Wow! What a storm in mainstream economics has been caused by the revelations of a new paper undermining the data and thus the conclusions of one of the most famous studies on the relationship between the size of public debt and economic growth. In 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper, “Growth in a Time of Debt.” Their “main result is that…median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower.” Indeed, countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate.
And this is a big deal because politicians around the world have used this finding from R&R to justify austerity measures. By austerity measures, we mean that cutting government spending, eliminating budget deficits and reducing levels of public debt are necessary in order to restore long-term economic growth. More borrowing and increasing spending would be disastrous, so the austerity argument goes. In the US, many politicians have pointed to R&R’s work as justification for deficit reduction. Paul Ryan, the Republican chair of the House Budget committee who has pushed for rapid fiscal tightening in the US, cited the Reinhart-Rogoff study as “conclusive empirical evidence that total debt exceeding 90 per cent of the economy has a significant negative effect on economic growth”. The Washington Post claimed it was economic consensus view that if the “debt-to-GDP could keep rising and stick dangerously near the 90 percent mark economists regard that as a threat to sustainable economic growth.” In Europe, R&R’s work has also been used to justify austerity policies.
Now, in a new paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst, using R&R’s own data, find that Reinhart and Rogoff selectively exclude years of high debt and average growth. They use a debatable method to weight the countries. And amazingly, there also appears to be a basic coding error in their excel spreadsheets that excludes high-debt and average-growth countries. Reinhart-Rogoff use 1946-2009 as their period, with the main difference among countries being their starting year. In their data set, there are 110 years of data available for countries that have a debt/GDP over 90 percent, but they only use 96 of those years. The R&R paper didn’t disclose which years they excluded or why. Herndon-Ash-Pollin find that they exclude Australia (1946-1950), New Zealand (1946-1949), and Canada (1946-1950). This has consequences, as these countries have high-debt and solid growth. Canada had debt-to-GDP over 90 percent during this period and 3 percent growth. New Zealand had a debt/GDP over 90 percent from 1946-1951. If you use the average growth rate across all those years it is 2.58 percent. If you only use the last year, as Reinhart-Rogoff does, it has a growth rate of -7.6 percent. That’s a big difference, especially considering how they weigh the countries.
Also Reinhart-Rogoff divide country years into debt-to-GDP buckets. They then take the average real growth for each country within the buckets. So the growth rate of the 19 years that U.K. is above 90 percent debt-to-GDP are averaged into one number. These country numbers are then averaged, equally by country, to calculate the average real GDP growth weight. The U.K. has 19 years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent growth rate. New Zealand has one year in their sample above 90 percent debt-to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally. Even though there are 19 times as many data points for U.K. This weighting significantly reduces the average; if you weight by the number of years you find a higher growth rate above 90 percent.
Finally, As Herndon-Ash-Pollin puts it: “A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49…This spreadsheet error…is responsible for a -0.3 percentage-point error in RR’s published average real GDP growth in the highest public debt/GDP category.” Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above). And this error is needed to get the results they published, and it would go a long way to explaining why it has been impossible for others to replicate these results. So what do Herndon-Ash-Pollin conclude? They find “the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim].” And they are unable to find a break point where growth falls quickly and significantly.
R&R responded quickly to this attack on their work: “We literally just received this draft comment and will review it in due course,” they said. But they argued that “The weight of the evidence to date – including this latest comment – seems entirely consistent with our original interpretation of the data” Really? As Paul Krugman put it in his blog (http://krugman.blogs.nytimes.com/2013/04/16/reinhart-rogoff-continued/), “R&R’s “response to the new critique is really, really bad. First, they argue that another measure — median growth — isn’t that different from the Herndon et al results. But that is, first of all, an apples-and-oranges comparison — the fact is that when you compare the results head to head, R-R looks very off. Something went very wrong, and pointing to your other results isn’t a good defense. Second, they say that they like to emphasize the median results, which are much milder than the mean results; but what everyone using their work likes to cite is the strong result, and if R-R have made a major effort to disabuse people of the notion that debt has huge negative effects on growth, I haven’t noticed it So this is really disappointing; they’re basically evading the critique. And that’s a terrible thing when so much is at stake.”
