Friday, November 06, 2009
Fort Hood posted by lenin
BY NOW EVERYBODY ON THE PLANET KNOWS about the killing of 12 people and wounding of 31 others at Fort Hood in Texas. There's no doubt that this is a tragedy for the families and friends of the slain. But from a tragedy like this there will inevitably issue forth a second tragedy - the racist, anti-Muslim hysteria that will follow because the man - Major Nidal Malik Hasan - was from a Palestinian background. And that hysteria - already in evidence in online newspaper comments boxes - will obscure the real issues and the real reasons for this tragedy. Hiding from the truth will only ensure more tragedies like this in the future. So, let's go through some of the truths.
1) The sheer racism involved in immediately speculating on the religion of the shooter. Back in May, an Army Sgt. stationed in Iraq and suffering from PTSD shot and killed five of his fellow soldiers. That man's name - John Russell - was Anglo Saxon. Nobody speculated on the role of his religion in the killing. In this instance, as an article in the New York Times makes clear, Hasan, who joined the military out of patriotism, faced harassment for being Muslim and wanted out, even pursuing a failed legal route to early discharge. As a psychiatrist, he had counseled many returning vets who suffered PTSD. The combination of these two things apparently made him "mortified" at the prospect of being sent to Iraq or Afghanistan.
2) This racism also provides a cover for the fact that men and women trained to kill and who experience the brutality of enforcing occupations in Afghanistan and Iraq, suffer from mental breakdowns, suicides and commit murders at far higher rates than the general population. A 2007 CBS News investigation into military suicides found:
"Veterans aged 20 through 24, those who have served during the war on terror... had the highest suicide rate among all veterans, estimated between two and four times higher than civilians the same age. (The suicide rate for non-veterans is 8.3 per 100,000, while the rate for veterans was found to be between 22.9 and 31.9 per 100,000.)"
And according to an article in the Washington Post, based in part upon an investigation by the Colorado Springs Newspaper, the rate of homicides amongst veterans from the Fourth Infantry Division's Fourth Brigade were 114 times higher than the rate amongst the general population in Colorado Springs, where they are stationed stateside.
"During their deployment, some soldiers killed civilians at random -- in some cases at point-blank range -- used banned stun guns on captives, pushed people off bridges, loaded weapons with illegal hollow-point bullets, abused drugs and occasionally mutilated the bodies of Iraqis, according to accounts the Gazette attributed to soldiers who said they witnessed the events."
Another study by the New York Times found that at least 120 people had been killed by returning vets. However, the Times itself assumes that this is a conservative number since it was reached only by looking at newspaper reports and it only includes active-duty soldiers and new veterans. The CBS survey used government statistics.
3) The wars in Iraq and Afghanistan have led to the slaughter of hundreds of thousands of innocents and the destruction of infrastructure and social networks that will take generations to repair. The media and government are utter, utter hypocrites to condemn these murders while taking no note - or reporting as simply normal operation procedure - the families slaughtered wholesale by US drones that fire missiles at wedding and funeral parties, into Pakistani villages. In Afghanistan alone there have been an estimated 8,400 - 28,000 direct and indirect civilian deaths caused by ISAF and US forces.
4) Mass murder has become as American as apple pie with dozens killed in spree murders this year alone. What is it about American society that brings about such a large number of these types of violent acts? The roots have to be found in the fact that America is the world's biggest, most violent empire, whose means of domination and largest single budget outlay goes towards the
military. This year alone the military will take up to $700 billion directly with more indirectly through military aid to countries such as Israel and Colombia. This is a country jacked on violence. America, as the wealthiest nation on earth, also had the third highest levels of inequality and poverty in a study by the OECD released in 2008. The only two countries above the US were Turkey and Mexico. The combination of poverty and glorified violence, in the shadow of historically unprecedented levels of wealth creation is key to understanding the prevalence of violence in America.
There is a danger that in the days following the Fort Hood shootings, the right and the media will whip up terrible racism. Arguing wherever possible the real reasons for this terrible act will be an important part of the ideological struggle to maintain the momentum of opposition to the wars in Afghanistan and Iraq. We mustn't allow the truth to drown in a sea of racist filth.
