officers and retired second-rate politicians. In addition to these managerial and porkbarrel complications, the long-term trends in production worked against tin; in 1927, just before total tin exports had peaked in 1929, tin made up 74.2% of Bolivia’s exports, whereas by 1956 that percentage had fallen to 56.5%. The slack was taken up to some extent by increases in exports of lead, tungsten, zinc and oil.208 But the tin barons had responded to the depression and to the threats of the “military socialism” of Toro and Busch, and later to Villaroel, with a general policy of disinvestment, so that the mining equipment nationalized in 1952 was quite out of date. (During the Busch years, the tin barons had lowered production to 19,000 tons annually on the pretext that reserves were being exhausted.) In light of this, the MNR’s nationalization parallels e.g. Britain’s nationalization in the same period of mines, steel, and railroads that were no longer profitable. Decrees in April and June 1952 required the COMIBOL to rehire workers laid off during the “sexenio rosquero”. The industries controlled by the COMIBOL had had 24,000 employees in 1951, and by 1956 had 36,000. Further ties to Western imperialism, in addition to U.S. aid, U.S. trade unions, and the various reports and commissions of inquiry were developed when in 1953 the COMIBOL signed a contract with the British tin smelter William Harvey Company. The working population as a whole paid for the losing proposition of the COMIBOL through taxation, and U.S. aid pressured the COMIBOL to return to orthodox management.

The agrarian reform undertaken by the MNR had some of the same ambiguities as the nationalization of the large mines. It was undertaken sixteen months after the revolution in response to land takeovers by armed peasants. It included, as indicated, the abolition of the quasi-feudal pongueaje. The leadership of the popular umbrella organization, the COB, for its part vacillated (SJ p. 143) between protesting the repression of the peasants and peasants and denouncing “provocation” by peasants influenced by the POR209 . According to Sandor John, the POR was actually lukewarm toward peasant mobilizations, arguing that peasants only wanted individual plots of lands for themselves. As Sandor John put it, the POR policy “resembled what Stalin told Chinese Communists in 1925-27: curb peasants’ land seizures because they threaten the party’s bloc with the nationalist Guomingtang.” The reference to China is apt, since the Chinese Communist Party’s “bloc of four classes” in the 1949-1953 period (workers, peasants, industrial capitalists and the progressive middle class) was a frequent reference of the MNR leaders. Shortly after the revolution, Paz Estenssoro had appointed MNR leader Hernan Siles Zuazo to head a commission on agrarian reform. The commission reflected a general lack of expertise on such matters. Further, it was dominated by members of the reduced (Stalinist) PIR wedded to their stagist idea of a bourgeois-democratic revolution, (above all PIR agrarian expert Arturo Urquidi Morales) , even further to the right and more cautious than the MNR’s own perspective of a “national revolution”. In keeping with the corporatist reality already manifest in nationalized industry, in agriculture as well the revolution had created a “new national and organic image of the State as a basic structure for transformation, representation, integration and development.”210 . Paz Estenssoro had carefully studied the Mexican agrarian reform under Cardenas but, the PIR influence on the commission was oriented to maintaining “an important nuclei of traditional latifundist power through the euphemism “small and medium-size properties”211 which were to be preserved. Peasants themselves mobilized in western Bolivia from January to August 1953, placing increasing pressure on the commission, but the latter continued to support the “microfundia”, tying peasants to those plots. The decree on agrarian reform came at the beginning of August 1953. In the view of Bedregal, the commission supported a “semi-democratic agrarian reform of the landowners” and of the “progressive hacendados”, leaving the latifundias with some power. The agrarian reform had to accept a modus vivendi “leaving an ample sector of growers and cattle owners to define what the law meant: ‘land to those who work it’212 . Urquidi, for his part, saw the reform transforming the latifundists into “progressive agriculturists”, better equipped than the indigenous population to advance the rural economy. The reform “did not resolve the key question of the historical survival of latifundist and microfundist factors which, over the long term, would become the most serious problem of Bolivian backwardness, by which the agrarian counter-reform could put down roots and derail the capitalist development which was the immediate objective of the national revolution.”213 Protected by this thrust of the reform were the latifundias of the Beni and Pando provinces (in the latter there were 3000 properties of 2000 hectares or more).

23. The Role of the Trotskyist POR

Following these brief sketches of the MNR nationalizations and agrarian reform, it is imperative to analyze, in conclusion, the dynamic of class forces in which these changes acquired their concrete meaning. In contrast to the other cases of Latin American corporatism in more developed economies, as discussed earlier, the “national revolution” of the MNR could not base itself, at least initially, on a modernizing military and state already in place, since the army, the “special body of armed men” quite simply disintegrated in April 1952, leaving the MNR precariously atop the armed militias of the Bolivian working class which it had to contain and, initially, to appease. Coming right behind the working class were the indigenous rural masses, largely trapped in pre-capitalist immiseration with quasi-feudal overtones, who went into motion at the beginning of 1953. Confronting these forces and trying to ride them, the MNR was drawn from “intellectual sectors of the Bolivian elite and upwardly mobile members of the middle class”214 . Out of this array of forces, the MNR leadership had set itself the task of revamping the Bolivian state it had taken away from the Rosca to “complete the bourgeois revolution”, using Bolivia’s rich endowment of resources and a reformed agriculture to build a viable capitalist nation-state that could hopefully at last escape from the “colonial” status which MNR nationalist theoreticians such as Carlos Montenegro ascribed to it.

The MNR that seized power in 1952 had evolved from its origins around the anti-Semitic broadsheet La Calle, via the Toro-Busch “military socialism” mixing clear German and Italian fascist influences with corporatist elements drawn from the Mexican Revolution, by way of the Nazi imprint on its founding program of 1942, to the force recognized by the U.S. State Department in 1950 as the sole real alternative to “communism” in Bolivia.

The MNR did not have to deal with “communism” in the form of a mass pro-Soviet party, because that party, the PIR, had totally discredited itself by its services rendered since 1940 to the Rosca’s “democracy”. Thus the sole ideological and practical force of any consequence to its left was the Trotskyist POR. Bolivia was, along with Vietnam and Ceylon (now Sri Lanka) one of the few countries in the world in which Trotskyism, and not Stalinism or Social Democracy, became for a time the mass current in the working class.

Undoubtedly the key figure in all but wedding the POR to the “left wing” of the MNR was Juan Lechin, the presumed “Lenin” to Paz Estenssoro’s “Kerensky”. As Dunkerley put it, “a disparity between words and deeds that was to be a consistent feature of the COB leader’s erratic career.”215 Lechin, a member of the MNR, had been politically educated by Guillermo Lora. Lechin was the restraining link to the Bolivian working class that the MNR desperately needed in 1952. Sandor John is succinct:

“While presenting their own viewpoint in articles and manifestos, Bolivian Trotskyists216 were becoming a radical appendage to lechinismo in the labor movement, while Lechin guarded the MNR’s left flank…” (quoting Lora): ‘Everything (the POR did in this period) led objectively to the numerical, but not political (sic) strengthening of the MNR’.217 Paz Estenssoro made constant attacks on Trotskyism, while he set about co-opting leaders and bureaucratizing structures. Ultimately more a pressure group than an independent party, the POR, in flat contradiction to the Theses of Pulacayo, supported not only Lechin but also other “worker ministers”. In May 1952, Guillermo Lora declared these “worker ministers” a conquest of the labor movement as “textile workers decided to impose their conditions on the right wing of the MNR”.218

Here is how the Latin American correspondent of U.S.-based Labor Action analyzed the role of the POR at the end of 1952:

“On the other hand, the government ushered the Trotskyist ‘leaders’ into very profitable positions in the official machinery, such as the Agrarian Commission, the Stabilization Office, the Workers’ Security Administration, etc. The PORista theoretician, Alaya Mercada, is a member of the Agrarian Commission with a salary of 70,000 pesos, which is 100 per cent higher than a minister’s salary. Another “theoretician” of the POR, Lora, a collaborator of Lechin’s, is now a member of the President’s Stabilization Office. The Secretary of the POR, Moller, is director of the Workers’ Savings Bank [Caja de Seguro y Ahorro Obrera].

Many other POR militants have also gotten good posts in the official government machine. In this way the Nationalist government has liquidated the ‘Communist’ and ‘Trotskyist’ danger in Bolivia, and now the whole Bolivian ‘left’ is collaborating with the regime, with the claim that it is thus ‘saving the revolution’ from capitalist restoration.

Parallel to all this, the government party is absorbing leading elements from the left, especially from the POR. Two former general secretaries of the POR, Edwin Moller and Jorge Salazar, and the POR theoretician Ernesto Ayala Mercada, as well as Lechin’s ex-secretary Josa Zogada, have entered the MNR officially. Thus a part of the POR staff has capitulated to the MNR, as we predicted long ago. Ideological capitulation preceded the personal and organizational capitulation. The right turn of the MNR is complemented by the capitulation and disintegration of the ‘Left.’”219

Along the same lines, Sandor John writes: “Complete control of the state by the left wing of the MNR” became a leitmotiv of the (POR’s) propaganda.”220 The 9th Congress of the POR in Sept 52 supported the MNR’s “progressive measures” and the left wing of the MNR. In early 1953, the party sent a message to the MNR’s national convention saying that “to fulfill its historic mission…” the convention “should be the scene of reaction’s defeat”. If the left wing wins and the MNR acquires a “proletarian physiognomy”, the Congress declared the POR would even consider fusion. At times of crisis, such as the attempted (and failed) coups by the Falange and the Rosca in June 1953, the POR called on left-wing ministers to take control. When Paz Estenssoro responded to the coup attempts with anti-business rhetoric, the POR newspaper Lucha Obrera headlined “Radicalization of Paz Estenssoro”. ‘THE PRESIDENT, REVISING ALL OF HIS PAST POLITICAL STANCE, POINTED OUT ANTI-CAPITALIST OBJECTIVES FOR THE REVOLUTION, NOT JUST ANTI-IMPERIALIST AND ANTI-FEUDAL ONES.” “All this struggle must center on the slogan ‘Total control of the state by the left wing of the MNR.’” “The people who join ministries as workers’ representatives will not be doing so simply as personal collaboration by particular leaders…(but on the basis of the) “program especially approved by the COB”.221 In early 1954, the POR supported a member of the MNR Left during the MNR’s internal elections to its La Paz Departmental Command.

