Marx

People’s Forum: Economic Lessons for 2020

Published by Anonymous (not verified) on Thu, 26/03/2020 - 8:53pm in

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Interviews, Marx

Economic Lessons for 2020: A Conversation with Dr. Michael Hudson
Peoples Forum, December 12, 2019.

We are facing a crisis of poverty and economic precarity, where 140 million people are poor or low-income, the costs of living are going up and the chances of living are going down. What condition is our economy in today, more than ten years after the Great Recession of 2008, to withstand another economic downturn? What lessons have we learned – or failed to learn – over this past decade? What lessons can we draw from history to guide us in the months and years to come?

On December 12, 2019, the Kairos Center hosted a talk at The People’s Forum in New York City with economist Dr. Michael Hudson on the 2008 economic crisis, what’s happened over the past ten year, and what we can anticipate in 2020. Dr. Hudson is President of the Institute for the Study for Long-Term Economic Trends (ISLET) and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He has been in conversation with the Kairos Center around economic issues for several years. He has also written extensively on the 2008 crisis, including the books The Bubble and Beyond, Killing the Host, and J is for Junk Economics, and done groundbreaking research on debt and finance in antiquity, most recently in “… and Forgive Them their Debts,” revealing a long history of lending, foreclosure and redemption, and how “debts that can’t be paid, won’t be paid.” The only question is on whose backs those debts will be carried.

Shailly Gupta Barnes:
I want to start by asking you why most economists were surprised by the great recession, the financial crisis of 2008.

Dr Michael Hudson:
Well, let’s first talk about all the people who were not surprised. Wall Street was not surprised, and bankers were not surprised. Already in 2007/08, new terms and words were being added to the English language. One term was “junk mortgage.” Another word was NINJA: “no income, no jobs, no assets,” describing the kind of loans that were being made.

The FBI also was not surprised. Already in 2004 it warned that the largest wave of financial fraud in American history was underway. Other people who weren’t surprised were the bank lobbyists, but they pretended to be. The banks that were most crooked – Citibank, Wells Fargo, Bank of America and Countrywide – have all grown tremendously since 2008. They were not only bailed out, they were subsidized and rewarded. Crime and fraud pay, if you have captured the regulators and policy makers.

Economists were surprised, because their mainstream theory says everybody behaves in a way that helps the economy. It is as if you need the banks, rich people, and especially the financiers to move the economy in the best direction. But when you look for the evidence, finance, debt, and savings don’t really appear in the economics textbooks. Most people think of the economy simply in terms of production and consumption. Textbooks depict workers producing goods for sale and other people buying them. Credit is taken for granted, not looked at in terms of how this actually affects peoples’ budgets and how much they have to spend after paying their debt, housing costs and other fixed monthly expenses.

The reality is that this production and consumption economy is wrapped in a financial sector. The financial sector’s product is debt. Most is created to buy assets – real estate, stocks and bonds, not goods and services. And more money has been made since 1980 by buying stocks and bonds, real estate or oher assets such as art than actually producing new things. That’s the problem we have now.

Many people make a wrong criticism of the Federal Reserve. They say the Federal Reserve is owned by the commercial banks. That’s not the problem. The problem is not that the bondholders and the banks can own the Federal Reserve, it is that they own the Government and back the campaigns of the politicians who control the Federal Reserve.

SGB:
Could you actually take us a step back to explain many of the trends since the 2000s that led to the Great Recession had been maturing over a number of years. Could you explain what precipitated that crisis?

MH:
What made 2008 different – and what makes the current depression different – is that in the past when there was a crash, banks would lose money, as Lehman Brothers did. They would go broke. What do you do if somebody owes you money and you can’t pay? Usually, you lose it. If you’ve written a junk mortgage pretending that a property is worth a lot of more than it is, you’re still going to lose money, because the collateral is not worth as much as the money that you’ve lent.

But such a loss didn’t happen in 2008. There was a temporary crash, but the bad loans were kept on the books. The Federal Reserve told the banks, “We know you’ve made bad loans. But don’t worry. None of you are going to lose money. We’ll make the homeowners pay or else kick them out. You can continue to demand payment of your debts and foreclose. You can borrow from the Federal Reserve.” It then created $4.6 trillion worth of credit for the banks, called Quantitative Easing.

