Friday, October 10, 2008

“MUST THE MOLECULES FEAR AS THE ENGINE DIES?”

I really have been slack lately. I'm writing about a section of a dynamic and innovative anti-capitalist movement but I have written nothing on the current crisis and the attempts to transfer it into the hands of the US working class in the form of a 700 billion dollar bail out and purchasing of bad debt.

Below are the musings of the righteous individuals at the Midnight Notes Collective on the current situation, its possible implications and on the need for resistance.

Dear Midnight Notes Friends,



The breakdown of the Wall Street financial machine makes the task that we
outlined in our June meeting more urgent. In June we planned to rethink
Midnight Notes in view of the restructuring of the accumulation process and
class relations carried out through the neo-liberal turn and Structural
Adjustment. We can now define this project more precisely: what do the current
crisis and restructuring of the financial system imply for us as we join the
rest of the world in the dog house of structural adjustment in the twilight of
the American empire?





In response to these questions, it
is important, first, that we realize that the so-called Wall Street “meltdown”
is certainly the end, but also the completion of the neo-liberal program. Let us
be clear about it. To think otherwise is to ignore the lesson taught to us by
the event that opened the present capitalist era: the 1973 coup again the
Chilean working class experiment with socialism, that led to the victory of
strong state backed market economy. Karl Polanyi’s theory that the single most
important cause of the rise of fascism and Nazism in Europe was the inability
to control the financial market after the 1929 crash also resonates here. In
other words, we should not read the restructuring taking place as a turn to
socialism/Keynesianism, to the extent at least that Keynesianism was an
intervention by the state into the economy aimed at increasing the state’s
investment in social reproduction, starting with the reproduction of the
working class, in exchange for an increase in the social productivity of labor.
Despite the adoption of regulatory mechanisms, the operation presently
conducted by the US government bears little resemblance to the Keynesian
program launched with the New Deal.





Behind the $700 billion bail-out
and the many others that will follow--some already in the pipeline-- is a
massive transfer of funds from the US working class to capital, inevitably
leading to an assault on the last remaining entitlements (like Medicare, Social
Security) and a general program of austerity the like of which we have not seen
yet in a long time. The fact that there is no organized response to this
assault makes us fear the worst. For things would never have reached this point
if over the last decade the US workers had responded to the repeated thefts of
their money and benefits, through the Enron scandal and the many other “crises”
that have followed it. That despite the “instability” of the market, despite
its usage as a means to expropriate thousands of small/working class investors,
US workers continued to trust their livelihoods and future to it is certainly a
key factor in what we are presently witnessing and Washington/Wall Street
confidence in launching=2 0the new austerity program. It is our argument that
in the same way as September 11 served the US government to shed the last
remains of? ?democracy? and move to a model of government where
militarization is always around the corner (apparently Representatives were
threatened with the proclamation of martial law if they did not pass the
bailout bill), so the Wall Street crash will serve to shed the last remaining
elements of working class ?socialism? in the US political economy, starting
with Social Security, Medicare, a thorn in capital’s flesh, but so far
demonstrating a great resilience, the last shore for working class struggle in
the nation.



2. Lessons from the Debt Crisis.

There is a important parallel here, not sufficiently noted, between the present
crash and bail-out and the “debt crisis” of the 1980s, which engulfed most
Third World nations (except for China) and was the start of the globalization
process. Both have been engineered in the same fashion.



The? ?debt crisis? was the outcome a financial campaign conducted by
Washington and Wall Street, to practically force Third World nations to take
cheap development loans --liberally dished out at the lowest interest rates--
at a time when capital was refusing to invest in Europe and North America in
the face of the most successful working class attack to its profit-rate since
the 1920s, and a new generation of Africans, Asians etc. were organizing to d
emand a global redistribution of wealth and a program of reparations, that is,
in the language of the Bucharest Conference of 1974 : A NEW WORLD ORDER. ?