For all the POR’s efforts on its behalf, the Paz government in 1954 increased repression against the Trotskyists, including large-scale arrests of POR workers and peasants, blacklists, and a crackdown on Lucha Obrera222 .

In sum, the Bolivian POR was by rough analogy rather like the Spanish POUM (Partido Obrero de Unificacion Marxista) during the Spanish Revolution and Civil War, which was widely denounced as “Trotskyist”, but which was in fact a centrist political formation supporting (and participating in) the bourgeois Republican government. In Spain, the real Trotskyists were expelled from the POUM and with a handful of others formed the “Bolshevik Leninist” group.223

During these first years after the revolution, the U.S. was more and more successfully pulling Bolivia into the fold. Aside from the crucial question of access to Bolivia’s natural resources, U.S. aid was also prompted by the propaganda value of appearing to support a non-Communist version of reform. Paz Estenssoro on May 1953 had proclaimed his intention to open diplomatic relations with newly-Communist Czechoslovakia, but under the impact of U.S. aid in the following months, the initiative was dropped. By fall 1953 the U.S. was providing millions of dollars worth of surplus food, as well as funds for technical assistance and road construction. Because they were no longer profitable, the nationalization of the mines had ultimately revealed Bolivia’s dependency on outside help. By 1954, the Bolivian government was backing the U.S.’s anti-communist measures at the Inter-American Conference in Caracas. Accelerating inflation, which reached 179% in 1956, and other economic disruptions brought a stabilization team headed by U.S. corporate executive George Eder, which proposed more opening to market forces and a dismantling of the public sector. The Eder stabilization plan was adopted in December 1956, with the scrapping of the multiple exchange rates left over from the earlier currency controls; the Bolivian currency was allowed to fluctuate with international supply and demand just as tin prices were contracting in the 1957 world recession224 . The momentum of the revolution of 1952 was long since broken, and the Bolivian working class and peasantry were left to endure ensuing decades of coups, counter-coups, hyperinflation, and a quasi narco-state, much of it under a refurbished military and the U.S. “national security” doctrine worked up, once again, from interwar fascist sources.

Conclusion: The Inability of the Left to Distinguish Between Corporatism and Socialism

The MNR revolution in Bolivia and the little-remembered ideological sources from which it developed provide an unusually clear example of the myopia of much of the self-styled left, both on the scene and internationally. Taking the example of the currents of Trotskyism, particularly the Mandel-Pablo variety dominant in the Fourth International at the time, we see evolving a methodology repeated again and again whereby different variants of the far-left set themselves up as the cheering section and often minor adjuncts to “progressive” movements and governments in fact quite alien to their ostensible goal of socialist revolution, movements and governments strictly committed to a restructuring (or creation) of a nation-state adequate to the present realities of world capitalism. This methodology involves imagining (as has been shown in the relationship of the POR with the MNR) a healthy “left” wing of a bourgeois or nationalist or “progressive” or Third World “anti-imperialist” movement that can be “pushed to the left” by “critical support”, opening the way for socialist revolution (there is nothing specifically “Trotskyist” about this; cf. appendix below). This methodology has been employed again and again, from Bolivia under the MNR to Algeria under the FLN to Mitterand’s France to the Iranian mullahs after 1979. The far-left groups in question see themselves in the role of Lenin’s Bolsheviks to Kerensky’s Provisional Government, when in fact their role is to enlist some of the more radical elements in supporting or tolerating an alien project which sooner or later co-opts or, even worst, represses and sometimes annihilates them.

In the case of Bolivia, the multi-class nationalism epitomized by MNR intellectual Carlos Montenegro, with its problematic of the “nation” versus the “foreign”, combined in practice with the corporatist models attempted by 1936- 1940 “military socialism” and the 1943-1946 Villaroel regime, and influenced to different degrees by Mussolini’s Italy, the Primo de Rivera dictatorship in Spain, Nazi Germany, Vargas’s Brazil, Peron’s Argentina and the Mexico of Cardenas. Though the standing bourgeois army in Bolivia (in contrast to these other experiences) simply dissolved and had to be rebuilt (as it quickly was), theoretical disarmament set the stage for the practical disarmament of the worker militias. The statist backing of the FSTMB and later of the COB, the creation of the COMIBOL to administer the nationalized mines, and state-sponsored agrarian reform gave Bolivia its variant of the 20th-century adaptation to the post-1929 world conjuncture, in which the old liberal ideologies and party organizations no longer sufficed.

Appendix: Trotskyism, Permanent Revolution and the Case of Bolivia

I felt the preceding text was complex and tortuous enough so I did not wish to burden it with excessive theoretical baggage. I have used the term “Trotskyist” throughout in a neutral way to refer to those who designated themselves as such. The blur of unfamiliar names and events is difficult enough for the unapprised reader, and indeed for some more apprised, without adding on what might seem like a detour into the labyrinth of mutually hostile self-proclaimed Trotskyist currents that existed even before the assassination of Trotsky in 1940, not to mention after. Yet in this case, the question of Trotskyism cannot be avoided because, as indicated, Bolivia was one of the few countries in the world where Trotskyism became the mass movement, as opposed to a small group (or sect) on the fringes of the mass movement. Hence its actions, particularly as they involved the POR and prominent POR leaders such as Guillermo Lora, are highly relevant to our story. In fact, as the comments of Sandor John and of the correspondent of Labor Action have already indicated, the Bolivian POR, at the high point of its influence from 1946 into the early 1950’s, had a rather tenuous relationship (at best) to “orthodox Trotskyism”.

My own distance from Trotskyism, orthodox or otherwise, is not the issue here225 . So many people have been exposed to Trotskyism as a blur of warring sects of no apparent historical weight that the attempt to distill a “true Trotskyism” might seem as futile as an attempt to distill a “true Christianity”.

In the case of Bolivia, however, the self-styled Trotskyists of the POR were not a “warring sect” but a significant party with a mass working-class base. What is most relevant for purposes of the Bolivian Revolution and the relationship of the POR to the MNR is Trotsky’s theory of permanent revolution, and the related theory of combined and uneven development.

That theory, stated most bluntly, held that any bourgeois revolution in a semi-developed or underdeveloped country must necessarily unleash forces beyond itself (most notably the working class) and “cross over” into a proletarian revolution, which can be successful in the medium to long term only if it successfully links up with a proletarian revolution in the capitalist heartland. Such was the strategy of the Bolshevik Revolution in its early (1917-1921) phase, predicated as it was on the urgent necessity of revolution in Germany at the very least.

The Trotsky-Parvus recovery of the mootings of permanent revolution in the pre- and post-1848 writings of Marx and Engels, and their use of that theory to understand, through the explosion of 1904-1905, that the coming revolution in Russia would be a working-class and not a bourgeois revolution, was a fundamental contribution to revolutionary theory in the 20th century. One does not have to be a “Trotskyist” to recognize this. (At the time of this formulation, it should be recalled, Trotsky was highly skeptical of Lenin’s Bolshevik conception of the vanguard party.226 )

The theory of permanent revolution is adumbrated by Marx and Engels in some of their writings of the 1840’s and on the revolution of 1848. From their earliest period, by way of their assessments of the failed revolutions of 1848, Marx and Engels portrayed the German bourgeoisie, in contrast to the English or the French, as having come historically “too late”:

“If one were to proceed from the status quo itself in Germany, even in the only appropriate way, that is, negatively, the result would still be an anachronism. Even the negation of our political present is already a dusty fact in the historical lumber room of modern nations. If I negate powered wigs, I am still left with unpowdered wigs. If I negate German conditions of 1843, I am hardly, according to French chronology, in the year 1789 and still less in the focus of the present. …We have in fact shared in the restoration of modern nations without sharing in their revolutions. We have been restored, first because other nations dared to make revolutions, and secondly because other nations suffered counter-revolutions…Led by our shepherds, we found ourselves in the company of freedom only once, on the day of its burial.”227

Engels, in his 1851 book Revolution and Counter-Revolution in Germany, diagnosing the timidity and impotence of the German liberal bourgeoisie in 1848, made this more concrete:

