As the Greek crisis develops and spreads, threatening to become a Europe-wide sovereign debt crisis, I thought the following line from The Economist’s editorial on the matter (‘Acropolis now’, 1 May 2010) is worth noting:

When the unthinkable suddenly becomes the inevitable, without pausing in the realm of the improbable, then you have contagion.

Another piece in the same issue is entitled ‘The cracks spread and widen’, which reminds me of John Holloway’s new book Crack Capitalism. One of the reasons financial investors are unwilling to purchase Greek debt — now rated below ‘investment grade’, i.e. ‘junk’ — is because they fear ‘Greece will not be able to stomach the programme of budgetary and economic reform which the IMF is due to set out in early May, and on which the euro-zone rescue funds will depend’. The Economist is talking about struggle.

I’ve been thinking about some of the issues around events in Greece and also ‘public concern’ over government debt in many other countries, including here in the UK where all three main parties are promising austerity in order to sort out the ‘public finances’. From the perspective of the financial markets, the number everybody’s talking about is the spread on bond yields between Greek government debt and that issued by the German central bank. The spread — or premium — is essentially the difference in interest rates. At the moment, financial investors are demanding a premium of almost four and a half percentage points for Greek 10-year bonds over 10-year bunds. Put the other way round, while at the moment the German government pays an interest rate of about 3% on its new borrowing, the Greek government must pay 7.4%. Investors are demanding this higher yield — this premium — because they fear sovereign default, i.e. there’s a risk the Greek government won’t be able to repay and investors want some reward for taking on this additional risk they won’t get their money back. (Of course, investors fear sovereign default because of the ’structural’ problems in the Greek economy — low productivity, too generous social entitlements, etc. — and the fact that, so far, Greek workers are resisting attempts at ’structural readjustment’.)

The problems don’t just affect Greece. Portugal, Ireland and Spain have all been mentioned. But also Britain. Britain’s public debt is almost at the level of its GDP and, if it continues on its present trajectory, debt will rise to more than five times the level of annual output by 2040. This is ‘unsustainable’. In the words of three Bank for International Settlements (the central bankers’ bank) economists: ‘the question is when markets will start putting pressure on governments, not if’. These economists are talking about investors demanding higher yields — increasing the interest rates that governments must pay to borrow money. The circle is a vicious one, because higher interest rates mean the burden of higher interest payments and an ever-worsening fiscal position — in the absence of what the BIS economists call a ‘fiscal consolidation programme’.

There’s a lot to said about ‘market discipline’ (what it means for ‘the markets’ to ‘put pressure’ on entities like governments or populations), as well as about struggles around structural adjustment and austerity. What I’ve started thinking about is capital’s flight. Capital flees Greece or threatens to flee Greece, unless it receives that premium. Capital is threatening to flee Britain — and the ratings agencies are warning the UK may lose its AAA credit rating, which would herald higher interest rates, again a premium reflecting a slightly higher chance of sovereign default. But this fleeing capital… Where’s it gonna run? It can’t all wind up in Germany (the ’strongest’ EU economy)? What about China? Some of it’s taking refuge in gold, whose price (now at more than $1,100 per ounce) has risen three-fold over the past decade. The problem with gold, of course, is that it isn’t productive in any way: it’s a ’store of value’, but the only ‘rate of return’ it produces is a result of its rising price (kind of like housing) and it certainly doesn’t contribute to the production of value and surplus value, through the exploitation of human labour — the lifeblood of capital.

So we have a story of flight. Following the crises of the 1970s, capital fled the factories of the First World. It headed South, to Latin America and Africa, so stoking the international debt crisis of the ’80s. Then it fled some more. To China, to India and other ‘emerging markets’. It also sought refuge in finance, seeking a return from and a safer haven in government debt, in household debt and so on. But the present crisis has forced it to flee some more. What I’m wondering is: first, where can capital flee to next? second, if capital is fleeing, are we chasing; can we ‘chase it out of Earth, send it to outer space’? And third, how useful to our struggle is this story?

Last night I gave a short talk on behalf of We Won’t Pay For Their Crisis to the Climate Chaos Cafe at The CommonPlace. There’s nothing staggeringly original in it, but it does contain some nice insights harvested from all over the place (some chunks were lifted verbatim from the latest issue of The Commoner and libcom).

WHAT DOES THE ECONOMIC CRISIS MEAN FOR THE CLIMATE CHANGE MOVEMENT?

We are in the middle of two crises, the climate crisis and the economic crisis. Although we we seem to treat them as separate, I’m going to argue that they are completely entangled. Tackling one without tackling the other is impossible or fruitless. But the connections are complex and shifting, so I want to first give a quick overview of how the economic crisis arose, before probing a little deeper…

60 YEARS IN 60 SECONDS

To understand the current economic crisis (and the collapse of what we call neo-liberalism, the most current phase of capitalism), we have to understand how it arose. And for that we have to go right back to the end of the Second World War. The post-war productivity boom was based on a ‘deal’ of higher wages in return for improved productivity – those were the days when we were told “you’ve never had it so good”. But by late 1960s this period of growth was being derailed by a wave of strikes and global unrest: in the workplace there were a growing number of struggles over time & quality of life (rather than money), while there was an explosion of anger from those excluded from this deal (i.e. anyone who wasn’t a white, skilled, male factory worker).

In the face of this, the post-war settlement was killed off in the mid- to late-1970s by a capitalist counter-attack which laid the foundations for ‘neo-liberalism’. You can pick any number of key moments – the coup in Chile in 1973, the defeat of the US air traffic controllers strike in 1981, or the defeat of the miners in 1984/5 in the UK. They were all part of a much broader systematic strategy, which played out here like this.

First, the old centres of workers’ militancy (mining, manufacturing) were dismantled and outsourced to low-wage economies overseas. In the UK in 1971 over 70% of people were employed in primary industries (like mining) or manufacturing, today over 70% of workers are in the service sector.

Second, the banking sector was massively deregulated. All sorts of complicated ‘derivatives’ markets were created. When this started to unravel in summer 2007, it ultimately resulted in the credit crunch – because no-one knew what all these pieces of paper were really worth.

Under neo-liberalism, wages were driven ever downward. I’m not alone in the fact that every pay rise I’ve had over the last 15 years has been below the rate of inflation. But while this boosts profits, the problem is that it keeps consumer spending (= economic growth) down. This problem was ‘solved’ by extending massive consumer credit, based mostly on rising house prices. This gave us the spending power to purchase all those lovely commodities coming out of the new manufacturing centres in the Far East and elsewhere. Hence the anomaly where our living standards in the UK rose at the same time as our wages as a proportion of profits kept falling.

Without primary industries or manufacturing the economy came to rely more and more on the banking and financial sector. This sector was in turn heavily reliant on rising house prices: complicated ‘mortgage derivatives’ were one of the major assets held by the big banks. So when the housing bubble burst, everything started to unravel – banks teetered on the brink of collapse, credit dried up, and the economy nosedived.

We are in uncharted waters. Despite comparisons to 1929, this level of collapse is unprecedented. How things pan out is of course partly down to us. But we don’t need a crystal ball to predict the storm that’s coming: in the UK, we’re already facing redundancies, wage cuts, benefit cuts, wage cuts, public service cuts, repossessions & evictions. Globally, there is mass social unrest on the horizon: workers laid off from thousands of factories in China have taken to the streets; food riots exploded in over 30 countries across the globe this time last year; and in the last few months we’ve seen violent battles in Latvia, Bulgaria & Iceland, not to mention Greece, Italy and France…

WHAT HAS ALL THIS GOT TO DO WITH CLIMATE CHANGE?

