May 2, 2012
April 29, 2012
Eight years ago my mother went into a nursing home after it became obvious that she could not manage on her own. When I began working on her house to get it realtor ready, I got calls almost every morning from one collection agency or another. Over a 5-year period at least, she had begun using credit cards to make ends meet and racked up about $8000 in debt. My first reaction was consternation since I had inherited my father’s hatred for owing money. My next impulse was to try to figure out a way to pay off the debt but an attorney friend told me that I was not really liable. Despite that knowledge, I was reluctant to tell the collection agencies that I was her son and crafted a new persona for the phone calls. Using an upstate NY drawl, I became “Lenny”, the handyman hired to work on the house who advised that Missus Proyect was in the nursing home, on Medicaid, and poorer than a church mouse.
About a year ago one of my oldest and closest friends, who is just a week younger than me, learned that he had Parkinson’s. After trying unsuccessfully for over two years to get a sales job, he was now part of the permanently unemployed. Tremors in both hands were bound to exclude him from a profession in which appearance counts for about 75 percent when closing a deal. Recently I learned from him that he is about $30,000 in debt from various credit cards. Like my mom, he uses them as a way to make ends meet. When I asked how he would be able to pay off the debt, he told me that he could only pay the monthly minimum. At this rate, he will be paying about $300 per month for the rest of his life. With only $2200 per month in Social Security as income, that’s a massive expense. I should add that he lost about 50 percent of his retirement savings in 2008.
As they say, the personal is political. I think of these people who have been very close to me when I recall the points made at a 2012 Left Forum panel discussion on After the Crisis, is a New New Deal Possible? Do We Want One? where the chairperson Eric Pineault drew a distinction between the 1930s and today. I wrote:
In drawing a contrast between the Great Depression of the 1930s and the Great Recession of today, Pineault referred to the different forms that the attack on the working class took. In the 1930s, the problem was obviously massive unemployment but today working people are being crushed by debt much more than by joblessness. He used the term debt peonage to describe the problems faced by millions as they confront home foreclosure and collection agencies trying to get a worker to pay for a huge Visa or Mastercard bill.
In the 1930s, layoffs in a place like Detroit or Chicago would affect workers as a social layer. Since this was at a time when workers tended to live near the factory and even walk to work in many instances and when they hung out at the same saloons or parks, they tended to think in terms of joint action.
But today someone in debt will tend to see himself or herself as an individual whose adversary is another individual at a bank or a collection agency. Since going into debt often strikes people as a personal failing, they will also tend to blame themselves rather than larger social and economic forces.
Although my mother and my old friend were not blue-collar workers at any point in their lives, I could not help but connect them to Pineault’s narrative, especially my mother who was probably ashamed to admit that she had become a “deadbeat” in the collection agencies’ eyes as well as unwilling to share her pain with me. It was almost as if she were hiding an addiction.
I was reminded of this when watching the powerful 2006 documentary “Maxed Out” on HBO about a month ago. It can also be seen on Netflix streaming (the film was co-produced by Red Envelope, a Netflix subsidiary) and on Amazon.com for only $2.99. Among the interviewees is Kathi Ballew, a resident of New Albany, Indiana. Her mother, Yvonne Pavey, had disappeared months before and the initial worry was that her $20,000 credit card debt had forced her to run away. Daily phone calls from collection agencies had threatened her with loss of her house, jail time and other woes. At the end of the film, we learn that she had committed suicide, as we see her car and body being dragged from the bottom of the Ohio River.
We also hear from the parents of two college students who had killed themselves as well over credit card debt. I had never thought much about the Citibank and Chase Manhattan tables set up in front of Columbia University in September each year but obviously they should be seen in the same light as crack dealers in front of high schools.
As serious the topic, the film is leavened by humor, some of which is unintentional. Dave Ramsey, the AM Radio “financial adviser”, is one such example who insists on telling his frantic and indebted callers that they should do everything in their power to pay up. He says that he is a living example of recovery from debt since he too once owned tens of thousands of dollars. The point is made implicitly that his recovery owes a lot to self-help books that are sold to his credulous fan base.
More explicit humor comes from Louis CK who riffs on trying to get a loan from a bank. They tell him that he can only get money if he has money. Laughing bitterly on stage (Louis CK was financially in bad shape earlier in his career, like all stand-up comedians), he tells the audience that the fucking banks are only interested in lending money to those who have it already.
Despite the joke, it seems that the opposite is true. The ideal credit card customer is someone like my old friend who is paying the minimum each month until he dies in a kind of modern-day “debt peonage”. Elizabeth Warren, who is probably the country’s leading expert on consumer debt and passed on by Barack Obama for a post that would have enabled her to make a real difference, says that a vice president of MasterCard once told her that they love people who’ve declared bankruptcy because they can’t declare it again and have what he termed “a taste for credit,” meaning they are “willing to make minimum monthly payments forever.”
If “Maxed Out” is unavailable to you through the channels mentioned above, I also strongly recommend a 2004 PBS Frontline Documentary Secret History of the Credit Card that can be watched online. It was produced by Lowell Bergman, a veteran of “60 Minutes” and a throwback to when Frontline was capable of challenging the powers-that-be. Bergman also conducted the interviews with assorted victims of credit card loansharking and various experts on the problem, including the ubiquitous Elizabeth Warren who made Michael Moore’s “Capitalism: a Love Affair” so compelling.