“The Revolution of February upset, in France, the very same sort of Government which the Prussian bourgeoisie were going to set up in their own country. The Revolution of February announced itself as a revolution of the working classes against the middle classes; it proclaimed the downfall of middle-class government and the emancipation of the workingman. Now the Prussian bourgeoisie had, of late, had quite enough of working-class agitation in their own country. After the first terror of the Silesian riots had passed away, they had even tried to give this agitation a turn in their own favor; but they always had retained a salutary horror of revolutionary Socialism and Communism; and, therefore, when they saw men at the head of the Government in Paris whom they considered as the most dangerous enemies of property, order, religion, family, and of the other Penates of the modern bourgeois, they at once experienced a considerable cooling down of their own revolutionary ardor. They knew that the moment must be seized, and that, without the aid of the working masses, they would be defeated; and yet their courage failed them. Thus they sided with the Government in the first partial and provincial outbreaks, tried to keep the people quiet in Berlin, who, during five days, met in crowds before the royal palace to discuss the news and ask for changes in the Government; and when at last, after the news of the downfall of Metternich, the King made some slight concessions, the bourgeoisie considered the Revolution as completed, and went to thank His Majesty for having fulfilled all the wishes of his people. But then followed the attack of the military on the crowd, the barricades, the struggle, and the defeat of royalty. Then everything was changed: the very working classes, which it had been the tendency of the bourgeoisie to keep in the background, had been pushed forward, had fought and conquered, and all at once were conscious of their strength. Restrictions of suffrage, of the liberty of the press, of the right to sit on juries, of the right of meeting-restrictions that would have been very agreeable to the bourgeoisie because they would have touched upon such classes only as were beneath them—now were no longer possible. The danger of a repetition of the Parisian scenes of “anarchy” was imminent. Before this danger all former differences disappeared. Against the victorious workingman, although he had not yet uttered any specific demands for himself, the friends and the foes of many years united, and the alliance between the bourgeoisie and the supporters of the over-turned system was concluded upon the very barricades of Berlin. The necessary concessions, but no more than was unavoidable, were to be made, a ministry of the opposition leaders of the United Diet was to be formed, and in return for its services in saving the Crown, it was to have the support of all the props of the old Government, the feudal aristocracy, the bureaucracy, the army.”228

Thus Marx and Engels, before, during and after the “springtime of peoples” of 1848, already saw the dynamic by which the struggle for the bourgeois revolution necessarily opened the way for the independent emergence of the working class, “even before (the working man) had uttered any specific demands for himself”. This “crossover” process between the bourgeois and proletarian revolutions was the kernel of what was later elaborated by Trotsky and his collaborator Parvus in 1904-1905 in the mature theory of “permanent revolution”.

Permanent revolution was intimately linked, for Trotsky, with the theory of combined and uneven development. This theory was a direct rejection of the linear- “stageist” view of history widely held in the parties of the Second International, in which every country had to pass through, first, the bourgeois revolution and then arriving at the socialist revolution. It was based on the perfectly reasonable insight, strengthened by the history of capitalism, that each individual country does not (indeed cannot) recapitulate all the “stages” undergone by other countries. Trotsky saw his theory confirmed already in 1905 with the vacillations of the timid liberal bourgeoisie in its feeble battles with Tsarism, all too aware of the workers, in contrast to Germany, already articulating demands of their own. Even at the beginning of 1917, Lenin still shared this stageist view. Trotsky and Parvus, on the other hand, linked up with the Marx-Engels germ of the theory of the “crossover” between the two revolutions, based on seeing individual capitalist countries as part of one single international system, in which developing countries tapping into the cutting edge of world technological innovation not only could but were compelled to “leap” over stages passed through by others. Thus on the eve of its 1905 and 1917 revolutions, Russia had some of the largest and most modern factories in the world, surrounded by a much larger sea of backward agriculture.

“The law of combined development reveals itself most indubitably, however, in the history and character of Russian industry. Arising late, Russian industry did not repeat the development of advanced countries, but inserted itself into this development, adapting their latest achievements to their own backwardness. Just as the economic evolution of Russia as a whole skipped over the epoch of craft guilds and manufacture, so also the separate branches of industry made a series of special leaps over technical productive stages that had been measured in the West by decades…The social character of the Russian bourgeoisie and its political physiognomy were determined by the condition of origin and structure of Russian industry. The extreme concentration of this industry alone meant that between the capitalist leaders and the popular masses there was no hierarchy of transitional layers…Such are the elementary and irremovable causes of the political isolation of the Russian bourgeoisie. Whereas in the dawn of its history it was too unripe to accomplish a Reformation, when the time came for leading a revolution it was overripe.”229

The triumph of Stalinism by 1924 was, among other things, a full restoration of the linear, Second International stage theory, having among its first fruits in the catastrophic Comintern policy of allying with Chiang kai-shek’s Nationalist movement in China in the years 1925-1927.

Whatever the problems of Trotsky himself, Trotskyism after his assassination was mainly an affair of mediocrities, of the Barneses and Cannons and Pablos and Mandels. Trotsky had predicted that the coming Second World War would be followed by world revolution similar to the aftermath of World War I; he also believed that the Stalinist regime in Russia would be swept away in the process. Instead, his followers in 1945 and thereafter found themselves confronted with a giant step forward in Stalinist power in Eastern Europe, China, Korea and Indochina, a giant step in which the working class had played no role. Western Trotskyists such as Mandel were egging on the “reformist” Stalinists in such places as Czechoslovakia and Yugoslavia, while the NKVD and their local counterparts were tracking down and assassinating their own Trotskyist comrades.

Probably the worst case was that of Michel Pablo, who by 1950 had concluded that the world was entering centuries of Stalinist hegemony, and called on Trotskyists to engage in “deep entry” into the Stalinist parties, like Christians in the catacombs. Pablo’s adaptation to current events was blown sky high only a few years later with the 1953 uprising of workers in East Berlin and in 1956 with workers’ movements that shook Stalinism to its foundations in the Polish Autumn and the Hungarian Revolution. But the damage maturing since 1940 had been done, and a methodology of adaptation to Stalinist expansionism as well as various Third World “national liberation fronts” and progressive regimes had been set down for decades. The list is long, from the adaptation of most230 Trotskyists (with their “revolutionary opposition” buried in fine print in footnotes) to such sundry movements and regimes as the Algerian FLN, the Vietnamese NLF231 , Castro’s Cuba, Allende’s Chile, the Iranian mullahs, the Nicaraguan Sandinistas, and Polish Solidarnosc.

And to the Bolivian MNR.

At the time of the April 1952 revolution, the most significant Bolivian Trotskyist, Guillermo Lora, was in Paris conferring with the leaders of the Fourth International, who were by then firmly in the camp of Pablo and who apparently did not impress him. Lora did not join the Pablo faction, and those in Bolivia who did so did not join the MNR government. Nevertheless the relationship between the POR and the MNR we have documented in the main text speaks for itself.

The theory of permanent revolution dictated for Bolivia, as for all other underdeveloped countries, the impossibility of a stable bourgeois democratic regime and the necessary “crossover” of the bourgeois into the proletarian revolution. Bolivia was of course not Russia in 1917, and, in contrast to Russia, did not possess some of the largest and most modern factories in the world. It certainly shared with Russia a vast majority of the population working in backward, mainly pre-capitalist agriculture. Fundamental agrarian reform was and is the sine qua non for any true bourgeois revolution. Instead, as we have seen, the Bolivia land reform of 1953 was compromised by preservation of the holdings of the “progressive hacendados” and sizeable micro- and latifundia lands which later became the base of a conservative peasantry.

Similarly, the “nationalization of decline” by the COMIBOL, with full compensation to the three tin barons, burdened the revolution from the beginning with the dead weight of the past.

Between these two halfway measures, and the accommodation with the United States, the runaway inflation of 1955-1956 was hardly a surprise.

Let us then pose the question point-blank: would a different, “truly Trotskyist” policy of the POR in 1951-1953 have resulted in a proletarian revolution in Bolivia? When one considers that in April 1952 the “nationalist revolution” of the MNR had the overwhelming support of the armed working class, the peasantry and the urban middle class; that 85% of the members of the POR ultimately entered the MNR in those years; and when a figure of the stature of Guillermo Lora decided not to enter only at the last moment, the question seems moot. The real question is why the national revolutionary ideology and organization was so popular, to the point that it was even attractive to the great majority of POR members. The Trotskyist view, with its belief that the “crisis of leadership” is paramount in such situations, makes the question of the presence or absence of the revolutionary party the deux ex machina of such crises, when the real historical question is what conditions make possible or mitigate against the existence of such a party in the first place.

In 1952, the Cold War was at its peak and a resulting World War III seemed a real possibility. Developments in Guatemala, Iran, China, Korea and the struggle of the two blocs to influence de-colonization in Asia and Africa were so many flashpoints. In such a conjuncture, surely a proletarian revolution in Bolivia could have had ripples far beyond a poor, remote, landlocked country of three million people. (We bracket for a moment the question of the possibility of a working-class revolution in the capitalist heartland, a necessary counterpart to the theory of permanent revolution, when in fact the working class everywhere in Europe and the U.S. had been contained or defeated by 1952; recall, to the credit of the POR, the declaration of solidarity (cited earlier) with North American workers.”232 ) Bolivia’s ability to command the attention of the United States, for reasons we have described in detail, when there were so many other, seemingly larger fires to put out, already attests to its explosive potential. Nevertheless, such calculations surely weighed on the thoughts of Bolivia’s workers as well, and they made their decisions accordingly. To “blame” the POR for “betraying” the Bolivian Revolution is to fall into the idealist trap of saying “they had the wrong ideas” instead of explaining why they had the ideas they did.

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Bieber, Leon. Presencia judia en Bolivia. La ola immigratoria de 1938-1940. (2010)

Braden, Spruille. Diplomats and Demagogues (1971)..

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Domich, Marcos. Ideologia y Mito. Los Origines del Fascismo Boliviano. 1979.

