Tapering? – maybe not

Stock markets rocketed up and the dollar fell on the news that the US Federal Reserve had decided not to reduce its planned monthly purchases of US government and mortgage bonds after all.  The prices of shares and commodities shot up because investors concluded that the US central bank was going to continue a while longer with its huge injections of ‘liquidity’ (dollars) into financial markets.  They had been told by the Fed in June that it was getting ready to cut back on its purchases of bonds starting this month.  But the Fed decided to wait.

Part of the reason for the Fed’s delay on beginning the process of ‘exiting’ from printing money was that the bank was still not convinced that the US economy was growing at a sufficiently fast and sustainable pace to get unemployment down and to expand without the help of liquidity injections.  Indeed, the Fed reduced its forecasts for US real GDP growth from its predictions in June from a minimum of 2.3% for 2013 to 2% and for next year from 3% to 2.9%.

Since it began its ‘quantitative easing’ programmes back 2010, the Fed has purchased nearly $3trn in government and mortgage bonds, or some 20% of US GDP – a huge injection of cash into financial markets.  The Fed was not proposing to stop all further purchases of bonds but merely slow the rate of purchase by a little bit.  Yet its decision just to hold off for the moment produced a huge boost to financial asset prices.

This shows that what is pushing stock prices to new highs and fuelling optimism about the world economy is mainly fictitious, based on central banks (the Fed, the Bank of England, the Bank of Japan and others) printing money.  This cash flows into the banks and financial institutions, but goes no further.  It does not get into the ‘real economy’, the productive sectors.  The economics of ‘quantitative easing’, ‘unconventional’ monetary stimulus, has been a failure in kick-starting the world economy

(see my posts, Down the Jackson Hole, https://thenextrecession.wordpress.com/2013/08/28/down-in-the-jackson-hole/

and The failure of QEhttps://thenextrecession.wordpress.com/2013/06/26/the-failure-of-qe-2/ .

QE has just fuelled a new property and financial market boom that last time eventually burst into collapse.  The productive sectors of the capitalist economies remain in the doldrums.  It suggests that when the Fed and other central banks do pull the plug, the world economy could slip back into a new slump.

53 Responses to “Tapering? – maybe not”

  1. Choppa Morph Says:

    Well, “slip back into a new slump” is their way of seeing it, of course. For us, the underlying slump will become fully visible again once it’s clear that they have just been papering over the cracks (literally).

  2. Boffy Says:

    Michael,

    I think you are trying to have it both ways here. I agree that the money printing is not getting into the real economy. It is instead going into blowing up all those asset price bubbles, as you correctly describe. The point is that although governments and central banks have SAID that the purpose of QE is to stimulate economic activity, that was never the purpose. The purpose all along has been to prevent a further collapse of the banks, and other financial institutions whose existence depends upon these asset price bubbles, because the value of those assets stuff the balance sheets of those organisations, and make them appear to still be solvent, when in reality they are all bankrupt, pretty much without exception!

    On CNBC last night, you could see Steve Liesman literally hand his head in his hands, because as he said, “If the economy cannot take 10 Year Bond rates of 2.8%, what can it take?” In reality, the economy, or at least the most important, most profitable bits of it, of course can take 2.8% rates. Verizon has just sold $50 billion of bonds, with the 10 Year offering a yield of over 5%! But, also the real economy can take higher rates, because as you point out, even at these current rates, the money is not being lent out, so higher rates would make no difference. The big corporations are stuffed with cash, whilst the banks will not lend to the zombie companies and zombie households, which is why the Pay Day Loan and other usurers are making hay. Its not the real economy that can’t take higher rates, but the financial markets, and the banks.

    Bernanke saw the Dow sell off again, he’s seen the rate on the 10 Year double, he’s seen the US housing market experience a huge drop in demand once more, and realised that this spells an asset price crash, and collapse of the banks. Its going to happen anyway, because market rates are still rising. The 10 year Treasury had backed off from 3 to 2.8% even before the decision. Its only backed off to 2.7% after the decision, and today it seems to be creeping higher again.

    If anything the real economy in the US and elsewhere would benefit from a collapse of these financial bubbles. As Marx put it,

    “As regards the fall in the purely nominal capital, State bonds, shares etc.—in so far as it does not lead to the bankruptcy of the state or of the share company, or to the complete stoppage of reproduction through undermining the credit of the industrial capitalists who hold such securities—it amounts only to the transfer of wealth from one hand to another and will, on the whole, act favourably upon reproduction, since the parvenus into whose hands these stocks or shares fall cheaply, are mostly more enterprising than their former owners.” (TOSV2 p 496)

    So, it seems to me you can’t have it both ways. Either the money printing is not effective economically because its not getting into the real economy – as you said, and as I agree with. Or else the withdrawal of that money will cause an economic rather than just financial collapse.

    I prefer Marx’s take, which is that a financial collapse, whilst nasty and messy in the short run, is likely to “act favourably upon reproduction, since the parvenus into whose hands these stocks or shares fall cheaply, are mostly more enterprising than their former owners” and also because the money being tied up by the zombie companies and households at the moment would be better used elsewhere. The collapse of the zombie companies would then also as Marx indicates mean the value of constant capital falls, boosting the rate of profit, and providing a firmer foundation for the economy.

  3. Boffy Says:

    Addenda. The real battle going on here is between money-capital, which has held sway for the last 30 years, and whose ideology is neo-liberalism, and big, multinational industrial capitalism whose ideology is social democracy/Keynesianism.

    Workers need to put forward their own socialist alternative to both, but that doesn’t mean we are “Politically Indifferent”, to use Marx’s term to the two above solutions in the meantime. Its in workers interests to support the latter against the former.

  4. S. Artesian Says:

    it’s in the workers interests to support “one wing” of the bourgeoisie “against the other”??? Really? Been tried before– all over the globe; advanced countries, colonies, developing countries off and on for about 90 years.. and how do we think that’s worked out?

    Same false opposition “industrial bourgeoisie vs. (financial, landowning, imperialist, mercantile, cattle raising, petroleum — pick one or all) bourgeoisie” has been the basis for everything from Peronism to the popular front.

    Epic, and repeated failures. The multinational bourgeoisie are not social democrats who believe in full employment, wealth re-distribution etc. etc. who find themselves in some sort of death grapple with the evil, nefarious representatives of money-capital, the so-called finance capitalists.

    Does anyone really think the big US multinationals, GM, GE, Boeing, ExxonMobil are social democrat ideologues?

    Sure, that’s why they lay off workers, gut pension funds, reduce health care benefits– because they are social democrats compelled to do those things by their banker-masters

  5. S. Artesian Says:

    Oh.. and just love the remark about “zombie households” WTF is that? Families being evicted and foreclosed upon by mortgage issuers who robosigned foreclosure notices and can’t even prove real ownership of the mortgage? Those families are zombies? Those people one medical incident away from living in their automobiles are “zombies”?

  6. Boffy Says:

    “It’s in the workers interests to support “one wing” of the bourgeoisie “against the other”???”

    No. I didn’t say that. I said that Marxists are not indifferent to alternative solutions. In fact, I started by saying quite clearly,

    “Workers need to put forward their own socialist alternative to both,”

    The position is the same as Marx set out, for example in relation to the attitude to Free Trade. Its the same as he sets out in relation to other policies in Political Indifferentism

    • S. Artesian Says:

      Yes you did: Here’s what you said: “Its in workers interests to support the latter against the former.”

      And what is the “latter against the former.”?

      It’s right there in your first paragraph:

      “The real battle going on here is between money-capital, which has held sway for the last 30 years, and whose ideology is neo-liberalism, and big, multinational industrial capitalism whose ideology is social democracy/Keynesianism.”

      The latter, which you think workers should support in their own interest is big multinational industrial capitalism with its social democratic ideology vs. the former– which is money capital neo-liberalism.

      This is nothing but the old nonsense of a “progressive industrial bourgeoisie vs. a reactionary financial bourgeoisie.”

      This is where all the out of historical context quoting of Marx gets you– nowhere.

      • Boffy Says:

        “And what is the “latter against the former.”?”

        Its exactly what I said, that we support a solution based on social democratic/Keyensian ideology as opposed to a solution based on neo-liberal ideology!!!! You really should try to actually read what people say rather than spending all your time trying to find some phrase to latch on to to disagree with, and score debating points. The latter approach makes you seem more like a troll than serious debater!

      • Boffy Says:

        If we accepted your logic chopping here then we would have to conclude that Marx “supported” the Liberal industrial bourgeoisie against the Tory landed aristocracy, when he came down on the side of Free Trade, because he said of the two it was more conducive to workers interests!

      • Boffy Says:

        “The latter, which you think workers should support in their own interest is big multinational industrial capitalism with its social democratic ideology vs. the former– which is money capital neo-liberalism.”

        Given that subsequent to the comment you have misrepresented I made clear that I most certainly was not proposing some kind of Popular front with any wing of the bourgeoisie, I am at a loss as to why you then again try to put words into my mouth!

        Surely any rational person would accept that if I say what I mean by this is that I am not proposing any kind of alliance, then that is what I mean, that is what I intended to say, whatever your attempts to interpret the words differently. Once again, your method of argument seems to be more like that of a troll, where you obsess over who said what, rather than actually discussing the substantive point. That seems to go along with your rather patronising debating style in general.

  7. Boffy Says:

    “Does anyone really think the big US multinationals, GM, GE, Boeing, ExxonMobil are social democrat ideologues?

    Sure, that’s why they lay off workers, gut pension funds, reduce health care benefits– because they are social democrats compelled to do those things by their banker-masters.”

    Yes, of course they are. Engels long ago set out the very material basis upon, which the big industrial bourgeoisie made that social democratic pact with the working class. That is why they established Welfare States across the globe including in the US. It is the basis of Fordism.

    The fact that they make cutbacks on these welfare states means no more than at times bosses cut back on wages and conditions. In the end they do not abolish those welfare states. Why would they, that big capital created them for its purposes in the first place?

    You seem to be arguing the old syndicalist, economistic line that without the Trades Unions workers would be getting Lassalle’s subsistence wages etc.

    • S. Artesian Says:

      I haven’t made any arguments about what workers wages would or would not be. I’m talking about how capital acts as capital here and now, and why it acts that way.

      Social-democratic pact with the working class? I might, if I were the nasty sort, ask you what planet you’ve been living on for the past 30 years? On this planet such a “pact” has been under attack for about 40 years or so. The EU multinational industrial bourgeoisie wishes it could pull off what the US multinational industrial bourgeoisie has pulled off re the “welfare state” and “social democracy.”

      But I’m not that nasty sort sort.

      The big multinational industrial concerns in the US have supported, funded, initiated, the attack against unions, workers rights, welfare etc. etc. Who do you think is funding the tea party in the US? The attacks against govt workers union representation, pensions, etc?

      The Koch Bros. as social democrats? You think Jack Welch is a social democrat? That’s hilarious. Or not.

      As for your remark about “zombie households”– I read the Financial Times everyday and I have never seen that term used in its pages, so that leads me to believe it is not quite so commonly used.

      And since Michael’s post is concerned with the US Fed’s actions, the term zombie households in the US is nothing but an attempt to obscure and dismiss the real viciousness inflicted upon the living standards of those saddled with these debts.

      As for banks having forbearance regarding these (basically) mortgage loans– that’s not forbearance– what little hesitation there has been (and while there may be more of that in the UK, there certainly has been little such “mercy” in the US) is based on the banks reluctance to REALIZE the losses, and thus have take the charges against earnings, and re-up their capital ratios.