Bergman also convinced some of the dirtbags responsible for predatory credit card lending to come out of the shadows and defend their practices, including the oleaginous Andrew Kahr who serves as a consultant to Visa, Mastercard and company.
NARRATOR: In fact, the industry was reaping huge profits from Andrew Kahr’s intuition about people’s behavior. But then, in the late ’90s, Kahr says he had a new insight. Customers were being flooded with competitive offers for low-interest cards.
ANDREW KAHR: People were offering 12.9 percent interest for the first six months, 10.9 percent on balance transfers, and I convinced the client to go straight to zero percent as an introductory rate. It gave them competitive advantage. It led to, of course, the others also going to zero percent.
NARRATOR: Kahr knew that even though the zero percent offer could easily change, people would still be attracted to the bait.
ANDREW KAHR: When you’re getting something in the mail several times a week that offers you zero percent for six months— they look at the headlines of the solicitation in the mail, they spend 30 seconds on it, and, “OK, I’m going to be better off at the beginning. They’re going to give me something. They’re going to give me a zero percent rate.” People believe what they want to believe
LOWELL BERGMAN: “Zero percent APR”— what does this mean? I mean, you’re saying that’s meaningless.
This zero percent rings a bell, doesn’t it? That’s essentially the same kind of come-on that led so many people to sign up for subprime mortgages using almost no money down and interest-only payments at the outset.
My reaction to “Maxed Out” and “Secret History of the Credit Card” was a heightened awareness that the United States is basically run by crooks not much different than the characters on “The Sopranos”. Kahr’s business about people believing what they want to believe, Goldman-Sachs’s reference to those it rips off as “muppets”, the Walmart briberies in Mexico, and just about an article a day in the NY Times with such revelations remind me of Woody Guthrie’s famous verse in “Pretty Boy Floyd”:
Yes, as through this world I’ve wandered
I’ve seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
As good as these films are, the most jaw-dropping revelations can be found in the recently published “Borrow: the American Way of Debt” by Louis Hyman, a history professor at the Cornell University School of Industrial and Labor Relations.
The book is a deeply informed and elegantly written combination of cultural history and economics. In a nutshell, Hyman traces the development of consumer debt historically focusing on a kind of tripod that was essential to American capitalism: the auto loan that originated in the 1920s, the federally backed mortgages of the 1930s and the postwar evolution of credit cards out of the department store installment plan. While each one of these was seen as boons to the blue-collar worker, they all ended up ultimately as serving the atomization of the very same workers. The key contradiction of contemporary American capitalism might be seen as the erosion of these kinds of consumer credit “benefits” but the lagging of consciousness that makes collective action possible.
In a kind of throwaway line in his remarkable new book titled “Debt: the first 5000 years”, David Graeber states: “Henry Ford once remarked that if ordinary Americans ever found out how the banking system really worked, there would be a revolution tomorrow”.
Louis Hyman puts this into a context that was new to me and to most people, including those on the left, I imagine. In a chapter titled “Everybody paid cash for the Model T (1908-1929)”, he discusses Henry Ford, a car manufacturer who came out of a Wall Street hating populist movement.
Although the Model T was the first car geared to the ordinary working person, it was a commodity that was not available on credit. Ford thought of himself as a mechanic first and a businessman last. In his youth, the farmers and many workers despised the Eastern banks as parasites. Using language that might be reminiscent of today’s rightwing populists, Ford lambasted financiers in a 1922 article on “the road to riches”:
Businessmen believed that you could do anything by “financing” it. If it did not go through on the first financing, then the idea was to “refinance.” The process of “refinancing” was simply the game of sending good money after bad. In the majority of cases the need of refinancing arises from bad management, and the effect of refinancing is simply to pay the poor managers to keep up their bad management a little longer. It is merely a postponement of the day of judgment. This makeshift of refinancing is a device of speculative financiers. Their money is no good to them unless they can connect it up with a place where real work is being done, and that they cannot do unless, somehow, that place is poorly managed. Thus, the speculative financiers delude themselves that they are putting their money out to use. They are not; they are putting it out to waste.
General Motors, by comparison, was a much smaller operation at the outset but after the Du Pont Corporation purchased it in 1920, a new approach much more friendly to finance was inaugurated and things took off. John Raskob, a Du Pont vice president and finance expert, hit on the idea of setting up a subsidiary called General Motors Acceptance Corporation (GMAC) that allowed cars to be bought on credit. Raskob understood that this strategy was not only good for GM’s profits but the health of the capitalist system generally. Consumer credit was “the dream haven of plenty for everybody and fair shake for all, which the socialists have pointed out to mankind. But our route will be by the capitalist road of upbuilding rather than by the socialistic road of tearing down.”
As sales dwindled in the face of new competition, Henry Ford grew increasingly bitter and began to scapegoat the Jews, a favorite rightwing populist target. In the “The International Jew”, Ford froths at the mouth over the Jew’s various offenses, including jazz: “Many people have wondered whence come the waves upon waves of musical slush that invade decent homes and set the young people of this generation imitating the drivel of morons. Popular music is a Jewish monopoly. Jazz is a Jewish creation. The mush, slush, the sly suggestion, the abandoned sensuousness of sliding notes, are of Jewish origin.” I don’t know. If I was a young person back then, the idea of abandoned sensuousness would have worked for me.