Obviously at a superficial level, there’s a shift of focus away from climate change, both for us as citizens/campaigners/workers/claimants and for NGOs and local and national government. Plus we now have to deal with the fact that a huge slice of public funds have been diverted into propping up financial institutions.

But we need to dig deeper. We talk about it as a “climate crisis” but from the point of view of capitalism (seen as a thing, an endlessly expanding dynamic system) it’s actually an energy crisis. And it’s an energy crisis that capital has to tackle in order to re-launch a new cycle of accumulation. This isn’t something new: the idea of “limits to growth” were an endless headache for capital in the mid-1970s before neo-liberalism took hold and unleashed new levels of exploitation.

In fact energy in its widest sense has been a permanent problem for capitalist development. Capitalism is an exploitative, ecologically destructive system but it is also incredibly dynamic. 300 years ago, when it faced down a similar twin crisis of a rebellious population and ecological crisis, its salvation was coal. Unlocking these carbon resources played a crucial role by allowing capital to substitute machinery for our labour, at a price that could sometimes be fixed years in advance and without risk of strikes, sabotage or go-slows.

It’s impossible to think about patterns of energy consumption, and therefore about global warming, without thinking of those social relations – capitalist social relations – that have shaped those patterns. The collapse of neo-liberalism and the climate crisis are intimately linked – so much so that they’re almost impossible to separate.

This isn’t necessarily a bad thing, for us. At the back of much of the talk around climate change has been the idea that if we can just get people to accept the thesis of “peak oil” or “global warming”, then we will be able to magically pass into a different sort of world. As if we can switch off a carbon-based economy without also switching off the material social relations that surround it. As if the relentless drive for economic growth is some sort of mad aberration that we can turn off, or tone down. It’s not. There is no accident. There are structural causes at work here: the way we reproduce ourselves socially is bound up with the way we reproduce ourselves economically and the way we reproduce ourselves ecologically. But – and this is the key thing – the global financial meltdown could lead to a recomposition of social forces that would enable the rapid switch-over we need.

To get that right, I think there are four related areas worth thinking about

1. HOW DO WE THINK ABOUT TIME?

By this I don’t simply mean what time-scales are we thinking about, altho they are also important.
There’s a time lag in the economic crisis which mirrors the time lag in climate change
– the first cracks in sub prime sector began Aug 2007 = implosion last year
– credit crisis from last summer = redundancies & layoffs now
– £500bn bank bail-out last autumn = massive public sector squeeze for the foreseeable future

This disconnect makes our responses very problematic – by the time we act, it may be too late. But there’s an even more important aspect to this time lag. Neo-liberalism has been built on a massive expansion of debt. By mortgaging our futures (in the case of pensions quite literally) we’ve been able to put off dealing with the fact that a few are reaping massive profits on the back of our falling wages. The same deferral, the same displacement of antagonism into the future, has also been going on with climate change. Except as we know that process is non-linear: once we reach a tipping point, change will be irreversible when it comes time to pay.

This leads into a deeper connection. Capitalist social relations are based on a particular notion of time. Capital is value in process: it has to move to remain as capital (otherwise it’s just money in the bank). That moving involves a calculation of investment over time – an assessment of risk and a projection from the present into the future. The interest rate, for example, is the most obvious expression of this quantitative relation between the past, the present and the future. It sets a benchmark for the rate of exploitation, the rate at which our present doing – our living labour – must be dominated by and subordinated to our past doing – our dead labour.

It’s hard to over-state how corrosive this notion of time is. It lies at the heart of capitalist valorisation, the immense piling-up of things, but it also lies at the heart of the production of everyday life. To paraphrase George Orwell, if you want a picture of the future, imagine a cash till ringing up a sale, forever. This is true at all levels, whether for capital’s planners meeting in Davos or for us trying to make ends meet.

But this is the deeper meaning of the meltdown: just like global warming, it has brought the future crashing into the present. Interest rates are now effectively below zero. We have reached a singularity. Capital’s temporality depends upon a positive rate of interest, along with a positive rate of profit and a positive rate of exploitation – all that has collapsed. And just as with climate chaos, the debts are, quite literally, being called in.

2. HOW DO WE THINK ABOUT CHANGE?

The word ‘crisis’ has its origins in a medical term meaning turning point – the point in the course of a serious disease where a decisive change occurs, leading either to recovery or to death. So capitalism may be in crisis, neo-liberalism may be over, but that doesn’t mean we’ve won. Far from it. Crisis is inherent to capitalism. Periodic crises allow capital to displace its limits, using them as the basis for new phases of accumulation. In that respect, it’s true to say that capitalism works precisely by breaking down. But that’s only true in retrospect – after the resolution of the crisis. In fact crisis is mortally dangerous to capital, because it means an open-ness to other possibilities.

The critical instability we’re living through offers a chance for a phase transition, a rapid flip from one form of social organisation to another – or to many others. From capital’s point of view, it’s exactly this sense of openness, of possibility, that needs to be closed down. At the three major summits this year (G20 in the UK in April, G8 in Italy in July, and COP15 in Denmark in December), world leaders will be looking to contain things, to rein in our desires, and draw a line under the events of the past few months. “Move along now, there’s nothing to see here…” Every ‘solution’ that’s touted at these summits will also be an act of closure, an attempt to reintroduce capitalist temporality, one that sees the future rolling out inexorably from the present. In other words, get back to work: normal service will be resumed as soon as possible.

We have to do a fine balancing act here. On the one hand, as recession deepens, we’ll resist any measures that restrict our immediate freedoms. That might mean pushing for ‘solutions’ that are slightly less damaging, and which may therefore help capitalism off its sickbed. Individually we may accept pay cuts rather than risk redundancies (altho historically one doesn’t rule out the other). Similarly, the catastrophic build-up of greenhouse gases needs us to act quickly and decisively.

But on the other hand our greatest chance of something different lies in keeping the crisis ongoing, in keeping the future open. So we also have to resist the pressure from capital’s planners for a quick fix, whether at the G20 or at Copenhagen. As soon as crises are ‘solved’, our room for manoeuvre is diminished.

3. HOW DO WE RELATE TO THE MARKET?

As crises are closed down, the way the question is framed moves back on to a safer terrain for capital. We drift back into that temporality.

Climate change becomes a matter of carbon trading, or investment, rather than circulation of capital. It becomes a question of technical solutions and national/international policy decisions. Funnily enough, as climate change becomes the major topic at summits, it becomes fundamentally depoliticised. It’s easier to debate carbon parts per million in the atmosphere, rather than ask ourselves what sort of worlds we want to live in

It’s the same with the financial meltdown. Since last summer, it’s gone from a “banking crisis” to a “credit crunch” to an “economic crisis” to “negative economic growth” to “recession”. For months the use of the word “recession” was discouraged on the grounds that it would become self-fulfilling. But if there’s no name to what we’re living through, it can’t be normalised. And if it’s not normal, then we can behave exceptionally… So it’s officially a Recession.

We can see this move from “crisis” to “recession” in another way: a crisis for capital has become a crisis for us. Costs are shifted on to us. The massive bail-out of the banking system in the UK and the US is just the tip of the iceberg.