      I don’t know what sources you access to get real information about real capitalism in this real world, but I can recommend a few if you are interested.

      • Boffy Says:

        “The EU multinational industrial bourgeoisie wishes it could pull off what the US multinational industrial bourgeoisie has pulled off re the “welfare state” and “social democracy.”

        Do you mean the introduction of Obamacare? Or do you mean that even George Bush socialised $750 billion of healthcare costs off the balance sheets of private companies on to the state budget? Or do you mean that the costs of Medicair and Medicaid continue to grow at a phenomenal rate?

        “On this planet such a “pact” has been under attack for about 40 years or so.” Really?

        Well the size of the state increased under Margaret Thatcher, welfare spending under her government exploded. The Blair government TREBLED spending on the NHS.

        “Who do you think is funding the tea party in the US? The attacks against govt workers union representation, pensions, etc?”

        Certainly not the big industrial capitals that provide the backing for the Democrats. Or do you now want us to believe that the Democrats are some kind of socialist outfit?

        “The Koch Bros. as social democrats? You think Jack Welch is a social democrat? That’s hilarious. Or not.”

        The same could have been said about henry Ford, yet Fordism is essentially the basis of Welfarism, as many Marxists long ago described.

        You obviously read the FT with as little attention as you seem to read what other people write if you have never seen the term “zombie” used.

        For example, its headline here “The Rise Of The Zombie”!

        “And since Michael’s post is concerned with the US Fed’s actions, the term zombie households in the US is nothing but an attempt to obscure and dismiss the real viciousness inflicted upon the living standards of those saddled with these debts.”

        There you go again imputing your own motives to other people, as though you were omniscient and knew what everyone else actually believes, even better than they know themselves!

        “As for banks having forbearance regarding these (basically) mortgage loans– that’s not forbearance– what little hesitation there has been (and while there may be more of that in the UK, there certainly has been little such “mercy” in the US) is based on the banks reluctance to REALIZE the losses, and thus have take the charges against earnings, and re-up their capital ratios.”

        Which is pretty much the policy of “extend and pretend” I described.

  8. Boffy Says:

    The term zombie businesses and zombie households is a commonly used term in the UK. It refers to businesses and households that appear to be coping from the outside, but who in actuality can only just pay the interest on their loans. The banks are exercising forbearance on these loans even though the borrowers can’t repay the capital sum what is called “extend and pretend”, because if they start to call in the loans, it will start a wider crash.

  9. Boffy Says:

    “And what is the “latter against the former.”?”

    Its exactly what I said, that we support a solution based on social democratic/Keyensian ideology as opposed to a solution based on neo-liberal ideology!!!! You really should try to actually read what people say rather than spending all your time trying to find some phrase to latch on to to disagree with, and score debating points. The latter approach makes you seem more like a troll than serious debater!

  10. S. Artesian Says:

    You’re repeating yourself, Boffy, Yes, you said workers should support in their own interests multinational industrial capitalism vs. “money-capital” neo-liberalism.

    That is a false, phony, dichotomy. And you can’t provide such support without supporting capitalism as a whole.

    All your posing about what Marx said 165 years ago doesn’t obscure the fact that you are saying nothing about real capitalism today except– workers should support it.

  11. Boffy Says:

    I copied the above post, because I should have posted it as a reply. I think you are exposing yourself actually as a troll. I have said TWICE that I do not propose what you claim I propose. I have indicated clearly what the statement you misrepresent means. Yet, instead of discussing the actual issue, you obsess over trying to prove that you know better what is in my head than I do myself!

    As in the past you seem more interested in debates over who said what, and pointless discussions of semantics. You talk a lot in vague terms about facts and data, but never actually provide much in the way of such data. In the case of dry bulk shipping you raised it then when I showed the data contradicted your argument you tried to say that it wasn’t important after all!

    I have no interest in wasting time discussing with trolls.

  12. S. Artesian Says:

    I’m sure you don’t.

    What’s at stake here is not “debating points” but 1)the actual content of Marx’s critique of capital which becomes 2) the recognition of the necessity of class struggle to effect the proletarian revolution in order to achieve the emancipation of labor.

    You say at one and the same time:”Workers need to put forward their own socialist alternative to both,” and “Its [sic] in workers interests to support the latter against the former” .

    What is it that you want us to support? The latter, in your own words is “big, multinational industrial capitalism whose ideology is social democracy/Keynesianism”– notice you said nothing about ” a solution” along “social democratic-Keynesian” lines– but an economic system which is and must be represented by a class– big multinational industrial capitalism.

    So how is it possible to do both? Of course it is not. This has been tried before– innumerable times– in numerous iterations– “progressive capitalism” against “reactionary capitalism,” industrial capital against financial capital, national capital against mult8inational capital (Allende’s UP), patriotic capital vs. comprador capital (Peron), bloc of four classes (Mao) “new democracy” (Mao again), popular fronts against reactionary, multinational financial landowning capital (Spain, France, Vietnam, Portugal, Indonesia, ad infinitum). And what have the results been? Disaster.

    Now you pop up and say “One more time, because the real fight here is between money capital and big industrial capital.” What bunk. There’s NO fight between these two, at least no more than the squabbling among hyenas over their place in the seating arrangement when it comes to tearing flesh off the kill.

    You prefer one brand of hyenas to the other? Be my guest. Don’t pretend it makes any difference to zebras though.

    Whatever disputes there are among capitals, between capitals has just as little meaning and importance as the squabbling among hyenas. (Put opposing Marx quote from 1848 here___________________.)

    We’ve been through this before: You make an assertion that is flat out absurd and when you get called on it, you duck into your “that’s not what I said” mode. When the statement is quoted back to you, then “it’s taken out of context”– meanwhile you provide all sorts of really important relevant quotes, or alleged quotes, from Engels and Marx referring to landholders in Britain in the first half of the 19th century. That’s certainly helpful.

    I just wonder when you’re going to trot out the quotes from Engels about supporting the US against Mexico in 1846 so that Yankee energy can do away with the slothfulness of those hacendados. Just ignore the fact that the war itself was fought on behalf of the slaveholders, which everyone in the US recognized, and at the time.

    So you propose that we support a big industrial capitalism, because its ideology is “social-democratic”? OK, let’s look at that. What kind of ideologues are we going to get with our support. How about some real social democrats? Like Schroeder? Is that social-democratic enough for you? Like Schroeder and his agenda 2010? Or how about.. Hollande? Is he social democrat enough for you? How’s that working out, good you think?

    How about Blair? Gordon Brown? or maybe we should take a trip down memory lane and bring back Callaghan?

    Your own examples– of Thatcher, of Blair, of Bush show the irrelevance, the immateriality, the ignorance involved in posing some sort of “big battle” between “money capital” and “big multinational industrial capital/social democracy.”

    I’d be more than happy to answer every one of your questions referring to what the EU bourgeoisie want to do to emulate their American cousins– but anybody, anybody who thinks supporting Ford, Dupont, Lockheed Martin, GE, GM, IBM, Hewlett-Packard, Fiat, Lucent, Caterpillar, Boeing, Intel, Siemens, Alsthom, etc etc is in the “workers own interests” is simply is not worth the time.

    But if anyone else is interested– here’s some of what they, the European bourgeoisie, wish they could do; drive down labor costs; close factories at will; dismiss employees at will; reduce payments to healthcare and pension plans with impunity; gut, literally, pension plans; change the starting point for overtime pay from 8 hours per day to 40 hours per week to reduce overall overtime payments; tier the wage structure so that new employees make half of those hired prior to 2008. All these things were done by big multinational industrial capital– the US auto industry in reconstituting itself.

    That’s what the US bourgeoisie have done with a vengeance in the last 5 years– and it is but a more acute iteration of what they’ve been doing for the last 40.

    PS re zombie households– you must have a guilty conscience. I was describing how the term is used in the US– and by WHOM. It is not used as you would like some to believe it is used in the UK. I’ve only heard it used by bankers and asset managers in the US– using it as I said THEY not you USE it. That’s what I was referring to. You made a poor choice of words, reflecting once again, your ignorance of the real conditions of capital, the real relations of capital and labor.

  13. bill j Says:

    The effect of QE on the real economy is far from insignificant. Its main effect is to reduce taxes on corporations and workers, thus increasing profits. It shifts the burden of paying for the US recovery onto the foreign holders of US government debt, mainly China and Japan, who see the effective value of their holdings diluted.
    It lowers US interest rates – printing cash is free – and shifts foreign money into other economies, so reducing world wide interest rates.
    There’s no incentive for the US capitalists to end it any time soon, given that it pays for the budget deficit and then some.

  14. Boffy Says:

    “You say at one and the same time:”Workers need to put forward their own socialist alternative to both,” and “Its [sic] in workers interests to support the latter against the former” .”

    Given that immediately prior to you making this comment I wrote,

    “I have said TWICE that I do not propose what you claim I propose. I have indicated clearly what the statement you misrepresent means. Yet, instead of discussing the actual issue, you obsess over trying to prove that you know better what is in my head than I do myself!”

    I can only assume that you are wilfully trying to misrepresent what I said, and as i said, that together with your obsessing over semantics is the behaviour of a troll not a serious analyst.

    Given a choice between neo-liberal austerity policies, which here and now means cuts in workers social wage, or a Keynesian fiscal stimulus, I choose the latter! What choice would you offer to the workers as a practical solution here and now! It appears that your only solution is “Socialism Now!”

    Having chosen the latter over the former does that in any way commit me to believing that such a Keynesian solution is adequate, absolutely not. Does it commit me to advocating a Keynesian solution? Absolutely not. I advocate a socialist solution, of workers taking ownership of the means of production themselves, but until such time as I can bring that to fruition I have to live in the real world with the working class, and not the fantasy world you seem to inhabit.

    When Stolypin brought in agrarian reforms in Russia, they were bourgeois reforms. There was no reason for socialists to advocate such bourgeois reforms. Yet relative to the existing situation those reforms were progressive, so there was no reason for socialists to oppose them either. Which is why Lenin did not oppose them. When the division between sections of the British exploiting classes led to Parliament bringing in the Ten Hours Act, Marx was quite happy to support it, just as he was prepared to support Free Trade as against protectionism, because it put workers in a stronger position to advance their cause.

  15. Boffy Says:

    Bill,

    QE does not reduce interest rates for the reasons Marx outlines, i.e. the rate of interest is determined by the demand and supply of money-capital, not money. QE can increase the amount of money tokens, it cannot increase the amount of money-capital. Capital can only be produced by the creation of surplus-value.

    Interest rates have continued to rise despite all of the money printing. Printing money and using it to buy certain bonds, can increase the price of those bonds, but only by causing interest rates to rise at some other point of the curve. If the demand or money-capital is rising, and it is, and the supply of money-capital is falling, which it will be as the rate of profit starts to fall, then interest rates will rise. If central banks print more money to counter it, it will lead to rapidly rising inflation, which will cause interest rates to rise further.

    I’m not exactly clear about your argument that it reduces taxes on corporations and workers. Can you explain. Do you mean because it devalues the dollar, and thereby pays back foreign debt holders with funny money? I think the stimulative effect on the economy is negligible. Corporations are stuffed with cash, and the zombie companies are too risky to lend to, so the money sits in bank deposits. Its simply liquidity keeping the asset prices inflated, and thereby keeping the banks looking solvent, as an alternative to dealing with the underlying problem of the insolvency of the banks after 40 years in both the US and UK of creating a hollowed out, zombified economy.

