Louis Proyect: The Unrepentant Marxist

January 4, 2018

Water woes

Filed under: water — louisproyect @ 9:39 pm

In a few days, I plan to write about the ecological and socio-economic implications of the drought in Iran that has been mentioned as a factor in the recent protests. As I indicated in an article on Syria, the revolution that began in March 2011 was also driven by drought and government failure to adequately provide a sustainable environment for water usage.

It dawned on me that an article I wrote for the online academic journal Class, Race and Corporate Power might help to shed additional light. It deals with the conflicts between Turkey, Iraq, and Syria over access to the waters of the Tigris and Euphrates rivers.

Class, Race and Corporate Power, Volume 5

Review: Negotiating International Water Rights: Resource Conflict in Turkey, Syria and Iraq
By Müşerref Yetim
I.B. Taurus, London, 2016

As the twenty-first century stumbles forward, there is every possibility that the warnings about peak oil might have been overstated. The bourgeoisie is investing heavily in new alternative energy sources such as wind and solar, while at the same time relying on shale oil despite its harmful environmental impact. Whether this will allow capitalist production to move forward perpetually is open to question but it might, in the long run, be overshadowed by a much bigger challenge: peak water. Nations everywhere are contending with dwindling water sources that are necessary not only for capitalist production but biological reproduction as well. This is exacerbated by climate change that has produced drought conditions in much of the world, including California according to some scientists. But nowhere in the world has water become such a critical path for economic and biological sustainability than in the Middle East and North Africa, even to the point of helping to precipitate the civil war in Syria.

A recent and deeply informed book titled Negotiating International Water Rights: Resource Conflict in Turkey, Syria, and Iraq by NYU professor Müşerref Yetim examines tensions between the three states over access to the waters of the Euphrates and Tigris Rivers that flow across their borders from north to south. The study evaluates property rights as understood by contending political philosophies ranging from Hobbes to contemporary liberalism based on their applicability to a vexing problem, namely how a free-flowing resource like water can be shared equitably. The book concludes with a case study of the Euphrates-Tigris watercourse that does not leave room for optimism. Considering the intractable wars in the three countries, it would be almost Panglossian to think otherwise.

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The Iranian People’s Uprising

Filed under: Iran — louisproyect @ 12:28 am

Iranian People Rise Again
By Reza Fiyouzat

Starting on Thursday December 28, spontaneous demonstrations broke out in different towns and cities across Iran. The protests broke out over economic issues such as high inflation and high youth unemployment, with the trigger being the sudden hike in price of eggs and chicken. The protesters, however, soon took up more politically oriented slogans, attacking the leaders of the regime with slogans such as, “People are begging and Mullahs rule like they’re gods!”

Regardless of how long these protests last and what the outcomes may be, these protests have proven once again that the Iranian regime is fundamentally incapable of addressing people’s most basic social and economic needs, and that is why for forty years it has depended on brute force to control the population. But, rule by brute force alone cannot last forever.

Deep-structure poverty has once again pushed the population over the edge. This uprising did not just happen out of the blue, though; it is the culmination of many smaller and more localized protests over a variety of social issues that have sent people to the streets in the past year.

But, first let’s see what has pushed people in Iran to take to the street once again, on a mass scale, across the country, in big cities just as in small towns; towns that most western readers have never heard of, nor will ever remember.

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January 1, 2018

Why did liberal Republicans go the way of the dodo?

Filed under: economics — louisproyect @ 8:40 pm

“Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs, you would not hear of that party again in our political history.”

Crooked Timber is a group blog of left-leaning academics that I have been following for nearly 20 years. I read it mostly to get a sense of what Keynesian, social democratic, and liberal professors are thinking. Yesterday John Holbo, an Associate Professor of Philosophy at the National University of Singapore, posted an article titled “Why Does The US Lack A Major Center-Right Party?”  that grappled with the question “Why do we have the Trump-headed, extreme right-tilted thing we’ve got?” Why didn’t the Republicans adopt a center-right program? Wouldn’t “the super-wealthy wouldn’t be better off under a plausibly dominant, moderate right-wing Republican Party” especially since “Extremist chaos is kind of costly, not to mention risky.” Looking back at the party’s history, Holbo wonders why “around 1964 various elements on the right that might have gone for a moderate option tilted far-right.”

I think the answer to this question has to engage with the class and economic issues that made the GOP the party of Goldwater rather than Nelson Rockefeller and other patricians who had much more in common with FDR than they did with today’s politicians. Essentially, the sharp turn to the right has to be explained in terms of the relationship of class forces in the USA and the failure of American capitalism to provide enough crumbs off the table to sustain the social compact that FDR created.