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Zanata, L. and Aguas, M. “Auge y declinacion de la tercera posicion. Bolivia, Peron y la Guerra fria, 1943-1954” in Desarrollo Economico, vol. 45, No. 177 (Apr.-Jun. 2005)

• 1These articles appear in three parts in Historical Materialism, beginning with No. 16, 2008. They are followed by more recent updates on the situation in Bolivia, available on line above all http://www.isreview.org/issues/73/feat-bolivia.shtml As good as these articles are on Morales’ and the MAS’s domestic agenda since 2005, I of course reject Webber’s situating of the Morales government in a “counter-hegemonic bloc” led by Cuba and Venezuela, with the implication that such a bloc is “progressive” and “anti-imperialist”.
• 2“Pachakuti” is a term taken from the Quechua “pacha”, meaning time and space or the world, and “kuti”, meaning upheaval or revolution.
• 3One strange sub-text of the anti-Eurocentric posture, which I encountered two or three times in person and also in books, is the recourse to quantum physics to buttress this perspective. Bell’s Theorem posits the possibility of one atomic particle being in two places at the same time, across galaxies, and nonetheless in communication. This is supposed to be a scientific grounding of the parakuti synthesis, as elaborated for example in the ex-Trotskyist Filemon Escobar’s 2008 book De la revolucion al Pachakuti: El aprendrizaje del Respeto Reciproco entre blancos y indios. Escobar at least comes to his “revolution of the coca leaf” from more than 40 years of worker militancy, but an even more elaborate counterposition of this indigenist synthesis to a vulgar Marxist straw man is by an academic, Blithz Lozada, Cosmovision, historia y politica en los Andes (2nd ed. 2008). Escobar and Lozada both see Marx as expressing a world view not qualitatively different from that of Newton and Descartes.
• 4 Long unavailable in English, except for a translation published in Ceylon in the late 1950’s, there is an excerpt from Luxemburg’s 1912 Einführung in die politische Ökonomie in P. Hudis/K. Anderson eds. The Rosa Luxemburg Reader (2004).
• 5 An account of Jeffrey Sachs’s 1985 “shock therapy” in Bolivia, under the very same Victor Paz Estenssoro who figures in the following narrative of the 1940’s and 1950’s, is in Naomi Klein. The Shock Doctrine (2007), Ch. 7.
• 6 This continuity with the past, following the dispersion of the Trotskyist-oriented Bolivian miners after 1985, is recounted in S. Sandor John’s Bolivia’s Radical Tradition. Permanent Revolution in the Andes (2009).
• 7 Published by the problematic South End Press, 2004.
• 8 See Olivera’s statement at http://mywordismyweapon.blogspot.com/2010/08/oscar-olivera-opposition-in-times-of.html
• 9 For a good overview of this Bolivian exception, cf. S. Sandor John, op. cit. A hilarious episode took place when a Soviet delegation came to Bolivia in the 1960’s to deliver some technology to one of the big state mines. The staid and suited bureaucrats were greeting by a mass of workers holding up pictures of Lenin and Trotsky, and at the end of the ceremonial speeches held up four fingers (the Fourth International) and the bureaucrats responded with three fingers, for the Third. Things were capped off by a reporter from Life magazine writing that the Bolivian workers were so backward they didn’t even know that Trotsky had fallen from power 40 years earlier, thereby revealing his own profound ignorance.
• 10Cf. the role of Ziya Gökalp (1875-1924), who imbibed the Prussian nationalist Treitschke through Emile Durkheim and who was effectively the ideologue of Kemalist Turkey, influential long after his death, in my “’Socialism in One Country’ Before Stalin, and the Origins of Reactionary ‘Anti-Imperialism’: The Case of Turkey, 1917-1925, available at http://home.earthlink.net/~lrgoldner/turkey.html
• 11Cf. on identity politics, the essays in Vanguard of Retrogression: Post-Modern Fictions in the Era of Fictitious Capital (200l), also available on the Break Their Haughty Power web site http://home.earthlink.net/~lrgoldner; on Bordiga and the Russian commune, the article “Communism is the Material Human Community: Amadeo Bordiga Today” on the same site; and finally the 2010 book of Kevin Anderson Marx at the Margins, reviewed in issue no. 2 of Insurgent Notes at http://insurgentnotes.com; cf. also Franklin Rosemont, “Karl Marx and the Iroquois” at http://libcom.org/library/karl-marx-iroquois-franklin-rosemont
• 12Cf. James Petras/Henry Veltmeyer. Social Movements and State Power. Argentina, Brazil, Bolivia, Ecuador (2005).
• 13On Jünger’s and Heidegger’s post-1945 transformation of the elitist, “hard” Conservative Revolution of the 1920’s into preoccupation with myth (Jünger) and “poetizing thought” (Heidegger), still replete with distance from and condescension toward concrete social reality and the masses of ordinary people, cf. Daniel Morat. Von der Tat zur Gelassenheit. Konservatives Denken bei Martin Heidegger, Ernst Jünger and F.J. Jünger 1920-1960 (2007). This shift involved a “turn to a proto-ecological thought critical of technology…Ecological thought, since the 1970’s, found its political home on the left, even if in this political repositioning many of the traditional anti-modern aspects drawn from Kulturkritik were hidden from the ecology movement…In this philosophically exaggerated avoidance of guilt motivated by collective peer group biography, the intellectual contributions of Heidegger and the Jünger brothers amounted to the quiet rehabilitation of the German “Tätergesellschaft” (in effect, the legacy of the 1920’s Conservative Revolution-LG).
• 14The abbreviation ‘MNR’ will be used throughout.
• 15The reactionary anti-imperialist and populist movements in interwar (1919-1939) Latin America had their parallel in the “Third World” status of parts of central and eastern Europe in the same period. The first theoretician to use the concepts of “core” and “periphery” was the complex but ultimately proto-fascist German sociologist Werner Sombart. For a remarkable account of the migration of these concepts, first to Rumanian corporatism and its theoretician Mihail Manoilescu, and from there to Latin America in the 1950’s and 1960’s work of Fernando Enrique Cardoso and Celso Furtado, see Joseph L. Love, Crafting the Third World: theorizing underdevelopment in Rumenia and Brazil (1996). Love’s book lacks only an account of the further migration of these ideas to the Western left through the “dependency school” and such outlets as Monthly Review Press and its international resonance.
• 16James Dunkerley, Origines del poder miltar. Bolivia 1879-1935 (3rd ed. 2006) p. 102.
• 17Unlike in the Pacific War with Chile and the Chaco War with Paraguay, Bolivia ceded territory to Brazil not from military defeat but simply because it lacked the resources to develop it.
• 18Cf. Leon Bieber. Las relaciones economicas de Bolivia en Alemania, 1880-1920. (1987) on these general trends.
• 19By the time of the systemic crisis of the 1930’s, tin baron Simon Patiño was one of the wealthiest men in the world. Cf. L. Peñaloza Cordero. Nueva Historia Economia de Bolivia. Vol. 7. 1987. Cf. pp. 129-155 for the holdings of the Patiño empire alone.
• 20Brazil, Argentina, Chile, Paraguay, and Bolivia all experienced significant German immigration by 1914.
• 21Cf. the reprint of Creacion… in Franz Tamayo, Obra escogida (Caracas, 1979) When Spanish-language sources are cited, all English translations are mine.
• 22Tamayo is celebrated in the pamphlet of Nestor Taboada Terán, Franz Tamayo: Profeta de la Rebelion, a work which makes virtually no mention of Tamayo’s sometimes reactionary politics.
• 23Bovaryism was a late 19th century concept taken from Flaubert’s novel, referring to a dreamy, ultimately impotent relation to reality.
• 24Charles Andrade, Historiografia colonial y moderna de Bolivia (2008), p. 81.
• 25From Creacion, quoted in the extended commentary in Abraham Valdez, La Nacion Boliviana y Franz Tamayo (1996), p. 45.
• 26Ibid. pp. 47-48. The identity theorists might also bridle at seeing their anti-universalism expressed in such an unabashed association of Prussian militarism and Social Darwinism.
• 27Ibid. p. 73. The racism of Bolivian society was such that, until the eve of the MNR revolution in 1952, the indigenous population was expected to stay off of main streets and out of sight. Kenneth Lehman, Bolivia and the United States (1999), p. 101.
• 28El pensamiento filosofica de Tamayo y el irrationalismo aleman. pp. 78-85.
• 29Andrade, op. cit. p. 92.
• 30In the view of V. Abecia Lopez, Montenegro (1997), p. 57 “Cespedes, as a writer, journalist and politician, was the most representative intellectual of the National Revolution by his literary, political and historical works.” For more on Montenegro, cf. below.
• 31V. Abecia Lopez, Montenegro, 1997, p. 63.
• 32Guillermo Lora, Obras completas, vol. XIX, 1997, p. 66.
• 33In Bolivia, “indigenismo” refers to attempts to deal socially, economically and practically with the situation of the indigenous majority; “indianismo” is more of a literary “appreciation” of the indigenous, written from the “outside”.
• 34F. Reinaga. Franz Tamayo y la Revolucion boliviana. 1970.
• 35Reinaga, p. 111.
• 36Ibid. p. 162.
• 37M. Baptisa Gumocio, Yo fui el orgullo: Vida y pensamiento de Franz Tamayo (La Paz, 1978). Pp. 328-329.
• 38Charles W. Andrade, Historiografia Colonial y Moderna de Bolivia (2nd ed. La Paz 2008). P. 3.
• 39Marcos Dumich. Ideologia y Mito. Los Origines del Fascismo Boliviano. 1979.
• 40Ibid. p. 38.
• 41Ibid. p. 61.
• 42Arguedes later pronounced eulogies for the German regime and received the Rome Prize from Mussolini.
• 43Ibid. pp. 69
• 44ibid. “Pachamama”, or Mother Earth, became one of the by-words of the current Morales regime in Bolivia.