Two eminent mainstream economists from the most prestigious and conservative Harvard University whose studies on debt have been used by everyone as a defence of the policies of austerity (although not openly by R&R themselves) have been found to distort, mislead and make basic errors in their stats! It does not make you very confident about mainstream economics, if you ever were.
In several previous posts, I have called on R&R’s data and conclusions to throw doubt on the arguments of Keynesians like Paul Krugman and others who have argue dthat that rising and high debt does not matter. For example, this is what I said in March 2010 “Recent research by two leading capitalist economists, Carmen Reinhart and Kenneth Rogoff (see economics.harvard.edu/faculty/…/This_Time_Is_Different.pdf) , has shown that when in any country, the public debt ratio reaches 90% of GDP, that will reduce its economic growth rate by 1.0-1.5% pts a year. So an economy that used to grow on average at 3% a year will now grow at only 1.5%. If that is borne out, it will really hit the ability of capitalism to provide jobs, services and wage rises.” And again in May 2012, I said “In their very latest report, the historians of debt, the Reinharts and Kenneth Rogoff confirm the relationship between debt and growth under capitalism (see Carmen M. Reinhart, Vincent R. Reinhart, and Kenneth S. Rogoff, Debt Overhangs: Past and Present, NBER Working Paper No. 18015 (April 2012)). They looked at 26 episodes of public debt overhangs (defined as where the public debt ratio was above 90%) and found that on 23 occasions, real GDP growth is lowered by an average of 1.2% points a year. And GDP is about 25% lower than it would have been at the end of the period of overhang.” So the revelation that the data and methods of R&R are riddled with errors and doubtful manipulations is disconcerting.
R&R have now come back with a more considered response to the new paper’s criticisms (http://blogs.ft.com/ftdata/2013/04/17/the-reinhart-rogoff-response-i/). R&R accept that there is a coding error on their data but reject the other criticisms. They conclude “So do where does this leave matters on debt and growth? Do Herndon et al. get dramatically different results on the relatively short post war sample they focus on? Not really. They, too, find lower growth associated with periods when debt is over 90 per cent. Put differently, growth at high debt levels is a little more than half of the growth rate at the lowest levels of debt. They ignore the fact that these results are close to what we get in our Table 1 of our AER paper they critique, and not far from the median results in Figure 2 despite its coding error. And they are not very different from what we report in our 2012 Journal of Economic Perspectives paper with Vincent Reinhart—where the average is 2.4 per cent for high debt versus 3.5 per cent for below 90 per cent.”
But before we write off all of R&R’s work, I’d make the following points. First, there is other research that makes similar claims, including more recent work by Reinhardt and Rogoff. A R&R put it in their reply to the attack on their work: “our 2012 JEP paper cites papers from the BIS, IMF and OECD (among others) which virtually all find very similar conclusions to original findings, albeit with slight differences in threshold, and many nuances of alternative interpretation. These later papers, by the way, use a variety of methodologies for dealing with non-linearity and also for trying to determine causation. Of course much further research is needed as the data we developed and is being used in these studies is new. Nevertheless, the weight of the evidence to date –including this latest comment — seems entirely consistent with our original interpretation of the data in our 2010 AER paper.”
