The Cost of Capitalism

Whenever there is an economic crisis, a country's incomings are reduced due to a shrinking of business, trade of taxable goods, numbers employed and individual wages (at least in real terms) . Consequently there is always pressure on a Government to reduce its outgoings during such a period. It must make cuts to state spending to keep its books balanced.

The current crisis, which manifested itself firstly as a global crisis of finance capital, and therefore struck the financial centres of the world first and most forcefully, was temporarily quelled by the state. Governments internationally poured astronomical sums of tax payers' money and future tax payers' money into the inefficient private banking sector, run into the ground by arrogant, greedy and incompetent bankers. And the Economist and other economic organs are recommending that Governments continue to do so and that they offer 'unlimited' funds.

Therefore, whilst on the one hand Governments are under pressure to make tremendous state cuts, they are under pressure to spend a tremendous amount too. Cuts to essential services which will adversely effect the lives of ordinary people of all ages, and the most vunerable most acutely, and spending on the reckless, incorrigable rich. The poor have too much money spent on them and the rich not enough. This is not due to any 'selfish gene' or evil personalities, but due to the demands of the capitalist system.

Therefore, society must ask itself what it has to gain by keeping the capitalist system, since its survival depends upon the destruction of the living standards of the majority, the 99%. And not just temporarily, but for an indefinite period, since governments everywhere are predicting a further reccession and most likely further bail outs, which in turn will require further cuts to public services. This in turn will lead to a further fall in demand, which will lead to a further fall in supply, and a further reccession etc. The world economy is in meltdown and will be for an indefinite period.

Whether we like it or not, in absolute terms, the living standards of the majority will plummet if Capitalism remains.

Democracy in Russia

The collapse of the Soviet Union twenty years ago (formally on December 25th 1991) marked the end of the Cold War. The West was victorious. It claimed to have rid the Soviet bloc’s peoples of oppression. Democracy, freedom and Western ‘liberal’ ideas had triumphed over Communism. A period of economic prosperity, harmony and peace was predicted. Some went as far as claiming that history had ended. How wrong they were.
After the ‘elections’ in Russia on December 4th last week, the Russian people took to the streets, most notably in Moscow, in the biggest demonstrations in years, chanting “Russia without Putin!”, their current Prime Minister. Despite his regime’s strangle-hold on the media, limited tolerance of opposition figures and blatant vote rigging, they only won about a third of the votes to the Duma (lower parliament), about half of what they had won before. But even this was too much for the people. Again, the people are living under severe oppression and want change.
These protests are not isolated either. When Mr Putin announced his intention of running for his third term as President next March at a recent ‘congress’ of his United Russia Party, the extent of his personal power became all-too-clear. Dmitry Medvedev, the current President, long suspected of being a seat warmer, vocalized his support for Putin’s candidacy, confirming people’s worst fears. Since Putin has formally not been in the position for a term, he has the constitutional right to run again, and more directly continue his reign. This triggered widespread discontent which manifested itself in his public heckling at a martial arts event soon afterwards and his cancelling of further such events, for example.
So why is the West not waging another war against dictatorship in the ex-Soviet Bloc? Why is it mildly critical of Putin in comparison to the former Soviet leaders and the Soviet Union as a whole? Surely, Russian and Slavic people are still deserving of freedom and prosperity. What has changed?
The Soviet Union was a beacon of hope for oppressed people everywhere, despite its ruthless leaders and oppressive state, because it proved that there was an alternative to Capitalism. It was a union which, despite political power still remaining in the hands of the few, had a planned economy, free education, free healthcare and limited unemployment. It was far from perfect, but the living standards of the masses rose substantially, although the economy stagnated in the late eighties. Moreover, it had a revolutionary philosophical system, culture and history. This could not be tolerated by the Capitalist West. This was ultimately the reason for the Cold War, not a lack of democracy and freedom for the people.
The dissolution of the Soviet Union resulted in privatization of the nationalized economy which brought with it all of the evils of Capitalism: anarchy of production, economic stagnation, wage-slavery, the oppression of minorities, and the incalculable wealth of the few and poverty of the many. Importantly, it allowed foreign capital into the country to plunder its wealth and resources. It is therefore hardly surprising that there is a lack of democracy in such a country, (as there was before the Soviet Union too), since the economy is ultimately being run against the interests of the majority.
As Lenin and Trotsky explained, in a relatively under-developed country in the epoch of imperialism, democracy can only flourish in a socialist state. What the Stalinist leaders of the USSR denied was that a socialist state can only flourish with democracy.