And it’s exactly the same with climate change. It’s obvious that costs of climate change are met disproportionately by the poor: globally it’s the poor who are most at risk of flooding, spread of disease, crop failure, resource shortages etc. And without a structural change, the costs of alleviating climate change will also be met by the poor. Three examples: green technologies are likely to remain expensive, so the poor will be shut out and forced to use “dirty” energy; agrofuel schemes which are still being forcibly rolled out across the global South (and in the US) in the face of widespread opposition; increasing enclosure of common land in the name of “conservation”, driving people away from resources that they have traditionally worked in order to sustain themselves. And in fact, as well as excluding the poor, all three have disastrous environmental consequences…

If we frame the question in this way, if we support attempts to resolve these crises through the market, and through the state, then we run the risk of engendering a green Keynesianism. In other words, a new regime of capitalist accumulation based on any combination of renewable energy, nuclear power, so-called clean coal or agro-fuels. It’s easy to see how this could make sense. You start off with the idea that in terms of life on earth “we’re all in it together”; but we need to save the economy first to enable us to have the resources to tackle the challenge…

In fact, far from being a ‘problem’ to overcome, the hope is that climate change may actually become a primary source of revenue to solve the massive fiscal problems faced by Europe and the US (but not those of the global South). Renewable energy, for example, is a huge growth sector, where demand far outstrips supply. And according to the head of UN Climate Change Secretariat:  “The credit crisis can be used to make progress in a new direction, an opportunity for global green economic growth… it is an opportunity to rebuild the financial system that would underpin sustainable growth … Governments now have an opportunity to create and enforce policy which stimulates private competition to fund clean industry.”

Or as the European commission President puts it when the EU signed a new climate change deal in December “We mean business when we talk about climate”.

But if the key question isn’t whether we shift away from fossil fuels, but how, then framing the answer in terms of the market and growth is a huge and explosive contradiction.

The problem of adopting the market as a frame of reference is that capital monetizes everything, it turns everything into money. And with financialisation, that trend has become even stronger. Under neo-liberalism, one of the most important roles of the the state, locally and globally, has been to impose “good governance”. In other words, to reinforce the idea that every problem raised by struggles can be addressed – on ONE condition: that we address those problems through the market. There’s a solution for everything, as long as we buy it. Or rather as long as ‘we’ (meaning the world’s poor) pay for it. If neo-liberalism had a slogan, it would be “stop me and buy one”.

Ironically some of the pressure for this has come from green campaigners who have argued, correctly, that capitalism takes no account of environmental costs when calculating price. But under the dictatorship of the market, money has become the measure of all things. The market tries to make commensurable things that are incommensurable. But how can you ‘sell’ the right to emit carbon? Or to poison water supplies?

This isn’t simply an ethical question, one of value against values. The idea of price is also based on linear dynamics. What price can you put on something when you can no longer calculate the probable outcome? As sea levels rise, it’s easy to predict coastal flooding. But then there’s the amount and pattern of rainfall, a probable expansion of the subtropical desert regions, Arctic shrinkage and resulting Arctic methane release, increases in the intensity of extreme weather events, changes in agricultural yields, modifications of trade routes, glacier retreat, species extinctions and changes in the ranges of disease vectors… Put that in your calculator.

4. HOW DO WE RELATE TO THE STATE?

With neo-liberalism in crisis, and the threat of irreversible climate change, the state’s role is going to become increasingly crucial. A de-carbonised global capitalism is not impossible. But it will require even higher levels of “discipline”. Austerity will have to be enforced on a massive scale.

As I said earler, capitalism is value in process – like a shark, it needs to keep moving or die. But this drive to self-expansion means it needs an ever-increasing energy base. Let’s look at it from the perspective of capitalism. The logic of capitalist growth is that it will always seek to externalise its costs. If we imagine there’s a three-way relation between capital, us and the environment (although none of these three things are actually discrete), then limits enforced in one sphere re-surface as intensified exploitation in another. If capital can’t rob one, it will rob the other. Leaving the coal in the hole, on its own, means more energy sucked from our bodies…

Let’s not forget that the last capitalist era of renewable energy (the age of sails and windmills) was also a time of slavery, genocide and enclosures on a massive scale

CONCLUSION

There are no easy answers here. The ground on which we’re fighting is shifting far too fast for that. But one thing to bear in mind is that movements rarely take straightforward forms.
In 1905 the Russian revolution which threw up the first Soviets began with a small strike by typesetters at a Moscow print-works: they wanted a shorter working day, a higher rate of pay, and the right to be paid for apostrophes. In France the uprising of May 68 was sparked in part by a student protest which began in Nanterre with a fight over demand for boys to be let into girls’ dormitories…

Last week a wave of wildcat strikes swept through UK oil refineries. They were hugely controversial, unpredictable, and came out of nowhere. Who knows their long-term meaning? And is it a coincidence that they happened in the energy sector?

What I’m trying to say is that real powerful interventions around climate change may well come from people and areas who don’t explicitly identify with climate change politics. They may take the shape instead of food riots, struggles against property developers, fuel poverty campaigns etc

There are two key points of intervention coming up. On 2 April the G20 are meeting in London’s Docklands. There’ll be a Climate Camp in the Square Mile in the City of London on 1 April. Then in December Copenhagen sees the United Nations Climate Change Conference (COP15). There’s a huge mobilisation underway amid an ongoing debate about what attitude we should adopt. Inside? Outside? One foot in? It’s been given added significance because will be almost exactly 10 years since the WTO shutdown in Seattle.

Before that, We Won’t Pay for Their Crisis are having a meeting on Saturday 28 February. It’s called ‘We are an image from the future’ and we will be picking up some of these themes and trying to relate them to recent events across Europe.

On the 28^th of April 2006 a group of activists dressed in Superhero costumes burst into the insanely expensive Hamburg delicatessen, Frische Paradies and ran out with 1500 Euros worth of expensive food. Despite several police cars and a helicopter rushing to the scene, the culprits they got clean away. Not, however, before they posed for the photo above, which they release along with a communiqué explaining that the food was given away to some of the city’s precarious workers. Months later the police raid some houses and arrest a woman in relation to the incident. The evidence against her wasn’t the strongest; they claimed that she sometimes wore her hair in a ponytail, as did one of the superheroes, and that on her computer were documents that mentioned precarity, which was also mentioned in the Superheroes communiqué. The case against her has recently been dismissed.

It’s a nice story but I want to use the incident to think through some recent concerns. Firstly, responses to the current crises. Secondly how to act without that acting seeming like specialised work for activists. And thirdly, how mediatised figures can change the way people think about themselves by allowing them to recognize commonalities with others.

In many ways the incident chimes with other recent actions and suggestions, which are all variations on the tradition of self-reduction struggles. In the UK there has been a suggestion for a Price Reduction Campaign, we’ve mentioned this before. The idea is to organize mass meetings outside supermarkets to decide what a fair price for essential goods should be in these exceptional times. One of the problems with this idea is how to avoid getting trapped in the identity of ‘consumers’ or ‘customers’. Another recent practice has been that of the Greek Robin Hoods, who have conducted mass raids on supermarkets, leaving the goods outside for the general public to help themselves. A problem with this, however, is that it is acting on behalf of other people, which could reinforce the identity of the activist as separate from passive category, ‘ordinary people’.

The precarious superheroes incident might seem similar but they try to overcome such problems by inventing identities meant to represent common experiences of precariousness. The superheroes call themselves names like Spidermom, Multiflex, Santa Guevara and Operaistorix. The idea is that you need super human abilities just to survive in this world of insecurity and precarity. As they explain:

“Superflex is familiar with every type of job contract: part time, full time, internship. All the stress led him to a pleasant mutation of his molecules… Operaistorix survived the last few years with the help of his unemployment module… Spider Mum’s mutant body developed somewhere between the kindergarten and unpaid and paid cleaning jobs. In her hands, Ajax and a mop turn into merciless weapons… Santa Guevara dodges all control checks and disappears without a trace. With this power, he is able to escape from the boredom of call centers and university seminars.”

We could think of the superheroes as P2P icons, a concept first raised in the context of San Precario, the patron saint of the precarious. San Precario was invented as a symbol or icon in which all the different experiences of the precarious could invest their desires. Large models of San Precario have been carried round on demonstrations, like the saints parades of Catholic countries.

