Louis Proyect: The Unrepentant Marxist

October 10, 2013

When the puppet talks back to the puppeteer

Filed under: conservatism,economics,financial crisis — louisproyect @ 8:26 pm

The puppet becomes the master in a classic Twilight Zone episode

Today’s NY Times raises some interesting questions about the connections or lack thereof between the big bourgeoisie (pardon me for a little Marxist jargon) and the Tea Party faction of the House of Representatives that has thrown the government into a crisis. Despite the reputation of the Tea Party for being free market fundamentalists, the masters of the marketplace find them rather inconvenient:

As the government shutdown grinds toward a potential debt default, some of the country’s most influential business executives have come to a conclusion all but unthinkable a few years ago: Their voices are carrying little weight with the House majority that their millions of dollars in campaign contributions helped build and sustain.

Their frustration has grown so intense in recent days that several trade association officials warned in interviews on Wednesday that they were considering helping wage primary campaigns against Republican lawmakers who had worked to engineer the political standoff in Washington.

Such an effort would thrust Washington’s traditionally cautious and pragmatic business lobby into open warfare with the Tea Party faction, which has grown in influence since the 2010 election and won a series of skirmishes with the Republican establishment in the last two years.

“We are looking at ways to counter the rise of an ideological brand of conservatism that, for lack of a better word, is more anti-establishment than it has been in the past,” said David French, the top lobbyist at the National Retail Federation. “We have come to the conclusion that sitting on the sidelines is not good enough.”

I probably listen to a lot more AM rightwing talk radio shows than the average socialist. Recently I discovered that there’s now a Fox radio station in NY at 970 on the dial that competes with WABC, the home of Sean Hannity and Rush Limbaugh. At 10pm there’s a Christian fundamentalist named Steve Deace who broadcasts for Fox radio out of Des Moines, Iowa. His motto is “Fear God. Tell the Truth. Make Money.” I can barely listen to him (or any of these characters) for more than 10 minutes but it helps me take the pulse of the ultraright.

Deace is fond of using the word “ruling class”, a term that he obviously knows was coined by the revolutionary movement. He uses it primarily to refer to the Republican Party establishment such as in this Politico article:

Not since Reagan has a nonestablishment presidential candidate had the comprehensive worldview and charisma capable of coalescing enough of the conservative/libertarian base to defeat the Republican ruling class in a national primary.

For Deace, the views of Hannity and Limbaugh are within “ruling class” parameters. On Town Hall, he blasted Bill O’Reilly as well:

From reporting inaccuracies on gun control, to no longer defending marriage, O’Reilly is now scoring goals for the other team. Similar sellouts and flip-flops aren’t news when they come from politicians. But given how O’Reilly has branded himself as the man with the moral high ground inside the “no spin zone,” it definitely has the potential to damage him much more. Nobody, right or left, likes a hypocrite. O’Reilly is now “evolving” so fast it would even give presidential candidates from Massachusetts ideological whiplash.

Clearly, the Tea Party right is on some kind of collision path with the establishment Right even though they share a common agenda against the left, working people, gays, and anybody who does not believe that Adam and Eve commingled with the Brontosaurus.

Before presenting my own views on what is going on here, I’d like to refer you to some noteworthy attempts by the left to explain the roots and dynamics of the Tea Party.

Doug Henwood was interviewed by Salon.com’s Josh Eidelson who asked: “You’ll hear some conservatives argue that the Tea Party represents a different politics, less “pro-business” than the GOP we knew – instead, consistently committed to “limited government” in ways that can be counter to business interests. To what extent is that just spin, or a real divide?” Doug replied:

It’s a kind of regional and inter-class battle. I think, to use the Marxist language, [the Tea Partyers] represent an enraged provincial petit bourgeois that feel that they are seeing society change in ways that they don’t like. They look at things like Obamacare and see that as a way of subsidizing a minority electoral bloc that will push the government in ways that they don’t like. These are the small-town worthies, like the local car dealers — people who are millionaires, but not billionaires. They are big wheels in their local communities, but not on a national level. And then you have ideological right-wingers like the Koch brothers who use these folks very effectively.

I would also refer you to Tim Horras, a founder of the Philly Socialists, who wrote a piece titled “Slouching Towards Shutdown: Left Reflections on the Tea Party, Then & Now” for the North Star website. Like Doug, Tim views the Tea Party as autonomous from what Deace calls “the ruling class”:

[T]he Tea Party was not an astroturf operation, but rather a legitimate social movement with a large mass base of support, 2) the mainstream Republican Party agenda was actually very different from the Tea Party agenda, 3) the capitalist class wouldn’t necessarily be in control of the Tea Party, like the sorcerer conjuring up forces they are incapable of controlling, 4) economic recovery was not going to happen, therefore extremism would continue to rise, and, (not mentioned in the passage quoted above), 5) key political conflicts would be centered around debt and default.