The Obama Administration could have been spent this money into the economy to make it grow. But it didn’t. It could have paid off the bad debt and left the ten million families that were foreclosed on in their homes. That wasn’t done. The government only gave money to the banks who were responsible for the crisis and for writing bad loans.

SGB:
Ten years later, we’re seeing negative interest rates, low unemployment rates but higher costs of living, record wealth inequality, and an even higher debt burden than in 2008. Are we actually in a worse situation than what led to the Great Recession?

MH:
The wealthiest 10 percent of Americans own between 75 and 80 percent of the stocks and bonds. When President Trump or others talk about how good the economy is doing, they mean that the stock market is going up, but they are only looking at that 10 percent. For the Federal Reserve, the economy is that 10%. For the government and the lobbyists, the economy is mainly that 10% – their Donor Class.

People talk about the GDP going up, but all of its growth since 2008 has accrued to just 5% of the population. For 95% of the economy the GDP is less than it was before. 95% of Americans they have less disposable income to spend on goods and services after paying their monthly debt service, rent or housing costs, medical insurance, other debt and utility bills. That is why we’re in the state we’re in today. People are not buying things. They don’t have enough money left to buy enough to keep employment going.

At the same time, if the government is going to balance the budget, increase the military build-up and cut taxes for the rich, then it will need to slash social security and drastically increase medical costs and the wage withholding that most of us face. Basically, our costs are going up and our incomes are going down.

But the top ten percent of the population is in a great situation. They have tripled their wealth since 2008. For all the rest of the country, it’s much worse. Their take-home pay less, while their debt overhead has grown, leaving less to spend on the things they need to live.

SGB:
There is a curious agreement between mainstream economists and orthodox Marxist economists today that household debt really doesn’t matter in terms of crisis formation. On the one hand mainstream economists see a debt to one person as a credit to another. And because they can’t appreciate the class distinction, it’s all a wash: Who’s in debt and who owns that debt doesn’t matter. Others argue that that idea of debt servicing crowds out effective demand, but the only factor that matters in crisis formation is the falling rate of profit. What are both sides missing when it comes to understanding the dynamics of debt and how it relates to crisis formation?

MH:
It seems simple: You can say that we owe the debt to ourselves, so it all balanced. But who’s the “we”? We owe the money to the banks and the 1 percent. They’re the “ourselves” to whom the debt is owed. Really, the 99 percent owe more and more debt to the 1 percent. If we’re going to have an efficient economy, we can’t have this kind of exploitation. The financial sector has become an oligarchic class.

The question is, how can workers afford to buy what they produce? Marx explained that underconsumption can never cause a problem, because as capitalists make more money by employing workers to make more goods. They build more factories, and they have to buy more machinery, because technology makes machinery is more and more efficient. Every new factory and every new machine they buy is more efficient. That means that new producers come online, undersell their competitors and the old factories have to invest in new machinery, so capitalism is forced to expand just to keep solvent.

The problem is that finance doesn’t have anything to do with profits. It is a purely mathematical dynamic. Compound interest grows much faster than the economy. Marx wrote about this in Volume III of Capital and his Theories of Surplus Value. He thought that industrial capitalism was going to act in its own self-interests and wouldn’t have a crisis coming from underconsumption, but it would have a crisis from the financial wrapping around the economy – unless it would industrialize and socialize the financial sector.

SGB:
Do you think the debt overhead today could trigger the next crisis?

MH:
There will be a huge crash. The Trump administration has followed the Democrats in getting rid of anti-monopoly legislation and prosecution. They’re essentially promoting rising prices for everything. The question is, how long can companies get by producing less and charging more when the customers are poorer and poorer? The banks know that the debts that can’t be paid, and hence that they won’t be paid – unless it’s by the government bailing them out. Everybody with whom I talk on Wall Street knows there’s going to be a crash. But they think they can sell out first because someone from the government will call them and say we’re going to raise interest rates suddenly, but will bail them out and leave the non-insiders holding the bag.

SGB:
Are there lessons from other periods of our history, maybe the 1930s, to draw on today?