The superheroes are a variation on this theme that address the problem of how people’s subjective understanding of themselves can limit their possibilities. Or as Mario Tronti put it: ‘As a matter of urgency we must get hold of, and start circulating, a photograph of the worker-proletariat that shows him as he really is – “proud and menacing”‘. The certainty and dignity of the job for life, that was some small compensation for the world of the mass workplace, has become increasingly rare. The precarious superheroes want to create a new “proud and menacing” photograph by reframing our precarious experiences as training for a world when we are in control of our lives and can be as flexible as we want. With the crumbling of the financial sector, the erstwhile ‘masters of the universe’ have been revealed as small men who wasted their lives building pointless pyramid skills. Our greatest revenge would be the menacing prospect of a new class of people stepping on to the world stage. As Spidermom says:

“We don’t care for the romanticism of the lonely hero type, we’d much rather bump into more and more superheroes in our daily lives.”

I went to a really productive meeting at the CommonPlace last night, throwing about ideas on the financial crisis and trying to work out how best we can ‘intervene’ (ugh, bad word but you know what I mean). I’m slowly coming to terms to with the fact that I’m fairly crap in meetings: I get distracted too easily and lose the thread; plus I have the turning circle of a small tanker (a small tankie, even), and need time to digest new ideas. But I can think on my wheels, if not on my feet, so here are a few things that occurred to me on the way to work this morning.

One of the recurring themes of recent debates around the financial crisis is that we really don’t know how things will pan out, and what new regime might take the place of neoliberalism (if it is dead), or what new form neoliberalism might take (if it’s just a bit poorly). Clearly some new Bretton Woods is going to take shape – it already is happening – but it might be more useful for us to focus on our end of the bargain. It’s not as if our leaders are going to emerge victorious from a boardroom clutching a piece of paper and proclaiming a new global financial regime… Actually, they might do just that, but the point is that regime will only ‘work’ to the extent that we allow it to work. Simplistic, I know, but it’s the same as any campaign around the law: during the struggle against the Poll Tax in the UK, it was really important for activists to know the law, to advise non-payers of their rights, to know how to use the power of “McKenzie Friends” to clog up the courts etc. But the aim of the game was to make the law unworkable.

Related to this is the problem that it’s really hard to work out what’s going on while we’re in the middle of this shit-storm. True. I’m struggling to understand what the fuck is going on (and why) and where we fit into this. But perhaps we can flip this around. This sense of global uncertainty is exactly what’s offering a possible opening. There’s a crack in capitalist reproduction (altho not one obviously created by our activity), and this has led to the suspension of some of the “normal” laws of operation. The impetus for a new Bretton Woods is an attempt to minimise this state of exception (and normalise what can’t be reduced), so we can all “stop worrying and get back to work”. So how can we slow down this process of normalisation? How do we keep these times exceptional?

One of the defining characteristics of neoliberalism (at least in the global north) is the way the logic of capital has penetrated ever further into our lives. And one of the results of this has been a real cramping of time and space. Two simple examples: the “working week” has been extended in countless, barely visible ways; and the cut-backs in state provision (and privatisation of social resources) have meant a decline in real, physical space available to us – community centres shut or squeezed, and the domination of shopping centres (private space) over the traditional High Street.

The idea of a Fair Price Campaign (or whatever it might turn out to be) could work really well on several fronts. First, it’s something new, a break with normality – an “exceptional” tactic. It could capture the imagination in a way that straightforward ‘political’ activities (like marches around town) doesn’t. Second, it tries to disentangle our needs from money. It’s not perfect, I know: it would be better to completely bypass the cash nexus, but we have to start in some sort of real world. Third, there’s a reclamation of space (and time), and the possibility of laying foundations for a new collectivity (subjectivity, even).

But (and this is a big ‘but’) there’s a real danger of getting trapped down a populist dead-end. This could be as simple as us all ganging up on Tescos, and Aldi/Waitrose/Netto then picking up a whole load of new business. Or the introduction of a new ‘Recession’ food range. Or maybe a wide-scale reintroduction of food stamps, or even rationing… All of these could easily be sold back to us as ’solutions’, precisely because none address the fundamental problem – our desire to escape this world and create new ones.

It’s useful here to think about the relation between demands and problematics which we talk about in Worlds in Motion. The demands we pose (like ‘fairer prices’) are useful because they help open up space for the development of problematics. Problematics are, well, problematic because they’re about movement into the unknown, the creation of the new – exploration, as our surrealist friends might say. Demands, on the other hand, are always partial or one-sided (we can demand lower prices knowing that they’ll only come by supermarkets screwing producers even further into the ground) because they operate within this world. It’s crucial that we don’t get stuck inside them, unable to remember what it was that brought us here in the first place.

As well as being a place to store our half-baked ideas, this blog is also meant to be a place where we can collect, record and circulate interesting stuff. And amidst all the shite that’s been written about the current credit/finance crisis, this piece (by George Caffentzis and Silvia Federici of Midnight Notes) really stands out. Read and think on…

“MUST THE MOLECULES FEAR AS THE ENGINE DIES?” –NOTES ON THE WALL STREET “MELTDOWN”

Dear Midnight Notes Friends,

The breakdown of the Wall Street financial machine makes the task that we outlined in our June meeting more urgent. In June we planned to rethink Midnight Notes in view of the restructuring of the accumulation process and class relations carried out through the neoliberal turn and Structural Adjustment. We can now define this project more precisely: what do the current crisis and restructuring of the financial system imply for us as we join the rest of the world in the dog house of structural adjustment in the twilight of the American empire?

In response to these questions, it is important, first, that we realize that the so-called Wall Street “meltdown” is certainly the end, but also the completion of the neoliberal program. Let us be clear about it. To think otherwise is to ignore the lesson taught to us by the event that opened the present capitalist era: the 1973 coup again the Chilean working class experiment with socialism, that led to the victory of strong state backed market economy. Karl Polanyi’s theory that the single most important cause of the rise of fascism and Nazism in Europe was the inability to control the financial market after the 1929 crash also resonates here. In other words, we should not read the restructuring taking place as a turn to socialism/Keynesianism, to the extent at least that Keynesianism was an intervention by the state into the economy aimed at increasing the state’s investment in social reproduction, starting with the reproduction of the working class, in exchange for an increase in the social productivity of labor. Despite the adoption of regulatory mechanisms, the operation presently conducted by the US government bears little resemblance to the Keynesian program launched with the New Deal.

Behind the $700 billion bail-out and the many others that will follow – some already in the pipeline – is a massive transfer of funds from the US working class to capital, inevitably leading to an assault on the last remaining entitlements (like Medicare, Social Security) and a general program of austerity the like of which we have not seen yet in a long time. The fact that there is no organized response to this assault makes us fear the worst. For things would never have reached this point if over the last decade the US workers had responded to the repeated thefts of their money and benefits, through the Enron scandal and the many other “crises” that have followed it. That despite the “instability” of the market, despite its usage as a means to expropriate thousands of small/working class investors, US workers continued to trust their livelihoods and future to it is certainly a key factor in what we are presently witnessing and Washington/Wall Street confidence in launching the new austerity program. It is our argument that in the same way as September 11 served the US government to shed the last remains of “democracy” and move to a model of government where militarization is always around the corner (apparently Representatives were threatened with the proclamation of martial law if they did not pass the bailout bill), so the Wall Street crash will serve to shed the last remaining elements of working class “socialism” in the US political economy, starting with Social Security, Medicare, a thorn in capital’s flesh, but so far demonstrating a great resilience, the last shore for working class struggle in the nation.

2. Lessons from the Debt Crisis

There is an important parallel here, not sufficiently noted, between the present crash and bail-out and the “debt crisis” of the 1980s, which engulfed most Third World nations (except for China) and was the start of the globalization process. Both have been engineered in the same fashion.