While some analysts like Michael Lind regard the Tea Party movement as an expression of Southern White racism, there are signs that it has powerful roots in the North as well. For example, Wisconsin governor Scott Walker went on the offensive against organized labor with backing from the Koch brothers and Ohio is the site of some of the most stringent anti-abortion laws in the country. Thirty years ago both Wisconsin and Ohio were considered strongholds of liberal Democratic power. What has happened?

I strongly agree with Doug’s assessment of it being the expression of an enraged petty-bourgeoisie but would differ on whether it is “provincial” (Doug cites Michael Lind favorably in the interview.) The big question, however, is what would make them so enraged? Does a millionaire car dealer in Mississippi really feel that Obamacare is an existential threat? I am not raising this question in a polemical fashion but only to demonstrate that I am not really sure.

The one thing I am relatively sure about is that the Tea Party flourishes in an environment where the Democratic Party lacks any kind of populist zeal. Obama is the perfect symbol of the kind of Eastern elitism that becomes a red flag in the face of the typical Tea Party activist. His connections to Wall Street, his Ivy League law degree, and primarily his condescending attitude to dwellers in “small towns in Pennsylvania and… small towns in the Midwest” who bitterly cling to guns or religion because of job loss, make him an easy target. Basically, Obama has generated the kind of blind hatred found in George Wallace’s 1968 campaign. Wallace ran as the candidate of the American Independent Party, a forerunner of the Tea Party in many ways. Wallace went around saying, “There’s not a dime’s worth of difference between the Democrat and Republican parties,” a virtual echo of Steve Deace’s complaint.

Middle class fury erupts on a fairly regular basis like Old Faithful in Yellowstone National Park but most of all in periods of economic crisis. Perhaps the first examination of this phenomenon was Karl Marx’s “18th Brumaire” that tried to explain how Louis Bonaparte, Napoleon’s nephew, could rule on behalf of the big bourgeoisie while assaulting it both verbally and through actions inimical to its interests. Marx wrote:

As the executive authority which has made itself independent, Bonaparte feels it to be his task to safeguard “bourgeois order.” But the strength of this bourgeois order lies in the middle class. He poses, therefore, as the representative of the middle class and issues decrees in this sense. Nevertheless, he is somebody solely because he has broken the power of that middle class, and keeps on breaking it daily.

You will, of course, note how Marx is focused on the contradictions of Bonaparte’s rule. A government committed to the “bourgeois order” carries out policies that violate the wishes of the very class on whose behalf it rules, drawing upon the power of a middle-class that has become alienated by the very order that makes it insecure. This is the same pattern that existed in fascist Italy, Germany and Spain but to a degree never seen before.

Throughout its existence as a class, the bourgeoisie has often relied on the middle class to impose its will even if there are appearances that a “new order” has prevailed. Marx’s article was the origin of the term Bonapartism, a useful way of looking at political figures who appear to rule above and beyond the major social classes while cultivating the impression that it rests on the will of the “people”. Juan Peron was an example of left-Bonapartism while DeGaulle was an example of right-Bonapartism.

While France never became fascist in the 1930s, the threat certainly existed. Trotsky was determined to warn the left about such a possibility in “Whither France”, a work that I hold in the highest regard. I might not be a Trotskyist in terms of the party-building methodology but his analysis of the class struggle will remain valuable as long as there are classes. Trotsky described the ruling Radical Party in 1934 as temporizing in the face of capitalist crisis. Despite the party’s name, it had more in common with the Democratic Party in the USA. Its refusal to act decisively led the middle-class to lean toward the fascists who at least gave the impression that they meant business. Trotsky wrote:

The petty bourgeoisie, the ruined masses of city and country, begins to lose patience. It assumes an attitude more and more hostile towards its own upper stratum. It becomes convinced of the bankruptcy and the perfidy of its political leadership. The poor peasant, the artisan, the petty merchant become convinced that an abyss separates them from all these mayors, all these lawyers and political businessmen of the type of Herriot, Daladier, Chautemps and Co., [Radical Party leaders] who by their mode of life and their conceptions are big bourgeois. It is precisely this disillusionment of the petty bourgeoisie, its impatience, its despair, that Fascism exploits. Its agitators stigmatize and execrate the parliamentary democracy which supports careerists and grafters but gives nothing to the toilers. These demagogues shake their fists at the bankers, the big merchants and the capitalists.

