Origins of the U.S. Two-Party System

April 24, 2016

A few months ago, I watched an Internet video that explored the attitudes of Americans toward present-day Germany. Germany has a history of at least a thousand years, going back to the medieval Holy Roman Empire. However, movies and TV shows Americans are exposed to focus only on Nazi Germany. Indeed, the popular U.S. entertainment media focus even more narrowly on the years 1944-1945, when heroic American soldiers defeated German Nazis alternatively shown as evil, comic or stupid.

This particular video showed a modern young German woman visiting the U.S. and meeting a young man. The American man, whose education in German history is of the type described above, asked the German woman whether her grandfather had been a Nazi. The German woman put the young man in his place by asking whether his ancestors had been slave owners. And herein lies a tale.

Today in Germany, with the exception of neo-Nazis, nobody honors the Nazis. There are no Adolf Hitler Platz’s and no cities or buildings named for Hitler or other Nazi leaders. Herman Goering’s prediction to his jailers at Nuremberg that in 50 years there would be statues of Hitler throughout Germany did not come true.

Perhaps textbooks in modern Germany don’t explore the deeper roots of what made the Nazis and their crimes possible. That would require an understanding of the imperialism that gave birth to the Nazis and the capitalism that inevitably developed into imperialism. And since Germany remains a capitalist as well as an imperialist country—all of Germany has been ruled by capitalists since 1989—it is unlikely that German textbooks would explain the contradictions of capitalism that made Nazism possible in the first place. But at least the Nazis are pictured as the band of criminals they were.

But what about the U.S. slaveholders and their “slaveholders’ rebellion” of 1861-1865, as it was called by Karl Marx? That rebellion—which formed the Confederate States of America—is pretty much viewed around the world as at least the moral equivalent of the Third Reich. Not identical to the Third Reich but no less evil.

It is not only left-of-center progressives who see it that way. Today’s fascists also see it that way. At fascist meetings throughout the world, the swastika, or symbols that look like the swastika, are displayed side by side with the stripes and bars of the Confederacy, the flag of slavery.

Are the leaders of the slaveholders’ rebellion in U.S. textbooks described as the band of criminals they were, like the Nazis are pictured in German textbooks? Not at all. The leaders of the slaveholders’ rebellion are generally pictured as honorable leaders of a “lost cause”—and as great American patriots—though the emphasis has shifted over the years reflecting the flows and ebbs of the struggle for African American liberation.

For example, in the years immediately after the war ended, it was called the “war of the rebellion.” But soon after, it was renamed the Civil War, a polite and neutral term that makes no distinction between those who fought and in many cases died in the war against the slaveholders’ rebellion and those who fought on the side of the slave owners.

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Can Trump Become the Next U.S. President?

March 27, 2016

In the “super-Tuesday” primaries held March 15, Donald Trump solidified his lead in the struggle for the Republican nomination for the U.S. presidency. He knocked right-wing Republican Senator Marco Rubio of Florida out of the race.

Rubio had been considered one the best hopes of the pro-Wall Street establishment Republicans in their increasingly desperate struggle to stop Trump. The only bright spot for the Republican leadership was that John Kasich, the establishment Republican governor of rust-belt state Ohio defeated Trump in that state’s primary.

However, Kasich has few delegates pledged to him. In normal circumstances, that would mean that he would have virtually no chance of winning the nomination for the presidency. He would simply be a “favorite son” candidate who would be expected to release his delegates to vote for the eventual winner. At most, Kasich might hope to win the vice-presidential nomination.

The super-Tuesday results barely keep alive the hopes of the Republican leadership that Trump might still be denied enough delegates to clinch the nomination before the Republican convention to be held this coming July in Cleveland, Ohio. If this proves to be the case, there remains the possibility a majority of delegates might be scraped together to nominate a more traditional Republican for president, but who that might be is anybody’s guess at this point.