But the biggest problem was Jewish control over finance. Ford wrote:
Rothschild power, as it was once known, has been so broadened by the entry of other banking families into governmental finance, that it must now be known not by the name of one family of Jews, but by the name of the race. Thus it is spoken of as International Jewish Finance, and its principal figures are described as International Jewish Financiers. Much of the veil of secrecy which contributed so greatly to the Rothschild power has been stripped away; war finance has been labeled for all time as “blood money,” and the mysterious magic surrounding large transactions between governments and individuals, by which individual controllers of large wealth were made the real rulers of the people, has been largely solved and the plain facts disclosed.
Eventually Ford dropped the resistance to financing, the anti-Semitism and the populist baggage that went along with David Graeber’s reference to him. As a couple of Wall Street big-wigs once noted, Ford “talks like a socialist” but “acts like one of us”—adding that “he gets away with it”.
In the roaring 20s, when ordinary working class people could purchase an automobile that was formerly a luxury attainable only by the super-rich, they also began to become homeowners as well. Hyman explains that the housing bubble of the recent past had a precedent 80 years ago when real estate bonds were ubiquitous. Issued in denominations as low as $100, they were brokered by “real estate bond houses”. When Walter Stabler, the top investment analyst at Metropolitan Life, questioned whether there might be a real estate bubble in New York, a developer denounced the comments as “more to be feared by the community in which we live than the utterances of Bolshevists.”
When the market crashed, the housing market dried up overnight as the foreclosure rate hit one thousand a day. As the Great Depression showed no signs of relenting and as many working people began to show signs that they were far more interested in Bolshevism than Henry Ford at his most populistic, FDR decided to use Big Government to help the homeowner in a way that Obama, the great conciliator, would never dream of. He set up the Federal Housing Administration in 1934 that provided capital to be invested in housing.
James Moffett headed up the FHA and symbolized the marriage between the New Deal leftists and the big bourgeoisie. Moffett had been a vice president of Standard Oil and fiercely opposed to federally-subsidized housing of the sort that his rival Harold Ickes endorsed. As head of the Public Works Administration, Ickes urged the government to build “attractive houses at low interest”. Moffett called a press conference and denounced Ickes, stating that “such a plan would wreck a 21-billion dollar mortgage market and undermine the nation’s real estate values.”
Needless to say, FDR backed Moffett to the hilt. In short order, the FHA created a new entity to fund the mortgage named the Federal National Mortgage Association (FNMA), more commonly known as Fannie Mae. Acting as a middleman between large institutional investors and local lenders, Fannie Mae injected large amounts of liquidity into the system and allowed those workers lucky enough to be employed to get 30 year mortgages at a reasonable interest rate.
With this system in place, it became possible for Long Island, New Jersey and their counterparts in large metropolitan centers around the country to become a home to blue-collar workers. Fannie Mae made it possible to purchase a home and financing from the big automobile companies provided the transportation to get from home to workplace.
The last building block in the “American Dream” was the credit card that made furnishing the home possible, especially after WWII when a revitalized economy made such purchases possible.
The first breakthrough in generalized consumer credit occurred when Macy’s and other large retailers set up installment plans that allowed furniture, appliances and other household items to be purchased with no money down. Early on the main customers were from the petty-bourgeoisie who felt comfortable applying for a credit line from a snooty credit manager. If you earned that privilege, the reward was a metal charge plate that was the plastic of its day.
The next stage was discount stores that were located in the suburbs and much more amenable to working class families, including Kmart, a store that was originally Kresge’s, a Macy’s type store. Unlike Macy’s, Bloomingdale’s et al, these stores demanded cash on the barrel. But in the 1960s, a recent innovation made credit purchases at such stores possible—the bankcard. The first bank to get into the business were Bank of America that issued the BankAmericard. Then came Master Charge, a card issues by BoA’s competitors in California, including the Wells Fargo Bank. BankAmericard became Visa and Master Charge became MasterCard.
At the outset, the credit card was not the cash cow it is today. Anti-usury laws passed in various states prevented banks from charging the kinds of rates they charge today. In 1978, the Supreme Court decided that banks would no longer be subject to state laws and the roof caved in. All of this is described in great detail in the two documentaries and therefore will not be repeated here.
The obvious question for a blog titled Unrepentant Marxist is what this has to do with Marxist theory. Why has what some called financialization taken over the American economy, which provides the context for the massive expansion of consumer credit and the failure of the working class to get off a treadmill that both seduces and abandons it during the vicissitudes of the business cycles.
Although I have the highest praise for Louis Hyman’s book, I do wonder if his solution for the credit crisis is a bit utopian. Like many admirers of the New Deal, he wonders why finance “can’t serve the real economy, not the other way around.” He adds, “When it is more profitable to build an electric car than to invest in a credit card, then we will know the crisis is over.”
Alas, the crisis of the capitalist economy revolves around the falling rate of profit. There is little investment in “the real economy” because basic industry does not generate the kinds of profits it once did. After all, GM resisted making compact cars with high gas mileage because they were less profitable than SUV’s.
Unlike Henry Ford, who paid workers enough so that they could purchase the goods they produced, today’s bourgeoisie can care less about the workers of their own nationality. If profits are to be made in credit cards or derivatives for that matter, it does not matter if another 50,000 factory workers lose their jobs. The only thing that will reverse this trend is militant mass action of the sort that took place on Wall Street last year and that will be reenergized before long based on the most recent woeful GDP growth statistics.