Through the lending mechanism, the massive flow of petrodollars that had been
amassed in the aftermath of the 1974 embargo (the first attack on US wages,
organized through a stiff inflationary wave) was redirected to the coffers of
Third World nations, which, attracted by the bait of cheap loans, were soon
hooked to the global economy, all dreams of an independent path to development
foregone.





In other words, loans at the
lowest interest rates were key to the creation of a global debt and the process
of primitive accumulation (through structural adjustment) that was imposed on
most of the workers of the world.





As we know, within less than a
decade, the rise of the interest rates in the US, turned manageable debts into
a long-term process of economic and political subordination. Debt became the
hook for a massive restructuring of Africa’s, Asia’s Latin America’s political
economies, re-establishing a colonial dependency that for three decades has
served to promote a massive transfer of funds from the Third to the First World
and defeat the organizational efforts of TW nation for an independent road to
development.





Under the guise of the “debt crisis”, portrayed as a case of “mismanagement” by backward countries, requiring First World-style financial responsibility, countries across the world were forced to open their books to Washington--via the IMF and World
Bank--accept any terms of repayment imposed on them. They were forced to freeze
wages, terminate all social spending, open their markets to foreign investors
and products, devaluate their currencies and so forth. The consequences of
these policies are well known. While Washington and NY built forests of
skyscrapers, sucking on the blood of Africans, Asians, Latin Americans, Caribbean
people, such levels of impoverishment and expropriation were imposed on the
people of the world that millions took the road out of their countries, unable
to survive in them, while those remaining witnessed epidemics, elimination of
schools, famines, wars, the loss of ancestral lands, waters and forests, brutal
wars of privatization, all directly related to the debt.



This is history now, though the politics of SAP have set back for decades the
project initiated by the anti-colonial struggle, reformulated and reasserted,
as I mentioned, at the Bucharest Conference of 1974, where TW nations
emboldened by the defeat of the US in Vietnam, demanded a NEW WORLD ORDER, i.e.
the redistribution, return of the wealth that Europe and the US have robbed
from the colonial world.

?? ?

With the debt crisis,
international capital obtained three major objectives.



?i) It disciplined the working class in Europe and the US, by dismantling
its manufacturing structure and refusing for years to engage in any serious
investment in these regions [remember zero growth??]

?

ii) It destroyed the attempt of
the former colonial world to escape a dependent/subordinate position, as
demanded by the new generation of Africans, Asians, etc., who, infused of the
spirit of Fanon, were keen on import substitution schemes, were pressing for
REPARATIONS, and pushing for some form of socialism (in Angola and Mozambique).




(iii). In addition to defeating revolution in First and Third World, the “debt
crisis” built the infrastructure for the new global economy. It forged the
mechanisms by which industries and offices could be relocated, companies could
run around the globe, the work process could be computerized and streamlined
and the working class thereby could be flexibilized and re-divided.



Against this background, we must note some basic similarities between the
engineering of the debt crisis and the engineering of the Wall Street crash and
must assume these similarities will extend to the social consequences of the
crash. The housing bubble was the result of loans made at very low though
adjustable credit rates, redirecting the influx of capital coming from abroad
(China and other countries) toward the US market.





Is it possible that investment
banks, credit rating agencies, the head of the Federal Reserve all FAILED to
realize what would be the inevitable result of an “easy credit”, lending policy
that reversed decades of regulatory principles and rules? Unless we want to
revel in the nonsensical tale of a blinding surge in human greed, the answer
must be a negative one. Thus, we must stop using the concept of “failure” to
describe the absence of regulations and the reasons for the crash. We must rule
out that the architects of the housing/mortgage crisis did not know it would end
in a financial disaster and cascade of foreclosures for the home owners, in the
same way as banks are partly responsible for the debt of the US working class
($45.000 on average per capita).

?