The only other Republican besides Trump and Kasich still officially in the race is Texas Senator Ted Cruz. Cruz mixes extreme “neo-liberal” economics with an appeal to the religious fanaticism of the so-called Christian Right. His colleagues in Republican Party leading circles consider him personally obnoxious. They also fear that he is likely to lose big time in November to the presumed Democratic nominee, Wall Street darling Hillary Clinton, due to his neo-liberalism combined with his support of extreme sectarian Protestant Christian religious fundamentalism.

While it is possible that Trump has considerable support among the coupon clippers in the country club locker rooms—I don’t know, since I don’t personally move in these circles—serious political strategists of the U.S. ruling class, whether Democrat or Republican—what Marx called the “political bourgeoisie“—consider Trump completely unqualified to assume the U.S. presidency. This is not because they doubt Trump’s loyalty to the capitalist system. On the contrary, Trump is a multi-billionaire and therefore has a personal stake in the survival of capitalism greater than all but a handful of his fellow billionaires.

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The U.S. Elections and the Decline of Empire

February 28, 2016

I showed in the series of posts on Germany that extreme class contradictions brought that country close to a workers’ revolution. The failure to achieve this revolution led to the dictatorship of Adolf Hitler and his Nazi Party. Hitler, backed by German monopoly capital, then attempted through war to transform Germany into a second version of the United States. For example, Poland and the nations of the Soviet Union were to be transformed into Germany’s version of the “American West.”

The fuhrer and the German imperialists he represented also attempted to destroy the class consciousness of the German working class. Their attempt to transform Germany into a second version of the United States failed, however, and after the war (West) Germany was absorbed into the U.S. world empire. With the help of “the Empire,” Germany finally gained the markets and access to cheap raw materials it so desperately needed.

So German imperialism got something out of World War II after all, finally emerging from the intolerable conditions that its imperialist rivals had imposed on it after World War I. As a result, the prolonged social crisis gripping German capitalism was overcome.

While German capitalist politics became increasingly “Americanized” after World War II, U.S. politics are showing signs of becoming “Germanized.” We should not, of course, exaggerate the “Germanization” of U.S. politics. It is neither 1918, 1923 nor 1933 in the United States. But the surprising response to “socialist” Bernie Sanders in the Democratic Party, combined with the gains made by far-right demagogue Donald Trump in the Republican Party—a man who some have compared to Adolf Hitler—represents something new in American politics.

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Germany and the U.S. Empire (Pt. 5)

January 31, 2016

On January 30, 1933, German President Paul von Hindenburg appointed Adolf Hitler Reich chancellor, the most powerful office in the government. But there were only two other Nazis in the cabinet. In terms of cabinet members, traditional reactionaries such as Franz Von Papen (1879-1969)—the vice-chancellor—and the arch reactionary media baron and Nationalist Party leader Alfred Hugenburg (1865-1951) dominated the government.

Hugenburg was the Rupert Murdock of Germany. Leaving aside the Nazis, Alfred Hugenburg’s Nationalist Party was considered Germany’s most right wing, representing the large landowners. Hugenburg held the Ministry of Economics and Food, a ministry of considerable interest to Germany’s large landowners.

The Communist movement at first believed Hugenburg, not Hitler, was the dominant member of the new government. Not only were Nazis a small minority in the cabinet but the Prussian landowner and militarist Paul von Hindenburg (1847-1934) still occupied the presidency and had the power to appoint and dismiss the chancellor.

The view that Hitler was not the real power in the cabinet, however, ignored several crucial facts. One was that the two Nazi ministers besides Hitler gave the Nazis control over the bulk of Germany’s police forces. The Ministry of the Interior was awarded to Nazi Wilhelm Frick (1877-1946), a lawyer and policeman by profession. The other Nazi, Herman Goering (1893-1946), held the post of minister without portfolio and, more importantly, served as acting minister of the interior for the State of Prussia. This gave Goering effective control of Germany’s police force, including its political branch—the “red squad” in U.S. terminology. The Prussian red squad was soon given a new name—State Secret Police, or Gestapo for short.

