Archive for the ‘Transformation Problem’ Category

Biden, ‘Sanctions’, Blockades, and Imperialism

August 22, 2021

“Sanctions” used by U.S. imperialism against governments it seeks to overthrow, and part of its policy of enforcing and extending its world domination, are acts of economic warfare. The demonstrations in Cuba that erupted on July 11 against the Cuban government around the slogan “Patria Y Vida” — country and life — illustrate this fact.

Background to the counterrevolutionary demonstrations

Since 1960, Cuba has been blockaded by the United States. According to Wikipedia, in April 1960, Deputy Assistant Secretary of State for Inter-American Affairs Lester D. Mallory wrote to his superior Roy Rubottom that the “only foreseeable means of alienating internal support is through disenchantment and disaffection based on economic dissatisfaction and hardship.” The aim would be to deny “money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.” This not only describes perfectly the policy adopted by the Eisenhower administration in 1960 but also Biden’s policy toward Cuba today.

Until the end of the 1980s, Cuba’s membership in the socialist bloc led by the USSR greatly mitigated the effects of the economic blockade. However, the counter-revolution that matured under Mikhail Gorbachev in the USSR not only destroyed the USSR as a socialist federation of Soviet Socialist Republics, it also destroyed what had been the socialist economy under construction as well. The wave of counterrevolution unleashed by Gorbachev’s policies engulfed all of Eastern Europe as well as the USSR. This capitalist counterrevolution had dire effects on the struggle of the working class, the peasantry, and oppressed people not only in the former socialist bloc but throughout the world.

The Soviet Union had been more than simply another trading partner for Cuba. The relationship between Cuba, the Soviet Union, the German Democratic Republic, and the other socialist countries in Eastern Europe contained elements of the planned international socialist economy of the future. All this had been lost by the time Mikhail Gorbachev “resigned” as president of the Soviet Union in December 1991.

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Commodity Money Versus Non-Commodity Money

April 4, 2021

On March 11, President Joseph Biden signed into law a $1.9 trillion package called the Coronavirus Relief bill. It provides for $300-a-week extra in unemployment insurance payments — only half the original $600 provided by the CARES Act passed last year — and only until Sept. 6. It also provides $25 billion for rental relief and utility assistance and $350 billion relief for hard-pressed state and local and Native American tribal governments.

The bill includes a one-time $1,400 payment for low- and middle-income Americans. Also, $20 billion will be spent on COVID-19 vaccinations. Democrats are especially proud of a provision that extends for a year a child tax credit that was part of the CARES Act. They claim this will reduce child poverty in the richest nation in the world by one-half. This tells you a lot about the nature of the U.S. tax system, which pushes many children of working-class families below the official federal poverty line while allowing billionaires like former President Trump as well as giant corporations like Apple to get away with paying virtually no taxes.

Progressives were hoping that the stimulus bill would have a provision raising the federal minimum wage to $15 an hour from the current $7.25. This was important because the bizarre and undemocratic rules that govern the U.S. Senate mean only a few bills can be passed through a process known as “budgetary reconciliation” with a simple majority vote. All other bills need the support of 60 senators. This means that given the composition of the current Senate, 50 Democrats and 50 Republicans with Democratic Vice President Kamala Harris casting the tie-breaking vote, the GOP has veto power over most other proposed legislation coming up this session.

For the minimum wage hike to have had any chance of passing in the current session, it would have been necessary to include it in the stimulus bill. President Biden gave lip service to the proposed minimum wage hike but failed to push it. This gave the green light to conservative Democrats to ally with the GOP to exclude the $15-an-hour minimum wage from the bill — effectively killing it. This is the exact outcome the capitalists wanted. Once again, the Democrats and Republicans working together delivered the goods for capital.

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The Second Trump Impeachment Trial

March 7, 2021

Former President Donald Trump was acquitted on an insurrection count on Feb. 13 in his second impeachment trial, though 57 senators out of a hundred, including seven Republicans, voted to convict him. However, this was short of the two-thirds’ majority required to convict a federal official or ex-official on an impeachment count.