Labels: amreeka, going postal, military, racism, US imperialism
Thursday, November 05, 2009
Alex Callinicos v Martin Wolf posted by lenin
Labels: capitalism, financial sector, neoliberalism, rate of profit, socialism
Tuesday, November 03, 2009
Citizen's arrest for Israeli ambassador in Nottingham University today posted by lenin
You might recall that Nottingham University students were among those who occupied in support of Gaza in January. In response to a visit by the Israeli ambassador, they have issued the following press release:A planned visit to the University of Nottingham campus today by the Israeli Ambassador to the UK, Ron Prosor, has caused widespread dismay and consternation within the university community, notably among the Palestinian and Islamic student body.
The visit, during which the ambassador is due to deliver a lecture entitled “Israel’s Search For Peace” is due to take part at 6pm on Wednesday 4th November in the Great Hall of the Trent Building, on the University’s Main Campus.
The visit is set to be the focus of a massive demonstration by student protestors who are objecting to the University authorities’ apparent insensitivity and lack of judgment by inviting Mr Prosor less than 8 months after Israel’s internationally-condemned attack on the Gazan population in December 2008-January 2009. This attack left more than a thousand civilians dead and inflicted a huge human and material toll on the Gazan population.
The decision by the University authorities to invite Mr Prosor is even more surprising considering the campus was the stage of a substantial protest movement back in February. This protest was widely reported and involved the occupation of a lecture theatre by hundreds of students. The students were protesting against what many considered to be the tacit complicity of the University authorities in Israeli war crimes.
The occupation protest culminated in a large demonstration outside the Vice Chancellor’s office, under the banner of “Books Not Bombs”. Nottingham South MP Alan Simpson, who spoke at the protest, urged the University to stop dealing with arms manufacturers and to help supply educational materials and financial aids to Gaza’s students.
Many of those who took part in the protest action earlier this year have expressed their disappointment at what many deem to be a highly provocative decision by the University authorities. They feel that this seriously goes against promises that were made, in the wake of the student occupation, by senior management to seek better relations with the Palestinian and Islamic student body.
The protest being organised on Wednesday 4th November is aimed at raising awareness about Israeli war crimes as highlighted in the recent UN “Goldstone” report of October 2009. Some of the protestors have been seeking legal advice regarding the possibility of affecting a citizen’s arrest on the Ambassador were he to enter the campus.
Many student and human rights campaigners have urged the University to rescind the invitation and have vouched to use all peaceful and legal avenues available to them to ensure the lecture does not take place.
PRESS CONTACT: 07786316571 – EMAIL: NottinghamForGaza@gmail.com
Labels: gaza, Israel, occupation, palestine, students, zionism
Monday, November 02, 2009
A ruined tea party, and a brewing inferno. posted by lenin
Or you could talk about the regional apocalypse that is developing within the bloody embrace of NATO and Obama-style multilateralism. I wish it were redundant to spend too much time talking about the terrorising of the Afghan population by the occupiers, but it plainly isn't. Johann Hari sometimes does a good job of drawing attention to the humanitarian consequences of the war. Here, he notes that according to Lt Col Kilcullen, in recent aerial attacks the US has killed 98 civilians for every two 'insurgents' killed. If that ratio holds for the air war as a rule, then consider that the US is currently boasting of having killed up to 25,000 insurgents. 25k is 2% of 1.25m. Lacking a Lancet-style cluster survey, one can only make an educated guess as to whether such a figure is approximately realistic. There was one cluster survey carried out for the first nine months of the invasion and occupation, which estimated that 10,000 civilians had been killed, the majority from air attacks. A similar survey today would be reporting the effects of a far more intense aerial campaign, in a war lasting for eight years now. Who can say that the soaring use of cluster bombs, daisy cutters, 'smart' missiles aimed at wedding parties, drone-based ordnance, and the usual deposits of unexploded ordnance, will have harvested a negligible number of bodies? I just venture that, were this to be properly investigated, levels of mortality way well exceed those in Iraq.