Even more importantly, the Nazis were not just another bourgeois political party, only further to the right. They were a combat organization with a huge SA militia, whose membership numbered in the millions—compared to only 100,000 for the official German military, the maximum allowed under the Treaty of Versailles. Members were recruited mostly from Germany’s desperate middle-class youth, who had few prospects in Depression-bound Germany. The SA was organized to wage civil war against all wings of the workers’ movement—especially the Communists but also the Social Democratic Party, the trade unions, cooperatives, youth groups, and so on, in the streets of Germany.

Imagine if Donald Trump today commanded a private army of tens of millions of mostly middle-class youths, dwarfing in size both the regular army and all police forces of the U.S. Imagine further that this militia was fanatically loyal to Trump’s person. Further imagine that this private army was waging violent war in the streets against the trade unions, all African American organizations, Mexican-American organizations, immigrant rights groups, and Muslim and Arab organizations. This is what a full-fledged, Nazi-like mass fascist movement would look like in the early 21st-century U.S.

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Germany and the U.S. Empire (Pt. 4)

January 3, 2016

Right-wing election victories, the U.S. Federal Reserve System and the ghost of Adolf Hitler

Over the last few months, there have been a wave of alarming electoral gains by right-wing and far-right parties in a series of countries. These countries are as different as Argentina, Venezuela, Poland and France. In the United States, the racist, anti-immigrant, Islamophobic billionaire real-estate magnate and demagogue Donald Trump has emerged in the polls as the favorite candidate among Republican voters.

Not all recent elections have seen gains only by right-wing candidates. Forces on the left have won victories as well. Among these was the victory of the veteran left-wing anti-war activist Jeremy Corbyn, leader of Great Britain’s traditionally very pro-imperialist Labour Party. Parties of the left have won a majority in the recent elections in Portugal as well.

In the U.S., too, where it has been extremely weak if not altogether absent in electoral politics, the left has made inroads. In the Democratic Party, the “socialist” candidate Bernie Sanders is drawing the largest crowds. He is the first avowed “socialist” to stand any chance—even if still a long shot at this point—of actually winning the presidency in U.S. history. Nothing like this has ever occurred in U.S. politics, even during the Depression. U.S. politics is therefore not so much moving toward the right as becoming polarized between an increasingly extreme right and an emerging mass “socialist”—though not yet in the Marxist sense of the word—left.

Later in the new year, I will take a closer look at the evolution of U.S. politics that features both the rise of the Sanders “socialist” left and the Donald Trump far right in light of the long-term social and economic trends reshaping U.S. society and beginning to transform its politics.

Similar trends of gains by both the right and the left are visible in other countries as well. In the elections that have just been held in Spain, new parties of the left and the right made gains at the expense of the parties that have dominated post-Franco Spain.

So all is not doom and gloom on the electoral front for the left. But since this post examines the rise of Adolf Hitler to power in Germany during the 1930s Depression, and since we must know our enemies, I want to take a brief look at victories of parties that operate on the right wing of bourgeois politics and see if there is any common denominator that explains their wave of electoral victories.

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Germany and the U.S. Empire (Pt. 3)

December 6, 2015

*Special Statement*

I don’t normally comment on current events unless they are connected to economic events or theories of capitalist economic crises. However, the terrorist acts in Paris that led to the deaths of at least 130 civilians and the injuring of scores of others forces an exception.

I deplore the deaths of civilians in Paris whose only crime was enjoying a night of partying, drinking and music, a “crime” I have been guilty of myself. This follows the terrorist attack in Beirut and the apparent bombing of a Russian airliner that crashed in Egypt causing the deaths of 224 passengers. All these acts seem to be the work of supporters of the Islamic State, also called ISIS, ISIL and Daesh.

The media has shown much more concern about the mostly white Western European victims in Paris than they have for the victims on the Russian plane, not to speak of the victims of Islamic State terror attacks in the Muslim countries such as the recent attack in Beirut. But bad as the carnage caused by the terrorist acts organized or encouraged by the Islamic state have been, it pales before the much greater number of civilians that are being killed not only in Syria but in many other countries being attacked by U.S. imperialism and its satellites such has France.