Finally, I want to say a few brief words about a documentary titled “Payback” that is based on Margaret Atwood’s 2008 essay “Payback: Debt and the Shadow Side of Wealth”. From the title, I anticipated that it would have some connection to the documentaries discussed above but unfortunately it is much more about ethics than politics. Even more unfortunately, it is entirely unfocused, a result probably of Margaret Atwood’s fuzzily moralistic worldview.
I should add that I am not a big fan of Margaret Atwood, after learning that she went to Israel to collect a lucrative prize in utter defiance of the BDS campaign.
The film consists of related “stories” about payback, including a blood feud in Albania in which the antagonists are obviously are far below the enlightened realm inhabited by liberal Canadian novelists. There’s also a trip down to the Louisiana coast where we learn that BP has been doing bad things, to nearby Florida where Latino farmworkers are struggling for economic justice in the tomato fields, and finally to an Eastern Pennsylvania where we hear from a repentant burglar. Any one of these stories might have been the subject for a compelling documentary if it had been based in politics rather than moral introspection but that’s inevitable given the source.
The film ends with the various personalities reading from Charles Dickens’s “Christmas Carol” where Scrooge has become transformed into a good guy. That’s what you might expect from someone who denigrated the BDS campaign.
April 26, 2012
I just learned from Les Schaffer, the technical coordinator of Marxmail, that Guy Robinson died a few months ago. He learned this from Rosa Lichtenstein who received word in turn from Guy Robinson Jr. Rosa has made a number of Guy’s articles available on her website. Rosa is a well-known and stubborn critic of dialectics as should be obvious from the name of her website and obviously found an affinity with Guy’s mixture of Marx and Wittgenstein:
In my opinion, Guy is one of the few Marxist Philosophers whose work is genuinely worth reading. Indeed, I’d go much further: I cannot praise his book, Philosophy and Mystification (Fordham University Press, 2003), too highly; it seems to me that this is how Marxist Philosophy should be done.
I only encountered Guy’s work in 2005, but I soon saw that he had anticipated several of my own ideas — except he manages to express in two paragraphs what it takes me several pages to say! Unlike the vast majority of work that claims to be Marxist, Guy’s work is a model of clarity. It is no accident, therefore, to see Guy writing in the Wittgensteinian tradition.
I had my own affinities with Guy. Like him, I was a graduate of Bard College. I was also a philosophy major, with 57 credits toward a PhD. Unlike Rosa, I never quite got Guy’s enthusiasm for Wittgenstein. When I was at the New School from 1965 to 1967, mostly trying to avoid being drafted, I got much more out of my seminar on Hegel’s “Phenomenology of Mind” than the one on Wittgenstein’s various writings. The dialectic in Hegel’s philosophy never sounded “unscientific” to me and only prepared me in my postgraduate studies of Marxism in the SWP’s school of hard knocks.
Guy was one of the most genial people I ever got to meet in person as a result of my Internet scribblings. Back in 1998 I attended a talk by Guy at the Brecht Forum in NYC and spoke to him and his son afterwards. Both had been to Nicaragua and worked on a construction brigade. Since my natural inclination is to bond with anybody who was involved with the Sandinista revolution, I made a point of writing up Guy’s talk for Marxmail and PEN-L (this was before the days of blogging). I wrote in part:
A couple of months ago I attended a talk at NYC’s Brecht Forum on “Philosophy and Marxism” which is relevant to this discussion. The speaker was Guy Robinson, who taught philosophy in British universities for 25 years. He retired in 1982 and moved to Nicaragua where he worked with construction brigades. He now lived in Dublin and his new book “Philosophy and Mystification” had just been published by Routledge.
Robinson’s main point was that modern philosophy evolved in order to meet the needs of the rising bourgeoisie. It aspires to be universal but conceals the very particular and historical needs of the class which was coming to power in the age of Descartes. One of the purposes of Marxism is to make this connection and expose the class bias of bourgeois philosophy.
One of the schools of thought that Marxism vies with in this project is post-structuralism or postmodernism. The pomos are also interested in showing that the claims of universality are specious. Robinson described the pomos in pithy terms, as “hunters of zeitgeists,” who try to capture historical trends as if they were animal specimens to pin on the wall like trophies. In the process of debunking “universality,” the pomos also trash history. This is where Marxists and pomos part company, as well as on the issue of class.
Apparently Guy really liked what I wrote since he not only made a point of looking me up on his occasional visits to New York but also called me out of the blue from Ireland every couple of months.
Guy was always very modest about his writings and even more so about whether he was a Marxist or not. All I can say is that he was a stimulating writer even if I had become skeptical over philosophy as a discipline. When I was first coming around the Trotskyist movement and heard Marx’s observation about “the point is to change it”, I resolved not only to drop out of graduate school but put all the philosophy stuff behind me. That being said, I always had time for Guy Robinson.
In addition to the articles on Rosa’s website, I recommend a visit to Guy’s Philosophical Nuggets, a blog he launched in 2007. You’ll get both aspects of his thought, the one shaped by Marx and the other by Wittgenstein. You’ll also find a fascinating log of his correspondence with Thomas Kuhn that is interesting both for its reflections on science as well as Guy’s considerable charm:
How could I not respond immediately to such a gracious and enthusiastic reaction to my letter and paper!
Sorry you have had such a tough medical time and hope that’s pretty well behind you.
I’m not surprised that you don’t remember that lunch you gave me in Princeton, (graciously, again as we had only brushed glancingly by one another at that famous Bedford conference in 1960-whatever.) But I have it in my mind that at that lunch you told me that you had been to the same tiny school I went to, Solebury, but only for a year before transferring to Germantown Friends. (We used to play Germantown in Football and always got slaughtered – Well, we only had fifty boys in the whole school.) Am I dreaming all that?