Further, nowhere is the point sufficiently taken that these consequences are an intended, deliberate, and considered outcome of the aggression. It is not just that as the US transfers the risks of its operations to the civilian population through high-octane aerial attacks, it necessarily leads to a perhaps undesired but accepted level of civilian slaughter. It is that the distinction between civilian and combatant is being eroded as rapidly as it was in Vietnam. The Afghan population has simply become, in the context of a guerilla war, part of the enemy. NATO planners know full well that the insurgency couldn't sustain a heavy presence in 80% of the territory, and effectively take over the Nuristan province, without the backing of a socially significant layer of the population. I would infer that the intention of constant attacks on civilian population centres is to terrorise the population - perhaps with the hope that whatever measly and corrupt civilian programmes are being promulgated can 'win hearts and minds' at some point in the increasingly distant future.
The second point is that we are witnessing anew the way in which imperialism and nationalism can intersect to bloodily reconstruct the geography and political economy of whole regions. Such is the history of the Indian subcontinent during and after colonial rule. There was little in the history of Muslims and Hindus in India to give rise to any apprehension of the schism that would arise in the 1930s, never mind the calamity that would unfold with partition in 1947 - 90 years after an uprising uniting Muslims and Hindus had delivered India's first body blow to the British behemoth. The story of India's division is an extraordinarily rapid one, in which the divide and rule policies of the British - some of whose deadly fruits were borne again this year in Sri Lanka - interacted with the independence struggle that took off in the 1920s following the Russian revolution and the 1919 Amritsar massacre. In Uttar Pradesh, a highly mixed region notable for its role in the 1857 uprising, the British authorities had already used such tactics by, eg, acceding to demands that Hindi be the official language of the region. As Indian struggles wrung forms of electoral representation from the British, the colonial power insisted that voters identify themselves on a communal basis. One major example of such divide-and-rule was the attempted partition of Bengal in 1905, then a mixed state in the east of India. That was succesfully resisted, but the basic policy of attempting to foment divisions based on confession remained.
This became important in the independence struggle as upper and middle class Indian Muslims whose position had been established through the colonial state sought to be included in any future settlement. The Muslim League, founded in 1906, was initially loyal to the British crown, and sought to promote these interests, and had supported the partition of Bengal on the basis that it was good for Indian Muslims. The British patronised the League for this reason. Until the 1937 elections, however, the majority of Indian Muslims had sought representation in a future independent polity through the Indian National Congress. The turn to other forms of political expression, some class-based and others confessional, resulted from Congress refusing to work in coalition with the Muslim League in government, which aroused fears that it would be a de facto communal power. (In truth, the Congress had allowed a certain blurring of the edges between secular nationalism and Hindu communalism by permitting joint membership of Congress and Hindu Mahasabha until the early 1930s. Much of its leadership was reactionary and sectarian, and the inspirations for avowedly secular Indian nationalism often included dubious Hindu communalist figures such as the writer Bankim Chattopadhyay.) By 1940, the Muslim League was campaigning for a Muslim state to be named Pakistan, including Sindh, Punjab, Balochistan, the North West Frontier Province and Bengal. Jinnah, who was no sectarian and had attempted to broker unity with the Congress, had concluded that Muslims and Hindus were two nations.
It turns out that there were more than two potential nations in there. India was first divided at the cost of 1 million lives. Then, as the Pakistani state came under the domination of the military in 1957, it escalated its practises of discrimination and oppression against the more populous eastern 'half' of the country, and thus sparking an independence struggle which it unsuccessfully attempted to suppress with near genocidal violence. It might have succeeded had it not provoked Indian intervention. But Pakistan was divided at a cost up to 3m civilian lives. Kashmir has remained a running sore and an object of military rivalry between India and Pakistan. Whatever happens to Kashmir, it has cost up to thousands of lives every year. And today, the authority of the Pakistani state over substantial swathes of its territory is in question - not because of fundamentalism, but because the state is unable to meet the needs of the population, and is instead devoting resources and firepower to fighting its own front in the 'war on terror'. Obama's $7.5bn aid package is supposed to help overcome this, but the conditions that come with this commit the Pakistani state to a prolonged, expensive and destabilising war (admittedly with the assistance of Xe, née Blackwater). It also infringes further on the polite fiction of Pakistani sovereignty by demanding more and larger US permanent military bases in the country. The military is divided over this strategy, and - despite much bravado - is unable to control south Waziristan or the Swat valley. It is taking sustained blows in major cities such as Rawalpindi, Lahore, and Islamabad. Some of the attacks reportedly aren't even coming from Talibs, but are mutinies from within. The Federally Administered Tribal Areas, created by the British to contain Pashtun revolt, are now a faultline in the 'war on terror'. The North-West Frontier Province, originally annexed from the Emirate of Afghanistan, may as well now be an autonomous region of Afghanistan.