The “debt crisis” was the outcome of a financial campaign conducted by Washington and Wall Street, to practically force Third World nations to take cheap development loans – liberally dished out at the lowest interest rates – at a time when capital was refusing to invest in Europe and North America in the face of the most successful working class attack on its profit-rate since the 1920s, and a new generation of Africans, Asians etc. were organizing to demand a global redistribution of wealth and a program of reparations, that is, in the language of the Bucharest Conference of 1974: A NEW WORLD ORDER.

Through the lending mechanism, the massive flow of petrodollars that had been amassed in the aftermath of the 1974 embargo (the first attack on US wages, organized through a stiff inflationary wave) was redirected to the coffers of Third World nations, which, attracted by the bait of cheap loans, were soon hooked to the global economy, all dreams of an independent path to development foregone.

In other words, loans at the lowest interest rates were key to the creation of a global debt and the process of primitive accumulation (through structural adjustment) that was imposed on most of the workers of the world.

As we know, within less than a decade, the rise of the interest rates in the US, turned manageable debts into a long-term process of economic and political subordination. Debt became the hook for a massive restructuring of Africa’s, Asia’s & Latin America’s political economies, re-establishing a colonial dependency that for three decades has served to promote a massive transfer of funds from the Third to the First World and defeat the organizational efforts of TW nations for an independent road to development.

Under the guise of the “debt crisis,” portrayed as a case of “mismanagement” by backward countries, requiring First World-style financial responsibility, countries across the world were forced to open their books to Washington – via the IMF and World Bank – and accept any terms of repayment imposed on them. They were forced to freeze wages, terminate all social spending, open their markets to foreign investors and products, devalue their currencies and so forth. The consequences of these policies are well known. While Washington and NY built forests of skyscrapers, sucking on the blood of Africans, Asians, Latin Americans, Caribbean people, such levels of impoverishment and expropriation were imposed on the people of the world that millions took the road out of their countries, unable to survive in them, while those remaining witnessed epidemics, elimination of schools, famines, wars, the loss of ancestral lands, waters and forests, brutal wars of privatization, all directly related to the debt.

This is history now, though the politics of SAP have set back for decades the project initiated by the anti-colonial struggle, reformulated and reasserted, as I mentioned, at the Bucharest Conference of 1974, where TW nations emboldened by the defeat of the US in Vietnam, demanded a NEW WORLD ORDER, i.e. the redistribution, return of the wealth that Europe and the US have robbed from the colonial world.

With the debt crisis, international capital obtained three major objectives.

i) It disciplined the working class in Europe and the US, by dismantling its manufacturing structure and refusing for years to engage in any serious investment in these regions [remember “zero growth”?]

ii) It destroyed the attempt of the former colonial world to escape a dependent/subordinate position, as demanded by the new generation of Africans, Asians, etc., who, infused of the spirit of Fanon, were keen on import substitution schemes, were pressing for REPARATIONS, and pushing for some form of socialism (in Angola and Mozambique).

(iii). In addition to defeating revolution in First and Third World, the “debt crisis” built the infrastructure for the new global economy. It forged the mechanisms by which industries and offices could be relocated, companies could run around the globe, the work process could be computerized and streamlined and the working class thereby could be flexibilized and re-divided.

Against this background, we must note some basic similarities between the engineering of the debt crisis and the engineering of the Wall Street crash and must assume these similarities will extend to the social consequences of the crash. The housing bubble was the result of loans made at very low though adjustable credit rates, redirecting the influx of capital coming from abroad (China and other countries) toward the US market.

Is it possible that investment banks, credit rating agencies, the head of the Federal Reserve all FAILED to realize what would be the inevitable result of an “easy credit,” lending policy that reversed decades of regulatory principles and rules? Unless we want to revel in the nonsensical tale of a blinding surge in human greed, the answer must be a negative one. Thus, we must stop using the concept of “failure” to describe the absence of regulations and the reasons for the crash. We must rule out that the architects of the housing/mortgage crisis did not know it would end in a financial disaster and cascade of foreclosures for the home owners, in the same way as banks are partly responsible for the debt of the US working class ($45,000 on average per capita).

Continuing with the parallel, we have to conclude that with this 700 billion dollar “bail-out,” coming straight out of our pockets and hides, the “structural adjustment” that since the 1980s has been imposed on countries across the world, is going to be extended to the US territory and the US working class. This time (after many beginnings and many deferrals) we too are being “adjusted.” I will discuss later what adjustment will mean at this time for us. For the moment we only want to stress that we are witnessing not only a financial meltdown, but also a great robbery, a macro-process of expropriation, an immense transfer of labor, this time siphoning funds to the US banking system not only from the Third World, as in the Debt Crisis of the 1980s, but from our households, through the classic maneuver of increasing the national debt. What we are witnessing is a capitalist coup, an example of capital’s historic readiness to destroy itself in order to regain the initiative and defeat resistance to its discipline.

3. Where does this resistance come from? How is the collapse of the financial systems a response to it?

We cannot understand the Wall Street crisis unless we read it in class term as a means to negotiate a different class deal and response to class struggle and resistance. However, in dealing with these questions, I also want to distinguish this approach and the growing tendency to view every development in capitalist planning as a realization of working class struggle and demands, the Negrian perspective on capital’s response to class movements.

This perspective is dangerous, because besides turning even defeat into a victory, (such as: we wanted globalization, we wanted flexibilization, etc), it ignores the fact that a capitalist response must use working class demands against themselves, use them to drive part of the working class out of the struggle, turn it against or away from the other half, use them in such a way as to spark off forms of development that decompose the class.

Let us look now at the crisis as a disciplinary tools and strategy. There are at least three areas of resistance to the neoliberal accumulation project that the Wall Street collapse has to respond to. I will list them without an attempt to establish an order.

First, the crash and the bail-out must defeat the attempt of the US working class to circumvent class discipline by using financial markets, rather than struggle, sweat and labor, to increase their wages. While strikes and struggles have died out over the last two decades, workers have tried to increase their income in three ways: investing in the stock market, buying on credit, now even for everyday expenses, getting equity money through housing, and defaulting student loans. These tactics have clearly failed and now millions of workers are now to pay twice for them, in terms of their individual losses and in terms of the losses that will be inflicted on the US proletariat as a class through the bailouts. If successful, these bail-outs will in fact be conducive to a new regime of low wages and zero entitlements the like of which we have not seen since the last part of the 19th century.

The new regime will not be the end of market fundamentalism. It will be a revitalization of market investment through the injection of our social security money, and it will be a revitalization of some parts of American industry now presumably taking advantage of the fact that workers are desperate enough to accept any conditions just to have a job and a roof over their heads. A large part of capital has for a long time been lusting to bring back America to the situation before the New Deal, when employers had the upper hand. The “crisis” is giving them a chance to return to that era.

That this time Social Security is at stake is due to various factors. First, Social Security is the last pot of money available to re-launch the US market, in a context in which workers have no savings and monetary flows from the outside are drying out. It is also the last “scandal” on the list of US capitalists who have relentlessly for years now told us it must go. Most important of all, Social Security affects primarily the old, the retired, and it is therefore an easier target than entitlements affecting the whole working class.

So far workers in the US have resisted the privatization of Social Security despite many governmental attempts. But cuts in pensions have already gone a long way in the private sector, where employers have given stocks of their companies to workers, or stopped putting any money in their pension funds. The present crisis will extend that to government-backed pensions. And the road to it has been cleared by years of false statements to the effect that Social Security is unsustainable. Though it is a colossal lie, younger generations have, however, accepted it. By cutting Social Security, capital undoubtedly hopes to pit the young against the old, who (as in Africa today) are being pictured as a crew of selfish gerontocrats sucking up the funds the young need to build their future.