• 45A full elaboration of this transition cannot concern us here. Cf. my “Remaking of the American Working Class: Restructuring of Global Capital, Recomposition of Class Terrain, available at http://home.earthlink.net/~lrgoldner/remaking.html. The title notwithstanding, the text offers a world perspective on the transition.
• 46Braden tells his story of business deals and bullying diplomacy in a memoir, Diplomats and Demagogues (1971). Whereas he seemed like an earlier version of John Bolton of the Bush (Jr.) era, the U.S. was attempting in the interwar period, with its “Good Neighbor Policy”, to overcome some of the excesses of the earlier gunboat diplomacy with which Braden seemed more comfortable.
• 47Not only did Bolivia pledge its customs receipts as income for the loan, but accepted surveillance by a three-member fiscal commission, two members of which were chosen b U.S. banks. Cf. Kenneth D. Lehman, op. cit. , p. 66.
• 48A detailed chronology of the Bolivian workers’ movement throughout this period is in Guillermo Lora, Obras completas, vols. XIX, XX and XXI (La Paz, 1994). Lora (1922-2009) was perhaps the dominant figure on the Bolivian radical left over subsequent decades, being a miner, a leader of the Bolivian Trotskyist movement, and a prolific writers (his complete works come to 67 volumes).
• 49A full portrait of Marof (the pseudonym of Gustavo Navarro) is in Lora, XX, pp. 277-301. His 1934 book La tragedia del altiplano launched what became a key slogan over the next two decades: “Mines to the state, land to the Indian”.
• 50Eduardo Arze Cuadros, in Bolivia. El Programa del MNR y la Revolucion Nacional (2002) dates the ideological origins of the MNR from the program adopted at this 1928 congress. It highlighted “selective immigration”, the emancipation of the Indian, the “moralization of the lower mestizo”, progressive socialization, nationalization of the mines and oil, and land to the Indians. It went on to call for a “complete regulation of labor and credit”, the latter aimed at avoiding exploitation by bank capital, progressive statification, a reduction of the military budget, the separation of church and state, lay education, the abolition of the monasteries, and finally “war on war”. We shall see below how important elements of this program later mixed with fascist elements during “military socialism” (1936-1940) and the Villaroel period (1943-1946).
• 51In the view of James Dunkerley, op. cit. p. 175, this radical ferment was unprecedented in Bolivian history.
• 52One thorough study of Mariategui’s ambiguous involvement with Sorel (and Mussolini) is Hugo Garcia Salvattecci, George Sorel y J.C. Mariátegui (1979).
• 53From yet another viewpoint, Roberto Prudencio, who began as a nationalist and indigenist and wound up as a founder of the Bolivian Falange and had been an early admirer of German fascism, said that “Mariategui and Tamayo were the fathers of the new America.” (Andrade, p. 119) The Stalinist intellectual and leader Jose Antonio Arce accused Tamayo of being a traitor to his own writings because, since 1917, he had typified “one of the most reactionary hatreds of feudal ideology.” (ibid. pp. 138-139). Ultimately, according to Andrade, “many writers who followed Tamayo were passionate leftists or fanatic nationalists’ (ibid. p. 155).
• 54ibid. p. 77. In M. Grindle pp. 130-131 “The Andrean socialist tradition of Marof…was the overriding tendency that could imagine a past and a future at least partially in terms of Indian community struggle and political autonomy. Yet this was a marginal tradition on the left by mid-century, and the national revolution, with the peasantizing project and corporatist unionism, would make it difficult for any such tendency to grow.
• 55Dunkerley (op. cit. p. 193) points out that the 1930 turnover in Bolivia cannot be compared to the simultaneous developments in the more modern and developed countries of Latin American, above all Argentina and Chile; be that as it may, it was part of the regional collapse of 19th-century elite arrangements in differing contexts.
• 56 At the time of the 1930 revolution, only 2% of Bolivia’s population of two million were eligible to vote.
• 57In this text the term “Trotskyist” will be used throughout for those who designated themselves as such; cf. the brief appendix attempting to explain what Trotskyism means.
• 58Lora, Obras Completas, 1994, vol. XX, p. 255.
• 59Herbert Klein, A Concise History of Bolivia (2003 ed.), Ch. 7. In 1932, Standard Oil of New Jersey had purchased a new petroleum concession in southeastern Bolivia, , but oil could not be exported because Argentina and Paraguay refused transit rights. It was widely believed in Bolivia that US and British corporations were supporting Paraguay through Argentina, and that both Standard Oil and Royal Dutch Shell were behind Chaco War. The Bolivian mining elite was definitely pro-war. Wealthy Argentine and foreign investors had lucrative stakes in the dispute. The US, Brazil and Argentina all opposed intervention by the League of Nations, and the Argentine press was the first to suggest that Standard Oil was to blame. The Wall Street representative Spruille Braden, who had previously negotiated highly favorable deals for Standard Oil, strongly opposed Bolivian interests at the Chaco peace conference. On the other hand, Dunkerley (op. cit. p. 216 footnotes) thinks that neither Standard Oil and nor Royal Dutch Shell were backing either side in the conflict. The Louisiana populist Huey Long, on the other hand, denounced their role in the U.S. Senate. In October 1935, the Bolivian government did take action against Standard Oil over an illegal pipeline to Argentina.
• 60Lora, op. cit. p. 257. Perhaps just as important as this ferment in the cities, the Tupac Amaru group was formed, expressing the “20th c. indigenista agrarian radical ideology of Indo-American left….Considered in 1932 “the ravings of an extremist and ineffectual minority of embittered and exiled intellectuals (it) would have profound impact on the postwar world.” (Herbert Klein, Political Parties, p. 144. )
• 61In 1935, the estimated population of Bolivia was made up of 1.6 million indios, 850,000 mestizos, 400,000 whites, 6000 blacks, and 300,000 unidentified. In Latin America, there were one million German speakers, of whom 180,000 were Reichsdeutsche.
• 62Nazi Germany apparently built about 1,400 schools throughout Latin America. According to Mariano Baptista Gumucio, (in his book Jose Cuadros Quiroga, 2000, p. 10). the German colegios in La Paz and Oruro were “active focos for the diffusion of Nazi ideology. Luis Ramiro Beltham remembers as a child in Oruro being in military parades with Hitler portraits.” A Bolivian, Federico Nielsen Reyes, was the Spanish translator of Hitler’s book Mein Kampf, and the far-right militant Roberto Hinojosa, who would be the Chief of Information in the Villaroel government after 1943, wrote the sole Spanish-language biography of Hitler.
• 63For an overview of the war, cf. http://worldatwar.net/chandelle/v1/v1n3/chaco.html
• 64Ferran Gallego, op. cit. p 82. There had been 80 million bolivianos in circulation at the end of 1932, and there were 388 million in circulation at the end of 1935.
• 65 Gustavo Maia Gomes, The Roots of State Intervention in the Brazilian Economy (1986), p. 155, pp. 152-153.
• 66Ibid. 154, 160.
• 67Ibid. p. 161.
• 68Arnaldo Cordova, La Politica de Masas del cardenismo (1974), pp. 48-49.
• 69 Ronaldo Munck, with Ricardo Falcon and Bernardo Galitelli. Argentina from Anarchism to Peronism. Workers, Unions and Politics, 1855-1985, p. 129, p. 132.
• 70In January 1938, under the German Busch government, Humberto Vasquez Rodrigues called for the organization of the legions “in a totalitarian form”. The reader will hopefully indulge the proliferation of party names and initials, and above all note their slight relationship to the real politics of various ephemeral groups.
• 71 Hereafter referred to as the POR. One key founder of the party, the brilliant revolutionary intellectual Jose Aguirre Gainsborg, in October 1938 died in an absurd self-inflicted accident, falling off a ferris wheel after undoing the safety bar in act of bravado. An extensive portrait of Aguirre Gainsborg, “one of the great revolutionary figures of the postwar period”, is in Lora, XXI, pp. 103-124. (Here “postwar” means post-Chaco war.)
• 72 And then some: by 1950, at the height of anti-MNR terror shortly before the revolution, Marof was the personal secretary of the reactionary, repressive President Urriologoitia.
• 73 Klein, Political Parties, p. 205. Klein describes a “fascination with corporatism” at the time.
• 74 Through the late 1930’s and into the war years, the Italian OVRA (secret police) had a military mission in Bolivia, at the Escuela de Guerra in Cochabamba.
• 75 This was of course a South American phenomenon, hardly restricted to Bolivia. In 1935, there were one million German speakers on the continent, and 180,000 Reichsdeutsche. This ten-year battle for influence between pro-fascist and pro-Anglo-American (later Allied) forces is told in detail in Leon E. Bieber, Pugna por influencia y Hegemonia. La rivalidad-estadounidense en Bolivia 1936-1946. Frankfurt am Main, 2004.
• 76 In the context of world depression, and a vast state management of the domestic economy, Schacht created a multi-tiered system of different types of Reichsmarks for international purposes. These different types of marks were paid to trading partners and could only be used in purchasing German goods, and only certain specified goods; moreover, their value could be administratively manipulated, to the detriment of Germany’s trading partners. In December 1934, Schacht created the so-called ASKI accounts (Spezial-Ausländer Sonderkonto fuer Inlandszahlungen, ASKI) as a commercial clearing mechanism. There were high hopes for using ASKI-marks for purchases from Bolivia, but in reality very little trade was financed in this way.