Senate Republican minority leader Mitch McConnell admitted that, while Trump was guilty, it was unconstitutional for the Senate to try a former official on an impeachment count after the official had left office. This was despite the fact that there was precedent to do so.

In the days leading up to the five-day impeachment trial, Trump had blackmailed the Republicans by threatening to form a new far-right “Patriot Party.” Such a party would split much of Trump’s MAGA base away from the Republicans, which would make many, perhaps most, Republican politicians unelectable.

Besides the acquittal, the trial was notable not only for its brevity — particularly considering the gravity of the count — but by the agreement between the Republicans and Democrats to not call witnesses.

The issue was not simply Trump’s incendiary speech to a MAGA crowd of tens of thousands gathered in front of the White House on Jan. 6. It could be argued that Trump’s speech, however despicable its content, was protected speech under the First Amendment. You can be sure that if a U.S. president can be convicted in an impeachment trial for exercising his right of free speech, Black Lives Matter activists, leftists of all types, trade unionists, and other progressive activists can be convicted at a criminal trial for exercising the same right.

What made Jan. 6 a failed putsch rather than a right-wing demonstration that got out of hand was not the content of Trump’s speech. It was the fact that National Guard and police forces were withheld for hours even though the Pentagon and FBI as well as the police knew that a dangerous armed demonstration was planned. Indeed, Washington, D.C., Mayor Muriel Bowser had specifically requested on Jan. 5 that National Guard forces be called to the capital in case needed to prevent the impending violence.

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The abortive 18th Brumaire of Donald John Trump

February 7, 2021

Joseph Biden was sworn in as the 46th president of the United States and Kamala Harris as vice president on Jan. 20, 2021. But it was an inauguration unlike any other. Washington was occupied by 20,000 National Guard troops. Nobody without a pass was allowed anywhere near the ceremony. One reporter on the eve of Biden’s inauguration said something to the effect that on Jan. 20 Washington did not look anything like America. But the point is this is exactly what the United States of America looks like now. The real questions are, how did the U.S. get this way and where is it going?

Four years earlier, the capitalist ruling class looked on with a mixture of great hope and some trepidation as Donald John Trump was sworn in as the 45th president of the United States. On one hand, Trump was a brazen amateur compared to even the least prepared of his predecessors. He had never served in the armed forces or held an elective office, nor had he served in a U.S. cabinet or any other government post. Indeed, he never held any job outside his family business besides his role as a TV showman.

Once in office, Trump wasted no time in starting a trade war with China but also with the U.S.’s imperialist satellite “allies” such as Germany and the other EU countries. There were fears in the ruling circles that this was endangering the world order that had emerged out of the U.S. victory against Nazi Germany and Imperial Japan. This world “order,” which Joseph Biden is now trying to reinvigorate, was based on a compromise agreement between the victorious U.S. and its defeated imperialist rivals that emerged after World War II.

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The Putsch of January 6, 2021

January 10, 2021

Normally, after my draft returns from the editors, I make a few last-minute changes, sometimes correct factual errors, and then send it back for final editing and posting. In this post, my deadline for the initial draft was Jan. 4. I considered updating the draft to cover the events of Jan. 6 but it was clear that would involve changes way beyond the usual last-minute updates I sometimes have to make. I therefore decided to leave the post as is, minus some minor editorial changes, but add this special section. The following post should be read as a description of the U.S. political situation on the eve of the attempted putsch of Jan. 6. There will be more on this subject in next month’s post.

After the the Electoral College elected Joseph Biden and Kamala Harris to the presidency and vice presidency of the United States on Dec. 14, Trump appeared to be out of legal options in his attempt to cling to office. But there was one more legal hurdle to clear before the presidential election was formally complete. This was the counting of the electoral vote and announcement of the results to a special joint session of the House of Representatives and Senate by the president of Senate, which was Trump’s vice president, Mike Pence.