Continuing with the parallel, we have to conclude that with this 700 billion
dollar “bail-out”, coming straight out of our pockets and hides, the
“structural adjustment” that since the 1980s has been imposed on countries
across the world, is going to be extended to the US territory and the US
working class. This time (after many beginnings and many deferrals) we too are
being “adjusted.” I will discuss later what adjustment will mean at this time
for us. For the moment we only want to stress that we are witnessing not only a
financial meltdown, but also a great robbery, a macro-process of expropriation,
an immense transfer of labor, this time siphoning funds to the US banking
system not only from the Third World, as in the Debt Crisis of the 1980s, but
from our households, through the classic maneuver of increasing the national
debt. What we are witnessing is a capitalist coup, an example of capital’s
historic readiness to destroy itself in order to regain the initiative and
defeat resistance to its discipline.



3. Where does this resistance come from? How is the collapse of the financial systems
a response to it?



We cannot understand the Wall Street crisis unless we read it in class term as
a means to negotiate a different class deal and response to class struggle and
resistance. However, in dealing with these questions, I also want to
distinguish this approach and the growing tendency to view every development in
capitalist planning as a realization of working class struggle and demands, the
Negrian perspective on capital’s response to class movements.





This perspective is dangerous,
because besides turning even defeat into a victory, (such as: we wanted
globalization, we wanted flexibilization, etc), it ignores the fact that a
capitalist response must use working class demands against themselves, use them
to drive part of the working class out of the struggle, turn it against or away
from the other half, use them in such a way as to spark off forms of
development that decompose the class.



Let us look now at the crisis as a disciplinary tools and strategy. There are
at least three areas of resistance to the neo-liberal accumulation project that
the Wall Street collapse has to respond to. I will list them without an attempt
to establish an order.



First, the c rash and the bail-out must defeat the attempt of the US working
class to circumvent class discipline by using financial markets, rather than
struggle, sweat and labor, to increase their wages. While strikes and struggles
have died out over the last two decades, workers have tried to increase their income
in three ways: investing in the stock market, buying on credit, now even for
everyday expenses, getting equity money through housing, and defaulting student
loans. These tactics have clearly failed and now millions of workers are now to
pay twice for them, in terms of their individual losses and in terms of the
losses that will be inflicted on the US proletariat as a class through the
bailouts. If successful, these bail-outs will in fact be conducive to a new
regime of low wages and zero entitlements the like of which we have not seen
since the last part of the 19th century.





The new regime will not be the end
of market fundamentalism. It will be a revitalization of market investment
through the injection of our social security money, and it will be a
revitalization of some parts of American industry now presumably taking
advantage of the fact that workers are desperate enough to accept any
conditions just to have a job and a roof over their heads. A large part of
capital has for a long time been lusting to bring back America to the situation
before the New Deal, when employers had the upper hand. The “crisis” is giving
them a chance to return to that era.





That this time Social Security is
at stake is due to various factors. First, Social Security is the last pot of
money available to re-launch the US market, in a context in which workers have
no savings and monetary flows from the outside are drying out. It is also the
last “scandal” on the list of US capitalists who have relentlessly for years now
told us it must go. Most important of all, Social Security affects primarily
the old, the retired, and it is therefore an easier target than entitlements
affecting the whole working class.





So far workers in the US have
resisted the privatization of Social Security despite many governmental
attempts. But cuts in pensions have already gone a long way in the private
sector, where employers have given stocks of their companies to workers, or
stopped putting any money in their pension funds. The present crisis will
extend that to government backed pensions. And the road to it has been cleared
by years of false statements to the effect that Social Security is
unsustainable. Though it is a colossal lie, younger generations have, however,
accepted it. By cutting Social Security, capital undoubtedly hopes to pit the
young against the old, who (as in Africa today) are being pictured as a crew of
selfish gerontocrats sucking up the funds the young need to build their future.



The second target of the attack is the global resistance to capital’s
appropriation of natural20resources beginning with oil and gas extraction. The
defeat in Iraq is the peak of it. To this day, despite an immense expenditure
in war funding, the US has not been able to put its hands on Iraqi oil.
Resistance to international capital control over global energy resources has
also come from Venezuela, Bolivia, and Ecuador. Many more countries are also
refusing the neo-liberal packet, especially in Latin America. These refusals,
not peak oil, are the true limits to capital’s energy plans.