Afghanistan's viability as a national state is also now in question. The US has attempted to control the country using largely Uzbek warlords, with a handpicked, carefully groomed and scented Pashtun leader. Whoever 'won' the Afghan election wouldn't be able to claim much legitimate authority outside of Kabul. Lacking much of a fiscal base, it is almost entirely dependent on US and donor funding, aid projects, World Bank programmes etc. Even if the Taliban and its associates were decisively defeated, it is hard to see this fractious bunch of mercenaries emerging into a coherent national ruling class, since their brand of highly profitable narco-capitalism comes with military competition and territorial struggle built in. The insurgency (not yet convinced by the insights of satyagraha for some reason), has marginally better chances. It has more national cohesion than the warlord factions do, but is inherently self-limiting by its rootedness in one dominant ethnic group and its reactionary ideology. Of course, the Taliban have proven to be capable of reinventing themselves, but that still doesn't mean they have a remotely plausible social vision. At best, they would be capable of forming an authoritarian nationalist coalition with some defecting warlord groups. It is hard to see a coherent national movement emerging here. If anything, the trend is toward a combination of regionalism and localism.
NATO imperialism is thus intersecting with national and regional politics in such a way now as to accelerate the centrifugal trends already in evidence. The legacy of British 'nation-building' in southern Asia has at times commanded applause and admiration from some of the intelligentsia, but it is a legacy that we are constantly living with no less than with the current reality of US empire. In both the long and the short view, the 'divide and quit' settlement has actually been catastrophic. Its problems may have been resolved more amicably and less bloodily if not for constant outside subventions, the pressures of the Cold War, the coopting of the Pakistani military, the creation of a layer of reactionary Wahabbis to fight Afghan communists and then the USSR etc. That the one force capable of subverting the barbaric heritage of colonial nation-building, international socialism, meets the present challenge in an historically weak state, only adds to the presentiment of grave danger.
Labels: afghanistan, barack obama, british empire, india, jinnah, NATO, pakistan, US imperialism
Actually Existing Capitalism: back in the USSA posted by Roobin
A strange kind of funk often descends on people, be they from the left or right of the political spectrum. Many people hold to the equation that state activity = socialism. What seems so obvious can suddenly become bizarre and endlessly confusing. People like Barack Obama, Winston Churchill and Gordon Brown are transfigured into revolutionaries. We end up with not just the workers state but also the degenerated workers state, the deformed workers state and the transitional genocidal workers state.Its interesting how many historical forms capitalism has had to pass through, how many surrogate regimes it has had to use in order to survive. Capitalism has rarely existed in the form it was supposed to.
There was less of a problem in ancient and feudal civilisations as political and economic power was more or less the same thing. Kings and emperors conquered land and took tribute. Capitalists are people who manage the process of commodity production. At their beginning especially they were actively involved in the production process.
This created a problem we are familiar with today. It is impossible to work and rule. Unlike the working class, which must forcibly redistribute wealth in order to maintain its rule (and in the process undo all class distinctions) the bourgeoisie had the luxury of being able to accumulate wealth within the Ancien Regime.
The bourgeoisie created representative systems of its own within the old regime, along with an army of paid intellectuals, representatives and advocates. It was even able to bring the intellectuals of the old classes over to its cause. An example: during the rise of capitalism the British aristocracy was recruited into the vanguard of capitalist development, in particular to the armed forces and government.
The development of capitalism in Western Europe the 19th century saw wealth accumulated at steeper and faster rates. The need for greater resources, more labour and bigger markets sent capital across the globe. Wherever it set down it transformed the local economy into a commodity economy.
The stakes were constantly raised. In order to stay in the game you needed more and more wealth in order to bid for the market. It is no mystery why surviving capitalists began to pool resources and organise. The typical company went from being private limited to publicly owned.