Still keeping to the personal: Who am I? Not sure how to answer. Brief CV: after Solebury, I went to Bard at the time of Mary McCarthy (The Groves of Academe gives a distorted account of those times and my teacher.) It was a pretty interesting place, though. My introduction to philosophy was via Aristotle, and his conception of philosophy’s business, I am coming to see has kept me away from the disastrous ‘theorizing’ conception of philosophy that has held pretty much sway since Descartes. (I’m working on getting clear about that question of philosophy’s business in the process of trying to bring out in an introduction to what has always been there implicit in the scanty few pieces I have published and now want to collect. I certainly don’t think that my second paragraph gives a knock-down argument against Realism. -As you can imagine, I don’t believe in those – But it’s something to think about.
Guy’s articles on Rosa Lichstenstein’s website:
They are all collected here (foot of the page):
Rosa adds that she will be posting his unpublished book Philosophy and Demystification over the next few months.
April 25, 2012
(From “Debt: the first 5,000 years”)
It is the secret scandal of capitalism that at no point has it been organized primarily around free labor. The conquest of the Americas began with mass enslavement, then gradually settled into various forms of debt peonage, African slavery, and “indentured service” — that is the use of contract labor, workers who had received cash in advance and were thus bound for five-, seven-, or ten-year terms to pay it back. Needless to say, indentured servants were recruited largely from among people who were already debtors. In the 1600s there were at times almost as many white debtors as African slaves working southern plantations, and legally they were at first in almost the same situation, since in the beginning, plantation societies were working within a European legal tradition that assumed slavery did not exist so even Africans in the Carolinas were classified, as contract labour. Of course this later changed when the idea of “race” was introduced. When African slaves were freed, they were replaced, on plantations from Barbados to Mauritius, with contract laborers again: though now ones recruited mainly in India or China. Chinese contract laborers built the North American railroad system, and Indian “coolies” built the South African mines. The peasants of Russia and Poland, who had been free landholders in the Middle Age, were only made serfs at the dawn of capitalism, when their lords began to sell grain on the new world market to feed the new industrial cities to the West. Colonial regimes in Africa and Southeast Asia regularly demanded forced labour from their conquered subjects, or, alternately, created tax systems designed to force the population into the labor market through debt. British overlords in India, starting with the East India Company but continuing under Her Majesty’s government, institutionalized debt peonage as their primary means of creating products for sale abroad.
This is a scandal not just because the system occasionally goes haywire, as it did in the Putumayo, but because it plays havoc with our most cherished assumptions about what capitalism really is— particularly that, in its basic nature, capitalism has something to do with freedom. For the capitalists, this means the freedom of the market place. For most workers, it means free labor. Marxists have questioned whether wage labor is ultimately free in any sense (since someone with nothing to sell but his or her body cannot in any sense be considered a genuinely free agent), but they still tend to assume that free wage labor is the basis of capitalism. And the dominant image in the history of capitalism is the English workingman toiling in the factories of the industrial revolution, and this image can be traced forward to Silicon Valley, with a straight line in between. All those millions of slaves and serfs and coolies and debt peons disappear, or if we must speak of them, we write them off as temporary bumps along the road. I Ike sweatshops, this is assumed to be a stage that industrializing nations had to pass through, just as it is still assumed that all those millions of debt peons and contract laborers and sweatshop workers who still exist, often in the same places, will surely live to see their children become regular wage laborers with health insurance and pensions, and their children, doctors and lawyers and entrepreneurs.
When one looks at the actual history of wage labor, even in countries like England, that picture begins to melt away. In most of Medieval northern Europe, wage labor had been mainly a lifestyle phenomenon. From roughly the age of twelve or fourteen to roughly twenty-eight or thirty, everyone was expected to be employed as a servant in someone else’s household—usually on a yearly contract basis, for which they received room, board, professional training, and usually a wage of some sort — until they accumulated enough resources to marry and set up a household of their own. The first thing that “proletarianization” came to mean was that millions of young men and women across Europe found themselves effectively stuck in a kind of permanent adolescence. Apprentices and journeymen could never become “masters,” and thus, never actually grow up. Eventually, many began to give up and marry early – to the great scandal of the moralists, who insisted that the new proletariat were starting families they could not possibly support.
There is, and has always been, a curious affinity between wage labor and slavery. This is not just because it was slaves on Caribbean sugar plantations who supplied the quick-energy products that powered much of early wage laborers’ work; not just because of the scientific management techniques applied in factories in industrial revolution can be traced back to those sugar plantations; but also because both the relation between master and slave, and between employer and employee, are in principle impersonal: whether you’ve been sold or you’re simply rented yourself out, the moment money changes hands, who you are is supposed to be unimportant; all that’s important is that you are capable of understanding orders and doing what you’re told.