  16. Boffy Says:

    “PS re zombie households– you must have a guilty conscience. I was describing how the term is used in the US– and by WHOM. It is not used as you would like some to believe it is used in the UK. I’ve only heard it used by bankers and asset managers in the US– using it as I said THEY not you USE it. That’s what I was referring to. You made a poor choice of words, reflecting once again, your ignorance of the real conditions of capital, the real relations of capital and labor.”

    Utter rubbish. I used the term as I and many more people have used it for a long time. You did as you usually did and sought to use it for one of your usual ad hominem attacks, whereby you try to imply that you have access to my mind, and are able to know what I am thinking, and what I mean by the words I use, better than I know myself.

    Just how ridiculous you and your claim are can easily be dealt with by looking at my series of blog posts – The Zombies Are Coming, which details how the attempt to build a low-wage/high debt economy over the last 30 years has resulted in the creation of a debt-ridden, hollowed out, zombified economy. In fact, its the very opposite of the motivation for the term, you sought to attribute to me.

    But, then your eye is always so firmly on the man you have no possibility of ever seeing the ball. No wonder you missed all those FT headlines.

  17. Boffy Says:

    “I’d be more than happy to answer every one of your questions referring to what the EU bourgeoisie want to do to emulate their American cousins– but anybody, anybody who thinks supporting Ford, Dupont, Lockheed Martin, GE, GM, IBM, Hewlett-Packard, Fiat, Lucent, Caterpillar, Boeing, Intel, Siemens, Alsthom, etc etc is in the “workers own interests” is simply is not worth the time.”

    What’s new? Bosses attack workers wages and conditions! They do so especially when their own business is suffering, i.e. they fall back on attempts to extract absolute surplus value. They also attack the social wage in the same way. That’s not the same as capital still seeing bourgeois social democracy as the best means of it extracting surplus value!

    Generally speaking capital has sought to incorporate the Trades Unions, and other workers organisations into the state as a means of achieving that. They have developed welfare states to socialise labour, and provide capital with the supply of labour they require, and to provide an economic lever, via the automatic stabilisers. Its precisely because these welfare states operate as such a stabiliser that at times its provision is cut back and at others its increased, just as the demand and supply of labour-power determines that at times wages rise, and at others they fall.

    But, meanwhile when you are answering questions, perhaps you could provide the data on shipping etc. rather than your vague allusions, because as it stands I’m the only one to have provided actually economic data on the industries you cited, and it is contrary to your argument!

  18. S. Artesian Says:

    Boffy,

    You said you have no interest in carrying on discussions with me. The feeling is mutual and in spades.

    But, you want information on shipping, the US auto industry– sure thing. There’s this:

    http://thewolfatthedoor.blogspot.com/2013/09/smoothand-by-numbers-4-christmas-in.html– the information on the US auto industry is from the the WSJ of 8/17– “US car plants shift into top gear.” The actions of the US auto makers against pensions and health care were initiated before the “meltdown” with the spinning off of the VEBA and continued under the “social democratic” administration of the UAW and the US Treasury when 1) company stock shares were accepted as legitimate payments to the VEBA trust and 2) “VEBA directors now have the authority to modify the benefits available to UAW retirees to match available funding sources as of Jan. 1, 2010, when the trust takes over responsibility for paying benefits.”– from the UAW notification to employees and former employees.

    Re shipping:information; available here:

    http://thewolfatthedoor.blogspot.com/2013/07/overproduction-overcapitalization-1.html

    and here…http://thewolfatthedoor.blogspot.com/2008/08/shipping-news-2.html

    With the major source of data provided by UNCTAD’s annual review of maritime transport, 2008, 09, 10, 11, 12– available from the UNCTAD website– plus there are various WSJ articles on the ongoing overcapacity in the industry, not the least bit lessened by Maersk’s bringing onstream the EEE class containers ships with 18,000 TEU capacity.

    Oh– and before we get another “spot price” of something that is supposed to amount to either a trend in itself, or a reversal of a trend– let’s be clear that the avg current TEU rental rates are about 3X higher than the rates in June 2009– near the trough of the decline– and let’s also keep in mind how much the rates have fallen since 2007.

    If you bother reading the Journal of Commerce, and my guess is you don’t, you get a pretty good running commentary on the current trend, the causes and sources, and what the future looks like. And in a word, that future is bleak.

    As for metals and the price rise indicating some sort of booming period of capitalist growth– suggest you check the FT article of July 5. If you do, you’ll see the tremendous increase in inventories for aluminum, zinc, and copper, and the slick maneuver the LME warehouse pull through amassing these inventories. Anyone looking at metal prices as an index to anything substantial about the capitalist economy is well-advised to check out the WSJ article on May 20, reporting on a study of commodity markets where you’ll be surprised or not to find out that “as much as 70 percent of price moves in commodity markets are generated by trading programs reacting to one another.”

    We can continue the analysis for coking coal; the decline and the recovery of railroads in the US, pre and post Staggers Act.

    Not a problem if you want references to that also.

    But you need to answer a question or at least account for certain inconsistencies– like:

    how is it possible for you to claim: “The real battle going on here is between money-capital, which has held sway for the last 30 years, and whose ideology is neo-liberalism, and big, multinational industrial capitalism whose ideology is social democracy/Keynesianism.”– when (1) it is precisely those multinational industrial capitalism who have supported the “neo-liberal ideology” which you think they are battling– or maybe you don’t think Caterpillar closing its plant in Ontario, even though it was profit making, because workers would not agree to give backs isn’t “neo-liberal” but actually “social democratic.” 2) you have asserted several times that the last 30 years has seen a rise in the rate of profits, or at least no decline, as well as massive capital accumulation. If that’s the case, then what basis is there for thinking that somehow neo-liberal “ideology” which has “held sway” is antagonistic to “big multinational industrial capitalism”? What possible basis can you have for claiming “big multinational industrial capitalism” is “social-democratic/Keynesian” in its “ideology”?

    PS loved how you think Henry Ford and his “Fordism” as the “basis for social democracy.” Really. The proclaimed admirer of Hitler as social democrat, as enabler of social democracy? The man who sent his goons into the homes of workers to beat them and threaten their families in order prevent unionization? That system is the basis of social-democracy? Or maybe you think is creation of an all black suburb, cleverly entitled “Inkster” for his black employees makes him a social democrat, because, after all, he hired black workers.

    You utter nothing but nonsense, and while apparently, you can’t keep to your word and avoid in engaging with someone you think is full of shit, I can, and I will.

    • Boffy Says:

      No wonder you didn’t provide a quick resume of actual data for anyone to assess! Just looking at the first link, we read.

      “Sales for 2013 are running at 15.8 million units, down a bit from the 2005 record of 17.5 million units, but with 27 fewer factories and the reduced wage bill, the less than record sales are no price to pay. It’s goody time.”

      So, the US auto industry according to your own information here is not only producing, but selling at close to its historic high levels!!!! Hardly, and indication that it is suffering from chronic overproduction wouldn’t you say? But, not only is it achieving this near record production and consumption, it is doing so on a far more efficient basis, so that its long term problem of profitability is being addressed.

      So, you’re own data even contradicts your argument about capital suffering a crisis of overproduction, based on a tendency for the rate of profit to fall caused by previous investment!!!!

      But, then as we know when someone says “I do not believe that black is white”, you respond in troll like fashion by claiming, “According to you black is white.” So its no wonder you interpret data as the opposite of what it says to suit your purposes.

      As for the arguments about money-capital and neo-liberalism, about Fordism as the basis of welfarism etc. its clear you do not have much knowledge of debates within the Marxist movement over the last 40 years. I’d suggest you check out the material produced by the Conference of Socialist Economists in “Capital and Class” during the 1980’s and 1990’s, where these ideas were discussed at length. I’d suggest reading the papers by people such as Henk Overbeek, and Kees Van Der Pijl, for example, which I have previously discussed – here, and in other blog posts.

      The discussion of the link between Fordist regulation, welfarism and etc. was undertaken most notably by German theorists at the time, that you seem to be completely unaware of.

      You also seem to misunderstand the concept of social democracy. If you want to understand the proper use of the term, you should try reading Marx’s “Eighteenth Brumaire”. You might also learn something there from Marx’s discussion of the material differences of interest between the money-capitalists and industrial capitalists, and the political formations that arise upon it. For an udnerstanding of what social democracy is, you might also want to read Engels’ Prefaces to his “Condition of the Working Class”, where he describes precisely how the big industrial capitalists had learned to embrace the Factory Acts, and Trades Unions, and how this flowed out of their need to make compromises with the workers via Parliaments in order to obtain majorities against their opponents within other sections of the exploiting classes.

      Bourgeois Social Democracy arises as the replacement for Bourgeois Liberal Democracy, precisely that the point where workers in their majority obtain the right to vote, and where the same kinds of negotiations and struggles over wages, and conditions in the factory, are also conducted in bourgeois Parliaments over the social wage. It goes together with the shift by big industrial capital from extraction of absolute surplus value, to the extraction of relative surplus value, and for which the incorporation of the working-class, and regulation are required.

      As you cannot provide data to back up your arguments, and the data you do refer to undermines your argument. I’m not surprised you want to duck out of an argument. But, then given the dishonest basis on which you always seem to argue, there will be no loss to anyone there.

  19. S. Artesian Says:

    If others are interested what has been going on in the maritime industry over the past several years, there’s plenty of information from UNCTAD, the WTO, the Boston Consulting Group, JOC (subscription required) gCaptain (an industry blog) etc. etc. etc.

  20. S. Artesian Says:

    I have claimed, in response to Michael’s post “Nobody’s investing” that the data from the auto industry’s recovery supports my original contention that the obstacle to further investment had been previous investment.

    The original issue is my disagreement with Michael that high levels and or rising corporate debt are the barrier to increased investment which investment is the “primary engine” of a capitalist recovery.

    Those who pay close attention to the article on North American automakers will note how in fact the automakers have as they acknowledged avoided further investment; utilizing the closing of 27 plants, “efficiencies” regarding labor costs and production process, tiering the wage structure, and reconfiguring the initiation point for overtime payments to achieve their recovery.

    What they automakers have not done is gone on a fixed asset accumulation binge.

    We might contrast that to Europe, where capacity has actually increased to 19.1 million units annually with the unit facing catastrophic decline.

    To those interested in something other than references to mid- 19th century remarks about capitalists vs. landowners, supposed interpretations of Henry Ford’s great contributions to the ideology of social democracy, or historical obscurantism in general, I’ll point out that what the “theory” or the ideology of social democracy is is completely and entirely irrelevant.

    The assertion made is that big industrial multinational capitalism which is “social democratic/keyesian” in its “ideology” is engaged in some sort of clash of the titans with money-capital and its “neo-liberal” ideology. So…1) the historical origin of social democratic ideology is immaterial as it is its COUPLING with what is called “Keynesianism” that is the defining point 2) there is absolutely no evidence that a)big industrial multinational capitalism and CAPITALISTS are advocating social democratic/keynesian “solutions” 3) there is no evidence that the debate OVER TAPERING has parties taking one side or the other based on their connection to “industrial capital” as opposed to “money capital” 4) there is absolutely no evidence that “money-capital” and “big industrial multinational capital” have any opposing interests 5) there is no evidence, despite what some people prefer or propose, that there is a “Keynesian solution” to the current, and recurrent, problems of capital, to impaired accumulation, and the tendency of profitability to decline as capital, and in particular fixed capital accumulates.