Perhaps the best illustration of this process can be found in the rewarding final chapters of Rosa Luxemburg’s work The Accumulation of Capital. For simplicity I will settle on one factor: transport. Under the heading International Loans, Luxemburg spent some time talking about the Victorian craze for railway building.
It was a risky, sometimes shady, practice often guaranteed by the state (example the Transcontinental Railroad in the USA, financed by 30-year government bonds). Profit was often little and a long time coming, if it ever came at all. Yet the permanent way was crucial to breaking new frontiers for capitalism. It not only brought commodities to new, faraway places, but also sped up freight and communication, and thus turnover.
The next great leap forward came with the internal combustion engine, leading to the car and aeroplane. Everything the steamer and train could do, the car and aeroplane could do more quickly, cheaply (in terms of running cost), and on a greater scale. But these new developments required a round of new and bigger investment, not to mention planning.
We live with the results of this speed up today, state founded railway networks (examples: Candian, Japanese and New Zealand National Railways), airports and airlines with large state involvement (name a few: Finnair, Air India, Alitalia, Olympic Air). Let's not forget the huge subsidies for private firms (such as the US government's Air Transportation and Safety and System Stabilisation Act, which guaranteed the US air industry $5 billion to cover losses resulting from the 9/11 attacks). Congestion is a major urban issue, wrestled with at city admin level (Transport for London or Régie Autonome des Transports Parisiens). Air congestion is juggled with everyday by networks of national and international controllers. There is no meaningful free market in transport.
There is a potential new frontier for capitalism in the 21st century. The cold war saw heated military and industrial competition between the American and Russian empires. There was another separate but connected competition, the space race. Incredible amounts of money were thrown at this contest. All of it was directed through national, central, bureaucratic organisations. Again there was no meaningful free market involved.
As the Russian empire fell behind during the 70s and 80s in terms of military and industrial competition, so the heat went out of the space race. With the exception of satellite communication (and even this is heavily reliant on state help) the potential of space remains largely untapped.
The point is, as capitalism has developed it has gone from private to public to state capitalist. The state is now the front man, the organiser and the defender at home (and crucially) abroad. It is the lender of last resort. The state has become the aggregate capitalist, the perfect personification of capital’s will.
Most importantly it is the collective frontiersman. Capital needs a hinterland to expand into, one of Luxemburg’s most clear and lasting observations. The state is the last organisation that can collect the resources and cover the cost of establishing new frontiers.
This means that the conflicts of our age will largely be national conflicts. You cannot have a theory of imperialism without a theory of state capitalism. Have no illusions in Actually Existing Capitalism.
Labels: imperialism, Rosa Luxemburg, space race, state capitalism, ussa, ussr
Thursday, October 29, 2009
Royal Mail's scabbing depots posted by lenin
Never mind the non-revelations in The Guardian's 'undercover' shock-horror expose of casual workers listening to music under their hoodies, and so on. Yes, Britain's number one liberal newspaper, scourge of corrupt MPs and multinationals, sent their reporter into a scab sorting office and he found out precisely fuck all. Socialist Worker, by contrast, accompanied a score of activists down to a Dartford sorting office, which Royal Mail says is being used to clear up early Christmas mail. They hoked through the bins, and established that Royal Mail is using the place as a sorting office for regular mail from all over the world. The casual workers are being employed at the minimum wage of £5.80 an hour on the basis that they are covering the Christmas surplus, whereas in fact they are being used as scabs. This, as SW also reports, is breaking the law. The temp agencies supplying these workers, Reed, Manpower and others, are not allowed to supply temporary workers for that purpose.The news reports a breakdown in talks last night, saying that both sides blame one another for the fall-out (oh, they do? quelle reportage!). In assessing these claims, bear in mind that the CWU did make a serious offer aimed at establishing a period of calm yesterday, and that Royal Mail management is committed to the one-sided imposition of its preferred settlement. And bear in mind that Royal Mail management are circumventing the law in order to keep the mail moving, and thus break the strike rather than negotiate. And finally bear in mind that the TUC's role in this is not to support the strikers, but to operate as an independent facilitator of negotiations. The CWU leadership doesn't have a problem with this, though some posties do. But the point is that the major forces of the organised labour movement are pushing for a negotiated settlement, including the CWU leadership itself. The workforce has signalled through acceptance of previous deals, which shed tens of thousands of jobs, that it is willing to negotiate even to its disadvantage. The only intransigent force here is management. That's the bottom line.