There have also been bottlenecks
in the exploitation of forests, waters, minerals, and lands which structural
adjustment was to remove. A new “urban” peasant movement has been growing that
is fighting independently of unions, parties, “civil society” and NGOs, using
direct action tactics, to re-appropriate the lands and resources of which it
has been robbed ---poaching, harvesting timber or produce in commercial
plantations, mining diamonds and gold “illegally”, or farming in the very lands
from which they have been “legally” excluded. When they move to the cities they
squat on urban land and take over land not used, private or public to farm it
for their needs. It is a vast re-appropriation movement that is redefining the
fundamentals of social reproduction globally. It has put globalisers and
adjusters out of government; it has forced the nationalization of local
resources, and has redistributed wealth and political power, putting the World
Bank and IMF almost out of business in Latin America. It has defeated the
attempt to completely liberalize the economies of the TW through the rule of
the World Trade organization. Though not sitting at the table, the specter of
the rural/urban peasants of the world has guided the refusal of TW
representative to comply.



Third, global migration has developed in ways that make it difficult for
governments to use it as a regulatory mechanism for the labor market. Far from
being an easy device for driving wages down, migration is now an autonomous
uncontrollable phenomenon, with a logic of its own that is not reducible to the
needs of the labor market. It is important however to stress (against the
idealization of the migrant and of Exit, Exodus, Flight as the highest form
of struggle) that the struggle of the migrants is not superior to the struggle
of those who remain. In fact, migration can lead to the dissolution of local
organizations, it can create new divisions among the locals, separating those
benefiting from remittances and those deprived of them, it can boost the cost
of living in the area of origin by the influx of new money and hook local
economies more strongly to the international monetary system, fostering the
expansion of monetary relations. These, of course, are not inevitable results.
Actually, migrants have been able to use the wage against the wage, to refuse
impoverishment, to create transnational networks, to move from country to
country seeking a better deal and nullifying nation al boundaries and borders.





The attacks on immigrants of recent months, which have seen the most massive factory raids and deportations
ever in the US, are response to this autonomy. They are part of the attempt to
create a population of rightless workers, to function as a safety valve for the
labor market. Only if they have no rights can immigrants function as regulatory
mechanism for the labor market (in the same way as mass incarceration and
expansion of unpaid labor do). The redefinition of immigrant workers as outlaws
and the criminalization of working class--historically a key strategy to
devalue labor power--will continue to be a tool of the world order we will see
emerging from the crisis. But the crash will intensify the divisions between
?natives? and migrants, attack the organizational strength of migrant
organizations, unless there is strong opposition to this strategy.



The Politics of the Financial Crisis and Our Response.



Crises are always a threat and an opportunity as they break down business as
usual, and reveal something of the inner workings and nastiness of capitalism.
This one is not an exception and we can be sure that what will come out of it
will be greatly a result of what people do in response to it. If the Great
Depression is an indication, it took more than ten years for capital to
organize a different social order. Much can happen in such a period.


The problem for us today is that
workers are only organized around electoral politics at best. And many still
place more hope in a racist and imperialist stance than in working class
solidarity. We certainly don’t have a communist or an anarchist movement
organizing rallies of the unemployed, fight against evictions, or organize
“penny auctions” of farms as they did during the Great Depression. Nor do we
have an anti-capitalist alternative as the Soviet Union was in the eyes of
many. We also do not have the kind of solidarity that in the Great Depression
led to invention of new commons, like the hobo movement and the creation of
“jungle cities.”



Where to start then? This is what we need to work on in the coming months and years. There is no clear path to this kind of mobilization. But we need to start somewhere. On two
things we can get people to agree with us: First, we better find alternatives,
because, as things stand presently, we are so incestually connected with
capitalism that its demise threats our own existence. Second, unless we
organize to resist government planning, what lies ahead for us, after a cut of
more than a trillion dollars of our “entitlements” looks much more like some
variant of fascism than socialism.

With warm greetings,

Silvia and George