Even if we count the nearly 3,000 people killed in the Twin Towers attack on September 11, 2001—also innocent bystanders whose only “crime” was showing up at work at the World Trade Center in New York that day—the total number of civilians killed by individual or small-group terrorist actions such as those carried out by the Islamic State or al-Qaeda is still dwarfed by the number of dead resulting from the terrorist war against terror waged by the U.S. government, Israel and the Empire’s imperialist satellite states against the peoples of the Muslim world and beyond. Are the lives of white Parisians more valuable than of “brown” Syrians, Iraqis or Palestinians? I say no! Black and Brown lives matter just as much!

It is also worth noting that the “war on terror” launched by George W. Bush and continued under President Obama has been joined with great enthusiasm by the French government. Paris is hoping the U.S. will allow France to once again become the colonial master in all but name of Syria.

The war on terror is itself being waged with terrorist methods. That is, the government of the U.S. and its satellites are using methods of warfare that in the past were associated with individual and small-group terrorist acts. One famous example is the assassination of Crown Prince Archduke Franz Ferdinand and his wife Sophie by Serbian nationalist terrorists in June 1914.

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Germany and the U.S. Empire (Pt. 2)

November 8, 2015

As the Soviet army swept westward toward Germany in 1945 and the American and British armies advanced eastward into Germany, soldiers in these armies were in for a shock. They would notice a peculiar smell in the air and then would arrive at one of the Nazi death camps.

These soldiers had been subjected to propaganda designed to portray the German enemy in the worst possible terms. Such wartime propaganda often takes more than a few liberties with the truth. In the case of the Soviet soldiers, they had plenty of experience with “the fascists,” as they called them, and their unspeakable crimes against the peoples of the occupied territories in the Soviet Union. These battle-hardened Soviet soldiers would expect the worst from the Germans.

But nothing could prepare them for what they found in the Nazi death camps. I will not attempt to describe it here. Today it is possible to watch videos of World War II Nazi death camps that are stored in digital form on the Internet. I would, however, advise anybody who is curious to watch these videos on an empty stomach.

A common reaction among the U.S. and British soldiers after they observed—and smelled—the horrors of the death camps was to tell the interviewers that now they knew what they were fighting for. The Soviet soldiers already knew what they were fighting for, but even they were shocked.

The reaction of one British soldier in one of the videos I streamed in preparation for this post unwittingly shed light on what had really happened. Interviewed many years after the war, he expressed amazement that the Germans could do this to “fellow Europeans” who simply practiced a “different faith.” A German Nazi would have explained that this was not true. The people murdered in the camps were not, our Nazi would have explained, Europeans at all. Nor were they murdered because they had a different faith. The death camp victims had to be liquidated because they were a different race.

According to the Nazis, the “great race” of white European Nordic Aryans were merely defending themselves against the racial “aggression” of the Jewish people and other “Asiatic” races such as the Roma—the so-called gypsies. In reality, our Nazi, assuming he was well educated in the “racial science” taught in all the educational institutions of the Third Reich, would explain that the Jews were a bastard Asiatic race mixed with “Negroid” elements. They had come to Europe to destroy the Nordic white Aryan race, who were the only creative race in the world and the hope of all humankind. Certainly, the Nazi would explain, a British soldier of “Nordic Germanic Aryan stock” should understand this in light of their own rich struggle against other races throughout its vast empire.

For 12 years, this lesson that the Jews, appearances to the contrary, were not white Europeans, was driven into the head of every German through the educational system from elementary school right through the universities, on the radio, in “educational” newsreels shown in movie theaters, as well through the various branches of Germany’s boy and girl scout movement—the “Hitler Youth.”

Anybody who wanted to challenge the Nazi “racial science” had no access to any media either printed, motion picture or radio. They would have to settle for word of mouth or illegally reproduced pamphlets. And if you were caught, you ran the risk being thrown into a concentration camp yourself or even being legally executed.

