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]

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.

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:

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.