The second target of the attack is the global resistance to capital’s appropriation of natural resources beginning with oil and gas extraction. The defeat in Iraq is the peak of it. To this day, despite an immense expenditure in war funding, the US has not been able to put its hands on Iraqi oil. Resistance to international capital control over global energy resources has also come from Venezuela, Bolivia, and Ecuador. Many more countries are also refusing the neoliberal packet, especially in Latin America. These refusals, not peak oil, are the true limits to capital’s energy plans.

There have also been bottlenecks in the exploitation of forests, waters, minerals, and lands which structural adjustment was to remove. A new “rurban” peasant movement has been growing that is fighting independently of unions, parties, “civil society” and NGOs, using direct action tactics, to re-appropriate the lands and resources of which it has been robbed —poaching, harvesting timber or produce in commercial plantations, mining diamonds and gold “illegally,” or farming in the very lands from which they have been “legally” excluded. When they move to the cities they squat on urban land and take over land not used, private or public to farm it for their needs. It is a vast re-appropriation movement that is redefining the fundamentals of social reproduction globally. It has put globalizers and adjusters out of government, it has forced the nationalization of local resources, and has redistributed wealth and political power, putting the World Bank and IMF almost out of business in Latin America. It has defeated the attempt to completely liberalize the economies of the TW through the rule of the World Trade organization. Though not sitting at the table, the specter of the rural/urban peasants of the world has guided the refusal of TW representative to comply.

Third, global migration has developed in ways that make it difficult for governments to use it as a regulatory mechanism for the labor market. Far from being an easy device for driving wages down, migration is now an autonomous uncontrollable phenomenon, with a logic of its own that is not reducible to the needs of the labor market. It is important however to stress (against the idealization of the migrant and of Exit, Exodus, Flight as the highest form of struggle) that the struggle of the migrants is not superior to the struggle of those who remain. In fact, migration can lead to the dissolution of local organizations, it can create new divisions among the locals, separating those benefiting from remittances and those deprived of them, it can boost the cost of living in the area of origin by the influx of new money and hook local economies more strongly to the international monetary system, fostering the expansion of monetary relations. These, of course, are not inevitable results. Actually, migrants have been able to use the wage against the wage, to refuse impoverishment, to create transnational networks, to move from country to country seeking a better deal and nullifying national boundaries and borders.

The attacks on immigrants of recent months, which have seen the most massive factory raids and deportations ever in the US, are responses to this autonomy. They are part of the attempt to create a population of rightless workers, to function as a safety valve for the labor market. Only if they have no rights can immigrants function as regulatory mechanism for the labor market (in the same way as mass incarceration and expansion of unpaid labor do). The redefinition of immigrant workers as outlaws and the criminalization of the working class – historically a key strategy to devalue labor power – will continue to be a tool of the world order we will see emerging from the crisis. But the crash will intensify the divisions between “natives” and migrants, attack the organizational strength of migrant organizations, unless there is strong opposition to this strategy.

The Politics of the Financial Crisis and Our Response

Crises are always a threat and an opportunity as they break down business as usual, and reveal something of the inner workings and nastiness of capitalism. This one is not an exception and we can be sure that what will come out of it will be greatly a result of what people do in response to it. If the Great Depression is an indication, it took more than ten years for capital to organize a different social order. Much can happen in such a period.

The problem for us today is that workers are only organized around electoral politics at best. And many still place more hope in a racist and imperialist stance than in working class solidarity. We certainly don’t have a communist or an anarchist movement organizing rallies of the unemployed, fight against evictions, or organize “penny auctions” of farms as they did during the Great Depression. Nor do we have an anti-capitalist alternative as the Soviet Union was in the eyes of many. We also do not have the kind of solidarity that in the Great Depression led to invention of new commons, like the hobo movement and the creation of “jungle cities.”

Where to start then? This is what we need to work on in the coming months and years. There is no clear path to this kind of mobilization. But we need to start somewhere. On two things we can get people to agree with us: First, we better find alternatives, because, as things stand presently, we are so incestually connected with capitalism that its demise threats our own existence. Second, unless we organize to resist government planning, what lies ahead for us, after a cut of more than a trillion dollars of our “entitlements,” looks much more like some variant of fascism than socialism.

With warm greetings

Silvia and George

Or the incredible credit crisis.

And so the dominoes begin to fall. In many ways this is a classic capitalist crisis, the popping of a 15 year credit fuelled consumer spending bubble, but it is also a singular event. It is singular because, the ‘credit fuelled’ part of the sentence is not some foolish excess or avoidable side effect but is inherent to the neo-liberal wave of accumulation over the last 30 years. Real wages in the developed world have fallen since 1979. Actual wages might have gone up a little but they don’t go anywhere near enough to cover the rollback of the social wage during that period. You might have more theoretical cash in your hand (although most is taken out by direct debit before your hand gets anywhere near it) but you have to pay directly for stuff the state used to provide and that you paid for indirectly through taxes but now you have to pay much more for that stuff (housing, etc). Since real wages have declined, increased consumer spending has only been possible through increased indebtedness. And that indebtedness in the UK and US is what has driven ‘development’ in China and India. Once credit dries the pyramid crumbles.

The credit crisis is also singular because, as we have pointed out in Turbulence, it is just one of a series of overlapping and interpenetrating crises; the food crisis, the energy crisis and perhaps most difficult of all the climate change crisis. This does indeed seem to be the playing out and the coming to a head of the contradictions of thirty years of neo-liberalism. In many ways the social movements have been ahead of the game here. There has been awareness for years that Seattle marked the beginning of the end of ‘the end of history’, of neo-liberalism in its modernist phase. Neo-conservatism was the attempt to restructure neoliberalism through a populist supplement based on permanent war. This seems to have stumbled to a halt but I suppose it could be picked up again. After all military Keynesianism is what got the US out of the 1930’s great depression – hard to see where the resources would come from though. Well, the same place it always does I suppose – our pocket – but war capitalism is a high risk strategy, that needs a Staussian uniting of the nation against a common enemy: Al Quida has never really fit the bill.

There is something that might though, although the neo-cons can’t quite get to this enemy, that’s global warming. This is what makes the Copenhagen summit to sign a new post-Koyoto agreement, so important. One of the most likely new regimes to emerge is a green Keynesianism, based around ameliorating the most catastrophic possibilities of climate change, while imposing a new austerity, that is a Keynesianism but not one based on social provision. As Naomi Klein reminds us it is just such shocks as we are going through that are used to change the normally unchangeable.

So it seems very likely we are at a new conjuncture and that a new regime of regulation will have to emerge and no-one knows what that new regime will look like. What is certain is that the amount of struggle taking place will have a huge influence on this and that the forms of struggle will have to change dramatically to accord with and influence the new situation.

Britain has the highest personal indebtedness of any country in the world. Now debt is normally a disciplining mechanism, it makes you stay on the straight and narrow, but it does get to a stage where it has the opposite effect, where it gets to the size where it can’t be dealt with under the rules of the game. Many people must be fairly close to that. This is also inherent to neo-liberalism, which was about privatising risks that used to be socialised, (as welfare provision, national insurance schemes). Well, that is for most of us; for the banks and the rich it’s been privatising profits while socialising losses. We have an interesting antagonism emerging when we are confronted with the truth of this. The hatred and Schadenfreude against the bankers is very apparent on talk radio, blog comments, etc.