At this point, if a member of the House mounts a challenge to the electors of a given state and is backed by a member of the Senate, both houses of Congress have to vote on the challenge. If the challenge is approved by both chambers, the electoral vote of that state is declared invalid. This year, a number of extreme right-wing Republican congressman and some senators announced that they would indeed mount such challenges in a series of swing states that were carried by electors pledged to the Harris-Biden ticket.

Such challenges, though they have occurred occasionally, have always been overwhelmingly voted down. This year, it was clear that the challenges would also be defeated. First, because as far as the Senate is concerned, they did not have support of Republican leader Mitch McConnell, and second, because the Democrats have a majority of the House of Representatives. Trump not only would have had to overcome McConnell’s resistance but split off some Democrats in the House to have any chance of prevailing.

But Trump hoped that the Electoral College vote could be nullified on Jan. 6, which would then move the election to the House of Representatives where Trump would be “elected” to a second four-year term. Or perhaps Trump hoped Vice President Mike Pence could simply announce that not Biden-Harris but Trump-Pence had carried the Electoral College.

When Pence tried to explain to him that the vice president has no such power under the U.S. Constitution, Trump was reportedly enraged and came to view Pence, who had hoped before the Nov. 3 election to become Trump’s anointed successor in four years, as a traitor just as Trump views so many other high officials who have come and gone over the last four years.

With time rapidly running out, Trump decided to play one final card. In the preceding weeks, thousands of MAGA supporters had arrived in Washington waiting to act on the president’s command. On Jan. 6, the command came. As the two houses of Congress were convening in the Capitol to carry out their ceremonial function of certifying the presidential election, Trump addressed a crowd of assembled fascists, some armed with guns, in front of the White House. He announced that they would march to the Capitol. Trump, however, instead of joining them retreated to the White House to watch the show on TV. The fascist mob not only marched to the Capitol, it stormed the Capitol.

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The End of the Trump Era

December 13, 2020

Just as he promised he would, Donald Trump has refused to concede the U.S. presidential election to Joseph Biden. However, on Nov. 23, Emily Murphy, the Trump-appointed head of the General Services Administration, or GSA, finally allowed the Biden transition team to begin preparations for Biden’s assumption of the U.S. presidency on Jan. 20, 2021.

Between Nov. 3 and 23, Murphy had stubbornly refused to grant access to the Biden transition team on grounds that, in Ms. Murphy’s judgment, it wasn’t clear that Biden had won the election. Her decision to begin cooperating with Biden’s transition team was seen as a de facto admission by at least some in the Trump administration that Biden had won the election.

Widespread relief was felt in financial circles that a contested election outcome leading to widespread unrest in the streets, if not outright civil war, had been adverted. The stock market celebrated by rising to new all-time highs and the U.S. dollar rose against gold. However, Trump himself along with many if not most Republican politicians still refused to concede the election. Trump continued to claim that he had in fact won and that Biden and the Democrats had stolen the election through massive fraud.

In a normal U.S. presidential election, the losing candidate concedes the election and congratulates the winner within hours after the polls close on election day. If the election leads to a new president, the outgoing and incoming presidents and their aides work closely with one another until the transition is officially completed. Since the 1896 presidential election, when the losing “silver” Democrat William Jennings Bryan conceded to the victorious “gold” Republican William McKinley, the concession statement from the losing candidate has become an unwritten part of the U.S. Constitution.

This election year had unusual complications because of COVID-19, which made voting at traditional polling stations extremely dangerous. As a result, many voters voted by mail. This had the paradoxical effect of making voting easier for many voters. Perhaps of even greater importance, the racist and bigoted reelection campaign of far-right incumbent Donald Trump led to an extreme polarization of the U.S. electorate. Usually, the differences between the Democratic and Republican presidential candidates are obviously not very deep, if not virtually nonexistent. As a result, most voters, though they generally prefer one candidate to another, do not care that much whether their preferred candidate wins or loses.