For example, the BIS by Stephen G Cecchetti, M S Mohanty and Fabrizio Zampolli’s, The Real Effects of Debt, published in September 2011, analysed OECD countries between 1980 and 2010. It also found that, beyond a certain level, debt is a drag on growth. They conclude that for government debt, the threshold is around 85 per cent of GDP; for corporate debt it is 90 per cent of GDP and for household debt it is also around 85 per cent. The McKinsey Institute also published a very illuminating study arguing that deleveraging usually took four to seven years after a crisis breaks (see Debt and deleveraging, mckinsey.com/mgi/…/debt_and_deleveraging_full_report.pdf). And in a recent World Economic Outlook, April 2012, IMF researchers outlined the evidence that debt does make a difference both to the depth of the crisis and the strength of the recovery, concluding that: “recessions preceded by economy-wide credit booms tend to be deeper and more protracted than other recessions” (p96) and “housing busts preceded by larger run-ups in gross household debt are associated with deeper slumps, weaker recoveries and more pronounced household deleveraging“, p115). Also, Owen Zidar pulled data from R&R’s AER paper on debt to GDP and economic growth to see if there is any evidence of a break at a 90 (http://owenzidar.wordpress.com/2013/04/16/debt-to-gdp-future-economic-growth/). He found that persistently 90+ Public Debt to GDP countries tend to grow less quickly over next 5 years, but the distribution of historical outcomes suggests that disaster scenarios are much less common than just modestly slower 5 year growth for these countries. And the data show that there’s no special break at a debt to GDP ratio of 90.
And second, even if there is still evidence of a good correlation between high debt levels and low growth rates, the issue of causality remains. Is it high debt that causes low growth or low growth that leads to high debt? Countries could have high debt-to-GDP ratios because they are having serious economic problems. The years of high debt in the US are to be found at the end of the 1939-45 war and it quickly came down as the economic boom began. In the past debate on causality, R&R have dismissed this criticism as wishful thinking. “We’re quite aware that you have causality going in both directions,” said Reinhart. “But please point out to me what episodes from 1800 to the present have we had advanced economies who carried high levels of debt growing as rapidly or more rapidly than the norm.” Belgium after World War I, she says, fits the bill, but that’s basically it. “It’s not about some exotic magic threshold where you cross the Rubicon,” she says. “But high debt levels are like a weak immune system.”
The third point is that there is also little evidence that alternative Keynesian policies of government spending and ‘unconventional’ monetary measures (i.e printing money and borrowing more) would work in restoring and sustaining a high rate of economic growth. The evidence is dubious, as I have shown in previous posts (see https://thenextrecession.wordpress.com/2012/10/14/the-smugness-multiplier/). And again, the causation is not clear: 1) a recession causes high debt, so the only way to get debt down is to boost growth (Keynesian) or 2) high debt causes recessions, so the only way to restore growth is to cut debt. Indeed, the issue for the Marxist approach is not so much the level of debt (R&R) or the level of spending (the fiscal multiplier), but the level of profit and profitability.
The revelations of this new paper come at a bad time for advocates of austerity. The IMF’s latest World Economic Outlook lays into austerity policies like those espoused by the UK coalition government and supported by right-wing cranks like David Stockman and Paul Ryan in the US. As IMF chief economist (and semi-Keynesian), Olivier Blanchard put it: “The danger of having no growth, or very little growth, for a long time is very high…you’re playing with fire when you get to very low growth rates. If you can decrease the speed of fiscal consolidation while maintaining credibility I think it’s worth considering.” His words were echoed by Christine Lagarde that “there is a need for higher demand” in countries with big trade surpluses. The Conservative government in the UK responded that the IMF forecasts better growth for the UK this year at 0.7%, than either France or Germany. But when these countries are also imposing austerity and the mature capitalist economies are expected to manage little more than 1% real growth this year and not much better in 2014, that’s hardly a convincing argument for austerity.
But whatever view you take: that austerity works or does not work; or the Keynesian alternatives work or don’t work in getting capitalism back on its feet, the news that mainstream academics are fast and loose with their number crunching in order to reach pre-conceived conclusions is not so surprising. It’s part of what Marx called ‘vulgar economics’. It has only been revealed this time because of the battle over pro-capitalist economic policy between the Austerians and Keynesians. As R&R say in their response: “Looking to the reaction to this comment in blogosphere, we note that this is not the first time our academic work is seen pandering to a political view. What is quite remarkable is that this claim has spanned polar opposites! This time, we are charged with misconstruing analysis to support austerity. Only a few months ago, our findings on slow recoveries from financial crises were accused as providing a rationale (excuse?) for the deep recession and weak economy the Obama administration has faced since 2007.”
The battle continues.