There is also no clear idea how far this crisis goes, some are talking about a hundred year event, the wiping out of the global financial architecture. We can’t know if that’s true because nobody can: nobody knows how much Lehman brothers is worth, or what its debts are and nobody knows what other banks’ liabilities are. You’d always imagine that techniques of governance are sophisticated enough that global meltdown won’t be allowed to happen but the overlap of these various crises make that a difficult task too.

We can look to the experience of the Argentinazo to think how that could play out and also for the forms that struggles might take. Of course we in the UK have our own history of debt struggles and the anti-Poll tax movement might be an interesting period to revisit. There might also be increased opportunity for the cross-pollination of the UK and European movements, especially around the concept of precarity. There have been some suggestions along those lines, originating from some unlikely sources. There was even a little discussion on Ian Bone’s blog about how the timing might be good for price reduction struggles. The previous attempt to import Euro-mayday style precarity actions into the UK being a little mistimed and so not resonating widely.

But that would mean a little joined-up thinking and the overcoming of a lot of the parochial baggage that we have inherited from the UK anarchist scene and indeed a shift in the level of thinking at least to the European level. And here we come back to Copenhagen, the ESF in Malmoe this weekend and the possibilities of a new green Keynesianism. The time does seem right for a cross-pollinating of the green orientation of a lot of the UK movement, with the focus on work, in particular the new conditions of work, of movements on the continent.

For some in the class struggle anarchist tradition that means overcoming the class-as-identity, class-as-culture orientation of the UK and starting to look at class composition, class as a tool of anti-capitalist analysis. That means the end of hiding behind all the lazy, comforting, bullshit rhetoric about “woolly jumper wearing yogurt weavers” and moving to think about climate change as a fundamental front in the class war. In fact the inability to make a similar leap was the reason we were involved in trying to dissolve the Class War Federation a decade ago.

The parochialism of the UK anarchist scene is only one of the things we have to take into account, however. The UK is in a funny position at the moment, as the political parties are almost entirely absent from the field. The Labour party looks like it will be wiped out at the next election, the Liberal Democrats have decided that the time is right for a move to the right and are promising even more fundamentally neo-liberal policies. The secret of great comedy – timing. At the same time the largest, but also most pernicious of the left groupuscles, the SWP, is in a state of virtual collapse and is turning in on itself, in order to regroup and survive as a rump. This all offers great opportunities but also great difficulties, for the social movements, as much as they exist, and the autonomous left in the UK.

The chances of the autonomous left getting at least some sort of workable relations with the traditional left is probably better with the SWP less confident and in regroupment. And that actually matters to some degree, they are part of the field we have to play in. If we can’t work together, then we have to at least be in control of our relationship. This goes for institutional parties although there are hardly any for us to have even very critical relations with in the UK, except perhaps the Green Party, who end up in the same tents at the climate camp. And despite the distorting effects they have on our ability to analyse things, we have to remember that they and the local MPs provided some protection for us at Kingsnorth. After all NECTU are leading a pre-emptive strategy against us to try and increase their fiefdom, and that, which in itself provides both opportunities and problems for us, has to be taken into account in how we act.

There is certainly this tendency within climate change politics. The group Plane Stupid calling for more taxes on aviation and an end to short-haul flights, for example. Yeah, the growth in aviation’s an environmental problem. But occupying the offices of EasyJet, for heaven’s sake? Is aviation more of a problem when flights are ‘cheap’, i.e., when poorer people fly?

Or take George Monbiot who, at 2007’s climate camp by Heathrow, called for a stronger state to manage climate change and suggested ‘we’ might have to put down anti-austerity riots. Apparently we heard this wrong. In fact, Monbiot was calling for ‘us’ to ‘riot for austerity’! That’s even better. It’s what he said in 2004, according to a BBC report:

People don’t riot for austerity; they riot because they want more, not less. We have to riot for less.

Apparently inspired by Monbiot, there is now a group called Riot for Austerity, the ‘90% reduction project’.

(We’re already trying to engage with this stuff: our article on antagonism and a blog post or two; a presentation we’ve made at The Common Place and at climate camp, responses to Monbiot at climate camp. Hopefully one of us will get about to posting something about our climate camp experiences this year.)

But climate change isn’t the only looming crisis. Economists and policy-makers are increasingly worried about so-called global imbalances and the United States’ ‘twin deficits’: the fiscal deficit (the excess of government spending over government revenues) and the trade deficit (the difference between spending on imports of goods and services and export revenues). ‘America is consuming more than it produces’, ‘Americans are living beyond their means’ are the soundbites.

The twin deficit problem is real. Both deficits have been steadily getting bigger over the past three decades. The fiscal deficit is now about $9.5 trillion c $31,600 for every US resident or two-thirds of annual GDP. (If you include ‘unfunded entitlements’ such as Social Security and Medicare, the figure nudges $53 million or $175,000 per person.) For years, economists have been going on about heavily-indebted poor countries, an important enough concern for them to have their own acronym, HIPC. The United States is now a heavily-indebted rich country. The annual trade deficit is now about 9 percent of GDP. Economists and politicians are in a tizz about that too, blaming ‘China’ or ‘Mexico’.

Some pundits are talking about four deficits. A third is the savings deficit: since the 1980s, the household savings rate –-the difference between income and spending – has been declining and is now hovering around zero. Basically, the average American spends everything they earn and many spend way more than they earn, i.e. their savings rate is negative. The fourth deficit is a ‘leadership deficit’: because politicians and other ‘leaders’ have allowed these other three deficits to emerge and get out of hand.

There’s lots of reasons for all of this and lots of contradictions. The US Treasury has been able to borrow money easily (and thus finance the fiscal deficit) because the US dollar remains the global reserve currency: other nation-states’ monetary authorities – particularly those of ‘developing’ countries – still wish to hold US dollar-denominated assets, such as US Treasury bills. Given this demand for dollars, the US Treasury only has to pay low interest rates and there’s an ample supply of money flowing into the country to balance the net outflows on the trade account. Former World Bank chief economist turned critic Joseph Stiglitz writes of money ‘flowing uphill, from the poor to the rich’. This persistent demand for dollars also means the value of the dollar remains high so imports are cheap and Americans are able to buy more imported goods and services, which contributes to the trade deficit problem. And the relatively low interest rates means it’s cheaper and easier to borrow money and people are less likely to save.

But let’s leave some of this economics behind and look a little deeper. Since the 1970s – oil price ‘shocks’, global recession, etc. – real wages (including social wages) have been falling in the United States and throughout most of the planet. Austerity. But, to some extent, Americans have been able to defend their living standards by getting more into debt. Low interest rates and rising property prices – the property bubble – have both helped. (If your house rises in value, even if the mortgage company owns most of it, you can borrow more money against its value.) Result: rising deficits. But the fact that the US working class has been able to defend its standard of living to this extent also means there hasn’t been enough austerity. Economists continue to bemoan the ‘structural weaknesses’ of that economy and the ‘adjustments’ that are required.

But all of this is what you’d expect of economists and policy-wonks. What’s more interesting is some of the public discourse.

The Concord Coalition has been around since 1992. Apparently it’s ‘a nationwide, non-partisan, grassroots organization advocating fiscal responsibility’. The Coalition has recruited chief executives and economists from establishment think-tanks like the Brookings Institution to its cause and is currently running a ‘Fiscal Wake-Up Tour’, that involves ‘public figures and thinkers with diverse perspectives traveling the country to discuss our nation’s budgetary challenges and entitlement problems’. (Note: ‘entitlement problems’ basically means the social wage is too high.) All this might be similar Margaret Thatcher’s intellectual guru, Keith Joseph, who toured Britain in the late 1970s trying to popularise free-market (neoliberal) ideas, but on a much larger scale. The Coalition has just produced a film, I.O.U.S.A., which, according to both Reuters and The Economist, may ‘be to the US economy, what An Inconvenient Truth was to the environment’

A more recent group, set up last year by four students, is Concerned Youth of America. Like the Concord Coalition they are concerned about the rising deficits and ‘fiscal irresponsibility’:

Across this country, young adults are looking to the 2008 presidential candidates for a change of policy and for fiscal responsibility. We will no longer support the culture of deficit spending and pork barrel legislation. The youth of America will have to bear that burden, crippling our future and America’s economic might.