I should make it clear, however, that the Tea Party is not a fascist threat. Fortunately (or unfortunately in another sense) there is no threat because there is no working class radicalism to speak of. Unlike the 1930s, the “Great Recession” has produced no mass leftwing movement in the USA. There are a number of reasons for this but suffice it to say that the existence of various safety nets make survival easier, even though those protections might be hollowed out or abolished in a period of even deeper crisis.

Tim Horras got it right. In his article he urged the need for militant mass action:

If the Left can successfully organize a genuine pole of attraction in the coming years, I remain convinced that poor and working class Americans will have the wherewithal to beat back the “rough beast” of reaction, press on towards social democracy, and finally arrive at a more fair and just society: the cooperative commonwealth.

We should never forget that during the Occupy Wall Street movement, there was hardly a peep about the Tea Party. When the left is on the offensive, the right tends to back down. For that matter, there is not much in the way of rallies by the Tea Party today. As a movement, it is manifested more by press conferences by politicians like Ted Cruz than those menacing gatherings that saw men toting semiautomatic weapons.

The conditions that created Occupy will be with us for the foreseeable future. There’s a tendency for some to view the current phase as one of post-crisis since reports about an uptick in employment and home sales occur daily in the newspapers, radio and television. At least one bourgeois economist warns about expecting prosperity around the corner, however. In an op-ed piece in the NY Times titled “When Wealth Disappears”, Stephen King warns about the horrors that await us. Unlike the novelist, this King’s fears are centered on economic stagnation rather than vampires or werewolves.

NY Times Op-Ed October 6, 2013
When Wealth Disappears
By STEPHEN D. KING

LONDON — AS bad as things in Washington are — the federal government shutdown since Tuesday, the slim but real potential for a debt default, a political system that seems increasingly ungovernable — they are going to get much worse, for the United States and other advanced economies, in the years ahead.

From the end of World War II to the brief interlude of prosperity after the cold war, politicians could console themselves with the thought that rapid economic growth would eventually rescue them from short-term fiscal transgressions. The miracle of rising living standards encouraged rich countries increasingly to live beyond their means, happy in the belief that healthy returns on their real estate and investment portfolios would let them pay off debts, educate their children and pay for their medical care and retirement. This was, it seemed, the postwar generations’ collective destiny.

But the numbers no longer add up. Even before the Great Recession, rich countries were seeing their tax revenues weaken, social expenditures rise, government debts accumulate and creditors fret thanks to lower economic growth rates.

We are reaching end times for Western affluence. Between 2000 and 2007, ahead of the Great Recession, the United States economy grew at a meager average of about 2.4 percent a year — a full percentage point below the 3.4 percent average of the 1980s and 1990s. From 2007 to 2012, annual growth amounted to just 0.8 percent. In Europe, as is well known, the situation is even worse. Both sides of the North Atlantic have already succumbed to a Japan-style “lost decade.”

Surely this is only an extended cyclical dip, some policy makers say. Champions of stimulus assert that another huge round of public spending or monetary easing — maybe even a commitment to higher inflation and government borrowing — will jump-start the engine. Proponents of austerity argue that only indiscriminate deficit reduction, accompanied by reforming entitlement programs and slashing regulations, will unleash the “animal spirits” necessary for a private-sector renaissance.

Both sides are wrong. It’s now abundantly clear that forecasters have been too optimistic, boldly projecting rates of growth that have failed to transpire.

The White House and Congress, unable to reach agreement in the face of a fiscal black hole, have turned over the economic repair job to the Federal Reserve, which has bought trillions of dollars in securities to keep interest rates low. That has propped up the stock market but left many working Americans no better off. Growth remains lackluster.

The end of the golden age cannot be explained by some technological reversal. From iPad apps to shale gas, technology continues to advance. The underlying reason for the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated.

First was the unleashing of global trade, after a period of protectionism and isolationism between the world wars, enabling manufacturing to take off across Western Europe, North America and East Asia. A boom that great is unlikely to be repeated in advanced economies.

Second, financial innovations that first appeared in the 1920s, notably consumer credit, spread in the postwar decades. Post-crisis, the pace of such borrowing is muted, and likely to stay that way.

Third, social safety nets became widespread, reducing the need for households to save for unforeseen emergencies. Those nets are fraying now, meaning that consumers will have to save more for ever longer periods of retirement.

Fourth, reduced discrimination flooded the labor market with the pent-up human capital of women. Women now make up a majority of the American labor force; that proportion can rise only a little bit more, if at all.