    The distinction “keynesian ideology” and “neoliberal ideology is as specious as the distinction between “money-capital” and “industrial capital.”

    Anybody can “prefer” any “solution” that he or she likes. Doesn’t mean it is a solution. And that’s not what was being offered. What was advocated is that the working class advocated, agitate, and support the preference of a section of the ruling class which section doesn’t even have such a preference for such; which section of the class doesn’t even exist separate and apart from, in conflict and opposed to its supposed “ideological” antagonists.

  21. Boffy Says:

    “Anybody can “prefer” any “solution” that he or she likes. Doesn’t mean it is a solution. And that’s not what was being offered. What was advocated is that the working class advocated, agitate, and support the preference of a section of the ruling class which section doesn’t even have such a preference for such; which section of the class doesn’t even exist separate and apart from, in conflict and opposed to its supposed “ideological” antagonists.”

    In that case why have the Democrats followed a policy of fiscal stimulus since 2009? Who is it that backs the Democrats other than big industrial capital?

    As for those big industrial capitalists and social democracy, for years sections of them, particularly in the auto industry pushed for some kind of socialised healthcare, precisely because such systems in Europe meant that US manufacturers, who had to contribute to expensive private schemes were at a massive disadvantage. One of their ideologues wrote this,

    “Then we’d find ways to guarantee coverage for all while reengineering health-care delivery to lower costs in the long term (without the price controls that stall innovation abroad). Easier said than done, you may say. But seen in this context, the prescription-drug bill last year was the first step in the Republican-led socialization of health spending. Companies have been clobbered funding retiree health plans. The GOP felt their pain, and presto, $750 billion over ten years moved from private to public budgets…

    The bigger hurdle may be stereotypes. Business’s sensible drive to get Uncle Sam to take on more of the health burden will run into the nihilistic (but potent) “big government” rhetoric of the GOP–plus the party’s delusion that we can keep federal taxes at 17% to 18% of GDP as the boomers retire. If Republican pols want to help Republican CEOs solve their biggest problems, this caricature of a political philosophy will have to give way to something more grown-up. Just as the Nixon-to-China theory of history says it will ultimately take a Democratic President to fix Social Security, it may take a Republican President to bless the socialization of health spending we need. ..Ask yourself: When we’re on the cusp of decades of wrenching challenges from places like China and India, doesn’t American business have enough to do without managing health care too?”

    Matt Miller in Fortune Magazine 2005

    US auto companies are not refraining from large scale investment because previous investment has caused them to suffer a tendency for the rate of profit to fall, or because they are suffering from overproduction, but because they can meet current demand from their existing capital! Given that this demand is effectively at its historic peak, why on earth would firms that plan their investment for years ahead, on the basis of an analysis of demand, waste money on increasing capacity for demand that does not exist???

  22. Boffy Says:

    “What was advocated is that the working class advocated, agitate, and support the preference of a section of the ruling class…”

    Certainly not by me it wasn’t!!!! I argued, and continue to argue that neither Keynesianism nor Neo-Liberalism can provide a solution for the problems of Capitalism, just as Marx argued that neither Free Trade nor Protectionism could provide a solution. But, just as Marx came down on the side of Free Trade as against Protectionism because it provided workers with a better situation to advance their cause, so I come down on the side of Keynesian fiscal stimulus rather than neo-liberal austerianism, because the former put workers in a better position than the latter.

    I do not advocate or propose a Keynesian solution, or any other capitalist solution, but if a Keynesian solution is proposed, if measures of Keynesian stimulus are enacted, I am certainly not going to oppose them!

    If comrade Artesian were addressing a group of hospital workers facing closure of their hospital, what would he say to them? Would he say, “I will support neither an austerian policy of closing the hospital, nor a Keynesian solution of providing a fiscal stimulus to keep it open?” Logically, that is precisely what he has to say.

    This is what Marx had to say about such people,
    (mockingly)

    ““If in the political struggle against the bourgeois state the workers succeed only in extracting concessions, then they are guilty of compromise; and this is contrary to eternal principles. All peaceful movements, such as those in which English and American workers have the bad habit of engaging, are therefore to be despised. Workers must not struggle to establish a legal limit to the working day, because this is to compromise with the masters, who can then only exploit them for ten or twelve hours, instead of fourteen or sixteen. They must not even exert themselves in order legally to prohibit the employment in factories of children under the age of ten, because by such means they do not bring to an end the exploitation of children over ten: they thus commit a new compromise, which stains the purity of the eternal principles.

    “Workers should even less desire that, as happens in the United States of America, the state whose budget is swollen by what is taken from the working class should be obliged to give primary education to the workers’ children; for primary education is not complete education. It is better that working men and working women should not be able to read or write or do sums than that they should receive education from a teacher in a school run by the state. It is far better that ignorance and a working day of sixteen hours should debase the working classes than that eternal principles should be violated…

    It cannot be denied that if the apostles of political indifferentism were to express themselves with such clarity, the working class would make short shrift of them and would resent being insulted by these doctrinaire bourgeois and displaced gentlemen, who are so stupid or so naive as to attempt to deny to the working class any real means of struggle. For all arms with which to fight must be drawn from society as it is and the fatal conditions of this struggle have the misfortune of not being easily adapted to the idealistic fantasies which these doctors in social science have exalted as divinities, under the names of Freedom, Autonomy, Anarchy. However the working-class movement is today so powerful that these philanthropic sectarians dare not repeat for the economic struggle those great truths which they used incessantly to proclaim on the subject of the political struggle. They are simply too cowardly to apply them any longer to strikes, combinations, single-craft unions, laws on the labour of women and children, on the limitation of the working day etc., etc.”

    Political Indifferentism.

    But, then comrade Artesian is so arrogant as to beleive he knows it all and has nothing to learn from the writings of Marx from 150 years ago!

  23. Edgar Says:

    When arguing whether the economy is recovering or not we should never do this based on the perspective of the capitalist class and it’s lackeys. We should do it based on the interests on the working class, not the accountants, doctors or lawyers you understand but the clerical staff, the cleaners, the factory workers etc. So we judge economic recovery on whether the working class are struggling or not. Clearly the working class are struggling, real wages are going down, public services are being decimated while taxes increase. Less and less value for money. Meanwhile bullying management techniques are back in favour, after an all too brief flirtation with touchy feely-ism.

    Ironically the anti catastrophists, e.g. Boffy and Billj, argue on the grounds of the capitalist class. But isn’t doing that actually embracing catastrophism as the basis of change? I.e. Boffy and Billj judge capitalism on whether it is on the brink of collapse or not, and not from the perspective of the working class.

    Finally, having read quite a bit of the political Marx myself, as I am always curious as to what my heroes believe politically, I am not sure Marx would have supported Keynesianism over Neo Liberalism actually, he often made the point that the Tories introduced more worker friendly policies than the Whigs! Marx hated the Whigs.

    And until they start doing opinion polls on what the industrial bourgeois believe, i think I am happy to reject Boffy’s idea that they are social democracts. In fact, I will say this assertion is shit on stilts.

    I will give Boffy one thing though, when he says Zombie, he is not insulting anyone but making a valid point.

    • billjefferies Says:

      if the assessment of recessions is whether or not the working class are struggling then capitalism’s always in recession.

    • Boffy Says:

      Response To Edgar

      Edgar,

      “When arguing whether the economy is recovering or not we should never do this based on the perspective of the capitalist class and it’s lackeys. We should do it based on the interests on the working class,…”

      Why? That was not Marx’s method! It was the approach of Sismondi, and approach that Marx heavily criticised. If Marx had adopted the approach you suggest, he would have concluded that Capitalism was in a dire state at the start of the 19th Century, because at that time the condition of the working class was appalling and getting rapidly worse! Yet, Marx comes to the opposite conclusion. He concludes that it is the most dynamic economic system the world has ever seen. Even in a piece of propaganda aimed against that very system he concludes,

      “It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.”

      And to those like Sismondi, who like you could only see the negative aspects, in terms of the effects on the workers, Marx commented,

      “In either case, it is both reactionary and Utopian.”

      When at the end of that century, the Narodniks in Russia adopted the approach you propose, Lenin attacked it in similar terms. Many of his early writings are devoted to this demolition of what is essentially a petit-bourgeois, moral socialism. Perhaps, the clearest elaboration is in his – https://www.marxists.org/archive/lenin/works/1897/econroman/index.htm.

      But, even if we adopt your standard rather than a Marxist, objective analysis of the health of capitalist production, the facts do not support your contention. According to the ILO, in the first decade of this century, the global working class expanded by around 30%, or about 500 million workers. That is hardly an indication of a Capitalism in a state of collapse, not of a working-class going backwards. The plurality of those additional workers are in China, where not only has Capitalism rescued hundreds of millions of these workers from “the idiocy of rural life”, but by almost any metric you care to use, living standards, health, life expectancy etc. the condition of those workers has been improved phenomenally during that time. But, that is true across many other Asian economies, in Latin America, and now several African economies are industrialising and growing rapidly too.

      “Ironically the anti catastrophists, e.g. Boffy and Billj, argue on the grounds of the capitalist class. But isn’t doing that actually embracing catastrophism as the basis of change? I.e. Boffy and Billj judge capitalism on whether it is on the brink of collapse or not, and not from the perspective of the working class.”

      Not at all. If capitalism were on the brink of capitalism then Socialism would probably be impossible. The last time I mode of production collapsed rather than being replaced by a superior mode of production – i.e. the collapse of slave production – the result was “the common ruin of the contending classes” followed by a period of barbarism. Capitalism replaced feudalism, not because feudalism collapsed – Feudalism was probably stronger at the time it was superseded by Capitalism than it had ever been, bolstered by all of the revenues of Colonialism – but, because Capitalism simply grew to be even more effective, even more powerful. As Marx points out, Socialism grows out of the conditions created for it by Capitalism. The job of socialists is to take advantage of Capitalist development in order to develop socialist forms of production within it, in order to replace it in the same way. That is why Marx was in favour of anything that facilitated the most efficient, most rapid development of Capitalism, and opposed those backward looking socialists like Sismondi that sought to limit that development.

      As for Marx noting that the Tories often introduced more worker friendly policies than the Whigs, the point here is that Marx favoured worker friendly policies! The question then is, which is more worker friendly austerianism, which seeks to attack the welfare state etc. or Keynesianism, which seeks to bolster it. Given that Marx argued that the best conditions for workers existed when there was full employment etc. I think it is a no brainer that he would support a policy geared towards encouraging employment, as opposed to one that does not!

      But, actually we do not even have to wonder. In Capital, Vol I, Chapter 31 he writes,

      “Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven.

      The public debt becomes one of the most powerful levers of primitive accumulation.”

      Given that Marx was in favour of anything that facilitated the most effective, most rapid development of Capitalism, because it is the precondition for the development of the working class and of Socialism, we can see that Marx was in favour of Keynesianism as he described in relation to the development of the Public debt as a means of developing the infrastructure etc. and accelerating the accumulation of capital.

      “And until they start doing opinion polls on what the industrial bourgeois believe, i think I am happy to reject Boffy’s idea that they are social democracts.”