• 77 Klein, Parties, p. 227.
• 78 For a portrait of the Italian original, cf. David D. Roberts, The Syndicalist Tradition and Italian Fascism (1979). In the classic of Gaetano Salvemini, Under the Axe of Fascism (1936), corporatism under Mussolini was characterized as little more than a sham and spectacle thinly covering iron regimentation of workers.
• 79 According to H. Klein (Parties, p. 188) Montenegro and Augusto Cespedes, both future MNR ideologues, most clearly articulated the “national socialist” ideology. During the years of “military socialism”, German business also expanded in commerce and commercial aviation, and German instructors in the army made programmatic headway with the fascist-inclined junior officers.
• 80“The SP was more worried about the presence of ‘demagogues’ in the worker federations than by the latter’s depoliticization.” Ferran Gallego, p. 117.
• 81Bieber, op. cit. p. 49: “Toro wanted to implement state socialism using the left-wing parties.”
• 82Cf. Herbert Klein, Concise History, p. 188.
• 83Augusto Hochschild (1881-1965), one of the three major tin barons and a Jew, was the prime target of La Calle anti-Semitism and of Bolivian popular anti-Semitism generally during the rise of the MNR. Bieber (op. cit. p. 154) finds some evidence of German funding of La Calle.
• 84M. Baptista Gumucio, José Cuadros Quiroga : inventor del Movimiento Nacionalista Revolucionario 1. ed. La Paz , 2002 p. 119.
• 85Jerry Knudson, Bolivia. Press and Revolution. 1986 p. 81. According to Knudson, (p. 130), Quiroga wrote most of the anti-Semitic articles.
• 86Op. cit. p. 130.
• 87Such a rabble-rousing paper was bound to invite strong reactions. Zavaleto Mercado called the MNR “a whole gamut of poor relatives of the oligarchy who no longer believed in the oligarchy” (quoted in Abecia Lopez, p. 199) The Marxist Liborio Justo said the founding of the MNR was the “desperate expression of the national petty bourgeoisie”. “Paz in particular was known as an admirer of Nazism and an assiduous vistor to the German legation”. L. Zanatta/M. Aguas. “Auge y declinacion de la tercera positcion. Bolivia, Peron y la Guerra Fria, 1943-1954” in Desarrollo Economico, Vol. 45, No. 177. Apr-June 2005.
• 88Abecia Lopez, p. 201.
• 89 S. Sandor John, op. cit. 2009. P. 59.
• 90Ferran Gallego, p. 117.
• 91Klein, Concise, p. 188.
• 92Klein, Parties, p. 245-246
• 93Lora, Obras Completas, vol. XXI, p. 357. Also Ferran Gallego, p. 116.
• 94Belmonte, according to Bieber (op. cit. p. 126) actually stayed in Germany until 1951, studying “geopolitics” there after the war. By his own account, he had graduated from the Colegio Miltar in 1923 and was a pilot during the Chaco War. From 1938 to 1945 he served as the Bolivian military attaché to Germany. After his return to Bolivia, he was a Professor of Geopolitics under the Ballavian government. Belmonte Pabon tells his story in the book RADEPA. Sombras y Refulgiencias del Pasado (1994).
• 95Another authoritarian nationalist group active in Bolivia in the late 1930’s was the Associacion Mariscal Santa Cruz. According to Irma Lorini,
• 96 Ferran Gallego, op. cit. p. 115.
• 97G. Lora, op. cit. vol XXI, pp. 52-53. Lora writes: “The ANPOS…had some influence in the worker organizations. Its stated goal was to coordinate and orient the actions of the worker minister, but in reality it tended to set itself up as the supreme command over the unions and even of the left-wing forces. Some Marxists were sure they could convert the Ministry of Labor into their own citadel, from which they would be able to mold the masses and decide the fate of the government’s policies. (in addition to well-known leaders) second and third-tier leftists practically invaded the Ministry of Labor, which at the time was operating in the National Senate. Leftist leaders fell into complacency from being able to meet weekly in the hall of the high chamber…At the beginning, they were all united in the hope of being able to transform society from above, almost painlessly, thanks to the backing which the military had handed over to men so capable of theorizing about the advantages of socialism.”
• 98Ibid. p. 55-56.
• 99Ferran Gallego, op. cit. p. 115.
• 100Ibid. p. 119.
• 101 Lora, op. cit. . p. 50.
• 102 Ibid. p. 51.
• 103 Ibid. p. 54.
• 104 Mauricio Hochschild, once again, was the Jewish tin baron in the “big three” of “La Rosca” and a major target of the populist anti-Semitism promoted by La Calle and the far right. His holdings are detailed in Peñaloza Cordero, Ch. VII.
• 105 Klein, Parties, p. 259.
• 106 By the 1950’s, state corporations in Bolivia would account for half of GDP.
• 107 In further developments on the far right, the Bolivian Socialist Falange (Falange Socialista Boliviana, or FSB) was founded, on the model of its Spanish counterpart, among student exiles in Chile. Pro-Catholic and nationalist, it was based on conservative and privileged high school students, especially from Cochabamba and the eastern part of the country, it remained a fringe group throughout. In 1952, it considered participating in the MNR revolt, but backed out at the last moment. After the MNR revolution, the tin barons turned to the FSB as the only viable party capable of advancing their interests. The Falange later evolved in a more Christian Democratic direction.
• 108 Agustino Barcelli, in a 1955 book (Medio siglo de lucha sindical revolucionaria), argued for the influence of the Carta di Lavoro and German Arbeitsfront on the Toro government. (Quoted in Bieber op. cit. p. 57-58) However, Nazi experts in the German embassy in La Paz apparently did not think the Toro-Busch government was very different from the previous one.
• 109 Klein, Parties, p. 276.
• 110 Op. cit. p. 305.
• 111 Op. cit. p. 191. Lehman (op. cit. p. 72) sees the 1938 constitution as specifically based on the 1917 Mexican charter.
• 112 The indigenous educational experiment in Warisata became known through the hemisphere.
• 113 Klein, Parties, p. 278.
• 114 Lora, op. cit. vol. XXI, p. 250. John L. Lewis of the American United Mine Workers was present at the 1938 conference. By 1946, the CTAL was following U.S. State Department politics.
• 115 In November 1942, Lombardo Toledano actually visited La Paz, sponsored by the Stalinists of the PIR and and by the CSTB. The CTALwas seen as serving imperialism and La Rosca because of the Stalinist line.
• 116 Bieber, op. cit. p. 72.
• 117 The full story is told in Leon E. Bieber, Presencia judia en Bolivia (2010).
• 118 Guillermo Lora (vol. XX, p. 357) elaborates: “The Busch Labor Code of 1939, originally promulgated in the form of a decree and turned into law in December 1942, was a synthesis of most of the measures taken earlier, plus some new additions. The Code required firms employing more than 500 or more people (i.e. the most important mining companies and a few other firms) to provide hospitalization and free medical care, and to maintain hospitals. It similarly reiterated the requirements already established, specifying the construction of free housing in all mining camps employing more than 200 workers and located more than six miles from the nearest village. It established, in a general way, an 8-hour day and a 48-hour week; exceptional cases aside, it limited the working day for women and for minors under 18 years of age to 7-hour days and a 40-hour week, and established a maximum of five hours for uninterrupted work.
• 119 Lora, vol. XXI, pp. 69ff.
• 120 Lora, XXI, p. 101.
• 121 Bieber, op. cit. pp. 70-71.
• 122 ASKI-Marks [Ausländer-Sonderkonten für Inlandszahlung]) were special non-convertible marks which Nazi Germany paid for foreign goods, and which could only be redeemed by purchasing certain German goods, often unavailable. Their value could further be manipulated administratively and retroactively, leaving the foreign holder to take the loss.
• 123 Op. cit. p. 71.
• 124 The standard joke in the late 1930’s, in countries having a trade surplus with Germany and finding themselves holding large stocks of aspirin and these special classes of non-convertible marks was that Germany created the headache and then provided the remedy.
• 125 The German delegation to Bolivia at this point had 70 personnel, of whom only thirteen were declared.
• 126 Lora, XXI, p. 97.
• 127 Lora, XXI, p. 89. “The provisional government of Gen. Carlos Quintanella, following the mysterious death of President Busch, had the task of dismantling the Decree of June 7 and the suspension of its effects, pending another decree at the end of 1939….The considerations of the Decree of Pres. Quintanilla, which dissolved the bold measure of Busch with right-wing reaction, were that the European war required the dictation of “emergency dispositions” which would permit the country to receive “the maximum benefit as a producer of raw materials”. In addition to changing the amount of foreign exchange that the mining companies were required to hand over to the Central Bank, the law watered down other aspects of the Busch decree to their advantage.
• 128 Germany had invested in airlines throughout Latin America. In April 1941, the U.S. helped Peru to expropriate the Lufthansa line operating there, and in the course of the war the US took over most Latin American air routes.
• 129 The “Rosca”, once again, was the popular term for the tin baron superstate.
• 130 Author’s note: I feel that the detailed exposition of the developments of 1936-1946 is imperative because the Anglo-American propaganda machine during these years repeatedly issued a flood of material portraying the MNR as “Nazi”, and were joined in this by the (Stalinist) PIR and the tin baron press in Bolivia itself. In this period, prior to Cold War anti-communism, any Latin American opposition to Anglo-American interests was “Nazi”, confirming George Orwell’s remark that “a fascist is someone I don’t like.” Since, at the same time, I do feel that the RADEPA and La Calle groups were in fact deeply marked by European fascism, while recognizing the “left corporatist” character of some social measures of the Toro-Busch, Villaroel and early MNR years, I feel it essential to sort out the differing strands which were crudely lumped together by the MNR’s imperialist and domestic enemies.
