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CURRENT POLITICS - Rhinocerous in the Room - Capital |
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3CR, 26 November 2016
One
is cinematic, the other personal. I encourage comrades to track down a movie
from this year’s Italian Film Festival. It’s
called The Confessions. There’s
no sign of a general release but the well-to-do can afford a DVD to share with
the rest of us. The
rest of us might find some way of downloading it for next-to-nothing. The Confessions is very humourous, very
sharp and exceedingly well informed about the condition of global capitalism. That
one-line pitch for funding would have gone something like this: ‘The
head of the IMF confesses his sins to St Francis of Assisi.’ ‘Great!’ chorus the consortium of producers. Then
they ask: ‘What next?’ Without
being a spoiler, here’s the context: The
G8 Finance ministers are meeting to trigger a global crash. They
know a smash is coming. They
know that it will wreck havoc on capitalism. So,
they plan to bring on a crash in a way which will protect the rich and
powerful. To
this end, the head of the IMF has come up with an algorithm. That
twist in the script is not as way-out as it sounds. The
new governor and deputy at the Reserve Bank of Australia are the end products
of a regime of indoctrination that convinces otherwise intelligent people that
only algebra is real.
I
also need to fess up. Throughout
the year, I’ve been reporting that the global economy is headed back to where
it was in 2007. In June that year, the Bank for International
Settlements warned of a 1930s style crash. That
almost in September 2008 when Lehman Brothers went bust. Governments
stepped in. They took-over other bankrupt banks and then pumped out a trillion dollars. Here
we are at the end of 2016 and the second crash has not happened. Yet
the Masters of the Universe still expect one. In
2014, the annual Report from the Bank
for International Settlements warned that governments and corporations had only
postponed the day of reckoning. In
June this year, the BIS Report added
a new warning. The
pumping out of money would make that inevitable reckoning worse. Some
of the powerful know what has to be done to serve capitalism. Excess
capacity has to be driven out of the system. That
means a massive devalorisation of capital, with terrible consequences for the
rest of us. Why
haven’t they done it? They’re
not game. Here’s
the President of the European Union, Jean-Claude Juncker: ‘We all know what to do, but we don’t
know how to reelected after we’ve done it.’ That
much is true. But
defeat at the polls is not even one half of what alarms them. Nor
are they worried about a new Bolshevik revolution. Rather,
our masters fear a breakdown of social controls. Their
world is ungovernable enough already.
This
morning, I’ll glace at only the first of those case studies - China. For
the third quarter in a row, Beijing has reported growth of 6.7 percent. As
we’ve noted often enough: Chinese statistics are a particularly boring form of
science fiction. Is
Beijing managing a soft landing – or managing the numbers yet again? China
is the leading example of excess capacity. Indeed,
it’s got worse since 2008. To
reduce even the six worst industrial sectors by only 10 percent would cost 4.3
million jobs. There
is no electoral cycle to worry about. The threat to the rulers is that the thousands
of incidents and protests that have being growing year by year will get out of
control: ‘A
single spark might once again start a prairie fire.’ The
prospect from the consequent upheaval goes a good way to explain why the
government spends so much on the army. The
PLA is not about to invade Tasmania. Its
role to keep a lid on things at home.
I’m
talking about the prospects for the EURO and, indeed, for the European Union. Six
weeks ago, the retiring chief economist at the European Central Bank: ‘One day, the house of cards will collapse.’[1] At
the same time, the politician who oversaw the introduction of the Euro, Jacques
Delors, had this to say: ‘It is essential and urgent: at some
point in the future, Europe will be hit by a new economic crisis. We do not
know whether this will be in six weeks, six months or six years. But in the
current set up the euro is unlikely to survive that currency crisis.’ The
current conventional wisdom is that the EURO should never have been introduced. The
expert predicts that it cannot survive in its present form, but will spit into
two. One
for the rich nation-market-states led by Germany. The
other for the PIGS – Portugal, Italy, Greece and Spain. More
broadly, will the next crash bring down the EURO or will the break-up of the
EURO trigger another global implosion?
Why
did it not happen six weeks ago rather than in six years time? We’re
not Christodelphians predicting the Second Coming. As
Marxists, we don’t depend on ‘faith’, but on analysing material realities. The
biggest reality working against a second smash continues to be the printing of
money. Is
pump-priming a sufficient explanation for why the smash has not happened? If
not the total explanation, everything else seems secondary.
Indeed,
sub-zero interest rates mean that corporates and governments are being paid to
borrow. The
U.S. economy is the only big one to show any sign of recovery. Yet
even the U.S. has not been game to lift interest rates. We’ll
see what happens next week in Washington at the Federal Reserve; and more
importantly, what will be the impact of a even tiny rise during the following
weeks. That
uncertainty about a 0.25 percent increase above zero comes on top of the
uncertainties at every level from the coming Trump rampage.
Yet
the European Central Bank, which their government dominates, has joined the
lemmings in the chase for growth from negative interest rates. The
UK has given up austerity to print money.
Governments
are making the day of reckoning worse by running up debts. We’re
all in unchartered territory. Everything
I have to say is a paraphrase of what I get from the BIS, the IMF and the
business media. The
experts now admit that they can’t understand why none of their policies works.
Yesterday,
I gave a paper at a so-called Historical Materialism Conference in Sydney. If
you want to be depressed go on-line and look at the program. Capitalism
is staggering and two thirds of the papers are fairly floss. It’s
unfair to single out anyone but on the morning of the first day you could chose
between a panels on ‘Critique,
Form, Language’ and one on ‘Ontology, Power, Poetics’. The
third session was about the politics of Spain and Greece, but not starting from
the economy. The
best that much of the Left can do is to go on bleating that it’s all the fault
of some beastie call neo-liberalism. And
that neo-liberalism is a bad in the heads of nasty people, mostly men. Some
time ago I used one of these sessions to point out that neo-liberalism is a
very good for the corporates; And
that neo-liberalism is secondary to the needs of capital. Neo-liberalism
as a bad idea in the brains of nasty people. How
often do you hear anyone penetrate into the catch-phrase ‘globalisation’ in
terms of socially necessary labour-times?
Much
of what used to be commonplace around the Left has been lost. For
thirty years, the basics of Marx’s critique of political economy have not been
front and center. No
one knows better than I do how much yakka has to go into keeping even two steps
behind the unfolding chaos. I
suspect that our ‘brightest and best’ know that there is something huge coming
down. Confronted
by a decade of global stagnation punctuated by multiple crises, the options are
to fight or to flee. Deprived
of the weapons that Marx and Engels fashioned for us, is it any wonder that so
many of the intelligentsia have taken flight into the la-la land? The
Young Hegelians of Marx’s youth have regressed into the disorder of infantile
Hegelianisms.
Opening
any of the four volumes of Capital
will not explain what has happened inside capitalism since the 1940s. However,
two features of capitalism remain. The
first is its need to expand. The
second is that capital can expand only through the exploitation of our labour
and by plundering the wealth of nature. Those
features will be constant for as long as capitalism exists. What
must keep changing is how the agents of capital organise the exploitation and
the plunder to ensure its expansion. In
September 2017, it will be 150 years since 1,000 copies rolled of the presses
in Hamburg.
Next
time, I’ll say something about two of Trump’s major economic policies. Tax
cuts and protectionism. We’ll
view them through the lenses that Marx ground for us which Engels polished.
‘Everything is fine until it is
not.’
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