Labels: cwu, new labour, public sector pay, royal mail, strike, working class
Tuesday, October 27, 2009
Crisis and recovery: myths about China posted by lenin
ARE WE IN A RECOVERY? Well, there’s certainly lots of talk of “green shoots” and the head of the IMF said on Saturday that “just now we see the beginning of the end of the crisis, predicting that the world will return to growth this year and by next year global growth will be around 3 percent. Is it true? Any talk of global recovery needs to start by looking at two key places – China and the USA. The two countries are locked together in an unwilling but interdependent dance from which neither can escape. The USA is China’s largest trading partner with 21 percent of China’s exports going to the US and almost eight percent of its imports coming from there. In the US, China is now the USA’s number 1 trading partner, representing up to 19 percent of total trade vs Canada’s 14.5 percent. Until last year Canada was the biggest trading partner.
This is significant for a few reasons. First, because exports are still key to China’s growth, with its balance of payments surplus accounting for 10 percent of China’s GDP. In real terms that means that China sells $300 billion per year more than it buys on the world market. It is a key component of China’s growth rates, which have hovered around the 10 percent mark. Having such a high balance of payments surplus has meant that China can invest heavily in growing its economy. It’s rate of investment is a whopping 43 percent of GDP, compared to about 16.5 percent in the United States and 23.1 percent in the EU. But it’s also meant that China can buy up American debt – it holds close to $800 billion in US debt – in a process of debt cycling that helped fund the 2003-2007 boom. It was as though the US borrowed money from China to pay for stuff that it was buying from China. And China lent money to the US that it had made by selling the US goods from its factories. Right wing historian Niall Ferguson labeled this cycle “Chimerica”. What was really happening, of course, was that by continuing to buy up US government securities they simultaneously kept US interest rates low – thus helping to fund the consumer debt boom – and also kept the US dollar high, making Chinese exports cheap.
It was a virtuous cycle until the bubble got too big. It is now in the process of becoming a negatively reinforcing cycle: the collapse in US imports is driving down China’s trade surplus, and the massive quantity of US debt is driving down the US dollar, which is making it less attractive as a reserve currency and threatens to push up US interest rates. The Chinese have stated on a number of occasions that they are concerned by US debt levels, levels that they were happy with in the past when it meant the sales of Chinese goods. In March, Premier Wen Jiabao made some very bald statements at the end of the closing of China’s legislative session:
“We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried... I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.”
But the Chinese can do little more than express concern. They know that ending the present round of massive stimulus spending in either country would be a disaster, since it is all that is propping up the anemic growth in the US and accounts for perhaps half of the growth in China. At a joint two-day conference between China and the US in July, China made the ritual noises about getting the deficit under control but then re-emphasized that now is not the time to stop deficit spending to stimulate the economy. As Peterson Institute economist, Ted Truman, put it:
“They don't want the U.S. economy to collapse because they are highly dependent on the U.S. economy in terms of economic activity and ... because they have a lot of their financial eggs in this basket.”
The result of the present crisis and the interdependent negative effect it has had on China and the US is leading to a number of processes. China is desperately trying to avoid a slowdown in growth. Anything below about 8 percent will cause a rise in unemployment and, it is feared, a growth in unrest – already in good supply. But with China pumping cash both directly through state investment and indirectly through a rapid expansion of lending – at 34 percent, or four times the rate of GDP growth – there is a serious danger of both an asset bubble and massive over capacity as plant comes online with insufficient global markets to absorb the increase in supply. With US retail sales stagnant and GDP in the European Union expected to shrink this year by four percent, the only hope for China beyond government stimulus that is expected to end after 2010 is to develop domestic consumption.