Who is to Blame? Socialism or Capitalism?

Last week a debate on the Occupy movement took place on Newsnight between former Goldman Sachs partner Richard Sharp and activist/journalist Laurie Penny. It was revealing largely because of the ideological parameters within which the debate was conducted. Only a couple of years ago, it would have been considered inconceivable to have a discussion in the mainstream media over alternatives to capitalism . Thanks in large part to the Occupy movement, such debates are increasingly becoming the norm.

The Newsnight debate was also interesting in that it demonstrated what form the capitalist response to such challenges is taking. Certainly there are reformist positions - witness Vince Cable and Ed Miliband calling for a 'more responsible capitalism' (whatever that actually means). But from more reactionary segments the ideological backlash has quite remarkably involved summoning the spectre of socialism. On Tuesday Tory MP Elizabeth Truss suggested that soaring inequality was a result of too much government regulation of markets. And Richard Sharp (a former partner in a company that received a government bail out to the tune of $1.1 billion) suggested that the Occupy protesters should be protesting against socialism:

According to Sharp, massive government spending (oddly equated with socialism) of the British and US governments (among others) is the reason that we are in are now confronted with austerity, the implication being that 'the markets have nothing to do with it'. And thinking about it, from purely a rhetorical point of view, blaming socialism is an ingenious ideological sally, for it at once deflects attention from the real problem, while also precluding any socialistic imagination of alternatives.

The problem for its proponents is that it such an argument patently nonsense. Even putting aside claims that the crisis was caused by the systemic tendencies of capitalism, it is relatively easy to demonstrate that the markets do have something to do with sovereign debt crisis.

Back in May 2010, just after the UK General Election that had brought the Con-Dem coalition to power, the deficit stood at £145 billion, including financial intervention. The amount George Osborne seeks to save over the course of the parliament is around £83 billion, which, when added to Labour's own brief period of deficit reduction, amounts to a £110 billion austerity programme. The cost of the bailout in simple cash terms was just under £124 billion (excluding guarantees and indemnities, as well as quantitative easing, which if included, would stand at over £1 trillion). Now I've never been that good at maths, but those figures of 145 billion, 110 billion and 124 billion seem pretty close to me.

There is of course, the argument that the £124 billion used to bailout the banks actually cost nothing, because the government now holds assets in the form of loans and shares which will be recouped when the banks are re-privatised. But it is becoming clear that British tax payers are set to make a massive loss from the bailouts. Earlier this month there was public dismay that Northern Rock was sold to Richard Branson's Virgin for £747 million pounds (rising to potentially £1 billion, depending on flotation or resale). The cost of Northern Rock's nationalisation was £1.4 billion.

Taking the further figures from the National Audit Office report, we find that the value of government owned shares is dramatically falling. The state bought 90.6 billion shares in RBS at 50.53p a share representing an outlay of around £45.8 billion. In March this year, the total value of these shares had fallen to £36.97 billion. At the time of writing (November 25th) one RBS share is worth 18.74p, meaning the government's stake is valued at around £17 billion  - a fall of 62%. The state also owns 27.6 billion shares in Lloyds TSB, bought at a cost of 74.4p per share - an outlay of about £20.5 billion. By March this was worth £16 billion. Today one share in Lloyds is worth 22.16p leaving the government's stake valued at around £6 billion - a fall of  over 70 %.