MH:
Roosevelt did. He did save capitalism, but he saved it for the capitalists. I think what we want to do is save capitalism for the socialists. The whole idea is to have capitalism save itself by evolving into socialism, not falling back into feudalism. So the problem is really political. We have a centralized economy and centralized planning, but it’s centralized in Wall Street. The question is how you get the centralized planning out of Wall Street and get it into the hands of the general government.

The key is to isolate the financial sector and financialized wealth. There can’t be any recovery without writing down the debts that are we owe. The good thing about writing down the debts is that you wipe out savings at the same time, including the tripling of savings of the upper 10 percent that’s occurred since 2008. If those savings are left place, then that echelon is going to essentially buy control of the government, the media and all of our economy.

SGB:
As you know the Kairos Center is one of the conveners of the Poor People’s Campaign: a National Call for Moral Revival. Our numbers are growing, not only because this is a timely campaign, but because of the conditions that you’ve been laying out: that growing poverty and dispossession and economic precarity that people are living in and the lack of responses from and accountability from any governmental or any other form of authority. We’re connected to these communities all over the country and we’re fighting around an agenda that is based on ending systemic racism, ending poverty, ending militarism and the war economy, and ending climate disasters. Do you have advice for us, as we organize this Campaign?

MH:
The problem is how do bring people together in a time of division and identity politics? Among all of the identities that are talked about, there’s only one kind of identity that they don’t talk about: wage earners and consumers. The one identity that you all have in common is that you’re the exploited part of an exploitive system, even if you’re exploited unequally. That is what you need to organize around and that is a real challenge, but the times are also pushing us in this direction.

unsplash-logotom coe

Distinguishing Capitalism from Growth

Published by Anonymous (not verified) on Fri, 22/11/2019 - 6:57am in

by James Magnus-Johnston

Capitalism and growth might have similar connotations, but they have important distinctions, too. “Capitalism” has become a clumsy catch-all for any number of value-laden projections—greed, big business, innovation, accumulation, complexity, workaholism. “Growth,” meanwhile, is a landmine of technical and cultural connotations, and I’ll explore just a couple of them here.

No trespassing sign.

Private property: the essence of capitalism. (Public Domain)

Technically speaking, their differences seem straightforward. Growth is a material increase in economic production and consumption. Capitalism is a highly complex term, but for our purposes can be distilled down to an economic system of private property in a competitive market. And to put them together: a capitalist economic system drives growth and wealth accumulation.

Critics articulate how each phenomenon eventually limits its own effectiveness. The economy is subject to the dynamics of any expanding complex system: it cannibalizes its foundation as it expands, leading to disorder and change. 20th century theorists like John Stuart Mill and John Maynard Keynes assumed that growth would eventually reach the limits of its effectiveness; they’re now echoed by a contemporary chorus of ecological economists. Critics of capitalism, embodying Marx, likewise argue that capitalism subverts its own effectiveness with its characteristic crises. The accumulation of wealth fosters social and financial crises. In contemporary parlance, money flows to the top one percent, where it accumulates as “capital” without benefiting society at large. All these trends are part of a complex we might call “uneconomic growth.”

Fundamentally, if capitalism drives growth and accumulation, it would be spurious to claim that a steady state economy could be referred to as “capitalist,” as we understand the term today. Neither growth nor wealth accumulation are synchronous with the idea of a post-growth economy. There are no hard prescriptions, however, for a steady state economy to dispense with all private property or (regulated) trade in a competitive market. Some ecological economists (for example, Peter Victor) have argued for an increase in public investment for socially desirable ends, and there is room for a diversity of views on this.

More importantly, however, capitalism’s cultural considerations don’t suit a steady state economy. Peter Ghosh writes in Aeon that Max Weber used the term capitalism to refer to a “modern Kultur” centered around a code of values for the 20th-century West. In a capitalist Kultur, the ethic includes “cool, reserved, hard and sober” public behavior governed by strict rational and impersonal procedures for the professional life of a market economy. In this new economy, the highest virtue became “the making of money and ever more money, without any limit.” Growth-as-prosperity then became virtuous, but remained distinct from greed, which retained its grotesque connotations. The outputs of mass consumption, technology, and legality, he argues, replaced the inherent virtues of “the human ideal of warmth.”