Recent statistics, for instance showing a 16.5 percent growth in retail sales and a whopping 34 percent growth in auto sales, seem to suggest that this is happening. However, these stats are largely for foreign consumption and for the central state paymasters of regional bureaucrats. In other words they are, at best, manipulated and are often outright fabrications. But even where there has been a growth in domestic demand, much of it either includes increased government expenditure or one-off incentives as part of the government stimulus package. The real problem is that rather than rising, household consumption in China is falling – from 47 percent in 2000 to around 30 percent today, a massive decline. What this suggests is that in the medium term shifting China’s economic priorities to develop domestic demand looks like an unlikely proposition for a number of reasons laid out in an article by Michael Pettis in Nouriel Roubini’s Global Economic Monitor. As he notes there are a number of structural and policy limitations to the growth of Chinese consumption:
“• An undervalued currency, which reduces real household wages by raising the cost of imports while subsidizing producers in the tradable goods sector.
“• Excessively low interest rates, which force households, who are mostly depositors, to subsidize the borrowing costs of borrowers, who are mostly manufacturers and include very few households, service industry companies or other net consumers.
“• A large spread between the deposit rate and the lending rate, which forces households to pay for the recapitalization of banks suffering from non-performing loans made to large manufacturers and state-owned enterprises.
“• Sluggish wage growth, perhaps caused in part by restrictions on the ability of workers to organize, which directly subsidizes employers at the cost of households.
“• Unraveling social safety nets and weak environmental restrictions, which effectively allow corporations to pass on the social cost to workers and households.
“• Other direct manufacturing subsidies, including controlled land and energy prices, which are also indirectly paid for by households
“By transferring wealth from households to boost the profitability of producers, China’s ability to grow consumption in line with growth in the nation’s GDP was severely hampered.”
While Pettis hits the producerist nail on the head, he fails to mention the contradictions that prevent the Chinese state from truly shifting towards a consumerist model. As I discussed above, the Chinese state is deadly terrified of a rise in unemployment and believe that an eight percent growth rate is necessary to absorb migration from the countryside to the cities. Shifting economic priorities towards developing domestic consumption necessarily means reducing the very high rate of investment and providing an increase in wages, social services, etc. For instance it was reported at the end of October that investment accounted for nearly 88 percent of GDP growth. Cutting back investment and redirecting that money to consumption would, at least in the short term, lead to a substantial increase in unemployment. However, the export-led model has its own drawbacks, not least of which is that the Chinese economy is vulnerable to drops in external demand. And the Chinese state can’t provide any direct stimulus to counteract such a pullback. The result of that vulnerability has been made clear in the present recession.
“Between January and September, China's exports fell by 21.3 percent compared with the same period in 2008. The country's total trade with the European Union dropped 19.4 percent while trade with the US and Japan declined 15.8 percent and 20 percent respectively, according to the General Administration of Customs.”
There is also great pressure from the Americans – and others - for China to increase domestic consumption because the USA can’t continue forever to be the repository for Chinese exports. The American ruling class is increasingly nervous about Chinese control of the US debt, which implies a vulnerability to Chinese pressure of US policy. That means that there must be reversal in US indebtedness – and thus an increase in exports and saving. Barbara Hackman Franklin, Bush Sr.’s former Director of Commerce, summarized the viewpoint recently, stating that:
"The US must increase savings and be less consumption-led and that China must become more consumption oriented and less dependent on exports”
But, if anything, China is doing the opposite. Its policy of pegging the Yuan to the US dollar means that as the dollar has declined to more normal pre-crisis levels, China’s currency has also declined. This is, in effect, a devaluation that hinders the US, desperate to overcome its trade deficits, from doing so. As Paul Krugman noted in the New York Times on October 23:
“By pursuing a weak-currency policy, China is siphoning some of… [the already deeply depressed] demand away from other nations, which is hurting growth almost everywhere.”
Yet, in the face of this policy the US administration is, if anything, becoming more conservative in confronting China on its currency. Back in January during hearings on his nomination as Treasury Secretary, Tim Geithner accused China of currency manipulation – a very big accusation that would have meant (if it was sustained after his confirmation) that the US would have to take action against China including, possibly, sanctions. But by October 15 the Treasury Dept under Geithner was singing a different tune in its report to Congress, saying that, while China’s currency was undervalued, it was not being manipulated. Krugman’s response was, “they’re kidding, right?”