In 1944, Thomas Dewey lost a close election to FDR whose fourth term was cut short by his death. Dewey epitomized the liberal tendencies of the GOP. As a member of the Eastern Establishment, Dewey doubled state aid to education, increased salaries for state employees and still reduced the state’s debt by over $100 million. (From Wikipedia). Four years later, running against Truman, Dewey refused to compete with the Democrat for who could be more anti-Communist. He opposed a ban on the CP on the basis that “you can’t shoot an idea with a gun” and added later on that he was not “going around looking under beds”.

In 1954, President Eisenhower, another paragon of the Eastern Establishment who even had served as President of Columbia University at one point, made a speech that warned against any attempt to undo the gains of the New Deal:

Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes that you can do these things. Among them are a few Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid.

Despite Richard Nixon’s well-deserved rotten reputation, he did not stray far from the Dewey/Eisenhower agenda. In 1971, he stated, “I am now a Keynesian in economics”. It was the year in which the American economy first began to show signs of anemia, a product of inflationary pressures from military spending on Vietnam and growing competition from Japan and Germany. In response to a faltering economy, Nixon carried out a program according to Keynesian principles. He proposed an expansionary budget for 1972 that would “be a budget in deficit, as will be the budget in 1971.” He also proposed an expansionary monetary policy that would be sufficient “to fuel a growing economy.”

After resigning from the presidency, he was replaced by his Vice-President Gerald Ford who Alexander Cockburn described as “our greatest President”–maybe a bit tongue in cheek but not entirely in consideration of this:

As a percentage of the federal budget, social spending crested in the Ford years. Never should it be forgotten that Jimmy Carter campaigned against Ford as the prophet of neo-liberalism, precursor of the Democratic Leadership Council, touting “zero-based budgeting”.

Nobody could possibly mistake Betty Ford with the wives of Republican presidents that followed. As Marxmailer Stewart Lawrence pointed out in a CounterPunch article, she was an outspoken defender of the Equal Rights Amendment, abortion rights, and even recreational pot-smoking. All this might have actually cost her husband his re-election and even led to the Reagan ascendancy.

However, to return to the initial point made in this article, it was not “social issues” that led to Reagan’s election but malaise over Jimmy Carter’s neoliberal economics. Promising like Trump to restore America to greatness, Reagan’s presidency was the first attempt to make the working-class pay for capitalist decline.

During the Carter years, I began to notice a move away from the New Deal consensus marked particularly by his 1979 “malaise” speech that set the tone for the Clinton and Obama administrations. To jump-start the economy, Carter pushed for deregulation of the airlines, the railroads, and trucking. Deregulation was a key part of supply-side economics, a policy that most people associate with Reagan but that was incubated in the Carter years. Lloyd Bentsen, Carter’s Secretary of the Treasury, issued a report in 1980 that “signals the start of a new era of economic thinking. The past has been dominated by economists who focused almost exclusively on the demand side of the economy … [T]he Committee recommends a comprehensive set of policies designed to enhance the productive side, the supply side of the economy.”

While Carter was pushing such neoliberal measures, Mobil Oil was running advertorials on the op-ed page of the N.Y. Times every Thursday that telegraphed the determination of big capital to organize an all-out assault on the New Deal legacy. You can read a sample of some of the 800 of these corporate messages here, including one from 1981 that proposed weakening the Clean Air Act since it impeded “the battle for industrial revitalization, economic growth, and less dependence on foreign energy”.

But the real motivation for the neoliberal turn was pressure from the completely recovered WWII economies in Europe and Japan, particularly the two axis powers that were making such headway into American markets that auto workers decided to stage rallies in which they took sledgehammers to Toyotas (racism explains why Mercedes-Benz got off the hook.) Throughout the 1980s and 90s, the rust belt became ever-widening as it turned cities like Detroit, Cleveland, Newark, Philadelphia, Youngstown, St. Louis, Buffalo, Pittsburgh and others into shells of their once-thriving, job-creating machines.

Most people on the left explain the ruthless attack on the New Deal social compact as driven by greed. To some extent, this is undeniable. People like the Koch brothers, Goldman Sachs partners, hedge fund operators, Silicon Valley magnates, energy company executives, et al, are creatures that only feel fulfilled by wealth, the more of it the better. Just 2 blocks north of my apartment, there used to be the International Center for Photography that was originally a mansion owned by Willard Straight, an investment banker who founded the New Republic in 1914 with fellow Progressive movement stalwart Walter Lippmann.