Michael Roberts Blog 
It is shocking to realise R & R’ methodological silliness. On the substance, 90 pct debt and growth, it is obvious that there is no rule. The interest rate on the debt counts vs the cumulative effects the debt has had on capitalist profitability. When and at what terms is the debt rolled over? What is the future prospect for government revenue? The US is in a league apart, given its role as reserve currency host. And true, high government debt is often a result rather than a cause (bailout). The reason keynesian deficits/ debt often do not work is that there is no effect on economic conditions. Apart from that, with the generally higher debt we have now, the frontiers have moved. The real problem is the power government debt gives/adds to financial markets to change the terms overnight.
Bloody hell, Excel error leads to austerity!
“And again, the causation is not clear: 1) a recession causes high debt, so the only way to get debt down is to boost growth (Keynesian) or 2) high debt causes recessions, so the only way to restore growth is to cut debt.”
Is there a dispute here? We’re looking at public debt and isn’t it clear that the Great Recession caused the sudden increase in debt – bank bailouts, reduced tax take, unemployment. Other reasons apart from recession can also increase debt, such as the needs of a war economy.
Yes, the way to get debt down is to boost growth. This doesn’t necessarily lead to Keynesian conclusions at the expense of the centrality of profitability as it still leaves the issue of how to achieve growth.
This 2010 paper by R&R with methodological/data errors led to incorrect conclusions that were leapt upon by austerians. Much better is the well-established earlier work by R&R on the history of crises and that crises of a financial nature are severe and the recovery period extended. IIRC, public debt wasn’t posited as the sole or key problem. Credit booms and housing busts are something different, and high public debt a consequence.
Spot on, Graham
Par for the course for what currently passes for capitalist economic “science”. “Both sides” must dance around the fact that, under 20th-21st century capitalist conditions, only a large state-directed industrial policy aimed at raising labor productivity and total output – the capitalist version of planned economy – can overcome the mountain of debt incurred in the process. That was WW2 in economic terms, and was likely why ANZL and Canada could sustain growth and high debt in the postwar.
Of course such an effort will only realize the TRPF, which is only an expression of the capitalist limits to planning. And that is exactly what happened in actual history since WW2.
But the capitalist sponsors (Krugman<-NYT<-TBTF banks) of these two sets of dueling academicians won't let them bring up economic planning in any form, of course.
Weak, Roberts. Weak. Marx didn’t critique political economy so that capitalists would know how the system properly functions; he did it to show society that even if it was in its purest form it will always demand a massive tribute of pain and suffering from the working class. So in that sense the Austerity solution is working, corroding capital infrastructure, stoking desperation and ethnic tensions, tip toeing us ever closer to another great conflagration so we can reboot the whole system at the low, low price of hundreds of millions of lives. So what if ‘Keynesian’ infrastructure projects or some kind of job guarantee don’t reverse the falling rate of profit — isn’t that even more reason to do them! Why do so many ‘Marxist’ seem so committed to the idea that a socialist revolution must, if its pure of heart, inherit a crumbling pile of shit from capitalism? So you just cited the work of frauds to ‘warn’ against Keynesian solutions not working (for whom?!!!!!), and you don’t even seem remorseful. I propose we have a third category in the debate – Marxtrians – advocates of Marxterity; those who advocate blindly against any public spending because it doesn’t fit the description of the system Marx was trying to show us how to kill.
Roberts is criticizing Keynesianism and Austerity in favour of a separate set of policy measures built around state-directed investment that he has outlined in other posts (IIRC).
Uh………no, Marx’s effort was to explore the immanent critique of capital, the critique that shows that the very thing that makes capital develop as capital is also the basis for the abolition of capital.
Uh…yes, austerity is definitely working for the bourgeoisie, as austerity is class struggle, their preemptive counterrevolution.
As for “public spending”– endorsing that and all that jazz– all that is is another iteration of “capitalism creates jobs”– “without the employer, there is job for the employee.” Marx and Engels said often enough, and once is enough, “not a farthing for this government.” They weren’t kidding.