But the Obama Administration is not kidding and for very good reasons. If China were to start selling it’s US dollar reserves in a big way it would lead to a much more dramatic decline in the dollar. That would put serious
upward pressure on interest rates as the US government found it more difficult to raise funds in bond markets. While a lower dollar would make US exports more attractive, the combination of higher interests rates and higher import costs – particularly energy – would choke off the feeble recovery and likely lead to stagflation. It would also prick the asset-bubble that is the New York stock market, awash in bailout cash, further depressing the economy. So, expect explicit discussion of currency manipulation to remain taboo. And while the Chinese aren’t happy about all their dollar holdings being worth less every day as the US dollar slides, they aren’t unhappy about their currency devaluing along with it, making their exports cheaper. However, doing nothing – which seems to be the better part of both countries’ present strategy – has a price. For China, it means a continuing decline in the buying power of the Chinese consumer as the cost of imports rise from everywhere but the US. This will make China further dependent upon exports to keep the economy growing, which will also make it vulnerable to factors beyond its borders and thus beyond its control. And as it buys less and sells more it not only has the effect of slowing growth elsewhere, thus undermining its market, it raises the possibility of protectionism. In its trade with the European Union, China had a trade surplus of €170 billion in 2008. The US, by contrast, had a trade deficit of €80 billion. It will be more politically palatable for recession-bound Europe to accept a decline in trade surplus than to see its deficit with China increase. One wonders if America’s weak dollar strategy isn’t, in part, to get Europe to put pressure on China to revalue its currency.
By looking at come of the contradictions faced by the Chinese economy, it begins to look less unassailable than the media is prone to represent it. And it is less the case that China is obstinately refusing to revalue the renminbi than that China has grown itself into a corner, so to speak. With asset-prices rising and the risk of a housing bubble on one side, along with a major crisis of overproduction looming on the other, China must navigate between the rocks of multiple economic dangers and the charybdis of urban and rural revolt that could destabilize the carefully built edifice of Chinese capitalism. It's not hyperbolic to say that the future of the world will be dramatically affected by whatever happens there.
Labels: capitalism, china, depression, obama, recession, us economy, wall street
Saturday, October 24, 2009
OutRage!ous Censorship of "Gay Imperialism" posted by Yoshie
The reader of Lenin's Tomb has long been familiar with the problem of Islamophobia in general and its unfortunate manifestations on the (broadly defined) Left in particular in the age of the "war on terror." The reader is also well acquainted with queer variants of it, such as attempts at gay-washing of Israel. Left-wing criticisms of these phenomena, especially by queers of color themselves, are indispensable to our struggle to displace the hegemony of liberal imperialism.One such queer-of-color criticism of "gay imperialism," a collection of essays titled Out of Place: Interrogating Silences in Queerness/Raciality, however, is being censored in Britain, apparently by Peter Tatchell of OutRage!, who evidently felt his sensationalist brand of activism and rhetoric ought to be above critical scrutiny and got the publisher of the book to take the book out of circulation. For more information about this OutRage!ous censorship, see:
- Johanna Rothe, "Out of Place, Out of Print: On the Censorship of the First Queerness/Raciality Collection in Britain" (MRZine, 15 October 2009)
- Aren Aizura, "Racism and the Censorship of 'Gay Imperialism'" (MRZine, 23 October 2009).
- Umut Erel and Christian Klesse, "Out of Place: Silencing Voices on Queerness/Raciality" (MRZine, 24 October 2009)
How can leftists beat this censorship? In addition to the actions recommended by Aren Aizura, I suggest a couple more, in the short term:
- Hold public forums to discuss the censorship of queer-of-color criticism of "gay imperialism."
- Open up your journals, classrooms, and so on (if you work in publishing, education, and related industries) to discussion of this problem.
In the long term, though, we need to work on creating a Queer Left, informed of Marxist Feminism, capable of discussing such questions as religion and sexuality in proper historical materialist fashion (i.e., supplying missing materialist foundations to Foucauldian critique of the dominant discourse on sexuality).
Labels: ideology, imperialism, islamophobia, liberal imperialism