      But, that completely misses the point! The point is not whether the industrial bourgeoisie singly or collectively are social democrats, but whether social democracy, and as an ideology is the ideology of that big industrial bourgeoisie. In other words, does its ideas objectively represent the material interests of the big industrial bourgeoisie, and the answer to that question is yes, it does! That is why it arose as a reflection in the realm of ideas of the material conditions in society, i.e. of the historic compromise between that big industrial bourgeoisie, and the working-class. It arises when workers obtain the vote, and society moves from being a bourgeois liberal democracy to being a bourgeois social democracy, whose basis is that very compromise. Its more specific reflection is in the British Liberal Party, which comprises both large numbers of workers, and their Trade Union representatives, as well as the big industrial bourgeoisie. In the US, its equivalent is the Democrats.

      The material basis of it is described by Engels who writes,

      “And in proportion as this increase took place, in the same proportion did manufacturing industry become apparently moralised. The competition of manufacturer against manufacturer by means of petty thefts upon the workpeople did no longer pay. Trade had outgrown such low means of making money; they were not worth while practising for the manufacturing millionaire, and served merely to keep alive the competition of smaller traders, thankful to pick up a penny wherever they could. Thus the truck system was suppressed, the Ten Hours’ Bill [2] was enacted, and a number of other secondary reforms introduced — much against the spirit of Free Trade and unbridled competition, but quite as much in favour of the giant-capitalist in his competition with his less favoured brother. Moreover, the larger the concern, and with it the number of hands, the greater the loss and inconvenience caused by every conflict between master and men; and thus a new spirit came over the masters, especially the large ones, which taught them to avoid unnecessary squabbles, to acquiesce in the existence and power of Trades’ Unions, and finally even to discover in strikes — at opportune times — a powerful means to serve their own ends. The largest manufacturers, formerly the leaders of the war against the working-class, were now the foremost to preach peace and harmony. And for a very good reason. The fact is that all these concessions to justice and philanthropy were nothing else but means to accelerate the concentration of capital in the hands of the few, for whom the niggardly extra extortions of former years had lost all importance and had become actual nuisances; and to crush all the quicker and all the safer their smaller competitors, who could not make both ends meet without such perquisites. Thus the development of production on the basis of the capitalistic system has of itself sufficed — at least in the leading industries, for in the more unimportant branches this is far from being the case — to do away with all those minor grievances which aggravated the workman’s fate during its earlier stages.”

      The epitome of that development was Fordism, which sharply raised wages, introduced company provided welfare for the worker and his family etc. and did so because it acted to more closely tie the worker to the company and to raise relative surplus value via higher productivity. As a model this Fordist regulation was extended at a social level to become Welfarism. Although its first manifestation was in Prussia in the 1820’s, it was with Bismark in the late 19th century that it took greater shape, and that model based on a National Insurance Scheme was taken up by the Tory Neville Chamberlain in the 1920’s, and by the Liberal Beveridge in the 1930’s.

      It dominated the polity throughout the 20th Century, and still forms the basis of the polity today, even though it has come under attack by the representatives of small capital, and of money-capital.

      The point is made by Marx in analysing the nature of social democracy in France in 1848.

      “The peculiar character of social-democracy is epitomized in the fact that democratic-republican institutions are demanded as a means, not of doing away with two extremes, capital and wage labour, but of weakening their antagonism and transforming it into harmony…This content is the transformation of society in a democratic way, but a transformation within the bounds of the petty bourgeoisie. Only one must not get the narrow-minded notion that the petty bourgeoisie, on principle, wishes to enforce an egoistic class interest. Rather, it believes that the special conditions of its emancipation are the general conditions within whose frame alone modern society can be saved and the class struggle avoided. Just as little must one imagine that the democratic representatives are indeed all shopkeepers or enthusiastic champions of shopkeepers. According to their education and their individual position they may be as far apart as heaven and earth. What makes them representatives of the petty bourgeoisie is the fact that in their minds they do not get beyond the limits which the latter do not get beyond in life, that they are consequently driven, theoretically, to the same problems and solutions to which material interest and social position drive the latter practically. This is, in general, the relationship between the political and literary representatives of a class and the class they represent.”

      The nature of social democracy by the end of the 19th century was based on the objective interests of the big industrial bourgeoisie for such social harmony based upon a working relation with the working-class via the intermediary of the workers bureaucracy.

      But, Artesian is unable of such a Marxist class analysis, because they are confined within a crude, mechanistic method. They do not see that they are in an irreconcilable contradiction. They say that it is impossible to support either Neo-Liberalism or Keynesianism, because both are bourgeois ideologies. It is of course true that they re both bourgeois ideologies. But, for a Marxist ideas do not simply arise out of the ether. Ideas are a reflection of the material interests of classes and class fragments. So, Artesian needs to tell us, as both Neo-Liberalism and Keynesianism are bourgeois ideologies reflecting the material interests of classes and class fragments, can he tell us, which classes’ material interests these ideologies represent?

      Both are bourgeois ideologies, both must represent the material interests of some bourgeois class fragment. Which is is it? But, for Artesian the answer is none! He believes unlike Marx, that there are no divisions within the ranks of the bourgeoisie, between money-capital, merchant capital, industrial capital and so on. For him it is just one monolithic block. Marx may as well never have written The Eighteenth Brumaire, Lenin may as well have saved his breath in talking about the need for the most flexible tactics to make the most of the divisions within the different fraction of the bourgeoisie. As a result Artesian arrives most suitably at a reductio ad absurdum.

      • Boffy Says:

        Just to emphasise the point about the development of social democracy as that historic compromise between the working class and the big industrial capitalists, Engels also continues,

        “Both these circumstances had turned the English working class, politically, into the tail of the ‘great Liberal Party’, the party led by the manufacturers. This advantage, once gained, had to be perpetuated. And the manufacturing capitalists, from the Chartist opposition, not to Free Trade, but to the transformation of Free Trade into the one vital national question, had learnt, and were learning more and more, that the middle class can never obtain full social and political power over the nation except by the help of the working class. Thus a gradual change came over the relations between both classes. The Factory Acts, once the bugbear of all manufacturers, were not only willingly submitted to, but their expansion into acts regulating almost all trades was tolerated. Trades Unions, hitherto considered inventions of the devil himself, were now petted and patronised as perfectly legitimate institutions, and as useful means of spreading sound economical doctrines amongst the workers. Even strikes, than which nothing had been more nefarious up to 1848, were now gradually found out to be occasionally very useful, especially when provoked by the masters themselves, at their own time. Of the legal enactments, placing the workman at a lower level or at a disadvantage with regard to the master, at least the most revolting were repealed. And, practically, that horrid People’s Charter actually became the political programme of the very manufacturers who had opposed it to the last. The Abolition of the Property Qualification and Vote by Ballot are now the law of the land. The Reform Acts of 1867 and 1884 make a near approach to universal suffrage, at least such as it now exists in Germany; the Redistribution Bill now before Parliament creates equal electoral districts-on the whole not more unequal than those of France or Germany; payment of members, and shorter, if not actually annual Parliaments, are visibly looming in the distanceand yet there are people who say that Chartism is dead.”
        Preface To The Second German Edition of “The Condition Of The Working Class

  24. S. Artesian Says:

    Let’s go back to the beginning shall we? Boffy stated:

    “Workers need to put forward their own socialist alternative to both, but that doesn’t mean we are “Politically Indifferent”, to use Marx’s term to the two above solutions in the meantime. Its in workers interests to support the latter against the former.”

    So according to Boffy it is in the workers interests to support the latter, the latter being “big industrial multinational capitalism” whose “ideology” is “social-democratic/keynesian” as opposed “money-capital” whose ideology is “neo-liberal.”

    First, Boffy is not talking about social-democracy is it originated and developed as a working class organization and program, but rather “social democracy” AS an expression of the interests of a section of the ruling class. Now maybe someone knows how to support an “ideology” of the ruling class without supporting representatives of that ruling class itself, but I don’t, and history has shown that no such differentiation is possible, nor has it led to anything other than disaster.

    That’s first. Secondly, the concrete issues: 1)there is no evidence that the Fed’s oscillations over tapering have the slightest thing to do with supposed conflicts between sections of the ruling class, finance vs. industrial 2) there isn’t any evidence of a conflict between finance capital and “big industrial capital” over “program.” 3) there is no evidence that big industrial capitalism is opposed to “neo-liberalism.” In fact, just the opposite, as big industrial multinational capitalism has embraced, advanced, and funded neo-liberalism in its big industrial multinational capitalist enterprises– everything from railroads– deregulation and purchase and privatization of railroads in foreign countries– to heavy equipment manufacturers like Caterpillar; to airlines with their use of bankruptcy to void labor contracts, pension obligations; to auto manufacturers with their movement of US production to non-unionized plants in the South; to the largest US multinational industrial firm, General Electric; to large multinational merchandising/retail concerns (Walmart, anyone? with it’s below living wage scales?); to web retailers (Amazon, anyone?); to petroleum manufacturers (’nuff said); to food processing concerns (meat packers, anyone?); to just about any and every segment of the economy 4)for Buffy’s edification, the Democratic Party is not a social-democratic party, and indeed the conflicts between it and the Republican Party are of complete indifference to the working class. Big industrial concerns and “money-capital” usually distribute their financial support to candidates of both parties (that’s called hedging), but if you look at the pattern of contributions, clearly the Republicans receive the lion’s share from both big finance capital and big industrial multinational capitalism. The Democrats get some, and in 2008, when Bush made it impossible for a white man to be elected, they got more than some– particularly from……….Wall Street money-capital. On the whole, the major sources of Democratic campaign cash comes from professionals, lawyers, etc.

    Mr. Boffy goes on to make the following qualifications:

    1 “Given a choice between neo-liberal austerity policies, which here and now means cuts in workers social wage, or a Keynesian fiscal stimulus, I choose the latter! What choice would you offer to the workers as a practical solution here and now! It appears that your only solution is “Socialism Now!” ”

    The question is not, and is never a question of “choice”– choice is a market function. We’re not in a department store choosing underwear. We’re talking about necessity.

    Boffy conflates Keynesian “fiscal stimulus” with a wage policy– referring to cuts in the “social wage.” There are plenty of examples throughout the practice of fiscal stimulus/”Keynesian” policies that have included, and or maintained the cuts in the social wage. Germany in the 1930s; FDR in the 1930s; Reagan in the 1980s.

    I don’t think there’s anything wrong with saying “socialism now.” I also think that saying “socialism now” doesn’t mean very much. But I do think proposing a working class program that rejects both the tweedle-dee of “neo-liberalism” and the tweedle-dum of “keynesianism” does say a lot. I do think that it is the first imperative of any socialist organization or agitation to oppose and reject both and not support one over the other.

    2. Mr. Boffy states: “I do not advocate or propose a Keynesian solution, or any other capitalist solution, but if a Keynesian solution is proposed, if measures of Keynesian stimulus are enacted, I am certainly not going to oppose them!”

    OK, here’s a test: The $700 billion fiscal rescue proposed by the Bush, Bernanke, and Paulson to the US Congress– support or oppose?

    Another test: Obama’s America Reinvestment and Recovery Act, another $700-$800 billion dollar measure– oppose or support?

    3. Mr. Boffy moves deeper into “his hands on real-politik” with this gem: “If comrade Artesian were addressing a group of hospital workers facing closure of their hospital, what would he say to them? Would he say, “I will support neither an austerian policy of closing the hospital, nor a Keynesian solution of providing a fiscal stimulus to keep it open?” Logically, that is precisely what he has to say.”