You don’t think “public works” are part and parcel of the program of another “great conflagration”? Sure was back in the days leading to that previous great conflagration.
We don’t “criticize” capitalism to “make it better,” a la the various inane suggestions for “solving” Cyprus’ problems. Nor do we flog “public spending” etc. as an offset to the misery it, public spending, will and must eventually compound.
Ok, I like it. I’m also willing to accept this as a good point by point take down of my screed. But can I ask for a little more? Explain to me how public spending – specifically like the ‘state-directed investment Roberts outlines’ – will and must compound the misery. If I’m unemployed, wasting my days on the internet at the ‘public’ library (as long as it stays open), craigslsiting for shitty work and trying to learn if a better world is possible, will a government provided job, where I can work with other people who need government work, argue with them, agree with them, learn from them … will that dilute my ability to be an immanent critique in the flesh? To keep my ire up, is it best I stay under the heel of a boss who thinks he’s some kind of Neitzchean ubermensch, and not take orders from a bureaucratic beetle-man? Is it too dangerous to give me a job fixing shit in crumbling cities because, as long as I’m periodically emptying office garbage cans and begging for the privileged to do so, I’m less likely to be a Nazi? I know you’re right that a government that can employ an army of the unemployed to sweep streets can employ that same army to slaughter each other. So is it better that we take our counter-revolution preemptively, in smaller, more digestible bites? But it seems to me that for every cut back in public spending on things that have any value for those who don’t want to, but have to work (like the public library where I first checked out and misread Marx – a few years before I was misreading him online), is offset by the financially prudent approved public spending on private prisons and cops. Again, my short site can’t see how these are the devices of Capitalism that it will undue itself with, if we only leave it to them. If Roberts agrees to state directed investment, then why not spend energy describing, advocating, defending those, instead of (incorrectly) choosing the least fraudulent of the frauds, as having anything worth reading? Educate me, please.
Sure, let’s put everyone to work in that big public spending project called war, because it will employ so many, and has an unquenchable need for replacement of its capital components. I call that compounding the misery, and on a grand scale.
Wait, you want to argue that its possible to have such massive public works under capitalism without the military component? If so, you need to educate me as to where this has actually taken place without the military component. Road building? Uh…no, not really, US construction of the Interstate Highway System was done under a defense appropriation.
I got it. How about public research at universities on developing and constructing automated machine tools? Give some work to the increasing numbers of unemployed with graduate study and graduate degrees, no? Sorry, undertaken through contracts awarded by the DOD with the intent of standardization, and eliminating labor control on the shop floor.
How about building dams a la the TVA? Certainly, lets go right ahead and seize land where necessary, dispossess where possible, and drown if absolutely essential so that we establish new and more elaborate markets for capitalism.
Or wait, how about public health? School lunches? Schools?
When the bourgeoisie launch their attacks on these things, just as they launch their attacks on employment, or wages, which these things really are– attacks on the cost of the reproduction of the working class– are we supposed to organize the working class to lobby for public health, for school funding? For wages? For employment? Or does the attack not indicate that there is an vital conflict between the needs of workers, of the general population, and capitalist production and something has to go, them or us?
I mean exactly what do you think the public works are creating when undertaken under the rule of capital, if not the means for the reproduction of capital? I mean why make a distinction between “public” and “private.” Why not also provide public money to capitalists to hire workers… wait a minute, we already did that, do that, will continue to do that and has that improved the situation for the working class, as a class?
Why not bail out banks in 2008 so the economy doesn’t spiral down in free fall, leading to massive unemployment? Support TARP? Sure, keep the credit system alive. Save jobs. Keep some people employed who would have been let go.
Why would we support public works undertaken by this government, this ruling class, when it will not alleviate the problem that exists on the class-level?
Because it will make things somewhat less shitty for some individuals in that class? Brilliant. What has been the history surrounding big public works efforts in the advanced capitalist countries? Did it make things better, you think? That’s not the same thing as asking if “things got better.?” It’s asking did the public works cause things to “get better?” I’m looking at the post-1931 record in the US, and I don’t see it, public works, making things better.