But what about before 1933, when Hitler came to power? Between 1918 and 1933, Germany was a (bourgeois) democracy, and before 1914 the existence of a large well-organized workers’ movement made it possible to legally oppose racist and anti-semitic ideas.

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Germany and the U.S. Empire (Pt. 1)

October 11, 2015

The Volkswagen scandal

It has recently been revealed that the Volkswagen Corporation, the world’s largest automobile producer in terms of revenue in 2014, had installed software in its diesel vehicles designed to circumvent U.S. emissions standards.

Motor vehicles of all types are increasingly controlled by computer software. Volkswagen engineers wrote subroutines in Volkswagen’s control software able to detect whether the vehicle was going through an emissions test or was in normal operation. If the software detected a test situation, the engines would strictly comply with the U.S. government’s Environmental Projection Agency guidelines and the vehicle would pass the test with flying colors. If the software determined the vehicle was in normal operation, the emissions restrictions would be ignored. In this way, buyers of the vehicle could enjoy the benefits of a more powerful vehicle apparently complying with the U.S. government’s emission standards while in practice ignoring them.

This was not a question of some accidental damage done by dangerous cost-cutting that is so common throughout capitalist production. The subroutines were not written “by mistake.” Even more than is the case in the U.S., the automotive industry is important for Germany’s industry-centered, export-oriented economy. Unlike the U.S. and Britain, Germany has largely avoided the process of “de-industrialization.” German automobiles are considered among the best in the world. The scandal is therefore a major blow not only to Volkswagen but to the German economy as a whole.

However, what is a loss for Germany is a boon for Germany’s competitors. If the Volkswagen “brand name” should be discredited, or if Volkswagen is forced to reduce its research and development expenditures on the next generation of automobiles because it has to pay costly fines, it could be permanently damaged. In the worst case, it might even go out of business. Rival automobile manufacturers, both present and aspiring ones, including those headquartered in Detroit—and Silicon Valley—are among those who would happily fill the market space vacated by Volkswagen’s demise.

What was the motive of the EPA, an arm of the U.S. government? As far as I know—and I won’t make any allegations I cannot prove—it was the best. Perhaps it wanted to protect the environment from the effects of releasing nitrous oxide, which causes acid rain, threatening countless lifeforms, both plant and animal, on the land and in the sea. Still, an attack on Germany’s export-oriented auto industry, whatever the motive, has the objective effect of undermining Germany’s economy as a whole. And it is also quite in line with Silicon Valley’s plans to invade the auto industry.

Above all, it is quite in accordance with the nature of competition between capitalist nation-states. An important function of a capitalist nation-state is to put its own capitalists in the best possible position relative to rivals headquartered in rival nation-states. A little less than 70 years ago—within the lifetime of many people still living—the efforts of the U.S. to curb Germany’s competitive threat to U.S. industry took the form of open shooting warfare that ended with the U.S. invasion and occupation of Germany. That occupation has never really ended.

Is it possible the U.S. government is using selective enforcement of the law to curb the same economic threat today? In order to explore this question, we should first start with the policies of the U.S. government that made Volkswagen’s crime possible in the first place.

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Capitalist Economists Debate ‘Secular Stagnation’ (Pt 5)

September 13, 2015

Rudi Dornbusch predicts unending capitalist expansion

“The U.S. economy likely will not see a recession for years to come,” economist Rudi Dornbusch (1942-2001) wrote in 1998. “We don’t want one, we don’t need one, and, as we have the tools to keep the current expansion going, we won’t have one. This expansion will run forever.”

In the late 1990s, the Internet was making rapid progress. Fueled by various technologies including the digital computer, the transistor and electronic circuit board—the “computer on a chip”—and the GNU/Linux computer operating system, world communications were, and are, being revolutionized. And this technological revolution was no illusion.

For the first time, home computer users could connect to the Internet, which now featured its own graphical user interface called the World Wide Web. No longer was the Internet confined to text but would soon include audio and video files. With such a great technological revolution under way, many capitalist economists—and this was echoed by some Marxists as well—foresaw an era of never-ending capitalist expansion. The Clinton boom of the late 1990s was to be just the beginning.

During the Clinton administration, stocks soared on Wall Street while the rise in the NASDAQ stock index—which lists “high-tech” stocks—seemed to know no limit. Goldman-Sachs economist and financial analyst Abby Joseph Cohen’s (1952- ) predictions of continuing soaring stock market prices drew skepticism from many seasoned stock market veterans, yet she continued to be proved right. Until March 2000, that is. Then things began to go horribly wrong as the NASDAQ index sagged and then crashed.

“Her reputation was further damaged when she failed to foresee the great crash of 2008,” Wikipedia writes. “In December 2007, she predicted the S&P 500 index would rally to 1,675 in 2008. The S&P 500 traded as low as 741 by November 2008, 56% below her prediction. On March 8, 2008, Goldman Sachs announced that Abby Joseph Cohen was being replaced by David Kostin as the bank’s chief forecaster for the U.S. stock market.” Although Internet technology continued to make great strides and stock markets both crashed and soared, the world capitalist economy entered into a period of slow growth—interrupted by the the turn-of-the-century recession that included the NASDAQ crash that Cohen missed and then the much deeper “Great Recession.”

Indeed, the world economy has, since Dornbusch made his prediction of unending capitalist prosperity, seen the worst growth figures since the 1930s Depression. The situation has gotten so bad that some capitalist economists have revived the term “secular stagnation,” last widely used among economists in the late 1930s. What did Cohen and Dornbusch and so many others miss?

They were right about the technological revolution. They left out only one little thing: the contradictions of the capitalist mode of production. But perhaps we shouldn’t be too hard on them. Though both Dornbusch and Cohen were/are highly trained economists, they didn’t learn about the contradictions of capitalism in their university studies. It wasn’t part of their course work. For that, they would have had to turn to the work of Karl Marx, and that they apparently neglected to do.

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Capitalist Economists Debate ‘Secular Stagnation’ (Pt 4)

August 16, 2015

How gold production drives expansion of the market

Here I assume that gold bullion serves as money material unless I indicate otherwise.

In a previous post, I indicated that there cannot be an overproduction of gold in its role as money material. This has been more or less the received view among Marxist writers over the years.

However, in thinking about this question more carefully I think my earlier post was incorrect on this point. I was correct in stating that from the viewpoint of capitalists as a whole there cannot be “too much” gold as far as the realization of value of (non-gold) commodities is concerned. The more gold there is relative to the quantity of other commodities, everything else remaining equal, the easier it will be for industrial and commercial capitalists to sell their commodities at their prices of production and thus realize the surplus value contained in them in the form of profit.

But what is true for the non-gold producing capitalists is not true for the gold producing capitalists. Indeed, from the viewpoint of an individual industrial capitalist there can never be too much of the commodities produced by their suppliers. As a productive consumer, industrial capitalist A can hope for nothing better than that supplier industrial capitalist B overproduces as much as possible. When B overproduces, all other things remaining equal, A gets to pocket some of the surplus value contained in B’s commodities. But from B’s point of view, the overproduction of B’s commodity is an absolute disaster.

True, the (non)gold producing capitalists do not consume gold, insomuch as gold serves as money material as opposed to raw material. But it is absolutely essential for them that gold is produced in adequate quantities if the value, including the surplus value, contained in their commodities is to be realized.

Even if gold bullion played no role whatsoever as raw material, a certain level of gold production would still be necessary for capitalist expanded reproduction to proceed. And capitalism can only exist as expanded reproduction.

How much gold capitalism needs—with the development of the credit system, banking, clearing houses, and so on being given—depends on the level and vigor of expanded reproduction at a particular time. The greater the possibilities of exploiting wage labor and the higher the rate of surplus value and the potential rate of profit in value terms, the higher the level of gold production must be if the process of expanded capitalist production is to proceed unchecked.

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