So, despite the fact that financial markets demanded bail outs, plunging Britain into its currently unmanageable level of debt, and despite the fact that state owned shares have fallen in those same financial markets, allowing, in turn, markets to buy back government shares at a fraction of their original cost, the markets are completely innocent (according to the markets)!

The Euro Crisis and the nation state

Marxists have always argued that the two greatest fetters on the means of production in today’s society, and therefore on the progress on human society and culture, are the private ownership of the means of production and the nation state. This is demonstrated in the current Euro crisis most strikingly.
Private ownership of the means of production dooms production to anarchy. This can be counteracted temporarily and can therefore sometimes seem not to be the case. But the laws of capitalist production, which are denied by the bourgeois and their professors, inevitably assert themselves “with iron necessity” in the words of Marx.
In a stampede for profits, capitalists are inclined to produce too many goods for the market. Not too many useful objects, but objects which cost more than people can afford. Ten capitalists all produce goods for a workers last bit of cash, particularly in years of boom. But that worker can only buy one of those goods, despite almost certainly having need for many more. Thus, nine capitalists fail to sell their goods. They have produced too much. On a world scale, this results in a crisis of overproduction.
This crisis can be averted temporarily but various means- conquests of new markets and credit being the most important. But since capitalism has now penetrated into every nook and cranny, credit was and is the most potent temporary counter.
Credit was handed out to all and sundry, whose wages were being held down by capitalists across the globe “to stop inflation”. But inflation persisted and thus real wages plummeted. Credit was therefore necessary for workers to maintain their living standards. The problem is that eventually, credit must be paid back. And this did not and furthermore could not happen. Therefore a crisis was inevitable, and would firstly manifest itself in a financial crisis.
Where such a crisis manifests itself is often a complete accident. Hegel once wrote “necessity expresses itself through accident”. It was inevitable that in such an orgy of speculation and lending the crisis would first manifest itself as a crisis of financial capital. But exactly where and when was not possible to predict. It happened to break out first in America, but it could have happened elsewhere. Regardless, it is clear that this crisis is not ultimately a “credit crunch” (i.e. a lack of credit without cause), but a crisis of overproduction. Furthermore, since the productive forces are now completely international, the world market is completely international, it is a world crisis of capitalism.
This crisis demands a swift decline in the living standards of the workers and oppressed layers of society if capitalism is to survive. Thus, it has sparked an explosion of the class struggle internationally. The workers and peasants of the Arab world are balancing the books of justice. Students across Latin America have demanded the abolition of private education. Workers of Wisconsin State in America have been protesting in the streets. In Britain, the lumpenised poor, unemployed and severely oppressed rioted against the status quo. “Enough!” was shouted by the workers internationally.
In Europe, the crisis of overproduction has resulted in unprecedented events. Many governments, who too borrowed staggering sums of money, are struggling to pay their debts and defaults are now looking likely. Greece has only staved off such events through ‘bail outs’ from the European Union. Italy and Spain both have debts over the whole of their GDP, and their economies are stalling. Thus, unless the German and French governments are willing to ‘bail out’ these substantial debts for an indefinite period, the euro is likely to collapse.
The German and French ministers and people are now asking themselves if they are prepared for such action. What is in it for them? Is it likely even to help? Is such a plan sustainable? Angela Merkel and Nikolas Sarkozy both admitted the possibility of a reduced Euro-zone for the first time in a G20 meeting last week. A storm is heading for the Mediterranean.
In order to prevent such crises from taking place, crises with the most horrific human consequences, it is necessary to socialise the means of production, to take them out of private hands and plan the economy. The most effective way to plan the economy and ensure it is done in a way which benefits the majority is to democratise production. This way, demand and supply can be harmonised too.
The nation state is not suitable for an international economy. In the euro zone, problems of an international nature, which cannot be dealt by any single country, are being dealt with over the heads of democracy by the European Central Bank (ECB) or the ‘European Financial Stability Facility’. The solution to this is to have a European government which can take international decisions and act democratically in the name of the people of Europe.
Therefore a solution exists: a United Socialist Federation of Europe. But the ‘leaders’ of the current European Union have no intention of working towards such a goal. Their priority is Capitalism. Thus it falls on the workers of Europe to transform the situation. If they don’t their living standards will plummet. They have nothing to lose.