This is one reason, perhaps, that in principle, there was always a feeling that both the buying of slaves and the hiring of laborers should really not be on credit, but should employ cash. The problem, as I’ve noted, was that for most of the history of British capitalism, cash simply didn’t exist. Even when the Royal Mint began to produce smaller-denomination silver and copper coins, the supply was sporadic and inadequate. This is how the “truck system” developed to begin with: during the industrial revolution, factory owners would often pay their workers with tickets or vouchers good only in local shops, whose owners they had some sort of informal arrangement, or, in more isolated parts of the country, which they owned themselves. Traditional credit relations with one’s local shopkeeper clearly took on entirely new complexion once the shopkeeper was effectively agent of the boss. Another expedient was to pay workers at least partly in kind—and notice the very richness of the vocabulary for the sorts of things one was assumed to be allowed to appropriate from one’s workplace, particularly from the waste, excess, and side products: cabbage, chips, thrums, sweepings, buggings, gleanings, sweepings, potchings, vails, poake, coltage, knockdowns, tinge. “Cabbage,” for instance, was the cloth left over from tailoring, “chips” the pieces of board that dockworkers had the right to carry from their workplace (any piece of timber less than two feet long), “thrums” were taken from the warping-bars of looms, and so on. And of course we have already heard about payment in the form of cod, or nails.
Employers had a final expedient: wait for the money to show up and in the meantime, don’t pay anything—leaving their employers to get by with only what they could scrounge from their shop floors, or what their families could finagle in outside employment, receive in charity, preserve in savings pools with friends and families, or, when all else failed, acquire on credit from the loan sharks and pawnbrokers, who rapidly came to be seen as the perennial scourge of the working poor. The situation became such that, by the nineteenth century, any time a fire destroyed a London pawnshop, working-class neighborhoods would brace for the wave of domestic violence that would inevitably ensue when many a wife was forced to confess that she’d long since secretly hocked her husband’s Sunday suit.
We are, nowadays, used to associating factories eighteen months in arrears for wages with a nation in economic free-fall, such as occurred during the collapse of the Soviet Union; but owing to the hard-money policies of the British government, who were always concerned above all to ensure that their paper money didn’t float away in another speculative bubble, in the early days of industrial capitalism, such a situation was in no way unusual. Even the government was often unable to find the cash to pay its own employees. In eighteenth-century London, the Royal Admiralty was regularly over a year behind in paying the wages of those who labored at the Deptford docks—one reason that they were willing to tolerate the appropriation of chips, not to mention hemp, canvas, steel bolts, and cordage. In fact, as Linebaugh has shown, the situation only really began to take recognizable form around 1800, when the government stabilized its finances, began paying cash wages (in schedule, and therefore tried to abolish the practice of what was now relabeled “workplace pilfering”—which, meeting outraged resistance on the part of the dockworkers, was made punishable by whipping and imprisonment. Samuel Bentham, the engineer put in charge of reforming the dockyards, had to turn them into a regular police state in order to be able to institute a regime of pure wage labor—to which purpose he ultimately conceived the notion of building a giant tower in the middle to guarantee constant surveillance, an idea that was later borrowed by his brother Jeremy for the famous Panopticon.
April 24, 2012
April 22, 2012
The NY Times was not content to give Francis Spufford’s mixture of fact and fiction about the USSR (faction—really) “Red Plenty” one rave review. At least two were necessary. On February 14th this year, Dwight Garner wrote this valentine:
Any reader with a pencil has a dozen ways to express negative sentiment in the margins of a book — I am partial to ick, ack, awk, ugh and the occasional wha? — but a writer’s great sentences, in their bid for posterity, mostly just get underlined. At the end of the first chapter of Francis Spufford’s “Red Plenty,” however, I printed a nerdy but heartfelt word: “Bravo.” I felt like giving the author a little bow, or maybe a one-man standing O.
For what it is worth, Garner also went head over heels for Saïd Sayrafiezadeh’s “When Skateboards Will Be Free”, a callow memoir about growing up an SWP red diaper baby. I guess that even if there was no longer a single Marxist alive anywhere in the world, reviewers will still be singing the praises of such books. That is to be expected when the contradictions of capitalism create the objective conditions for a renewed interest in Marxism, as is the case today.
On March 2nd, Andrew Meier was just as effusive, concluding his review thusly:
Yes, “Red Plenty” is a literary/historical seesaw, a work sure to have even the most bilious Kindle-haters tapping for hyperlinks. But it is a work, by turns learned and lyrical, that grows by degree, accreting into something lasting: a replica in miniature of a world of ideas never visible to most, and now gone.
Neither Garner nor Meier are typical hardened anti-Communists. In fact, their political outlook is not that much different from that of Spufford, a liberal I have described as preferring the “devil you know” to the socialism some unrepentant types still uphold.
One thing is made abundantly clear from the introduction to Part Five of “Red Plenty”, the USSR was rotten from the beginning:
But the Soviet experiment had run into exactly the difficulty that Plato’s admirers encountered, back in the fifth century BC, when they attempted to mould philosophical monarchies for Syracuse and Macedonia. The recipe called for rule by heavily-armed virtue—or in the Leninist case, not exactly virtue, but a sort of intentionally post-ethical counterpart to it, self-righteously brutal. Wisdom was to be set where it could be ruthless. Once such a system existed, though, the qualities required to rise in it had much more to do with ruthlessness than wisdom. Lenin’s core of Bolsheviks, and the socialists like Trotsky who joined them, were many of them highly educated people, literate in multiple European languages, learned in the scholastic traditions of Marxism; and they preserved these attributes even as they murdered and lied and tortured and terrorized. They were social scientists who thought principle required them to behave like gangsters.
In other words, Lenin led to Stalin. This is the same formula that is at the heart of all Sovietology, whether of the liberal variety like Robert Tucker or the reactionary Robert Service. Spufford grudgingly admits that the USSR was proceeding along a viable path in the 1920s under the NEP, but concludes that Stalin’s war on the peasantry was practically necessary: “the farmers’ incomes made them dangerously independent, and food prices bounced disconcertingly up and down. Collectivisation saw to all these problems at once.”