The museum was founded in the mansion in 1974 and operated there until 1999 when it was sold to Bruce Kovner, a hedge fund billionaire who despite refusing to back Trump in 2016 because of his boorishness remains one of the major funders of the policies he is carrying out. Kovner is one of the main funders of the American Enterprise Institute, whose journal publishes articles like The Upside of Income Inequality and Why Do We Underpay Our Best CEOs?.

So, what accounts for Willard Straight’s Progressivism and the new owner of his mansion defending values that are his polar opposite?

Back in 1998, I read a book by a British economist named Harry Shutt titled “The Trouble with Capitalism” who to this day remains my favorite thinker when it comes to understanding the retreat from FDR type liberalism in the USA and the erosion of social democratic norms in Europe. In straightforward prose, he describes it in terms that are reminiscent of the period that led up to WWI and WWII as capitalist competition for markets and resources led to a disastrous war. The difference today is that such wars would mean the end of the capitalist system itself since it would quickly involve nuclear weapons.

So to prop up the system, you have various mechanisms but none accomplishes what previous wars accomplished, mainly the liquidation of fixed assets through bombs and rockets and the possibility for a new round of capital accumulation.

In an interview with Red Pepper, Shutt dismisses greed as an explanation for a process that began more than 40 years ago. He says, “People are hitting on greed but greed is not a cause of things, greed is a symptom. Greed has been with us since the Garden of Eden.”

Instead, it is the stagnation of the capitalist system that has inhibited the bourgeoisie from redistributing a share of profits to the working class as was the case in the post-WWII period through tax collections that would be unheard of today. Under Eisenhower, the top marginal tax rate was 91 percent. In 2016, it was 39.6 percent. This is what allowed the massive expansion of state universities under Eisenhower’s Republican administration and LBJ’s Great Society that was funded by a tax system with a marginal tax rate of 70 percent.

When economic growth was skyrocketing after WWII, the bourgeoisie accepted such a tax “burden” but when it began to slow down in the 1970s, it was much more resistant. The corporate tax rate had to be cut in order for capital to expand but the contradictions of the capitalist system were making profitable investment more and more unrealizable. There was a declining rate of profit that was ultimately tied to the replacement of living labor by machinery as well as increased competition between various national capitalisms. Steel, auto, petrochemicals—and other mainstays of the industrial system from the 1930s to the 1970s—were no longer rewarding investors. So, they looked elsewhere especially in East Asia, where labor was cheap. When workers in the USA could no longer rely on jobs in an auto plant, they were forced to work for Walmart. All this meant lower pay and lower tax revenues.

With a decline in manufacturing, investors flocked not only to overseas opportunities but to financial speculation such as the collateralized mortgage securities that brought the system to the brink of oblivion only a decade ago. Despite the roaring stock market, this is an unstable system that could founder on the rocks very easily.

Shutt’s prescriptions for overcoming these contradictions stop short of overthrowing the capitalist system but his outlook for the future does not appear very rosy for the Bruce Kovners of the world, as the Red Pepper article indicates:

Remove debt-fuelled consumption and property speculation from the equation, and you are left with anaemic subsititues such as the internet, the service sector and green technology. The arguments of centre-left Keynesian commentators that the answer lies in re-regulating the financial sector and encouraging consumer spending, ignore the fact, says Shutt, that the demand for capital – the availability of new profitable productive activities to invest in – is in long-term decline, and consumer spending power has been exhausted.

“It is easy to say that we’ll emerge from the slump eventually, but to quote Keynes, ‘in the long run we are all dead’,” he says. “In other words there has to be a huge contraction in the meantime and the impact on livelihoods and lives is likely to be intolerable. The fundamental misconception of mainstream commentators is that people can and should be induced to consume more when they’re already ‘maxed out’ on credit. In practice it is right and necessary that they should now be forced to rebuild their personal balance sheets, which means saving rather than spending. Only once they’ve done this, probably after several years will they be able to start spending again. This pinpoints a fundamental weakness of capitalism. In order to function it requires the perpetuation of unsustainable levels of consumption in order to absorb the endlessly expanding stock of capital.”

The ultraright economic policies of the Republican Party are based on a big lie. They claim that squeezing the working class is in its best interest since it is only by putting more money in the hands of their exploiters can good jobs be created. Since a stagnant economy is not likely to be revived by their policies or even by a new round of Keynesian spending, the possibilities for liberal Republicanism are excluded at the outset just as they would be for a Bernie Sanders presidency.

The inescapable prognosis is one of declining standards of living and increasing state repression to keep the masses in line. There will also be more and more scapegoating of immigrants and other vulnerable sections of the population in order to mollify the white working class that is becoming as susceptible to con jobs as the non-unionized workforce in the South. Before long, the USA in its entirety will look like Mississippi unless the left can get its act together and challenge these bastards in the street where real politics always takes place.


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