Consent, Coercion and Crisis

One of the most striking aspects of the build up to the TUC demonstration in March, and the continuing Occupation of St. Pauls, has been the opposition both inside and outside of the movement to link our local struggles to the Arab Spring. The reasoning goes: we have ‘democracy’ here; we have ‘freedoms’; we have ‘human rights’; we are not ‘repressed’ by the state; we are not fighting ‘despots’. Some have even argued that, by drawing inspiration from Tahrir Square, we are insulting our Egyptian counterparts. Others have suggested that it is all merely an excuse to riot.

The overall tendency of these arguments is to suggest that since that Egyptians live under a system based on political coercion, their struggles are valid and honourable. Because we live within a system based on political consent, our struggles are naïve and indulgent. But this double patronisation of both Arab and Western protestors reveals a latent ruling-class bias which overshadows and skews the definitions of what should and shouldn’t be considered legitimate protest.

Consent

The whole basis for distinguishing between Arab and Western struggles overlooks the interrelation of both coercion and consent as reproductive mechanisms of ruling-class power. One of the greatest of achievements of Antonio Gramsci’s work is to show how rather than a guarantee of freedom, consent acts as the primary mechanism for the maintenance of ruling-class hegemony under capitalism. In the Prison Notebooks Gramsci argues that by ‘manufacturing consent’ through political, ideological and cultural practices – bargaining, concession making, propaganda etc. – dominant class interests are maintained and reproduced without the need for state coercion.

This is not to say that such processes do not constitute a substantial part of any form of ruling-class reproduction. But consent takes on an especial character under capitalism due to the distinctiveness of its material reproduction. One of the defining elements of capitalism is the supposed freedom of labour. While under slavery and feudalism, labourers were coerced into working for the ruling-class, under capitalism workers formally consent to do so. This in turn obscures the specifically non-political, economic, form of coercion (the unfreedom of having to work in order to buy food, clothes, shelter etc) and exploitation (surplus labour, labour made to work for more than it is paid).

In turn, the ideological legitimation of consent also takes on characteristics specific to capitalism. Because capitalism has, in theory, dispensed itself of political and cultural loci of power, consent is established on the basis of our political freedom – our right to vote, our right to freedom of expression, our right to free assembly, etc. Mechanisms of economic coercion – the commodification of labour-power and the exploitative relation between capital and labour are considered off limits. Equally the material and ideological bases of consent frame the parameters of what is considered legitimate protest – while political repression is considered fair game, economic repression is not. Struggles for democracy: good. Strikes: bad. Taken together, these ideological and material moments serve to both legitimise and disguise ruling-class domination; our political freedom both justifies and veils our economic unfreedom.

The attempted division of the Arab Spring from resistance movements in the West should be seen within this very context of consent generation. Creating a distinction between the two represents an integral part of the ideological reproduction of ruling class power. For it is precisely through such consent generating discourse that the division between the Arab Spring and Western struggles is articulated: the Arab Spring is about their tyrannical system of rule, that is, political coercion. Their challenge to the system or to the ruling-class is therefore legitimate. The struggle in say, Britain, is different. It is simply about public sector cuts, issues of supposed economic necessity. It is therefore not about our system of rule, not about our ruling-class. Why? Because ‘we have democracy, we have freedom of speech, we have a right to protest.’

Coercion

However, for Gramsci, consent constituted only the formal appearance of coercion. Put differently, consent can be better defined as ‘consented coercion’. The true nature of this relation becomes clear in moments of ruling-class crisis, where the ideological mechanisms that underpin consent break down, and the ‘mask of consent’ is removed thus revealing the naked force of coercion. In other words, where consent fails, coercion picks up the pieces and re-asserts ruling-class hegemony through the use of state violence, repression and suppression.