Finally, the quality of education improved: in 1950, only 15 percent of American men and 4 percent of American women between ages 20 and 24 were enrolled in college. The proportions for both sexes are now over 30 percent, but with graduates no longer guaranteed substantial wage increases, the costs of education may come to outweigh the benefits.

These five factors induced, if not complacency, an assumption that economies could expand forever.

Adam Smith discerned this back in 1776 in his “Wealth of Nations”: “It is in the progressive state, while the society is advancing to the further acquisition, rather than when it has acquired its full complement of riches, that the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable. It is hard in the stationary, and miserable in the declining state.”

The decades before the French Revolution saw an extraordinary increase in living standards (alongside a huge increase in government debt). But in the late 1780s, bad weather led to failed harvests and much higher food prices. Rising expectations could no longer be met. We all know what happened next.

When the money runs out, a rising state, which Smith described as “cheerful,” gives way to a declining, “melancholy” one: promises can no longer be met, mistrust spreads and markets malfunction. Today, that’s particularly true for societies where income inequality is high and where the current generation has, in effect, borrowed from future ones.

In the face of stagnation, reform is essential. The euro zone is unlikely to survive without the creation of a legitimate fiscal and banking union to match the growing political union. But even if that happens, Southern Europe’s sky-high debts will be largely indigestible. Will Angela Merkel’s Germany accept a one-off debt restructuring that would impose losses on Northern European creditors and taxpayers but preserve the euro zone? The alternatives — disorderly defaults, higher inflation, a breakup of the common currency, the dismantling of the postwar political project — seem worse.

In the United States, which ostensibly has the right institutions (if not the political will) to deal with its economic problems, a potentially explosive fiscal situation could be resolved through scurrilous means, but only by threatening global financial and economic instability. Interest rates can be held lower than the inflation rate, as the Fed has done. Or the government could devalue the dollar, thereby hitting Asian and Arab creditors. Such “default by stealth,” however, might threaten a crisis of confidence in the dollar, wiping away the purchasing-power benefits Americans get from the dollar’s status as the world’s reserve currency.

Not knowing who, ultimately, will lose as a consequence of our past excesses helps explain America’s current strife. This is not an argument for immediate and painful austerity, which isn’t working in Europe. It is, instead, a plea for economic honesty, to recognize that promises made during good times can no longer be easily kept.

That means a higher retirement age, more immigration to increase the working-age population, less borrowing from abroad, less reliance on monetary policy that creates unsustainable financial bubbles, a new social compact that doesn’t cannibalize the young to feed the boomers, a tougher stance toward banks, a further opening of world trade and, over the medium term, a commitment to sustained deficit reduction.

In his “Future of an Illusion,” Sigmund Freud argued that the faithful clung to God’s existence in the absence of evidence because the alternative — an empty void — was so much worse. Modern beliefs about economic prospects are not so different. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear. But as the current fiscal crisis demonstrates, facing the pain will not be easy. And the waking up from our collective illusions has barely begun.

Stephen D. King, chief economist at HSBC, is the author of “When the Money Runs Out: The End of Western Affluence.”

6 Comments »

  1. “I should make it clear, however, that the Tea Party is not a fascist threat.”

    I agree with this, but try telling this to liberals, even ones willing to challenge the Obama administration as being neoliberal sell outs. They frequently post variations on a theme that the Tea Party is a Koch brothers creation bent upon creating a populist corporate autocracy in the US. The notion that there is actually a real Tea Party base responding to economic and social turmoil is either dismissed or rationalized as people being too ignorant to think for themselves. Your conclusion that the Tea Party flourishes in an environment of where the Democratic Party implements the policies of elites is right on the money. Interesting that you don’t mention the significance of immigration in regard to the emergence of Tea Party Republicans. There appears to be a correlation between purported progress toward “immigration reform” and Tea Party activity.

    Also worth noting that Tea Party is responsible for two significant elite defeats in the last couple of years: (1) the failure of the Obama administration to reach a “Grand Bargain” that would cut Social Security and Medicare (because House Tea Party Republican representatives in the House will accept no tax increases); and (2) the defeat of the effort to obtain authorization for airstrikes in Syria (House Tea Party Republicans pulled the rug out from progressive Democrats who were otherwise willing to begrudgingly support them) .