• 131 A full portrait of Arze is in Lora, XXI, pp. 125-133.
• 132 Indeed, along with Vietnam and Ceylon in the 1930’s and 1940’s, Bolivia was the sole country in the world where the Trotskyists and not the Stalinists dominated the working class in that period
• 133Lora (XX, pp. 300-301) has this to say about these configurations: “There are no real reasons to doubt that the caudillos of “nationalism” had had contacts with the German embassy…but their campaign against the government of Peñaranda expressed a popular sentiment and channeled the radicalization of the masses. The errors of the presumed Marxists (both of the PIR and of Marof) directly contributed to the strengthening of the MNR and they were the ones who practically paved its way to power.”
• 134 Ostria Gutierrez went into exile in Chile after the ouster of Peñaranda in 1943, and wrote a polemical (and somewhat tendentious) book, Una revolucion tras las Andes (1944), giving his version of events. Ostria Gutierrez pointed to (pp. 120-121), in his view, striking parallels between the founding program of the MNR and the program of the German Nazis (cf. below).
• 135 Klein, Concise History, p. 197.
• 136 Again, in parallel to the kind of organization from above associated with Cardenas, as described previously.
• 137 In 1972, the American political scientist Cole Blasier proved the letter was a British forgery; cf. Bieber op. cit. p. 126.
• 138 In January 1942, Peñaranda admitted that secret compensation payments to Standard Oil had begun in 1937.
• 139 At the Rio conference, after Bolivia had reached a formal settlement with the U.S. for the Standard Oil expropriation, loans from the U.S. Export-Import (ExIm) Bank quickly followed. Lehman, op. cit. p. 78.
• 140 G. Bedregal, Victor Paz Estenssoro, el Politico (1999). p. 134.
• 141 W.Q. Morales, Brief History of Bolivia, 2003, p. 117.
• 142 Abecia Lopez, p. 195-196. Abecia Lopez refers to the “fascism” of Cuadros Quiroga, p. 197
• 143 M. Baptista Gumucio, p. 8. His book provides further details on the author of the founding document of the MNR. “Hochschild claimed to be to the ‘socialist’ government what (tin baron) Patiño had been to the traditional parties: the master.” (p. 180) “We all saw how the Jewish parvenus contributed to the affirmation of the democratic faith’ (p. 191). Ours was the “struggle against socialism, the instrument of international finance” (p. 193). Liberal ideas penetrated Bolivia through the Masonic international, a dissolving internationalism “with a dose of the Judaism which was cropping up everywhere” (p. 195). “We can’t construct our identity as a Nation while tied to the universalist ideology which is just being born in our country (p. 196).
• 144 Printed in full in G. Bedregal, op. cit. p. 99.
• 145 In 1983, Walter Guevara Arze, an MNR intellectual and later author of a book Bases para replantear la revolucion nacional (1988), on Bolivian national television called the 1942 document a “creole version of Hitler’s Mein Kampf”.
• 146 Op. cit. p. 105.
• 147 Bedregal, op. cit. p. 72.
• 148 Eduardo Arze Cuadros, op. cit.
• 149 ibid. p. 78.
• 150 On the Catavi massacre, cf. Lora, XXI, Ch. V; also S. Sandor John, op. cit. , pp. 80-83.
• 151 They would not merge into the AFL-CIO until 1955. According to M. Grindle, p. 101, the US labor movement in the years leading up to the 1952 MNR revolution played a major role in explaining Bolivian politics in the U.S. (The AFL and CIO ultimately sent $5000 to the families of those killed.)
• 152 Lora, XXI, p. 284. Not only aid was mooted; Watt called for a “mandate of 25 years” to revamp the Bolivian economy. Lehman, op. cit. p. 79.
• 153 Lehman, op. cit. p. 79.
• 154 L. Rout and J. Bratzel, in their book The Shadow War (1986), p. 380, claim that “the U.S. was able to…verify that SD agents and Argentine army officers had conspired with Bolivian nationalists in the overthrow of Peñaranda.” Lora (XXI, pp. 349-354) also argues that the coup leaders were pro-Axis. Lora’s portrait of Villaroel is on XXI, pp. 355-357. For his part. U.S. Secretary of State Cordell Hull in January 1944 described the MNR as “Nazi” and attempted to link the MNR to Peron.
• 155 After the MNR revolution in 1952, he joined the Bolivian Falange. The Falange had participated in the coup, at least in Cochabamba. Elias Belmonte, a founder of RADEPA and a tenacious opponent of the MNR, was a Falange deputy in Parliament.
• 156 The populist APRA of Haya de la Torre in Peru split on the question of Nazis in the Bolivian government
• 157 Klein, Parties, p. 201.
• 158 Montenegro, who became Minister of Agriculture, was deeply involved in the coup. According to Abecia Lopez (op. cit. p. 215) he had told the U.S. embassy that he was being paid by Germany, but would change sides if paid enough.
• 159 Joseph Page, Peron (1983), p. 58.
• 160 On Paz Estenssoro’s relations with the Argentine regime in this period. cf. Beatriz Figallo, “Bolivia y la Argentina: los conflictos regionales durante la Segunda Guerra Mundial” in Estudios Interdisciplinarios de América Latina y el Caribe, vol. 7/1. Paz was honored in Buenos Aires in July 1943. Figallo claims that prior to 1943, Paz Estenssoro was distinguished by his cult of Nazism and his frequent visits to the German legation in La Paz. According to Lora (XXI, p. 251) the Confedacion de Trabajo de America (CTLA), under the influence of the Stalinists and Lombardo Toledano, saw a conspiratorial link between Argentine coup of June 1943 and the Villaroel coup of December.
• 161 Klein, Parties, p. 372.
• 162 Other fascist organizations, in addition to the Falange, that were active in Bolivia in these years were the Accion Nacionalista Boliviana, Estrella de Hierro and the CEHGA (Centro de Estudios Historicos Geograficos Andinos).
• 163 A series of negotiations between the Villaroel government and the U.S. ensued over the prices of raw materials, and especially of tin. According to Villaroel’s ambassador to the U.S. Victor Andrade, Bolivia asked for an increase in the tin price specifically for workers’ wages, following the scandalous conditions in the mines revealed to international opinion after the Catavi massacre. Cf. V. Andrade, My Mission for Revolutionary Bolivia, 1944-1962 (1976), p. 31. The U.S. did agree to raise the tin price from $0.62 per pound to $0.635. Throughout the war, Bolivia sold rubber to the U.S. for $2 per pound, when Argentina was offering $5.
• 164 V. Andrade op. cit. (p. 49) wrote: “For the Welles, the Bradens and other U.S. officials of their ilk, the shooting of ten civilians shook the foundations of civilization” (in contrast to their tolerance of the Catavi massacre of late 1942). Andrade was, for his part, a member of the far-right group Estrella de Hierro. Abecia Lopez (op. cit. p. 241) argues that the totalitarian cell of RADEPA extended to national and departmental police chiefs.
• 165 Cf. Sandor John, op. cit. pp. 87-90.
• 166 Lora (XXI, p. 363) considered the congress to be “one of the most transcendent events in Bolivian social history.”
• 167 Lora XXI, p. 92.
• 168 From 1945 to 1949, U.S. policy, backed by large reserves of tin accumulated during the war, kept the lid on the tin price. With the onset of the Korean War in 1950, as well as insurgencies in British Malaya and Indonesia, the price rose to $2 per pound, or almost 300%. The US posture strengthened the appeal of the MNR. The mines employed only 3.2% of the Bolivian work force, produced 25% of GNP, and 95% of Bolivia’s foreign exchange. (Lehman, op. cit. p. 97.)
• 169 According to Knudson, op. cit. p. 128, Augusto Cespedes in a 1973 interview had denied any special link to Peron. But cf. the articles of Zanata and Figallo listed below.
• 170 Lora, XXI, pp. 368ff.
• 171 C. Montenegro, Nacionalismo y coloniaje, 1953, p. 28.
• 172 Ibid. p. 53.
• 173 Ibid. p. 77.
• 174 Ibid. p. 158.
• 175 Ibid. p. 161. Jose Ballivian (1805-1852) was a military figure in the war of independence and later president of Bolivia; Jose Maria Linares (1808-1861) was another military figure and caudillo; president of Bolivia 1857-1861.
• 176 Guillermo Lora, Fue revolucionario Carlos Montenegro? (1965), p. 49.
• 177 Ibid. pp. 53-54, 56.
• 178 Oswald Spengler’s 1918 work Decline of the West was based on a biological metaphor of cultures rising and falling from youth to maturity to senescence; the biological interpretation of race seems to have been Spengler’s legacy to Montenegro.
• 179 Ibid. pp. 64, 68.
• 180 Quoted in Abecia Lopez, op. cit. p. 280.
• 181 Ibid.
• 182 In Grindle, M. ed. op. cit. pp. 125-26, 129. Montenegro and Paz Estenssoro, as fellow exiles in Buenos Aires, daily discussed Montenegro’s book as he was writing it: “…the essential was the discovery and the lived reality of the social contradictions of the parties based on the separation between the people (the nation) and the aristocrats of blood…and money (the anti-nation). (G. Bedregal, op. cit. p. 251)
• 183 ibid. p. 382.
• 184 G. Lora, XXI, 415.
• 185 The following overview of the Theses of Pulacayo is drawn from S. Sandor John, op. cit. pp. 92-94.
• 186 Ibid. 94-95.
• 187 Ibid. p. 95.
• 188 G. Lora, XXI, p. 373. Sandor John, op. cit. p. 98.
• 189 With the abject capitulation of the PIR to Rosca dominance, the influence of the international CTAL of Lombardo Toledano disappeared along with it. By June 1950 and the Sixth Congress of FSTMB the rival Stalinist union federation, the CSTB, had virtually disappeared.
• 190 Through all this, nonetheless, such august American newspapers as the Washington Post were still referring to the MNR as “Nazi”.