Three hypotheses can be drawn from this observation. Firstly, it gives us a more appropriate basis from which we can distinguish between the Arab Spring and its Western counterparts. In the Arab region ruling-class consent was (for a variety of historical and conjunctural reasons) weaker, and therefore tended to break down quicker and more suddenly than in the West. Consequently, coercion played a much more dominant role in the maintenance of ruling-class hegemony than in the West.

Secondly, consent and coercion are merely two sides of the same coin. The dominance of one form over another should not blind us to the fact that both are expressions of the same ruling-class hegemony. As Richard Seymour points out, the ruling-classes in the West are becoming attuned to and aware of cracks in ruling-class ideology. So, as consent fails as a mechanism for ruling-class reproduction, coercion will increasingly step in and take its place. 

Thirdly, the break down of consent is therefore not confined to Arab nations. Indeed, there is a growing body of evidence that we are witnessing a crisis of consent in the heartlands of global capitalism. From the undemocratic power of finance, to legal restrictions on the occupation of public space, from technocratic coups, to the draconian sentencing of protesters, more people are becoming aware that our supposed political freedoms are often used to mask the coercive hegemony of the ruling-class.

Crisis

To summarise, Gramsci’s analysis of consent and coercion is instructive in that it highlights the interconnection between the two. But it also demonstrates that the two exist in perpetual tension and are prone to crisis. If the whole structure of ruling-class consent is built on supposed political freedoms, what happens when the ruling classes have to resort to the brutal methods of state repression? What happens when the UK government seeks to ban protests during the Olympic games? What happens when the US state does this:

Indeed, what happens when the ruling military junta in Egypt uses Western practices of political coercion as a justification for their own brutal repression of demonstrators in Tahrir Square?

The more the ruling-class depends on coercion to reproduce its power, the more it will undermine and weaken the basis of its own consent. The more it will become like Mubarak’s Egypt, or Ben Ali’s Tunisia, or Assad’s Syria. The more it will become self-evident that there is no fundamental difference between Arab and Western struggles.

As with the Arab Spring, the political coercion of movements such as Occupy Wall Street has the potential to popularise and broaden the movement to sections of society that would have otherwise been opposed or indifferent – liberals, trade union leaders, mainstream media, political parties, religious groups, etc. The embryo of such broad based solidarity has already been witnessed in the Occupy movements either side of the Atlantic. So as we look to build for November 30^th and beyond, establishing and maintaining the unity of various resistance movements should form the bedrock of any political strategy of resistance. 

Mayor Bloomberg Hammered

Best known for his baiting of Fox anchor and arch-twat Bill O'Reilly, as well as his outspoken criticism of the Bush administration, Keith Olbermann recently took on Mayor Bloomberg over the heavy handed suppression of Occupy Wall Street. And thanked him. Deep par...

There is something wonderfully agitational (or should I say showbiz?) about US politics and media. For example, could you imagine our most flamboyant anchor Jeremy Paxman doing something like this? Of course there is a bad side: Fox News; cringey election videos; Nuremberg-style campaign rallies. But at a time when the message of the Occupy movement - and the resistance to capitalism as a whole - needs articulation and popularisation, all manifestations of revolutionary pedagogy and propaganda should be welcomed.

Football Against the Enemy

How many football fans are familiar with the following criticism: “I can’t believe you buy into all that hype”? Or, “how can you make such a big deal out of a bunch of grown men chasing a ball around a park?”, “it’s only a sport!”? We quite often respond with a sagely “well it is much more than just a sport” and be done with it, but recently I have been haunted by these questions.

The spark for such doubts was a politically minded friend who challenged me on my own devotion to the game: “You moan about the world’s ills, yet rather than doing something about it, you spend your spare time drinking in front of Sky Sports.” He had a point, one to which a simple, “well it’s more that a sport” struck me as an unsatisfactory riposte. After all, in a post-theistic world, where the cult of celebrity has replaced religion, football could very much be considered an “opiate of the masses” – a distraction of human time and energy away from political and social action.