    In regard to the first, it is entirely possible that the inability to reach an end to the government shutdown is because of this continued Tea Party intransigence, as there are prominent Republicans and Democrats willing to reach a deal based upon the “Grand Bargain”. In regard to the second, this defeat must have alarmed elites, and potentially even lead them to the conclusion that the Tea Party must be marginalized. Otherwise, the post-war consensus about US military intervention abroad is at risk. The Syria debate was noteworthy for the kind of populist hostility towards political elites that you mention here. A future failed military intervention against public sentiment could result in the emergence of a real fascist threat

    Comment by Richard Estes — October 11, 2013 @ 1:48 am

  2. The ultra-right in Britain have the same approach towards Labour Party leader Ed Miliband that Tea-Party-wingnuts in the US have towards Obama.
    -even the slightest deviation to the left is treated as evidence of “socialism”.

    http://owenjonesramblings.tumblr.com/post/62811986074/be-prepared-the-right-are-preparing-all-out-war

    Comment by prianikoff — October 11, 2013 @ 4:57 pm

  3. Hi Louis. I’m pretty new to your blog but I really like it so far. I have a question…

    I get what you’re saying about the tea party not being a fascist threat because there is no working class radicalism. But what if the working class becomes more and more radicalized in the near future with all these cuts to public programs? Can the Tea Party and its base become a fascist threat in that scenario?

    Comment by ruben — October 11, 2013 @ 10:09 pm

  4. If the Occupy movement had continued to grow with occupying public spaces and achieved an organizational critical mass with their 99% message then a genuine fascist reaction would under most conditions have crystalized in response.

    Comment by Karlk Friedrich — October 13, 2013 @ 3:00 pm

  5. This Stephen D King guy’s ‘solutions’ are not solutions. Also, there is plenty of affluence – the billionaire’s list is swelling every year, it’s a matter of distribution. His solution is basically that the masses should live in shantytowns so they can be equal with the developing world.

    As an aside, comparing the IPhone to the internal combustion engine, electricity as a commodity, the washing machine or penicillin is laughable. The pace of technological innovation is decreasing.

    Comment by jeff — October 13, 2013 @ 11:15 pm

  6. The sentiments which motivated tea-baggers were in conflict with the Republican Party, but the Koch brothers et al did indeed astroturf it onto the scene in order to create a diversion from the mess left over from Bush. As far as the Kochs are concerned, this is principally a diversionary game and is not meant to usher in anything dramatically new except more Reaganisms.

    If one was to compare this something like the classical movements grouped under the title of “fascism” then it’s clear that any attempt to build a “fascist” party would require a clear sharp break from the Republicans, just as any attempt to build a socialist party requires a clear sharp break from the Democrats. There were a number of conservative parties in Weimar Germany to which Hitler could have simply hired himself out as a well-paid speaker akin to a 1920s version of Rush Limbaugh. Hitler chose build the NSDAP up from small beginnings because he realized that this was the only way to have a party which really conformed to his agenda. If someone on the Right sets out to build an independent party which runs in clear rivalry to the Republicans then that will be worthy of note. But it hasn’t occurred yet.

    Beyond that, there’s no really no good comparison to make with Germany, Italy, Japan or Spain in the 1930s. The assertions that some vague entity called “fascism” appears under conditions of capitalist crisis are grossly oversimplified and don’t really match the events of the 1930s. The countries where “fascism” took root were not overextended, overdeveloped empires such as the USA or the more traditional European colonial empires of that time. Germany in 1933 was still very much an agrarian country, and this was even more true for the others. It was not really that capitalism in these countries had developed its full potential. That was much more true of Britain or France than of Germany and Italy. The economies in these nations had vast potential for development, the only problem being that they were locked out of the resources which even small decaying colonial powers like Belgium or the Netherlands had won in the colonial scrambles of the 19th century.

    The nationalist movements which grew in such countries demanded that they should be given what they viewed as their rightful share of European colonial spoils in proportion to their status as developing European powers. But it was absolutely not true that capitalism was exhausted in these countries. Until Heinrich Bruning managed in 1932 to negotiate an end the reparations of the Versailles Treaty, the crises in Allied nations exerted a downward pull on Germany. But the German economy began recovering as soon as the reparations clause was abandoned. Hitler gained the Chancellorship by political accident due to Papen underestimating him, but the economy was already recovering at that point and there was no indication that anyone saw Hitler as a special means of saving a capitalism which was already recovering.

    In sharp contrast to those countries where “fascism” arose in the 1930s, the USA today is the penultimate example of a decaying imperial power. There has been no fascist movement here because such movements did not and do not arise in the context of overextended, overdeveloped imperial capitalist states. In this country people are too hypnotized by the recollections of imperial prosperity as it was a half-century ago to form serious visions of a recreation of the Roman Empire or of Charlemagne’s thousand-year Reich. They really just want to go back to the 1950s. That’s reactionary politics for sure, but it has little resemblance to the movements which defined “fascism.”

    Comment by PatrickSMcNally — October 15, 2013 @ 6:57 pm


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