    Yeah right, Artesian. What trees do you plant? Except that isn’t how the fiscal stimulus works, as proven so clearly by the fiscal stimulus,anti neo-liberal program that “kept open” the US auto industry. The fiscal stimulus program involves wage cuts, service reductions, reducing accumulated benefits etc. etc. So if you want to support that in the name of “keeping open” the business of capital, then go right ahead. However, do not confuse that with what Marx said about WORKERS winning concession from the bourgeoisie that materially benefit the workers and society as a whole– like education, reduced working day, etc. etc.– because that ain’t what’s happening there, Mr. Can’t- See-The-Trees-Being-Uprooted-Because-Of-The-Forest Fire Boffy.

    What I would advocate in front of those workers is no support for the tweedle-dee Democrat claim to keep the hospital open vs. tweedle-dum Republican malign neglect in letting the hospital close.

    I’d suggest something that has workers addressing the issue SOCIALLY, not in isolation, and taking action locally for that SOCIAL PROGRAM– like occupying the hospital, something like that.

    4. Mr. Boffy makes a big show of quoting Marx “supporting” this and “supporting” that– except Mr. Boffy clearly doesn’t understand what he’s quoting– to wit:

    “If in the political struggle against the bourgeois state the workers succeed only in extracting concessions, then they are guilty of compromise; and this is contrary to eternal principles. All peaceful movements, such as those in which English and American workers have the bad habit of engaging, are therefore to be despised. Workers must not struggle to establish a legal limit to the working day, because this is to compromise with the masters, who can then only exploit them for ten or twelve hours, instead of fourteen or sixteen. They must not even exert themselves in order legally to prohibit the employment in factories of children under the age of ten, because by such means they do not bring to an end the exploitation of children over ten: they thus commit a new compromise, which stains the purity of the eternal principles.”

    The diligent reader will note, as Mr. Boffy has not so noted, that the determining factor is Marx’s initial, original, primary condition– “in the political struggle AGAINST the BOURGEOIS STATE, the WORKERS.

    Contrast that to Mr. Boffy’s condition that workers should SUPPORT “big industrial multinational capitalism” vs. “money capital.”

    5. Regarding the US auto industry, Boffy thinks that, from the data, I provided, the industry has resolved its problems with overcapacity:

    ” Hardly, and indication that it is suffering from chronic overproduction wouldn’t you say? But, not only is it achieving this near record production and consumption, it is doing so on a far more efficient basis, so that its long term problem of profitability is being addressed.”

    First, lets be clear, the information re the auto-industry was introduced to show that recovery in the industry showed that a) investment is not always the measure of recovery b) that in fact the distinction between “big industrial social democratic keynesian multinational capitalism” (which the auto industry is) and “neo-liberal-austerity money-capital” is meaningless, and in fact NON-existent– as the keynesian solution to keeping the auto industry ‘open’ involved drastic cuts in the “social wage.”

    Secondly, the information was introduced in response to Mr. Boffy’s challenge to my assertion that the European bourgeoisie wished they could do to the working class in Europe what the US bourgeoisie did in the US. He wanted to know what they wished they could do. Well there it is; and I suggest that everyone take a look at the “catastrophic decline” (in the words of a Renault executive) in the EU auto industry and it will become clear just how much the EU bourgeoisie wish they were American.

    Thirdly, Mr. Boffy is the master at taking a momentary upturn even an extended upturn and making it a permanent condition. Spot rates on bulk carriers recover to half of what they were in 2007 and all is right with the industry; the auto industry comes within 1.5 million units of reaching its peak sales, and suddenly the auto industry “demand is effectively at its historic peak” when actually it’s not only below its historic peak, it’s below the volume it achieved in 2000– but such petty details are of no concern, I’m sure.

    Mr. Boffy waxes passionately about the miracle of the recovery in the auto industry, claiming “it is doing so on a far more efficient basis, so that its long term problem of profitability is being addressed.”

    Really? That’s fantastic. The long term issue of profitability is being addressed? Well I suppose I should be grateful that Mr. Boffy even admits there ever was a long term problem, since he thinks the last 30 years are evidence of no long term problem in profitability for capital…. but let’s be clear, The auto industry, and industry in general, has followed this course before– and not long ago– in the recovery from the 2001-2003 recession– when it restricted investment, drove wages down– and on the broad basis held down those wages and that investment– until 2005, and then…….and then we get to 2006 when profitability declines and 2007 and then we’re right back to where we started from, which is here.

    Those of us, or at least I, who think that there is a TFROP don’t necessarily think that the fall itself is not cyclical, cannot be offset, cannot even be reversed– to a point– within an overall secular decline. Such reversal, cyclical and momentary, occurred after 1993, ending in about 1998-2000. Even then however, the return on capital investment in the US did not exceed the peak established in the 1968-1970 period– nor did the recovery in real wages exceed the peak established approximately at the same time.

    6. Which leads us once again to a critical question for Mr. Boffy. If, as he claims, the last 30 years has been a period of pretty much continuous expansion, continuously expanding capital accumulation without a decline in the rate of profit, yet at the same time “money-capital neo-liberal ideolog” has “held sway” over the economy, then exactly what basis is there for any conflict between “big industrial multinational capital” and “neo-liberal money-capital.” What possible meaning can there be to counterposing those two?

    I don’t think there’s ever a basis for imagining an opposition between those two, even when there APPEARS to be one in the speeches, or proposals, of the agents of the ruling class… BECAUSE in fact these are the proposals of the ruling class.

    But Mr. Boffy sees a conflict, a struggle, between the two. What is the material basis if, for the last 30 years things have been just about perfect profit wise?

    I think Edgar has it right and I would expand his evaluation of Mr. Boffy’s assertion on capitalists as social democrats. I think EVERY assertion Boffy has made is nothing but “shit on stilts.”

    • Boffy Says:

      “First, lets be clear, the information re the auto-industry was introduced to show that recovery in the industry showed that a) investment is not always the measure of recovery b) that in fact the distinction between “big industrial social democratic keynesian multinational capitalism” (which the auto industry is) and “neo-liberal-austerity money-capital” is meaningless, and in fact NON-existent– as the keynesian solution to keeping the auto industry ‘open’ involved drastic cuts in the “social wage.”

      Secondly, the information was introduced in response to Mr. Boffy’s challenge to my assertion that the European bourgeoisie wished they could do to the working class in Europe what the US bourgeoisie did in the US. He wanted to know what they wished they could do. Well there it is; and I suggest that everyone take a look at the “catastrophic decline” (in the words of a Renault executive) in the EU auto industry and it will become clear just how much the EU bourgeoisie wish they were American.”

      No it wasn’t. It was asked for to back up your vague statements that there was a lack of investment, because the tendency of the rate of profit to fall based on previous investment meant that new investment would be unprofitable and result in overproduction!!!!

    • Boffy Says:

      “Well I suppose I should be grateful that Mr. Boffy even admits there ever was a long term problem, since he thinks the last 30 years are evidence of no long term problem in profitability for capital…”

      You may not have noticed but the auto industry is NOT CAPITAL in General! There has certainly been a problem with profitability of sections of the US auto industry over the last 30 years. Even that has not been a general problem. Japanese auto producers in the Us generally did quite well. The reason US producers like GM and ford did badly was not because of a tendency for the rate of profit to fall based on a rising organic composition of capital, but quite the contrary a lack of investment, particularly in producing the right types of vehicles, which meant they continually lost market share to Toyota, Honda etc.

      Over the last 30 years there has been no problem of a rate of profit for capital in general. It has been rising rapidly. If that is not the case, then Artesian should answer the question where has all the capital for the creation of vast new economies in China, in India, in the Asian Tigers etc. come from? According to Marx, Capital can only come from the production of surplus value, so if all this capital was accumulated in unprecedented quantities, if even after that accumulation there was enough surplus value left over to create vast money hoards, how does Artesian explain the source of that surplus value???

    • Boffy Says:

      “Which leads us once again to a critical question for Mr. Boffy. If, as he claims, the last 30 years has been a period of pretty much continuous expansion, continuously expanding capital accumulation without a decline in the rate of profit, yet at the same time “money-capital neo-liberal ideolog” has “held sway” over the economy, then exactly what basis is there for any conflict between “big industrial multinational capital” and “neo-liberal money-capital.” What possible meaning can there be to counterposing those two?”

      Where was the massive expansion of big industrial capital? In China, Asia etc. Where was there a big expansion of money-capital, and merchant capital that leached off the surplus value created in those economies in return for enabling them to realise the surplus value? In the US, UK etc.!!!

  25. S. Artesian Says:

    Oh and one more thing…….re “zombie households”– I think I asked before for some data on home mortgage loans that have been “forgiven” or “pretended and extended.” Such is, was, never has been the trend in the United States. The US sponsored programs for mortgage restructurings were hardly patronized at all, with qualification requirements disqualifying the households applying for such help. Where extension was afforded the terms of the restructuring were inadequate to remedy the problem, with estimates that 70% of that small number of mortgage holders being approved went back into foreclosure.

    Those who have managed to hold on did so because court actions found the lenders violated proper procedures for verifying the default conditions of the loans; for proving their own actual ownership of the debt instruments; for foreclosing improperly when in fact the mortgage payer was not in default, or could not legally be foreclosed upon (like active duty military).

    In some cases, municipalities have stepped in, either buying the properties from the mortgage lender, or rarely, declaring eminent domain, and seizing the property from the mortgage company, to protect the residents (which seizures by the way, the US govt. owned and operated FNMA, FMAC, under the supervision of the the Federal Housing Finance Authority and the conservator-ship of the US Treasury, have protested as jeopardizing their claims to the assets, and threatening their future willingness to offer backing to mortgages in such localities. So much for “social-democratic” Keynesian fiscal-stimulus policies).

    So where are the “zombie households” being kept alive artificially by loan subsidies and extensions in the US or the UK or anwhere else? Maybe it exists, but it sure would be nice to see the data.

    Where are the zombie households receiving the sorts of deals that AIG got– with the US govt paying off its counterparties in ABS and derivatives contracts IN FULL?

    Where are the zombies getting the deal JPMorgan Chase got when it took over Bear Stearns, with the NY Fed picking up and backing up 95% of the costs?

    “Zombie households”? Nowhere.
    Vampire, predatory lending is the proper characterization.

  26. Boffy Says:

    “So according to Boffy it is in the workers interests to support the latter, the latter being “big industrial multinational capitalism” whose “ideology” is “social-democratic/keynesian” as opposed “money-capital” whose ideology is “neo-liberal.”

    I have said repeatedly what “the latter” means, and I have repeatedly said that it does not in any sense mean supporting any section of the bourgeoisie. I have made abundantly clear on numerous occasions that support here meant support for a Keynesian as opposed to an austerian solution. Support does not mean to advocate or agitate for. I advocate and agitate for a socialist solution based on workers taking ownership of the means of production e.g. by establishing co-operatives.

    But, that is not at all contradicted by support for a Keynesian solution. I am quite capable, for example of supporting a strike militantly as opposed to being indifferent towards it, and yet at the same time, as Marx did to argue that strikes are an essentially bourgeois solution, which keep workers within the realms of Capitalism, that

    “the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market.”

    But, as I have made clear in terms that no honest person can mistake exactly what was meant by “the latter”, and that it did not in any shape or form imply making an alliance with or supporting a section of the bourgeoisie, that Artesian continually makes this claim simply demonstrates that either they are thoroughly dishonest, or and it makes little difference either way, they not only behave like a troll, but they are a troll.