One suspects that Spufford views the NEP as an outlier. For him, the main course of Soviet history is a blend of top-down economic planning and the police state. Even more disconcertingly, this historical narrative would appear to be in consonance with Marx’s writings rather than an assault on them.
The dead giveaway is the reference to Plato in the citation above. When Heinrich Blucher (Mr. Hannah Arendt) was indoctrinating me as an undergraduate at Bard College in the early 60s, he insisted that totalitarianism was the logical outcome of a German philosophical idealism rooted in Plato’s philosophy. The Soviet dictatorship was nothing else but the embodiment of the philosopher king. This obsession with ideology ran very deep in the 50s and early 60s. To some extent, it was a reflection of the existentialism of the day (Blucher and Arendt were part of Heidegger’s circle in the 1920s) but also Anglo-American sociology typified by Daniel Bell’s “End of Ideology”. Now that I am older and wiser (go ahead and laugh), I understand that American pragmatism–the official ideology of the ruling class–never received the same kind of critical scrutiny. After all, as Marx pointed out, the ideas of the ruling class are in every epoch the ruling ideas. Why should America be any different?
Although book reviewers are beside themselves with Spufford’s literary skills, I find them just as dubious as his political analysis. The brunt of this review will be about the latter, but a few words about style are necessary.
I counted 56 characters in “Red Plenty”—some fictional like Khrushchev and others made up like Galina, a college student who is a kind of hard-core Communist. Unlike a novel, there is little attempt to connect them. They pop up in one part and only reappear a decade or so later. It is almost as if Spufford had written a thousand page novel and about half of it got lost on the way to the printer. Not just the first half or the second half, but random pages perhaps strewn by the wind. In many ways, they remind me of the “interludes” in John Dos Passos’s “USA”, his brief profiles of people like Henry Ford, etc. But “Red Plenty” is all interludes with no connective plot tissue. This is certainly “novel” in the sense of being new, but no competition to the traditional novel of ideas that such a subject (the crisis of Soviet planning) deserves.
The other major problem is the rather clumsy attempt by Spufford to achieve verisimilitude by throwing in all sorts of reminders that this is happening in a very backward Russia and nowhere else. You can turn to practically any page and read something like this:
But the smell of vodka merged with the sweaty sourness of the workers a little further forward, whose factory had plainly lodged them in a barracks without a bathroom, and the fierce rosewater scent the short woman had on, into one, hot, composite human smell, just as all the corners and pieces of sleeve and collar he could see fused into one tight kaleidoscope of darned hand-me-downs, and worn leather, and too-big khaki.
Aaah! I can hear the Song of the Volga Boatmen in the background now.
From the very top of the hierarchy to the very bottom, Spufford’s characters are marked by a Quixotic belief that their system works, even if they disagree on how to make it work better. Unlike some of the classic anti-totalitarian literature of the 20th century, there is no Winston Smith to put forward a contrary analysis even though there is an implication throughout that a Grand Illusion is at work.
At its core, “Red Plenty” is a rehashing of issues that I first ran into nearly 20 years ago when “market socialism” was all the rage among certain elements of the left. On PEN-L, the Progressive Economists Network listserv, you had both Marxists and liberals similar to Spufford arguing that planning was futile. Some were even ready to agree with the Austrian school that markets were necessary for the proper allocation of resources.
There was always an assumption that planning existed in the USSR. Even with computers, planning was doomed to fail—a central thesis of “Red Plenty”. But how warranted was that assumption? While I admit to having only a skimpy knowledge of planning in the USSR in the 50s and 60s, I have to wonder how much it differed from what went on when its rulers were up-and-coming bureaucrats.
The Soviet government announced the first five-year plan in 1928. Stalin loyalists, like Krzhizanovksy and Strumlin, who headed Gosplan, the minister of planning, worried about the excess rigidity of this plan. They noted that the success of the plan was based on 4 factors: 1) five good consecutive crops, 2) more external trade and help than in 1928, 3) a “sharp improvement” in overall economic indicators, and 4) a smaller ration than before of military expenditures in the state’s total expenditures.
How could anybody predict five consecutive good crops in the USSR? The plan assumed the most optimistic conditions and nobody had a contingency plan to allow for failure of any of the necessary conditions.
Bazarov, another Stalin loyalist in Gosplan, pointed to another area of risk: the lack of political cadres. He warned the Gosplan presidium in 1929, “If you plan simultaneously a series of undertakings on such a gigantic scale without knowing in advance the organizational forms, without having cadres and without knowing what they should be taught, then you get a chaos guaranteed in advance; difficulties will arise which will not only slow down the execution of the five-year plan, which will take seven if not ten years to achieve, but results even worse may occur; here such a blatantly squandering of means could happen which would discredit the whole idea of industrialization.”
Strumlin admitted that the planners preferred to “stand for higher tempos rather than sit in prison for lower ones.” Strumlin and Krzhizanovksy had been expressing doubts about the plan for some time and Stalin removed these acolytes from Gosplan in 1930.