capitalism pyramid

No one’s vision of a steady state economy. (Public Domain)

A post-growth society may not include a hard shift away from private property or a competitive market, though it most certainly needs a shift away from capitalism’s present ethic. While there isn’t yet a well-established ethical code for such a new Kultur, it is emerging: a reduced emphasis on productivism; greater emphasis on self-reliance; a stronger connection to land and place (including Indigenous knowledge); dispensing with the virtue of growth-as-prosperity; and, a reclamation of warmth and care among people living in community. I’ll argue, too, that we need a new political language for whatever comes next, because whatever it is, it can’t look or sound like what we’ve done to the planet for the last few hundred years.

The post Distinguishing Capitalism from Growth appeared first on Center for the Advancement of the Steady State Economy.


Book Review: Falter by Bill McKibben

Published by Anonymous (not verified) on Thu, 14/11/2019 - 2:58am in

By Herman Daly

Thanks to Bill McKibben, not just for his new book but for 30 years of honest, eloquent, and insightful environmental writing and activism.

Thomas Merton Center dinner honoring Bill McKibben, 11/4/2013

Thomas Merton Center dinner honoring Bill McKibben. (Image CC BY 2.0, Credit: Mark Dixon)

He begins Falter by pointing out that the human game we’ve been playing has no rules and no end, but it does come with two logical imperatives. The first is to keep it going, and the second is to keep it human.”

What McKibben calls “the game” that we must keep going and keep human is similar to what C. S. Lewis called the “Tao” in his 1944 classic, The Abolition of Man. The Tao refers to the common morality informed by natural law and spiritual insight—the given yet evolving conscience and wisdom of mankind. The Tao also develops and evolves out of its own past. It is our best understanding of objective value. We cannot logically depart from it in any fundamental way—it transcends both subjectivism and naturalism.

In McKibben’s version, the “human game” has to continue and remain human. It is the second part that gets close to Lewis’ idea, who wrote long before the age of genetic engineering with CRISPR technology. Lewis’ “Conditioners,” social engineers in effect, were only educators and psychologists. Lewis granted them the complete power to mold their subjects, the same power that seems to be possessed by the modern genetic Conditioners of today, so his argument remains relevant, indeed becomes more so.

CS Lewis

CS Lewis (Public Domain)

Lewis’ argument is simple: the Conditioners want to create in their subjects a new artificial Tao, a “better” one. They have the power to do so. They may appeal to the traditional Tao for guidance on how to make the artificial Tao better. But then they are still servants of the Tao and not creators of a new Tao. In other words, they are developing the Tao, not replacing it. To replace the Tao, they must step outside of it to find the criteria for how to remake it. But in stepping outside, they step into an ethical void. “I should” or “I ought” comes from the historical Tao and disappears with its absence. What remains to motivate the Conditioners is “I want.”

The personal desires of the Conditioners, uninstructed by the Tao from which they have emancipated themselves, become the motives directing the “I can” of these all-powerful Conditioners. What appeared to be the collective power of mankind over the Tao has turned out to be the arbitrary power of some over many. The future subjects are no longer men but creatures of the Conditioners’ wants, whims, desires, and fantasies. Hence the title, Abolition of Man.

Lewis is not arguing against knowledge or technology. For each step in controlling nature, it may (or may not) be that the benefits outweigh the costs. He is insisting, however, that the last step of treating the Tao as another part of nature to be remade according to human desire is fundamentally different, like dividing by zero instead of by a smaller and smaller number. At this last step, the process does not continue—it blows up in your face.

McKibben’s argument is similar in form but different in its terms. The Tao is “the human game” that must continue and remain human. The continuation of the game is threatened by the fact that we are destroying the physical board (or sphere) on which the game is played. Much of McKibben’s writing and activism has been motivated by saving the biophysical board necessary to keep playing the game, specifically, saving a climate conducive to life. What is new in this book is the emphasis on keeping the game human or “within the Tao” in Lewis’ terms.

McKibben declares, “I am not great with eschatology; I don’t know the final destination. While I don’t know how to change the ‘system,’ the urgent nature of the climate crisis doesn’t let us simply put off action. The biophysics doesn’t allow it.”

One understands his reluctance to “go eschatological” and to stick with the biophysical. Yet McKibben is already neck deep in eschatology, and necessarily so, by emphasizing early on the apocalyptic consequences of the climate crisis. Some technocrats go on to argue that since our civilization is unsustainable anyway, we are justified in taking extreme technical risks to save it, like a dying cancer patient volunteering for any experimental treatment. But where things really get specific is in his reflections on the full-blown and frank eschatology of the Silicon Valley billionaire self-creationists.

As McKibben reports, a number of these folks are planning to live forever, not in the New Jerusalem or in a Platonic spirit world but here on the unredeemed earth. Either survive whole or freeze your severed head until the Singularity (Second Coming?) when science will resurrect you, or at least your consciousness, by uploading it into silicon memory chips. Where, oh Death, is now thy sting? What these Silicon Valley self-creationists ridicule as naive religious belief, a remnant of the old Tao, they recreate as a new technological religion, an eternal digital heaven on earth (or maybe Mars) populated not by mortal men, but by—what? Marxists had something similar (but much less extreme) in mind with their eschatology of the new socialist man and classless society.

McKibben is politely dismissive of the eschatology of these “self-rapturing” techies, noting their extreme individualism (stemming from their common hero, Ayn Rand) that leads them to appropriate a kind of heaven on earth for themselves. McKibben also reminds us that these are the richest people in the world, and what they believe is influential. Modern theologians have prematurely “closed the office of eschatology.” Now it has been reopened, under new management. G.K. Chesterton famously said that when people stop believing in God, the problem is not that they then believe nothing, but that they are likely to believe anything. Could be.

Cryonics Institute

Cryogenics: Abolition of Tao? (Image CC BY-SA 4.0, Credit: Dan)

Keeping the present creation going as long as possible is an ethical judgment in favor of longevity, not a logical imperative. Nothing in logic prevents extinction or death; indeed, evolution requires it for individuals and species. Whether the end is entropic heat death or new creation is the eschatological question—a question of reasoned hope rather than demonstrated knowledge.

We tend to dismiss eschatology on the grounds that the sun will last for some billions of years and thoughts about the final end will distract our attention from the immediate crisis. Fair enough, but the scientific materialism underlying Salvation-by-Singularity has given us the power to destroy creation without providing—indeed by undercutting—any reason to keep it going other than chanting the colorless abstract noun “sustainability.” Meanwhile, the Silicon Valley eschatologists are working out their personal salvation independently. They probably already have started marketing it to those who can afford it.

McKibben has explained that the climate threat is so pressing and so intermingled with current economic arrangements, that it provides the best possible lever for making profound change in other aspects of the economy…” I suspect that a serious effort to solve the climate crisis—or the biodiversity crisis, or water crisis, or political crisis for that matter—will soon lead to the recognition of their underlying common cause, namely the continuous growth of the human economy and its consequent displacement and degradation of the rest of our world.

Nevertheless, most discussions of climate change usually fail to make the connection to growth. The focus is on how to accommodate growth within the structure of complex climate models and their predictions. The main accommodation is to advocate a switch from nonrenewable to renewable energy resources but without recognizing that renewables effectively become nonrenewable, once growth leads to exploitation levels beyond sustainable yield.

Maybe, after repeated failures, a steady state economy will begin to seem like a reasonable policy to save whatever is left for however long it can last. That falls far short of a real eschatological vision, but it is better than the cryogenic rapture of the Singularity preached by the technical Gnostics. McKibben does not pursue his initial critique of Silicon Valley eschatology, and one cannot blame him because the topic is daunting. But the eschatological question of ultimate purpose and final end keeps breaking through into policy discussions, however unwelcome to present attitudes. In Falter, McKibben at least identifies this usually repressed issue.

Falter
by Bill McKibben
Henry Holt and Co., 2019
$28.00

 

Herman DalyHerman Daly is an emeritus professor at the University of Maryland School of Public Affairs and a member of the CASSE executive board. He is co-founder and associate editor of the journal Ecological Economics, and he was a senior economist with the World Bank from 1988 to 1994. His interests in economic development, population, resources, and environment have resulted in more than 100 articles in professional journals and anthologies, as well as numerous books.

 

The post Book Review: <em>Falter</em> by Bill McKibben appeared first on Center for the Advancement of the Steady State Economy.


We actually read Capital!

Published by Anonymous (not verified) on Thu, 07/04/2016 - 8:30pm in

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Marx

“So, what did you do over the summer”? Most students respond to this ubiquitous question with the familiar answers: “caught up with family”, “earned some money” or (perhaps more commonly) “lots of daytime drinking”.   For a small group of political economy students from the University of Sydney, however, they might respond: “I read Marx’s Capital, volume 1”.

Between November, 2015 and March, 2016 a small, dedicated group of students – undergraduate, postgraduate, or between degrees – met weekly to discuss that text which too-few Marxists have actually read: Capital. Meeting largely at the University of Sydney, the group persevered through the entire 682 pages, despite the oppressive heat of a Sydney summer (intensified by the contradiction of capitalism that is climate change).

Running through the weekly discussions were themes including the specificity of capitalism, the continued relevance of this historical text, and questions of Marxist strategy moving forward into the 21st century. Below are some of the thoughts and impressions of just some of these students.

Matthew Ryan – Postgraduate student

It’s quite a broad brief, “say something about your experience reading Capital”. Do I focus on a particular concept, something I never understood but now grasp a little better? Do I talk about the relevance of the text in the twenty-first century? Perhaps I can comment on an ongoing debate within Marxism, and offer my personal resolution through reference to the text? All valid options and it would be easy to write too many words on any of these topics. But instead, I’m going to talk about reading Capital.

David Harvey has taught a class on Capital every year for decades. Well, maybe he’s missed a few on leave and what not, but the point is he has read it many times! I always used to wonder why he read it again each year. Having now read it myself, I can understand why – different groups and different approaches to reading the text all result in a unique, contingent experience of the text. This can be seen even through our own short encounter with the text.

Some people would watch Harvey’s lectures on Capital before each week’s meeting, as well as the chapter. Some would watch the video then read the chapter, while others would do the opposite. Some read companions to Capital in parallel, whilst others supplemented their reading with online resources – glossaries of concepts, and the like. Some people read earnestly, taking notes, and bringing these as discussion points. Others had a more organic reading process, and a discussion style to match. The point is there are a lot of ways to read it. And if I’m honest, my own approach was a mix of almost all of these, resulting in different experiences with different chapters.

A further variable producing different, yet equally stimulating, readings were the backgrounds and interests of those in the group. Some came to the group with a wealth of knowledge of Marx and Marxism, while others (myself included) did not know their absolute from their relative surplus-values. Personal research interests varied from the role of technology in capitalism, to issues relating to profit rate, to colonisation and class formation, through to the historical specificity of capitalism and the agency of class actors in capitalist development. Each brought a different perspective, leading the conversation in suggestive and distinct directions. I’m sure no reading group would have the same experience.

Reading Capital was a wholly social experience – or, I should say, a socially contingent experience – and I’m sure I’ll be telling friends, family, and students about my reading of Capital in the summer of 2015-16 for many years to come.

Rhys Cohen – Tutor and Honours graduate

For me there were two really significant things that I got from the reading group – the first was to do with the content of the book and its modern context, and the second was to do with the social experience and practice of the exercise.

First, something that Llewelyn in particular was keen to draw our attention to, was the extent to which our engagement with more contemporary Marxian literature tended to cloud our reading of Capital. I know personally that many times I assumed Marx was making an argument that was much more sensitive, nuanced and, for want of a better word, acceptable for modern theorists than was actually the case.

It took conscious effort to read the book on its own terms and it was confronting to see some of the limitations that Marx is so often criticised for. But in many ways this was heartening because it reaffirmed to me the huge contributions that theorists since Marx have made to the understanding and critique of capitalism, and also the necessity for this project to continue.

Second, as young, Left students I think we had all become very familiar with the standard lamentations of the Left more broadly: how can we stop this constant infighting, factionalism etc. The absurdity of these divisions was something we had all discussed at length in the past. And going into the reading group, although we all respected each other as friends and colleagues, I felt some anxiety as to whether this would remain the case, or if we might find some fundamental rift emerging between us.