• 191 Klein, Parties, p. 395. Also by 1950 a study by the U.S. embassy had concluded that the MNR and the army were the main bulwark against communism, and the MNR’s fascist past and nationalism were no longer liabilities. (Lehman op. cit. p. 95). 1950 also saw the visit of the United Nations’ Keenleyside Commission, which attempted to draw a profile of the Bolivian economy in view of future aid, again reflecting U.S. concerns about access to Bolivian raw materials. (ibid.) Released in 1951, the commission’s report was critical of the Urriolagoitia government, as informed opinion in the West increasingly realized the non-viability of the status quo, and the potential of the MNR as the only solution, once the U.S. government had concluded that there was no communist or Peronist influence. Grasping for analogies, the Keenleyside report likened the MNR to Kerensky and saw the centrist Lechin as Lenin (ibid.).
• 192 According to Paz’s main biographer, the MNR leaders in exile were studying the Mexican Revolution and even the Russian Revolution. (G. Bedregal, op. cit. p. 249). They were also hardly immune to the influence of Peron’s “justicialismo” in the surrounding ambience. According to Labor Action, the weekly paper of the U.S.-based Independent Socialist League led by Max Schactman, (4/7/52), the POR backed the Peronist Congress of Workers’ Unions, organized by Peron’s agents in Asuncion.
• 193 Ibid. p. 401.
• 194 To keep the regional perspective in mind, it should be noted that in November 1951, Juan Peron was re-elected president of Argentina with 62.4% of the vote. Peron, however, had not backed the MNR in the February 1951 elections.
• 195 Only seven weeks after the revolution, Paz Estenssoro authorized the opening of a new air force college in Santa Cruz to rebuild the shattered military. The Colegio Militar reopened in 1953 to form a new generation of “nationalist officers”. Showing the continuity of the pre-World War II German influence, Marcos Domich (in Militares en la revolucion y la contrarevolucion p. 50 (1993) writes; “The high commands of the Allied armies absorbed from fascist sources a whole series of justifications, theory and models of conduct and…acquired the ‘values’ of the dead. Domich (p. 55) sees the origins of the post-1945 doctrine of “national security” in the work of German theoreticians such as Ritter, Raetzel, Haushofer, Kjellen and Mackinder, i.e. the notorious Anglo-German geopolitical school.
• 196 Other groups “relied on the COB to resolve problems that would, elsewhere, have been the province of government functionaries”. Sandor John op. cit. p. 120. Lechin was also named Minister of Mines and Petroleum.
• 197 Dunkerley, op. cit. p. 42. This was not a unique outburst. According to Labor Action (August 18, 1952): The “Trotskyist” POR also speaks in empty revolutionary phrases about the “workers’ revolution” of April 9th, about the fight between the “left” and “right” wings of the Nationalist party, and about the “revolutionary maturity of the Bolivian proletariat” – while trade union elements protest against the “Jewish oppressors’ class” and demand “freedom of pogroms.” And this is against a few Jewish small industrialists, owners of little factories – this is the “maturity” of the Bolivian proletariat, which entirely backs the Nationalist party while the Trotskyist POR backs not only the “left wing” of the MNR led by Lechin, but also the government of Paz Estenssoro.
• 198 As early as 1950, a U.S. embassy study found the MNR and the Bolivian army to be a reliable bulwark against communism and the MNR’s nationalism and fascist past to be no longer “liabilities”. Lehman, op. cit. p. 95. In fact, the U.S. was coming to consider the MNR to be the only solution. Such was the rapidity of ideological remake at the onset of the Cold War. Similarly, the Keenleyside Report of the United Nations in 1951 had underscored Bolivia’s structural problems and seriously criticized the Rosca government. It likened the MNR to Kerensky (!) and gave it a clean bill of health, free of Communist or Peronist influence.
• 199“A political phenomenon which could not be alien to Paz Estenssoro was that of Gen. Juan Domingo Peron. Argentine “justicialism” was a peculiar military-worker symbiosis expressed a new reality for Paz and his party. Peron was the vanguard of a front-line struggle against …the agrarian oligarchy…and the manipulative presence of U.S. interests..,justicialism combinec political categories from Marxism and other aspects of British trade unionism and the social reformism of the Mexican PRI” G. Bedregal, op. cit. p. 251.
• 200 On the overall Peronist strategy of a anti-communist “third position” independent of Washington and Moscow in the Southern Cone, cf.L. Zanata/M. Aguas, “Auge y declinacion de la tercera posicion. Bolivia, Peron y la Guerra fria, 1943-1954.” In Desarrollo Economico, vol. 45, No. 177, (Apr-June 2005). Beatriz Figallo. “Bolivia y Argentina: los conflictos regionales durante la Segunda Guerra Mundial. In Estudios Interdisciplinarios de America Latiny el Caribe. 1996. Vol. 7/1.
• 201 Cf. Estudios Interdisciplinarios de America Latina y el Caribe. Beatriz Figallo. “Bolivia y Argentina: los conflictos regionales durante la Segunda Guerra Mundial. In Estudios Interdisciplinarios de America Latiny el Caribe. 1996. Vol. 7/1.
• 202 Ibid. p. 54.
• 203 After visiting Bolivia on the commission investigating Catavi, which had disclosed the abysmal situation of the wage-labor workforce there, the AF of L’s Worth had called for a “mandate of 25 years” to recoup the Bolivian economy (Lehman, op. cit. p. 81.). Bolivians resented the “scores of North American experts and diplomatic attachés who descended on their country during the war.” (ibid. p. 89).
• 204 In addition to tin, oil and natural gas, these included lead, zinc, copper, wolfram and bismuth.
• 205 Dunkerley, op. cit. p. 57.
• 206 Labor Action, 12/8/52. Most subsequent quotes from Labor Action are from the pamphlet of the League for the Revolutionary Party (LRP) “Bolivia: The Revolution the Fourth International Betrayed”, available on-line at http://www.lrp-cofi.org/pamphlets/bolivia1letter.html
• 207 The propaganda battle between the well-funded public relations campaign of the Rosca and the Bolivian government is recounted in Victor Andrade, op. cit. pp. 135-146.
• 208 G. Bedregal, op. cit. p. 350.
• 209 Sandor John, op. cit. pp. 143, 146.
• 210 Begregal, op. cit. p. 448.
• 211 Ibid. p. 451.
• 212 Ibid. p. 455.
• 213Ibid. p. 458.
• 214Sandor John, op. cit. p. 123.
• 215Dunkerley, op. cit. p. 57.
• 216I have left a theoretical discussion of Trotsky and the vicissitudes of post-Trotsky Trotskyism to the Appendix, in order not to excessively burden the main text.
• 217Sandor John, op. cit. p. 89.
• 218Ibid. p. 135.
• 219Labor Action, 12/22/52.
• 220Ibid. p. 136. Most of the material on the POR’s role beginning in 1952 is from this source.
• 221Ibid. p. 137.
• 222The POR, following these developments, entered an internal crisis in 1954-55. The crisis was related to the 1951-53 split in the (Trotskyist) Fourth International pitting Michel Pablo and Ernest Mandel against the American Trotksyist James Cannon. Guillermo Lora attempted to avoid aligning with either faction. The pro-Pablo faction did not enter the MNR. The great majority of Lora’s faction opted for “entrism” into the MNR though Lora broke over the question of entrism at the last moment.
• 223A rough analogy, indeed. The POR never formally entered the MNR government, though its members occupied posts therein; the POUM vehemently denied it was Trotskyist, whereas the POR claimed that it was. Cf. Burnett Bolleton, The Spanish Revolution (1979), pp. 381-383. “In its polemic with the Trotskyists the POUM argued that its presence in the Catalan government was a transitional step toward complete working-class power…(for the Trotskyists this)…was inconsistent with the POUM’s participation in a government that…decreed the dissolution of the workers’ committees…”
• 224The information in this paragraph is based on Lehman, op. cit. pp. 109-124.
• 225Cf. my articles on the Break Their Haughty Power web site http://home.earthlink.net/~lrgoldner :Introduction to the Johnson-Forest Tendency and the Background to “Facing Reality” (2004); Facing Reality 45 Years Later: Critical Dialogue With CLR James/Grace Lee/Pierre Chaulieu (2002); Max Eastman : One American Radical’s View of the “Bolshevization” of the American Revolutionary Movement and a Forgotten, and Unforgettable, Portrait of Trotsky (2006) and The Situation of Left Communism Today: An Interview with the Korean SaNoShin Group (2008)
• 226“In the internal politics of the Party these methods lead, as we shall see below, to the Party organisation “substituting” itself for the Party, the Central Committee substituting itself for the Party organisation, and finally the dictator substituting himself for the Central Committee…” This quote is from Trotsky’s Our Political Tasks (1904), a text rarely referred to by Trotskyists. http://www.marxists.org/archive/trotsky/1904/tasks/ch03.htm
• 227“Toward the Critique of Hegel’s Philosophy of Law: Introduction” in L. Easton/ K. Guddat Writings of the Young Marx on Philosophy and Society, (1967), p. 251.
• 228From http://www.marxists.org/archive/marx/works/1852/germany/ch06.htm
• 229Leon Trotsky, History of the Russian Revolution. London 1967 pp. 26-28.
• 230The varieties proliferated with the passing decades.
• 231Cf. the remarkable books of Ngo Van, Vietnam 1920-1945 (in French; a review on the Break Their Haughty Power web site summarizes the book in English: http://home.earthlink.net/~lrgoldner/vietnam.html ) See also the English translation of his autobiography (In the Crossfire: Memoirs of a Vietnamese Revolutionary, AK Press 2010), in which he details the massacres of the Trotskyists by Ho Chi Minh’s Stalinists in 1945 and thereafter.
• 232Sandor John, op. cit. 94-95