What you describe– getting a govt. job where you “can work with others” “learn from them” etc. etc. is touching, and brought a tear to my eye, almost– except that part you throw in about immanent critique, since I only used that phrase to describe Marx’s analysis, and not whatever salutary or not impacts programs might have on class struggle. So hey, where have I heard about that learning together, working together, agreeing together……..? Damn if that doesn’t sound like New Deal idealism. And how did that work out for the working class as a class? Good you think? You think that somehow wasn’t connected to that great uptick for workers called WW2?
You can argue for public works; you can argue for Proudhon-izing the banking system in Cyprus, or Greece, or anywhere because after all, that will save the jobs of the bank employees… but we don’t live in a make-believe world where such actions are possible without reproducing the whole miserable ball of shitty wax called capitalism.
You don’t get to go part of the way with capitalism. You don’t get to reproduce only the “good bits.”
You as an individual can go after any job you want. There are plenty of social democrats to argue for public works, etc. That’s not the point. The point is what should Marxists be doing as Marxists that advances the abolition of capital by the working class?
At the end, it boils down to this: Higher wages or abolish the wage system?
Pick one.
“When the bourgeoisie launch their attacks on these things, just as they launch their attacks on employment, or wages, which these things really are– attacks on the cost of the reproduction of the working class– are we supposed to organize the working class to lobby for public health, for school funding? For wages? For employment? Or does the attack not indicate that there is an vital conflict between the needs of workers, of the general population, and capitalist production and something has to go, them or us?”
Every Marxist should organise to fight for public health, schools funding, higher wages and lower unemployment. This is ABC stuff. Perhaps you think being in a trade union is a waste of time for Marxists – I don’t.
I’m grateful for the energy you put in to this. I’m mostly convinced, but there is still a lot where I am just lost. If you’re not tired of this yet, I’d ask for a little more.
Every point you make, about the new dealism, the public works always being intrinsically linked with militarism, my own narrow worldview are dead on. And, higher wages or abolish the wage system? Abolish the wage system please! Where do I vote, sign up, get in line, set up my tent, march, fight? How do I ‘pick’ it? I’m sick of working for assholes, but I’m too much of a pussy to be homeless.
I thought Capital was a relationship, the ability of one group to demand the energy of another because they have something that the other group doesn’t. So when people say the reproduction of capitalism, I thought it meant the reproduction of the situation that makes it necessary for workers to submit to this arrangement. With this (perhaps way oversimplified) understanding, it seems to me that the current policies are doing quite a bit to increase that situation. I also thought that part of the dynamic of the eventual abolition of the wage system was the discipline and organization workers learn from mass production, real social productive skills that would aid in the production of use values for their own sake. If this is wildly antiquated, I apologize, but it makes sense to me. Is there another way? What would it look like?
And I don’t think capitalism has any good bits, but I don’t think every productive technique, social activity, or institution under capitalism is capitalist. I guess this has what’s kept me from fully embracing the anarchists’ dream of running off to some bio-regionalist flat feudalism. Your point about my sentimentality is well taken, but is it completely off the mark?
Every Marxist should organize for the free universal public health care, free universal public education, transport etc. Somebody might even point out that CCNY remained tuition free during the great depression, but since 1975?
No Marxist should organize for govt. public works programs.
There’s a difference, a big difference. The former speaks to the working class having to seize the machinery that delivers these necessities from capital, because after all, “they have to be paid for.” Indeed they do.
We know the how of “how” they are paid for today; which is the how, not the god, that failed.
The latter program–organizing for “public works” or “tuition rebates” or sliding scales or whatever– because it leaves that god intact is doomed to fail and will do nothing but restore the totem– only with a nationalized, “public” mask.
I don’t think “being in a trade union” is a “waste of time.” I think it is, firstly, — not necessary to the organization of the working class as a “whole” class; is insufficient to the task of the working class organizing itself as a whole class; is downright inadequate to the working class self-organization; is incapable of even the “theoretical” “basic” task of trade unions– “defending” the workers from the attacks of capital; and, when push comes to shove, and push always comes to shove– is downright inimical to workers organizing themselves as a “whole” class– see for example the role of the unions in the struggle in Wisconsin.