But not this time. While Joseph Biden created even less excitement than the usual Democratic candidate, Donald Trump in contrast was either hated — the clear majority view in the U.S. and even more so in the world — or loved by his bigoted white racist supporters. The result was the largest turnout of voters for a U.S. presidential election in decades. As a consequence, the large number of mail-in ballots, combined with COVID-19, messed up the computer algorithms that since 1952 have enabled the networks to accurately call the election with only a minority of the votes counted.

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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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Three Books on Marxist Political Economy (Pt 10)

September 10, 2017

History of interest rates

A chart showing the history of interest rates over the last few centuries shows an interesting pattern — low hills and valleys with a generally downward tendency. During and immediately after World War I, interest rates form what looks like a low mountain range. Then with the arrival of the Great Depression of the 1930s, rates sink into a deep valley. Unlike during World War I, interest rates remain near Depression lows during World War II but start to rise slowly with some wiggles through the end of the 1960s.

But during the 1970s, interest rates suddenly spike upward, without precedent in the history of capitalist production. It is as though after riding through gently rolling country for several hundred years of capitalist history, you suddenly run into the Himalaya mountain range. Then, beginning in the early 1980s, interest rates start to fall into a deep valley, reaching all-time lows in the wake of the 2007-09 Great Recession. Clearly something dramatic occurred in the last half of the 20th century.

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Three Books on Marxist Political Economy (Pt 7)

July 10, 2017

“The real net rate of profit,” Shaikh writes, “is the central driver of accumulation, the material foundation around which the ‘animal spirits’ of capitalists frisk, with injections of net new purchasing power taking on a major role in the era of fiat money.” This sentence sums both the strengths and the basic flaw in Shaikh’s theory of crises, and without too much exaggeration the whole of his “Capitalism.”

By “net rate of profit,” Shaikh means the difference between the total profit (surplus value minus rent) and the rate of interest, divided by total advanced capital. This is absolutely correct.

But now we come to the devastating weakness of Shaikh’s analysis. Shaikh refers not to the net rate of profit but the real net rate of profit. “Real” refers to the use value of commodities as opposed to their value—embodied abstract human labor—and the form this value must take—money value. While real wages—wages in terms of use values—are what interest workers, the capitalists are interested in profit, which must always consist of and be expressed in the form of exchange value—monetary value (a sum of money).

In modern capitalism, as a practical matter the money that makes up net profit or profit as a whole consists of bank credit money convertible into state-issued legal-tender paper money that represents gold bullion. The fact that legal-tender paper money must represent gold bullion in circulation is an economic law, not a legal law. (More on this in next month’s post.) When Shaikh refers to real net profit, he does not refer to profit at all but rather to the portion of the surplus product that is purchased with the money that makes up the net profit.

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Three Books on Marxist Political Economy (Pt 6)

May 21, 2017

Shaikh’s theory of money

Shaikh deals with money in two chapters—one near the beginning of “Capitalism” and one near the end. The first is Chapter 5, “Exchange, Money, and Price.” The other is Chapter 15, “Modern Money and Inflation.” In this post, I will concentrate on Shaikh’s presentation in Chapter 5. In Chapter 15, Shaikh deals with what he terms “modern money.” I will deal with his presentation in this chapter when I deal with Shaikh’s theory of inflation crises that is developed in the last part of “Capitalism.”

In Chapter 5, Shaikh lists three functions of money—considerably fewer than Marx does. The three functions, according to Shaikh, are (1) money as a medium of pricing (p. 183), (2) money as a medium of circulation, and (3) money as a medium of safety. Shaikh deals with money’s function as a means of payment under its role as a means of circulation. The problem with doing this is that money’s role as a means of payment is by no means identical to its role as a means of circulation and should have been dealt with separately.

Anybody who has studied seriously the first three chapters of “Capital” Volume I will be struck by how radically improvised Shaikh’s presentation here is compared to that of Marx. It is in the first three chapters of “Capital” that Marx develops his theory of value, exchange value as the necessary form of value, and money as the highest form of exchange value. He does this before he deals with capital. Indeed, Marx had to, since the commodity and its independent value form, money, is absolutely vital to Marx’s whole analysis of capital.

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