  27. S. Artesian Says:

    Blahblahblahblahblah, Boffy does not provide a single concrete answer to the concrete questions– just more bullshit about.”Given that Marx was in favour of anything that facilitated the most effective, most rapid development of Capitalism”….blahblahblahblah — like I said I fully expect Boffy to reproduce and endorse Engels support of the US in the war with Mexico… and we’re getting damn close to it. I’m sure Boffy will tell us how Engels wanted the IMWA to support Bismarck during the Franco-Prussian war as that would “facilitate the rapid development of capitalism.”

    Of course… and let’s endorse colonization because that facilitated the rapid growth of capitalism. Let’s dig around and see if we can find some quotes from Marx endorsing the British East India Company, which most definitely facilitated capitalism. Let’s see…. are there any quotes from Marx endorsing ENCLOSURE? Wait, there aren’t, are there? Why is that? Boffy better get in his time machine and straighten Marx out.

    This isn’t 1810, 1848, 1868, 1871. Capitalism is always making moves to facilitate its development. We, that is to say Marxists, have no interest in facilitating the development of capitalism. We have every interest in its overthrow.

    Shit on stilts indeed, every word that tumbles out of the fingertips of that dissembling quote-mongering slob is shit on stilts.

    Hey Boffy, last word on this. Fuck off with your pom-poming for things that facilitate capitalist development.

  28. S. Artesian Says:

    Oh… and this steaming pile of horse manure:

    “Where was the massive expansion of big industrial capital? In China, Asia etc. Where was there a big expansion of money-capital, and merchant capital that leached off the surplus value created in those economies in return for enabling them to realise the surplus value? In the US, UK etc.!!!z’

    That wasn’t what I asked you, Mr. Dissembler. I asked you if as you claim “money capital” has “held sway” in opposition to “big industrial multinational capital” over the “past 30 years” YET as you claim the last 30 years have witnessed a tremendous accumulation of big industrial multinational capital WITHOUT any decline in the profitability… WHAT BASIS IS THERE FOR ARGUING THAT “THE BATTLE” IS BETWEEN MONEY CAPITAL AND BIG INDUSTRIAL CAPITAL AND THE WORKING CLASS SHOULD, IN ITS OWN INTEREST, SUPPORT THE LATTER?

  29. S. Artesian Says:

    Actually, here’s what the last word should be:

    “Neo-liberalism” is not the ideology of “money-capital.” It is the ideological justification for the assaults on the working class standard of living that has been organized, financed, and executed precisely by the “big industrial mutinational capitalism” that Mr. Boffy calls “social-democratic/Keynesian.”

  30. Edgar Says:

    Response to Boffy,

    “Why? That was not Marx’s method! It was the approach of Sismondi, and approach that Marx heavily criticised.”

    Because Marx places class at the centre of his outlook and if politics isn’t related to class then why put it at the centre? Marx didn’t criticise being an advocate for the Proletariat, on the contrary, he criticised slipping into nostalgia. His main criticism of other forms of socialism, Christian, Bourgeois etc, was that it didn’t advocate for the proletariat, hence it was Utopian!

    In Marx’s academic work, he obviously takes a strictly scientific approach but in his political speeches, polemics, he is a determined fighter for the working class. There can be no dispute about this, surely?

    I don’t only see the negatives of capitalism, even as workers real wages are being reduced and their public services decimated, I am sure Apple are in the process of inventing some elegant new product that we can queue all night for. Not sure the folks in the Apple factories will be buying the stuff though! I do presume though, in this worshipping of the wonders of the free market and the capital-labour class relations, we can find time to argue for the alternative, and present arguments why the alternative would be better? If not, Marx wasted an awful lot of effort for nothing.

    It isn’t moralism to fight for the interests of the working class and point out when workers are suffering, this is a slur against the whole history of the Labour movement. A labour movement cannot possibly turn a blind eye to injustice, it is practically impossible.

    “The question then is, which is more worker friendly austerianism, which seeks to attack the welfare state etc. or Keynesianism, which seeks to bolster it.”

    Good question, if a little positivist. I am sure Marx was from the historical-materialism school though.

    “But, that completely misses the point! The point is not whether the industrial bourgeoisie singly or collectively are social democrats, but whether social democracy, and as an ideology is the ideology of that big industrial bourgeoisie. In other words, does its ideas objectively represent the material interests of the big industrial bourgeoisie, and the answer to that question is yes, it does!”

    If the industrial bourgeois do not act like they support Social democracy, I think it prompts the follow up question, why? That needs answering before we can say it is objective.
    But is it in the objective interests of the industrial bourgeois? Not when they can move production from one country to another, i.e. to where the market really does rule and away from all that red tape and burdensome taxation. The actual development of modern industrial capitalism destroys your argument that social democracy is in the interests of the industrial bourgeois (Engels would have noticed this I think). So this is still shit on stilts in my opinion.

    The developments that you speak of, Bismark etc, were the product of a powerful, organised and rising working class. We see that where working class organisation is weak then social democracy is also weak. This is the real correlation, and Marx alluded to this in the quote you give from France 1848.

    “He believes unlike Marx, that there are no divisions within the ranks of the bourgeoisie, between money-capital, merchant capital, industrial capital and so on.”

    Marx understood that the capitalist class was made up of the elements you mention, but it is quite another thing to turn the class conflict into a battle between parts of the capitalist class, aligned with the proletariat and the ‘bad’ elements of the capitalist class. I look forward to the quote from Marx advocating that tactic.

  31. jlowrie Says:

    Whatever the merits or not of Boffy’s arguments, those of Artesian seem to be expressed with such an intemperance as to make one wonder if they are occasioned by purely scientific dissension!

  32. S. Artesian Says:

    I agree. They are not occasioned by “purely scientific dissension.” They are occasioned in part by the practical applications of claiming that:

    “The real battle going on here is between money-capital, which has held sway for the last 30 years, and whose ideology is neo-liberalism, and big, multinational industrial capitalism whose ideology is social democracy/Keynesianism.

    Workers need to put forward their own socialist alternative to both, but that doesn’t mean we are “Politically Indifferent”, to use Marx’s term to the two above solutions in the meantime. Its in workers interests to support the latter against the former.”

    The real battle going on here is between capital and labor, not between “money capital” and “industrial capital.”

    It is not in the workers’ interest to support the “Keynesian” “solutions” [sic] proposed by the bourgeoisie.

    This argument has, and has had, critical, vital, and possibly fatal results for class struggle.

  33. Boffy Says:

    I see that VW have been having talks in Germany with the UAW and IG Metall about setting up a German style Works Council at their Tennesse factory – http://online.wsj.com/article/SB10001424127887323527004579081032408682124.html.

    Given the success of German car makers and german manufacturers in general of being the second biggest exporting country after China, the US car bosses no doubt could learn something from their social-democratic, German equivalents.

  34. Boffy Says:

    Edgar,

    “Because Marx places class at the centre of his outlook and if politics isn’t related to class then why put it at the centre? Marx didn’t criticise being an advocate for the Proletariat, on the contrary, he criticised slipping into nostalgia. His main criticism of other forms of socialism, Christian, Bourgeois etc, was that it didn’t advocate for the proletariat, hence it was Utopian!”

    No, he argued that the Utopian socialists were Utopian because at the time they were writing they could not locate the workers as the means of bringing about Socialism. They couldn’t because as Marx points out even for Owen, the working class had not yet emerged as an historical force that could be seen as able to fulfil that role. Engels says, he and Marx too only recognised that role around 1847. He argues that the Petit-Bourgeois socialists like Sismondi on the other hand, were reactionary, because they failed to recognise the revolutionary role that Capitalism was playing, and that without Capitalism creating the material conditions – both in the development of the productive forces, and the development of a large, organised and cultured working class, Socialism was not possible.

    As Marx says the best conditions for workers is when Capitalism is expanding.

    Well, would you call his political works, things such as his debates with Weston within the First International? I would, and there you find a clear link with his academic works. So, for example, in Capital he sets out the process of capitalist concentration and centralisation and extends it to the development of Joint Stock Companies and Co-operatives, both of which he says are the transitional forms to the associated mode of production, i.e. socialism. In his Inaugural Address to the FI, he says that the development of the workers co-operatives was the most important development there had been, more important than the Ten Hours Act. And in his debates with Weston, pointing out the limited nature of Economism, and why workers should not get too bogged down with engaging in strikes etc. he says,

    “They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. “, i.e. the workers co-operatives, and to an extent the Joint Stock Companies. But, as he points out in Capital, those developments are themselves only possible because of capitalist development, and the means for extending them nationally he, says is another product of Capitalism, credit!

    Marx criticised Proudhon who thought that dialectics was about being able to simply pick out the good things about a phenomena and discard the bad. Phenomena are composed not of good and bad, but progressive and reactionary, and the two cannot be divorced. That is why the idea of Proudhon that you could simply go to some kind of co-operative society without going through the miseries of capitalism was Utopian.

    “I do presume though, in this worshipping of the wonders of the free market and the capital-labour class relations, we can find time to argue for the alternative, and present arguments why the alternative would be better? If not, Marx wasted an awful lot of effort for nothing.”

    And, if you read my blog articles you will see that I continually do that. For example, arguing that workers should occupy their workplaces, be they the banks or Public Services, and that we should build here and now worker owned and controlled alternatives rather than accepting inferior private or state capitalist solutions like the welfare state etc. But, I do that in the same way that Marx did. That is that in the interim I do not insist on this purity of solution. If workers strike for better pay, I’m going to support them, even though its an inadequate solution, a compromise with capital. If workers decide to support a keynesian fiscal stimulus as an alternative to austerity, I’m going to support them rather than Artesian who in typical Third Period Stalinist fashion, sees all bourgeois solutions as identical. It doesn’t mean I’m not going to tell workers in the process that such bourgeois solutions are limited, and ultimately will not work.

    “If the industrial bourgeois do not act like they support Social democracy, I think it prompts the follow up question, why? That needs answering before we can say it is objective.”

    But, the big industrial bourgeoisie does act in a social democratic fashion. That is why every developed economy has a large welfare state! Its why even in neo-liberal USA, the state accounts for around 40-50% of economic activity, and why its medicare, medicaid and pension bills are growing hugely. Its why in palces like Brazil, where big, multinational capital has expanded, the basis of the bourgeois democracy is a bourgeois social democracy where workers have a vote, and where negotiations over the social wage as well as the nominal wage take place.

    They can move production, but the basis of modern surplus value extraction for such companies, is relative surplus value not absolute surplus value, and as Engels describes the methods for achieving that rely on incorporating the workers. That is why Ford introduced the $5 a day wage, which was a huge rise, its why he introduced the company welfare system etc. Bourgeois governments like the Tories and Liberals in Britain simply generalised that lesson by setting up the Welfare State, and thereby took the burden off the back of individual companies, creating a level playing field that benefitted the big capitalists. That’s why Churchill introduced the Minimum Wage in the interests of big capital against the interests of small capital. Its why the bosses of big US corporations, as well as their ideologues like Matt Miller argued for the introduction of socialised healthcare in the US to take the burden of providing expensive health insurance off the backs of those large corporations.

    The introduction of the first National Insurance scheme in Prussia in the 1820’s was long before there was any working class to speak of in Germany, let alone a powerful labour movement! Bismark was introducing it in Germany even as he had banned the labour movement by the Anti-Socialist laws. Far from it being the product of a strong labour movement, the German Marxists were opposed to the introduction of National Insurance and a Welfare State, because as Engels points out in his Critique of the Erfurt Programme, it was contrary to their opposition to state socialism!