I understand that you may be sick of working for assholes, or that you might even welcome the chance to work for assholes if it put more food on the table. That’s an individual manifestation of the class problem. Either/or doesn’t solve the class problem does it? It reproduces it. So the task is how do the workers move from reproducing the conditions of their own misery to exploding the conditions of their own misery. I don’t think bailing out banks, providing public works programs, infrastructure restoration plans, do that. Not in the least. Do you?
Govt. wants to introduce a public works program to reduce discontent? You want the job? Good for it and good for you. But under what conceivable reason should that become a “programmatic demand”?
I think the historical evidence shows that the dominant ideology, and ideology it is, of the left– is to “fight” for “public works,” to agitate for this or that program “under trade union control” etc etc. has amounted to nothing other than a “rationalization” of capitalism; a rationalization of the irrational so to speak. So……we’ve been doing it GrahamB’s “way” (note: literary device, don’t know if that amounts to GrahamB’s “way”) and where, again looking at the historical evidence has that worked out in ways other than to purchase a respite for capital at massive cost to labor?
It always causes me to smile when those who have advocated what patently has not worked, cannot work, accuse those “radicals” “maximalists” who advocate exactly that– radicalism, maximalism– of being “unrealistic” “immature” when the lack of contact with reality, the inability to absorb and manifest “wisdom” is the signature characteristics of the accusers.
So I’d feel a whole lot better if someone could point to a program of public works that in fact “worked.” Did CAUSE the condition of the working class to get better, and the condition of capital to DECLINE.
If there is no such evidence, then we have to come to grips with that, and the fact that advocacy of such a program amounts to little other than another iteration of Gompers’ infamous “transitional program:” MORE!
Capital indeed is a social relationship, but not of groups. It’s of classes. More than a mere technicality. In the everyday existence capital reproduces itself through classes reproducing themselves as classes– ruling and ruled.
No one’s arguing that every technique or social activity is capitalist. But they all exist under capitalism. The issue is what activities break the continuum of that reproduction.
And one could just as well say: Lower wages, or abolish the wage system? Pick one.
Because if a worker can’t conceive of any reality beyond the wage system, lower wages represents “survival, at least”.
The point is, from the revolutionary standpoint, “Keynesian public works” vs. “Austerianism” represents simply a tactical variation of the class struggle playing field. In the abstract, both may or may not improve the the chances for an opening to abolish the system altogether, depending on the historical circumstances.
The proof is that both sides of the coin can appear simultaneously, precisely in the combination, “public works austerity”, commonly called all out war. And the first bout of this almost a century ago opened the way for the Russian Revolution.
I think we need to qualify the statement,
“Uh…yes, austerity is definitely working for the bourgeoisie, as austerity is class struggle, their preemptive counterrevolution.”
because if you attack workers living standards you do indeed have a class of people who are cheaper to employ etc but then again you have a class of people who are demoralised, exhausted and have less money to buy stuff. So some of the bourgeoisie must loose out, can’t be any other way. Some bourgeois go to the wall and other bourgeois pick up the pieces. So austerity is working for some but not all of the bourgeoisie.
The whole idea of doing research into debt level as a % of GDP seems fraught with problems to me, limitless variables, nations at different levels of development etc etc.The idea that you cut back wealth, destroy public services in order to, er, increase wealth and provide services again seems a tad problematic, sort of 2 steps back and 2 steps forward!
Who knows, maybe as more and more of the world get brought into the sphere of capitalism, that increased demand means a leveling of living standards, for many people in the West, all that means so far is slightly less to top up on mobile phones, what a shame! Surely the point of radicals is to get rid of the class of exploiters and re-direct production to human need.
All and all very illuminating for me. Thank you. I’m with you a hundred percent on the universal education and healthcare. But wouldn’t that mean a job guarantee for doctors, nurses and teachers? Is this acceptable to Marxists because they are not proletarian, and by recreating them as a class we are not recreating the capitalist classes?