In order for the planners, who were operating under terrible political pressure, to make sense of the plan, they had to play all kinds of games. They had to falsify productivity and yield goals in order to allow the input and output portions of the plan to balance. V.V. Kuibyshev, another high-level planner and one of Stalin’s protégés, confessed in a letter to his wife how he had finessed the industrial plan he had developing. “Here is what worried me yesterday and today; I am unable to tie up the balance, and as I cannot go for contracting the capital outlays–contracting the tempo–there will be no other way but to take upon myself an almost unmanageable task in the realm of lowering costs.”
Eventually Kuibyshev swallowed any doubts he may have had and began cooking the books in such a way as to make the five-year plan, risky as it was, totally unrealizable.
Real life proved how senseless the plan was. Kuibyshev had recklessly predicted that costs would go down, meanwhile they went up: although the plan allocated 22 billion rubles for industry, transportation and building, the Soviets spent 41.6 billion. The money in circulation, which planners limited to a growth of only 1.25 billion rubles, consequently grew to 5.7 billion in 1933.
As madcap and as utopian as the original plan was, Stalin tossed it into the garbage can immediately after the planners submitted it to him. He commanded new goals in 1929-30 that disregarded any economic criteria. For example, instead of a goal of producing 10 million tons of pig iron in 1933, the Soviets now targeted 17 million. All this scientific “planning” was taking place when a bloody war against the Kulaks was turning the Russian countryside into chaos. Molotov declared that to talk about a 5-year plan during this period was “nonsense.”
Stalin told Gosplan to forget about coming up with a new plan that made sense. The main driving force now was speed. The slogan “tempos decide everything” became policy. The overwhelming majority of Gosplan, hand-picked by Stalin, viewed the new policy with shock. Molotov said this was too bad, and cleaned house in the old Gosplan with “all of its old-fashioned planners” as he delicately put it.
Now the USSR was clearly a different place in 1960 than it was in 1930. But it was subject to the same distortions as it was earlier. Politics trumped science. No matter how cogent the strategies put forward by software engineers, they were likely to be superseded by the feudal-like social relations that existed under Stalinism, with a King at the top—the General Secretary of the CP—and all the fiefdoms underneath him run by factory managers. Socialism is not just about planning. It is about workers control. Without thoroughgoing democracy that is fed by initiatives by those who produce the wealth of society, it is very difficult to use scientific methods to create “plenty”. The implied message of “Red Plenty” is that since democratic socialism is impossible, you might as well live with market relations and all the shit that goes along with it, well on display in his own country and the rest of Europe today.
In the 1980s I was president of the board of Tecnica, a kind of radical Peace Corps that sent programmers and engineers to Nicaragua to volunteer their skills. While Nicaragua was not socialist, it was committed to planning on a large scale. Our organization reported to Carl Oquist who was Daniel Ortega’s chief economics adviser. But no matter how many volunteers we sent, including some very capable people from Bell Labs and other blue-chip American firms, and no matter how many Nicaraguans we trained in the use of spreadsheets and database management systems, it could never compensate for a contra war that was draining the country economically.
Missing from “Red Plenty” is any engagement with the costs of war on economic development in the USSR. Spufford has no use for Stalin but does not explain how the Soviet people ended up with him. A contra war that ensued after the Bolsheviks took power resulted in the deaths of many of the most democratically minded and politically educated worker cadres who made the revolution. A political vacuum and the country’s inherited backwardness made it all the more easy for a despot like Stalin to take power and build a “socialism” that had much more in common with the primitive accumulation stage of capitalism than the Marxist beliefs of those who were shot down by American and British rifles in 1919.
In an interview with the Browser, Spufford is asked whether he agrees with the thesis of Yuri Slezkine’s “The Jewish Century”, namely that “in the 1920s and 30s the Soviet Union was a brilliantly successful state for Jews.”
While admitting that some aspects of the book are “undeniable”, he repeats the catechism of the professional anti-Communist:
But communism is a bit embarrassing now. It is getting hard to get people to own up to the fact that once upon a time they thought it was sensible. It was part of the centre of gravity of the 20th century. What I agree with about it is that it brings an aspect of the 20th century into view. One of the hardest things for us to remember about Stalinism is that as well as being a system of horrors it also represented modernity and social mobility and opportunity for lots of people. In a horribly straightforward way the great purges opened up an incredible number of jobs, as we saw with Khrushchev, who is a fine example of Russia being a land of opportunity built on numerous graves.
In generational terms, I belong to the 60s—a time when many young people still believed that the Soviet Union was “progressive” but only in the most dialectical sense. Born in 1964 and nearly 20 years my junior, Spufford comes of age at a time when Francis Fukuyama’s “end of history” and Austrian economics were becoming hegemonic.
Those born 20 years after Spufford are now in their late twenties and unlikely to be convinced that history is at an end or that markets and “plenty” go together. These are the young people with crappy jobs if they are lucky and/or with huge college debts. They are also the kinds of people in the vanguard of the Occupy movement and the democratic revolutions sweeping the Middle East.
No matter how many books get written about the evils of 20th century communism, I doubt that this will matter to them. They want a society that is based on economic justice and peace. Whatever name you call it, this is what they seek no matter how many glowing reviews that “Red Plenty” garners in the New York Times. As has been the case since Marx and Engels were the same age, capitalism creates socialism through its own contradictions. As long as there is capitalism, there will be a movement for socialism. It is our job in the 21st century to rebuild a movement that is the only hope for the future, starting now.
April 20, 2012
Everybody knows how great a musician he was and you can see Band clips today in his honor all across the blogosphere. But Levon Helm was also a damned good character actor as this scene from “The Shooter” should illustrate: