Archive for the ‘Boom’ Category

Political and Economic Crises (Pt 2)

December 23, 2018

As boom slows, political instability rises in the imperialist countries

As 2018 winds down, political instability is sweeping the Western imperialist countries – both the United States and Western Europe. In the United States, as part of a plea bargain with federal prosecutors, Michael Cohen, Trump’s former lawyer and “fixer,” pleaded guilty to violating with “Individual 1” U.S. campaign finance laws. Cohen faces three years in prison.

It is no secret that “Individual 1” is one Donald J. Trump, the current president of the United States. According to Cohen’s plea, Trump directed Cohen to break U.S. campaign finance laws in order to pay “hush money” to porn star Stormy Daniels and “Playboy playmate” Karen McDougall. Trump paid the hush money because he didn’t want the headlines of his extramarital affairs to dominate the news in the weeks leading up to the U.S. presidential election.

Since these payments violated federal election law, it is clear that Trump committed felonies. These felonies, it should be pointed out, are not connected with the so-called Mueller probe into whether Trump, other members of the Trump family, or other associates violated U.S. laws as part of their alleged collusion with Russia in the 2016 elections. That is a separate matter. So far, Mueller and his prosecutors have not presented concrete evidence of law-breaking on the part of Trump in this matter, though there continues to be much speculation about this possibility in the media.

Theoretically, Trump can now be impeached because he committed felonies, which meets the U.S. constitutional standard for impeachment for “high crimes and misdemeanors.” Some Democrats have suggested that in light of these facts impeachment proceedings against Trump in the House of Representatives should now commence. However, there is also a general feeling that crimes centered on sexual affairs are not sufficient grounds to remove a president from office. After all, who in Washington has not had an affair or two or more? While the Democrats will have a majority in the U.S. House of Representatives beginning in January, they would need a large number of Republican votes in the Senate to reach the two-thirds’ majority necessary to remove Trump from office.

The Republicans are reluctant to remove Trump on impeachment charges. If they do vote to remove him, they will likely lose Trump’s white racist “base,” which continues to adore him. The “Trump base” will be furious if their adored leader is removed over what is essentially a sex scandal. Can Trump – and this is a concern for those ruling-class circles of the “Party of Order” who do not like Trump – be removed from office without splitting the Republican Party in such a way that its continued existence as one of the two “major parties” in the two-party system would be in question?

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Political and Economic Crises

November 25, 2018

I had originally planned to deal with the current state of the industrial cycle in this post. I assumed I would make a few passing comments on the U.S. mid-term elections and then go into the economic analysis. However, it became clear that the political crisis gripping the U.S. has reached a new stage. At the same time, the industrial cycle that began with the Great Recession of 2007-09 has now entered its terminal stage.

I have therefore decided to begin with the political crisis this month and, events allowing, examine the terminal stage of the current industrial cycle next month. One way or another, the interaction between the political crisis represented by Trump’s rise to power and the developing cyclical economic crisis will dominate national and global politics between now and the 2020 U.S. presidential election.

This blog has centered on capitalist economic crises, especially the periodic crises of overproduction. The industrial cycle with its periodic crises of overproduction and the political crises and wars that can turn into revolutions – or counterrevolutions – are closely intertwined in ways that are not always obvious.

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Modern Money (Pt 4)

September 23, 2018

U.S. political crisis deepens

On September 5, The New York Times published an op-ed by an anonymous author who claims to be a top official of the Trump administration. The author describes him- or herself as a representative of the “resistance” among high officials working within the Trump administration. The author makes clear that this “resistance” is not “the popular ‘resistance’ of the left.” Instead, the author represents the resistance of the Republican wing of what I call the “Party of Order.”

What is the program of this “resistance”?

The op-ed author hails Trump’s “effective deregulation, historic tax reform, a more robust military and more.” This is the program of the Republican faction – and to a considerable extent the Democratic faction as well (2) — of the Party of Order. It includes an increase in the freedom of capital to pump more carbon dioxide into the atmosphere while leaking additional methane through his “relaxation” of regulation of the natural gas industry.

All these policies aim at increasing the rate of profit for the owners of capital at the expense of the working class and Mother Earth. The author also “supports” deep tax cuts for the rich with the intention of undermining social security, unemployment insurance, Medicare and Medicaid. Again, the aim is to raise the rate of profit on invested capital.

And not least, the op-ed writer supports spending more on the already “robust military,” as the author put it, so the U.S. empire can continue to terrorize the world. So if our Party of Order author is so enthusiastic about Trump’s policies, why “resist” Trump at all?

Trump versus free trade

The official complains that Trump’s “impulses are generally anti-trade and anti-democratic.” Notice the order. The biggest problem with Trump is that he is “anti-trade,” and as a kind of afterthought he is also “anti-democratic.” One is reminded of the words from the Communist Manifesto: “It [the capitalist class — SW] has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade.” So that’s the real problem with Trump. He is against “free trade.”

Our op-ed writer further complains, “In public and in private, President Trump shows a preference for autocrats and dictators, such as President Vladimir Putin of Russia and North Korea’s leader, Kim Jong-un, and displays little genuine appreciation for the ties that bind us to allied, like-minded nations.”

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Modern Money

July 1, 2018

By the time of the U.S. presidential election in November 2020, historical experience and the condition of global money markets suggest that the current global economic boom will probably have run its course. While the latest government economic figures show the current boom continuing in the United States and Europe, serious crises have already hit the currencies of Argentina and Turkey.

The dollar after a period of weakness has begun rising against the euro and other currencies and against gold. This sudden dollar strength is not only the result of rising U.S. interest rates. Trump’s threat to impose high tariffs on a whole range of commodities starting on July 6 has set off a flight into the dollar due to its role as the international means of payment. We have seen many such flights into the dollar over the years whenever a crisis threatens, whether political, military or economic.

If no compromise is reached by July 6 and Trump’s tariffs – and the retaliatory tariffs of competing nations – go into effect, it is possible that some commodity sales will fall through, which could trigger an international credit crisis. If severe enough, such a crisis would quickly throw the global capitalist economy into recession. This is all the more likely given the very late stage in the current industrial cycle, which has made the global credit system increasingly fragile even in the absence of a trade war. Whatever happens in the short run, Trump’s economic nationalist “America First” policies are undermining the entire world order that has prevailed since 1945. But that is the subject for another post.

Because capitalist economic crises tend to manifest themselves first in the spheres of currency and then credit, many reformers have sought cures for crises through reforms to the currency and credit systems. This creates the illusion in the minds of middle-class reformers, who stand between the two main class camps of modern society, the capitalist class and the working class, that the contradictions of capitalist society can be overcome through reforming the credit/monetary system. The U.S., in particular, has produced numerous monetary reform movements.

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Three Books on Marxist Political Economy (Pt 17)

June 3, 2018

Apartheid planet and the new racism

John Smith in his “Imperialism in the 21st Century” sees imperialism as evolving towards a form of global apartheid. Under the rule of the U.S. world empire, the freedom of capital to move across national boundaries in its endless search for the highest rate of profit has expanded. However, workers do not have freedom to cross national borders in search of the highest wage.

Since World War II, the nation-state, the cradle of the capitalist mode of production, has been in decline. One example of this decline is the limited sovereignty of Germany and especially Japan since World War II. Even the sovereignty of countries that were allies of the U.S. in World War II, Britain and France, has been severely restricted within the NATO “alliance,” and in the case of Britain within the “special relationship.”

The U.S. and its imperialist satellite states of Western Europe and Japan have opposed every attempt to establish new strong independent nation-states – though with mixed results – since World War II. In the pre-war era, the then-politically divided imperialist countries sometimes gave limited support to nationalist movements in their rivals’ colonies and semi-colonies. Since World War II, the entire imperialist world has been united against national liberation movements in the oppressed world.

Taking the world economy as a whole, the productive forces have long outgrown the nation-state. This was already shown by the outbreak of World War I more than a hundred years ago. In recent years, the revolution in communications represented by the rise of the Internet and the smartphone is increasingly breaking down global, linguistic, and cultural boundaries.

But the nation-state has refused to peacefully fade away into the sunset as the productive forces have outgrown it. In the period between the two world wars, there emerged within the imperialist world a counter-tendency of resurgent economic nationalism, which found expression in increased tariff and other trade barriers. Economic nationalism was accompanied by growing political nationalism, racist anti-immigrant movements, and racism within the imperialist countries. These trends found their most extreme manifestation in Nazi Germany.

Today in the imperialist countries, we once again see a rise of economic and political nationalism accompanied by anti-immigrant movements and growing racism. This extremely dangerous tendency is currently represented by President Donald Trump and his supporters in the U.S., where it is now in power; the current government of Austria; the National Front in France; the Alternative for Germany in Germany, where it is the official opposition party; and their counterparts in other imperialist countries. Though they are not imperialist countries, similar movements dominate governments of many of the ex-socialist countries of eastern Europe such as Poland, Hungary and the Czech Republic

Trump’s recent decision to move the U.S. Embassy in Israel to Jerusalem and recognize Jerusalem as Israel’s “eternal” capital was accompanied by Israeli massacres that have left more than a hundred Palestinians dead and thousands wounded in Gaza. Trump’s move cannot be separated from the broader racist trend that Trump personifies.

Israel itself is the product of an earlier wave of racism that accompanied the economic and political nationalism of the period between World War I and World II that ended with Nazi Germany’s attempt to physically exterminate the entire European Jewish population. Zionist Israel, therefore, links the “old racism” with the new.