And some conflicts did emerge: we argued about determinism, structuralism and agency; the nature of class and intersectionality; technology, morality and communism. At times these arguments got quite heated. But what struck me was our capacity to stick with the project, to work through the arguments. And in the end I felt that not only were many of these divisions revealed to be largely semantic miscommunications, but that we had moved closer to each other’s understandings in a way that felt constructive as opposed to coercive.

Llewellyn Williams-Brooks – Honours student

Returning to the New Left critique of Australian History

It certainly is a strange to read Capital in the context of Australia: a country straddling the contradictions of core and peripheral development within global capitalism. This precariousness, in terms of the world market, has always made Australia something of a strange case in the scheme of things. After all, Australia in the 19th century was producing a third of the British gold-standard’s reserve while it was championing the 8-hour work day and birthing a major union movement and Labor party. There seems something of an uncertainty, perhaps, a contradiction, at the very heart of Australianess. This economic uncertainty was best expressed, in the language of political office, through Paul Keating’s ‘Banana Republic’. Conversely, the nationalist writers were quick to convert this ambiguity into a mythical treatment of egalitarianism, most famously addressed in Ward’s Australian Legend, and necessarily critiqued by McQueen in A New Britannia and Irving and Connell’s Class Structure in Australian History. This was the project of the old and the new left, but this is not our project.

Wakefield is seen to observe, in the final section of Capital, that social relations of production are not reducible to simply a cloned relocation of the economic and political apparatus in Britain.

As Marx comments: “[Wakefield] discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things”. Australian colonialism required the re-establishment of the old relationships within a complex set of new social relations.

This reading substantiates that by understanding the economic relations of capitalism, we have, in the most optimistic reading, only half the picture. We should also observe the necessity of positioning the agency of resistance in the centre of human social history. We must neither fall into the trap of accepting Australia as a ‘peripheral’ banana republic, or a mythical space of elite nationalism. Instead we should understand that resistance in Australia is a fact of our history: Indigenous resistance in the frontier-wars, the militant organising of the great strikes, and the women’s suffrage movement are all evidence of this fact. Marx’s Capital only gets us part of the way, we must take hold of our own social history in order to change it.

Joel Griggs – Honours student

Reading Capital in its entirety is like reading Marx for the first time. For a self-professed Marxist, the experience is both one of vindication and sobriety. On the one hand I feel the hubris that Marx inspired in me from the very outset. On the other, a deep trepidation begging an answer to the question: What if Marx was right?

Incidentally, as an undergraduate embarking upon my honours year, I am repeatedly reminded that Marxism is experiencing a kind of academic renaissance. What is driving this resurgence is anyone’s guess but as my comrades and I wade through the murky waters from commodity fetishism to Marx’s own theory of colonisation I am struck by the powerful clarity of a man whose perspicacity eclipses the moral dilemma evident on every page. Less than two years after a young American Union formally abolished slavery, Marx is alone in revealing a new kind of slavery emerging in the Old World. Waged-labour with its ‘freedom in the double sense’ replaced the stability of the indentured peasant with the precariousness of the proletariat; a class at once pitted against one another and unified in their wretched struggle.

It is this constant dialectical relationship present throughout Capital that exposes the structure and the structural weaknesses of our predicament. While the conditions have undeniably improved, the structural realities of the working class remain largely unchanged today. Likewise, even though the capitalism that so consumed Marx in the nineteenth-century may have traded in its ostentatious top hat for a less-assuming tie, it is nonetheless the same vampiric fiend that dogs every step of our collective existence.

Capital’s strength lies in its piercing internal critique of what defines capitalism. Twenty-first century capitalism is adaptable, mobile, and has a thousand faces. To assign capitalism homogeneity is to lose before we have even begun to unravel its web. The uneven development of capitalism, too, makes it equally difficult to analyse. There must be, however, an underlying logic that serves as a motor for capitalism. To this end, Marx’s unfinished project is no less mistaken today than it was one and a half centuries ago – though like most things in life, questions of right and wrong are seldom black and white. The answer for me lies within the explanatory scope of the theory. For an exploration into the insights of an exceptional dialectician, then, my hubris and trepidation seem entirely fitting. More relevant today than ever, reading Capital has been a wonderful and enlightening experience.