This wasn’t always the case. Simon Kuper’s classic, Football Against the Enemy, recounts numerous instances where football has played a part in shaping political events and vice-versa. Memorable examples easily spring to mind. In particular, Franco’s support (in more ways than one) of Real Madrid, and the role clubs such as Barcelona and Athletic Bilbao played in resistance to the fascist regime. Never has football been so clearly “more than just a sport”. But, since the fall of the Berlin wall, such cases have been conspicuously difficult to find. Where has football’s political content gone?

The reason is itself political. Ellen Wood has noted that since the end of the Cold War an unfettered neoliberal political project has sought to dismantle the unity between society and individuals – between ‘public’ and ‘private’. “There is no such thing as society” bellowed Thatcher and this has very much been the rallying call of neoliberal ideology since. “Rolling back the state” entailed nothing less than the fragmentation of social life into separate and autonomous private institutions. It is therefore no coincidence that in this same period football should have carved out its own privatised mode of being, a bubble distinct and insulated from the world outside it.

Nowhere is this more pronounced than in the Premiership, where unfathomably vulgar wages and transfer fees appear unaffected by a global economic crisis and domestic recession; where Rio Ferdinand ponders the negative effects of cuts in public spending whilst dodging 22% of his tax contributions; where players compare their multi-million pound contracts to slavery; and where supporters pay obscene sums to watch precisely those players they criticise for being ‘removed from the real world’. With such a radical disjuncture between football and reality, it is paradoxically understandable that political issues can be so clearly evident and yet so readily ignored – it represents the very essence of the Murdoch dream realised as an Orwellian nightmare.    

 
So is football now inherently antithetical to politics? Well not entirely. This year saw an unprecedented street protest by supporters of Istanbul’s ‘big three’ – Galatasaray, Fenerbahce and Besitkas – against the ruling (and unabashedly neoliberal) AK party. Earlier that week Prime Minister Erdogan had attended the opening of Galatasary’s new stadium, only to be met with deafening boos. That these supposedly ‘organized protests’ were condemned by the AKP was a farce in itself – Turkey is meant to be a liberal democracy with an institutionalised right to protest.

But when the Chairman of Galatasaray crumbled under the pressure of Erdogan’s comments and pledged to root out and ban the Galatasaray protestors, a wave of indignation swept Turkish football, bringing together otherwise violently partisan fans in solidarity against Erdogan. Moreover, beyond protest against political involvement in football matters, this march struck very much at the heart of the government and its policies. Metin Kurt, a former Galatasary player and head of the Sports Workers Union that helped organise the protests said: “The prime minister has tried to turn the inauguration into a political show, but the reaction of our people, who are weary of his policies and of his eight years in power, has been rubbed into his face through Galatasaray supporters.”

These events demonstrated a clear breakdown in the formal disjuncture of football and ‘the real world’, clearly evidenced in the rapid attempts made by the AKP to re-establish the separation between the two. Erdogan claimed that the booing was not by real Galatasaray fans, while government minister Taner Yıldız laughably announced that he had “suspended” his support for Galatasaray. Today’s Zaman, a government mouthpiece howled of “insolence” and “organized crime” (yes, really!) while insisting “[s]ports and politics do not mix, or at least they shouldn’t.” That the two were, and through solidarity between Turkey’s most divorced clubs, was nothing short of a fundamental challenge to the inherently neoliberal notion of what politics should (and shouldn’t) be.

Now it is not for me to pass judgement on whether such a challenge is (in the words of Today’s Zaman) ‘Good’ or ‘Evil’. Nor is it the place to make bold future predictions. So to conclude with a couple of questions. In our current epoch, which has witnessed neoliberalism’s economic and ideological hegemony shaken to the core, could the iron curtain between football and politics be torn down? Can we expect more political interventions by movements organised around football, and equally more engagement with football by politicians?