Is a kind of global apartheid system emerging, as Smith suggests, that is replacing the increasingly outmoded bourgeois nation-state? Today’s political and economic trends suggest the answer could be yes if the coming period does not result in a victory of the global working class.

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The Current U.S. Economic Boom in Historical Perspective (Pt 2)

May 6, 2018

Trump’s attempts to reverse the decline of U.S. capitalism

In April 2018, the U.S. political world was shaken by the news that Paul Ryan, the Ayn Rand/Austrian school-inspired Republican speaker of the U.S. House of Representatives, would not be running for re-election in this year’s mid-term race. Ryan claimed he was retiring at the age of 48 from politics “to spend more time with my family.”

It is widely believed, however, that Ryan is retiring from Congress because he fears a humiliating defeat at the hands of his Democratic Party opponent, the construction worker, trade unionist, and “Berniecrat” Randy Bryce. Over the last year, many of Ryan’s constituents were no doubt shocked to learn that their handsome, genial congressperson wanted to take away their health insurance.

It seems likely that Ryan, who is believed to harbor presidential ambitions, plans to lie low, make lots of money in the private sector, and count on the public forgetting (with the assistance of the mass media) about his attempt to throw tens of millions of people off their health insurance. At a later day, Ryan will be poised to reenter electoral politics and ride a new Republican wave, perhaps all the way to the White House.

But how could there be another Republican wave in the aftermath of the ever-growing debacle of the Trump presidency and the self-exposure of the Republican Party on the health insurance issue? To assume that a Republican comeback is impossible, would be to ignore the lessons of the last great “progressive” victory in U.S. politics—the election in November 2008 that brought into the White House the first African-American president, combined with solid Democratic majorities in both houses of Congress. However, at the end of Obama’s triumph lurked the racist Donald Trump, backed by Republican majorities in both the Senate and the House.

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The Current U.S. Economic Boom in Historical Perspective (Pt 1)

April 1, 2018

U.S capitalism has been in decline for decades. Within that long-term trend, U.S. capitalism continues to experience cyclical booms. During its dramatic rise between 1865 and 1929, the U.S. economy experienced three major financial panics—1873, 1893 and 1907—along with numerous lesser recessions. However, the increase of the number of workers employed in manufacturing—which represents the core of capitalist production and the core of the working class—that occurred during the industrial booms of that era was greater than the declines that occurred during recessions. In the years 1945-1979, though the number of workers in manufacturing began to decline relative to overall employment—a symptom of capitalist decay—that number continued to grow in absolute terms.

However, since the recession 1979-82, known as “the Volcker shock,” the pattern has reversed. The U.S. economy has continued to experience cyclical booms—defined as periods of above-average business activity in terms of industrial production, manufacturing, and overall employment and trade—as well as recessions. But the rise in manufacturing employment during booms—if any—has been far less than the declines during recessions. Therefore, the year 1979, which marks the beginning of the Volcker shock recession, represents the most important turning point—not excepting 1929—in the history of U.S. capitalism.

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Three Books on Marxist Political Economy (Pt 11)

October 8, 2017

John Smith’s ‘Imperialism in the Twenty-First Century’

The year 2016 marks the centenary of V.I. Lenin’s famous pamphlet “Imperialism, the Highest Stage of Capitalism,” subtitled “A Popular Outline.” The pamphlet has immensely influenced politics of the last century. This is largely but not only because the author the following year became the leader of the first socialist revolution as well as chief inspirer and de facto leader of the Third (Communist) International—also known as the Comintern. If Lenin had not led the first socialist revolution and/or had not lived to found the Third International, the pamphlet would still have had considerable influence but of course not the influence it has had.

A century after Lenin’s “Imperialism” appeared, Monthly Review Press published “Imperialism in the Twenty-First Century,” by the British Marxist John Smith. As the title indicates, this book aims to do for the Marxist analysis of imperialism in our new century what Lenin’s “Imperialism” did for the last. Smith holds against innumerable critics that Lenin’s basic thesis was not only correct for its own time but also for our own, at least in broad outline.

But Smith’s book is more ambitious than that, and this is what attracted the interest of this blog. Smith is not entirely satisfied with Lenin’s work, which in the Third International, and the more loosely organized international Communist movement that continued after the Third International was dissolved in 1943, was often treated as virtually on a par with Marx’s “Capital.” Smith is dissatisfied with Lenin’s classic pamphlet because, unlike Marx in “Capital,” Lenin does not directly apply value theory. Value analysis is implicit rather than explicit as it is in “Capital.”

Smith in his “Imperialism” attempts to accomplish two tasks. One, he attempts to update Lenin’s “Imperialism.” More ambitiously, he attempts to “complete” Lenin’s work, bringing it into line with Marx’s “Capital,” first published 150 years ago this year. Smith explicitly puts value analysis at the center of his analysis of modern imperialism.

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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. 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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