Who says nurses, teachers, medical professionals, doctors working for hospitals aren’t proletarians?
In taking over those services, organizing them for social need, the proletarians are doing away with the subjugation of social need to capitalist profit. That’s the point.
Agreed, if we restrict it to doctors working for hospitals and not the other half that owns their practice. But I was under the impression that the Marxist demand for universal health coverage and education that you mentioned applied to the current political climate, while the phrase “taking over those services” makes it sound decidedly post revolutionary. Does this mean you don’t support universal health coverage and education in the current capitalist system, by means of government policy? If you did not imply that, then my apologies for misconstruing it. If you did intend to say that Marxists should argue for universal healthcare and free education even within the current system (with maybe an eye toward the eventual take over), then why are these two fields special? Why not advocate for government provided universal plumbing, childcare, garbage collection, etc.? In other words, any and all services currently provided by ‘the market’.
I support nothing this government, or any capitalist government, does. Ever. Here’s how I look at it: suppose by some freak of software contaminated vote tabulation, I or a Marxist were elected to a parliamentary body. A bill is submitted for the government to fund, staff, etc. local health care centers. Do I vote for it?
I don’t think so. Marx and Engels said “not a farthing for this government” and I don’t think they misspoke. Programmatic demands are supposed to illuminate “class” and shift initiative to the working class.
Look, let’s take the most difficult case I can think of, one that struck close to home since I got my start in the civil rights movement. Suppose you’re in the US Congress and you want to support the struggle. Do you support sending US agents, or the army, into the South to protect civil rights activists? And if you do, do you then vote to approve the appropriations to the Defense Department to fund the deployment? Me, because I would not vote for the latter, find it kind of ridiculous to come out in favor of the former.
Here’s when “anti-trade union” me would be agitating for labor unions to organize to protect the demonstrations.
Anyway, not an easy question to answer even under the best of circumstances, and we rarely achieve the best circumstances.
Artesian
“I don’t think so. Marx and Engels said “not a farthing for this government” ”
In that case you would be voting on very very little, which would raise the question, why the fuck get elected in the first place? Why bother with politics at all?
The answer to Paul’s question is that the left imagine being part of a movement and when a movement get’s into power it will enact the policies it desires. I would imagine that a left party would propose some sort of universal health coverage as a more immediate demand. From what Artesian is saying you would almost think the left would be breaking up every state monopoly! Engels would have called that reactionary!
Well, the answer to your question is breaking up the bourgeois state monopoly is hardly reactionary, and it isn’t even a question of breaking up; it’s a question of expropriation; of expropriating the expropriators.
I don’t think anyone can argue that the task is to take over the state or capitalism and make either or both do what either or both simply cannot– be organized for the benefit of all, for the satisfaction of need. I’m not stupid enough to undertake a fool’s errand or wish one on anybody else. I mean, I may be stupid, but not that stupid..
So right, there’s very little I would vote on. There’s a lot I’d agitate about, a lot I’d expose, a lot I’d criticize, but very very very very little I would vote for.
That’s not my idiosyncrasy, that’s the problem of expecting a parliamentary platform to accomplish anything other than recement the facade of capitalism. Plenty of examples of this, no? Labor Party, social-democrats, CPs. If that aint enough evidence for you, well good luck.
If you are not taking over capitalist firms or the capitalist state, what are you taking over? How can expropriate without touching the source of that expropriation?
How can you expect anyone to send you to parliament to simply agitate. A party must have a programme behind it. Otherwise stay out of politics and be an anarchist.
“Stay out of politics and be an anarchist.”.. thanks, I’ll keep that in mind. Now you might want to keep in mind that there’s more to politics than parliamentary posturing or arguing for “more”… not to put to fine a point on it.
Yes a party must have a programme, and that programme must be for a class to take power. That is quite different than arguing for a public works projects, road building here, a dam there, or money for schools everywhere.
Class power it what it’s all about, at the risk of appearing to be a maximalist.