    As for the bourgeoisie and advocating social democracy etc. it could be turned round. Very few workers advocate marxism, or any other kind of socialism. Does this mean marxism and socialism are not objectively the ideology of the working-class, and represent its interests?

    I have not advocated that workers make any kind of alliance with any section of the bourgeoisie. I have repeatedly stated that I oppose any such alliance. I have only said that like Marx, Lenin, Trotsky I’m not politically indifferent to various bourgeois solutions. I’m not politically indifferent between bourgeois democracy and fascism, yet both are political masks worn by the bourgeoisie. Artesian’s position is the same as Third Period Stalinism, in refusing to recognise any political difference between bourgeois solutions.

    Lenin, in recognising these material differences between sections of the bourgeoisie argued for using the most flexible tactics, siding now with this section, now with that in order to drive wedges between them. Siding with, supporting, does not at all mean forming any kind of alliance with. But, in fact, in the 1890’s Lenin did actually enter into open political alliances with bourgeoisi parties in Russia.

    As for Marx and Engels, in 1848, they actually joined the Democrats in Germany, a party that was an openly bourgeois Party. This was not even like joining the LP in Britain, but more like joining the Liberals. And even at the end of his life, Engels defended and recommended such an approach to the US socialists. They joined he says, because the party had the ear of the workers, and it was the most effective means of obtaining a hearing with the workers.

    But Artesian is so blinded with sectarianism, or the desire of a troll to simply start a flame war over anything he can cause an argument over that he can’t he even read Marx clearly. So, when I gave the quote from Marx on Political Indifferentism, for instance, he reads all of Marx’s opening remarks, which he was using mockingly to attack people like Artesian, as though Marx himself was actually calling on workers to oppose reforms such as state education and so on, because they were not pure socialist solutions, but compromises with bourgeois ideology!

    There really is no point discussing with such no nothings.

  35. S. Artesian Says:

    Mr. Boffy claims his advocacy of “big multinational industrial capitalism” in the “battle” with “money capital” doesn’t amount to support for any section of the bourgeoisie.

    He claims it is only not being “indifferent” to the social-democratic/Keynesian program of the “big multinational capitalists” vs. the neo-liberal program of “money capital.”

    Except programs, proposals, do not exist separate and apart from class, from the agency of classes, and from the agents of classes. So how you can state it is int the interests of the working CLASS to support the proposals of “big multinational industrial capitalism” but not therefore in the same interest to support the big mulinational industrial capitalists is bit disingenuous. As well as acrobatic. If politics was gymnastics, Mr. Boffy would get a ten for floor exercise.

    Except he has stated that given the choice between the (mythical) “Keynesian solutions” advanced by his mythical social democratic big capitalists and the proposals of the money capitals, he prefers the Keynesian solutions.

    So I repeat the question: The American Recovery and Reinvestment Act of 2009– $700 billion (authorized) of “good” Keynesian proposals– like funds to states for education, like increasing agricultural community research facilities– etc etc.
    support, oppose, or indifferent?

    The ARRI was supported by the AFL-CIO; the ARRI was supported by every (I think) organized labor union in the United States.

    support, oppose, or indifferent?

    I say we oppose the “Keynesian solution” as 1) not being a solution 2) benefiting and reinforcing the power of capital.

    There is no indication that the program or ideology of the “big industral capitalists” is social-democratic/Keynesian or that that ideology is in opposed to the “neo-liberalism” of money-capital.

    Ideologically Mr. Boffy likes to imagine a “pact” that the industrial bourgeois “makes” with the organized section of the working class. That must be opposed to the “anti-pact” of the neo-liberal ideology which involves opposing unions, decertifying unions, legislation against unions, sub-contracting work to non-unionized plants, “runaway factories” to areas of hostility to unions, diminished worker safety, reduced benefits, hollowing out, if not direct, looting of pension funds, elimination of pensions,

    But who has taken all those “anti-pact” measures? Since the US multinational industrial bourgeoisie is by far the most multinational in the world of capitalism, I think that it’s accurate to use that class as the representative for this “litmus test.” So who has taken all those anti-pact measures?

    Mr. Boffy compares his lack of indifference to the struggle between “big industrial multinational capitalism (BIMC) and “money capital (MC) to the supposed struggle between bourgeois democracy and fascism. He is not indifferent to bourgeois democracy vs. fascism. He refers to Marx, Engels, Lenin, Trotsky etc.

    Except what Mr. Boffy does not explain, does not quote, that when in fact there is a struggle between fascism and bourgeois democracy, the “choices” are not between bourgeois democratic “solutions” and fascist “solutions.” It is NOT in the interest of the working class to support the program of bourgeois democracy, or of the real social-democrats in these instance.

    The struggle between bourgeois democracy and fascism, such that it is, is but an indication of the revolutionary cracking of society along class lines– with the bourgeois democracy no longer having a solution, or a proposal worth even reviewing. That’s the point of Trotsky’s analysis of fascism in Germany, and of the civil war in Spain.

    Trotsky’s united front under these condidtions is class-based and is NOT a unity around the program of social-democracy. It is a front based specifically on excluding the bourgeoisie and supporting the organization of the working class in opposition to capitalism in its waning bourgeois democratic form and its waxing corporatist, fascist etc. garb.

    And it might be of interest for Mr. Boffy to look at the role the big industrial, multinational corporations played in supporting the emergence of such forms of capitalist class struggle against the working class.

    But anything after 1848 or 18–? what is just so much non-history to Mr. Boffy.

    Mr. Boffy claims; ” Artesian’s position is the same as Third Period Stalinism, in refusing to recognise any political difference between bourgeois solutions.”

    Nonsense, I certainly do recognize a political difference between “bourgeois solutions.” I do not recognize them as SOLUTIONS. The struggles in China, Spain, Germany, France, Vietnam proved that the bourgeoisie have NO SOLUTIONS. When bourgeois democracy is decomposing, it is not a SOLUTION to support the proposals of the bourgeois democrats.

    So I conclude with the single question asked earlier: ARRI of 2009: Support, oppose, or indifferent. And if you support it, do you endorse the unions spending money and lobbying for it?

    If there is no answer that Mr. Boffy cares to provide, then indeed there is no point discussing this further. And there is no point to spending any time reading the piles of quotes from 1848 or about Lenin in 1890s Russia. Mr. Boffy simply uses his “history” to obscure the real content of the real relations between real classes.

  36. Edgar Says:

    Reply to Boffy,

    “As Marx says the best conditions for workers is when Capitalism is expanding”

    If this were true he would never have argued for the overthrow of the capitalists!

    I agree with your point about Owen, but this only emphasises that Marx was an advocate of the working class, precisely because it was in their interests, as the oppressed class, to overthrow the capitalist system. Marx was critical of the socialists of his day who harked back to the past, and didn’t acknowledge that a component part of progression was the increased productiveness of labour. He was also critical of those who correlated progression only with the productiveness of labour. He only used this criticism against the apologists of the bourgeois, because they were the only ones proposing the idea!

    “In his Inaugural Address to the FI, he says that the development of the workers co-operatives was the most important development there had been”

    Who would argue with that?

    “Marx criticised Proudhon who thought that dialectics was about being able to simply pick out the good things about a phenomena and discard the bad.”

    Isn’t this what you do when you ask –

    “the question then is, which is more worker friendly austerianism, which seeks to attack the welfare state etc. or Keynesianism, which seeks to bolster it.”?

    As I said previously, hardly a dialectical way to approach a problem!

    “If workers decide to support a keynesian fiscal stimulus as an alternative to austerity, I’m going to support them rather than Artesian who in typical Third Period Stalinist fashion, sees all bourgeois solutions as identical.”

    And if they don’t support such a solution?

    “Its why even in neo-liberal USA, the state accounts for around 40-50% of economic activity”

    The state collects taxes off the middle and working classes and pays out the poorer sections; meanwhile big industrial capitalist employs, at great cost, the same people who drafted the accounting rules to avoid paying taxes! The state always transfers wealth from the Middle and working classes and subsidises business.

    Big industrial capitalists take advantage of modern technology, communication, computers and transport revolutions, to move production to areas where pay is poorer, conditions are worse and regulation are non-existent. This is a real, observable development of modern capitalism. The big industrial capitalists do the opposite of social democracy. They take advantage, then they take more advantage and finally they take even more advantage. You could easily, very easily, argue that it is small businesses and workers who have, from time to time allied to fight this globetrotting big industrial capitalist. This development, of big industrial capitalism using the cheap alternative, is chock full of contradictions that are bound to come to a head sooner or later, but we are not there yet.

    “Far from it being the product of a strong labour movement, the German Marxists were opposed to the introduction of National Insurance and a Welfare State, because as Engels points out in his Critique of the Erfurt Programme, it was contrary to their opposition to state socialism!”

    So what? Marx and Engels have never been the labour movement, they have always been on the periphery. The Labour movement was always located within the nation. This is probably why we are in such a mess today!

    “As for the bourgeoisie and advocating social democracy etc. it could be turned round. Very few workers advocate marxism, or any other kind of socialism.”

    I find this very lazy. The bourgeois own the press, determine opinion, their ideas reflect the ideas of society. You cannot correlate one with the other, it needs qualifying.

    “I have only said that like Marx, Lenin, Trotsky I’m not politically indifferent to various bourgeois solutions.”

    Neither am I. I would support the hard won union rights workers have struggled to attain, and which capitalists are forever trying to undermine. I just don’t attribute every bourgeois solution to the bourgeois.

    “Lenin, in recognising these material differences between sections of the bourgeoisie argued for using the most flexible tactics, siding now with this section, now with that in order to drive wedges between them.”

    But proposing social democracy is swimming against the tide of ruling class opinion. It allies with no section of the ruling class. It most chimes with certain sections of the labour movement.

    “They joined he says, because the party had the ear of the workers, and it was the most effective means of obtaining a hearing with the workers.”

    This is different from proposing ‘bourgeois solutions’, and has little to do with what big industrial capitalists think.

  37. S. Artesian Says:

    Gee… am I the only one to question Mr. Boffy’s assertion that:

    ” Its why even in neo-liberal USA, the state accounts for around 40-50% of economic activity,” ????

    That too is OK by me. I’d like to see Boffy’s data on this. If we use the “standard” categories, as published by the US BEA, out of a 2012 GDP of $16.244 trillion, government expenses and investment, federal plus state plus local, amounted to $3.167 trillion, or less than 20%.

    If you opt to classify every dollar spent by the government as “economic activity”– including social security payments, pension payments etc, then the total for the governments in the US is about $6 trillion, close, but still less than 40%.

    So a little clarification would help here.

    And while we’re at it, that ARRA– support, oppose, or indifferent.

    Even better, the “Affordable Care Act”– support, oppose or indifferent?

  38. Edgar Says:

    Another point I would like to pick upon, Boffy claims social democracy is in the objective interests of the big industrial bourgeois but also that it is a compromise. Well it can’t be both can it?

    If it is a compromise, then with who? Presumably the working class, which surely brings us back to the correlation I mentioned earlier. I.e. The stronger the labour movement the more likely there will be social democracy, the weaker it is the more likely we will have neo-liberalism.

  39. VN Gelis Says:

    The reserve role of the dollar as the world currency affords it the capacity to print money in perpetuity. Now this role is being questioned America may bring its own house down as its back is up against a wall.
    We are being told that less and less workers are producing more cars and this is a sign of increasing profits. If QE is subtracted from GDP figures America hasn’t recovered from 2008. Its zombie capitalism…

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