Over two-and-a-half centuries after colonists fought for their rights against an oppressive British Empire, American youth are facing the scourge of “taxation without representation” once more. Even though we did not enact the current spending polices, we will have to pay for them through our taxes. Through the burgeoning federal debt, a malignant tumor has grown as a result of irresponsible fiscal policy at the highest levels of our government. Debts accumulated to pay for bloated and inefficient entitlement programs and the War in Iraq will have to be paid for not by the current leadership, but by us, the youth of America.

The irresponsible spending policies of today will weaken the American economy if not stopped.

…

As today’s leaders, businessmen, parents, and grandparents age and retire, their children and grandchildren will have to bear the burden of a bloated debt. Those children will face high taxation to service exploding interest payments. By allowing this disastrous spending to continue, they condemn their children to live without American economic strength. They condemn their children to live under a government unable to care for its citizens. Paying the interest on the debt alone will leave our nation impotent, helpless to fund worthwhile programs, and captive to our lenders.

…

This is not an issue of large government or small government, conservatism or liberalism, Democrat or Republican. This is an issue of America’s future. Our position is simple: the generation with power, especially the next president, must maintain fiscal responsibility at all times. The next president must spend only what the government collects in revenues, while only deficit spending during recessions and emergencies. Not only is this a fair position. For America’s youth, it is a necessary one.

Of course, some of this makes sense. CYA want to save themselves from ‘crushing debt’ and there’s little doubt Latin American and African proletarians were crushed by debt following the international debt crisis of the 1980s (Latin America’s ‘lost decade’)… except in the wake of that debt crisis, many Latin American and African governments were encouraged to take on more debts. Their recalcitrant populations were crushed by ‘adjustment’ imposed – sometimes literally – at gunpoint. And we also have to understand that many of those governments only took on debt in the first place in order to meet or neutralise local demands. A similar story to current US indebtedness?

But essentially CYA are arguing for austerity. I think this might be a terrain we may need to start fighting on much more seriously.

We’ve been thinking antagonism recently and have drafted a piece entitled ‘Six impossible things before breakfast’, that we hope will be published in the forthcoming Turbulence product and also – in an extended form – in Antipode in a special issue on ‘autonomy’.

In the piece we describe the 1980s UK anarchist practice of publishing names and addresses of those who dominate our lives as liberating and quote Lucy Parsons:

Let every dirty, lousy tramp arm himself with a revolver or knife and lay in wait on the steps of the palaces of the rich and stab or shoot the owners as they come out. Let us kill them without mercy, and let it be a war of extermination and without pity. Let us devastate the avenues where the wealthy live…

This section drew some criticism. One of our Turbulence comrades wondered whether we seriously believed this naming revealed some real vulnerability in the capital relation and suggested we had confused the ‘important distinction between the “personalisation” and “personification” of capital, [using] the latter term here to describe what is actually the former’:

My boss, at work everyday, personifies capital. But to blame the rational behavior of an individual, like my boss, on that person him/herself is a problematic personalisation of the capital relation. It not only (as you note yourselves) corresponds in some ways to some of the vulgar anti-capitalist positions which characterised earlier anti-Semitic movements (in this sense, the horrific Parsons quote about “extermination without mercy is particularly unfortunate!); but it also attributes too much agency to individual capitalists. As Marx said, “…looking at these things as a whole, it is evident that this does not depend on the will, good or bad, of the individual capitalist. Under free competition, the immanent laws of capitalist production confront the individual capitalist as a coercive force external to him.” (Capital, Vol I, 381). In other words: don’t fight the players, fight the game, baby!

Our comrade is, of course, correct about this distinction between personalising and personifying … to an extent. And he’s also right that we are all – workers and capitalists alike – confronted by laws that appear as coercive forces external to us.

But, capital is a social relation. It is a relationship amongst human beings, not a relationship between things, although this is how it frequently appears – this is what Marx meant by fetishism. John Holloway writes about this in Change the World Without Taking Power, describing it as the ‘rupture of doing and done’:

Marx begins the second paragraph of Capital saying, ‘A commodity is, in the first place, an object outside us.’ The commodity is an object produced by us, but standing outside us. The commodity takes on a life of its own in which its social origin in human labour is extinguished. It is a product which denies its own character as product, a done which denies its own relation to doing. (p. 46)

Somewhere else, he (Holloway) has emphasised the ‘in the first place’ bit; once we get beyond this ‘the first place’ to delve more deeply, we discover that the commodity is not external to us at all. It’s the same with the idea that the ‘forces of competition’ or the worker-capital (or worker-boss) relationship are somehow external to us. They’re not!

Fetishism is one aspect of the separation effected by capital, the way, as we say in our ‘Six impossible things’ piece, that atagonism is constantly displaced. There’s an interesting take on separation in a new book on finance by two Marxists Dick Bryan and Michael Rafferty, Capitalism with Derivatives. . Bryan and Rafferty talk of three degrees of separation. The first is the separation of humans from the commons and the transition from feudalism to capitalism (primitive accumulation). The second occurs with the creation of the joint-stock company when the owners of capital become distinct individuals from its managers. And the third separation takes place with the emergence and widespread growth of financial derivatives, which make it possible to ‘own’ some attribute of an asset – e.g. its profitability – without owning the asset itself. For example, you could purchase some share-index derivative linked to the performance of the FTSE-100, giving you an interest in these companies without owning a single share in any one of them.

At each new level of separation, antagonism is further displaced. ‘Doing (human activity) disappears further and further from sight.’ (Holloway in Change the World again: p. 47) Under feudalism, the peasant or serf’s relationship with the lord who dominated him or her was personal and direct. The lord was there, on his horse, in his manor, visible. Moreover the relationship between the lord and his serfs was fixed: the lord could no more escape the lazy or unruly serf than the serf was allowed to run away from an unusually cruel lord.

With the transition to capitalism this relationship became more fluid. Both capitalists (who once were lords) and workers (né serfs) were free. The worker was free to seek employment wherever he or she liked, just as the boss could ‘let go’ the worker if market conditions were unfavourable or for any other reason. And the capitalist was as buffeted by market forces as the worker: if he was forced to sack workers he could always hold up his hands and blame these market forces. But the relationship remained face-to-face and thus quite personal: the industrious Victorian factory-owner would probably have spent almost as long each day stalking his satanic mill as his overworked ‘hands’. What’s more, his livelihood was on the line, just as theirs were. If his business failed, his creditors wouldn’t spare the family home, his horse or his wife’s silk.

This shifted once again with the creation of joint-stock companies in 1844 and the ‘invention’ of limited liability in 1855. The joint-stock company allowed many wealthy individuals to pool capital and thus led to the development of large-scale projects such as railways. It also introduced a further separation: the relationship between workers and capital(ists) was now mediated by a layer of professional managers, a new managerial class. Limited liability introduced a (second) asymmetry into the capital relation. (One asymmetry is that while capital is wholly dependent upon living labour, we, humanity, does not need capital. The second asymmetry is in capital’s favour, not ours.) With limited liability a capitalist’s (whether this capitalist is an owner-manager or a shareholder) liability is limited to her investment, to the value of the company or of his shares or whatever. If the company goes bust, the manager will keep his or her house, the car, the savings. Except in certain cases (where a firm carries on trading whilst insolvent, which is illegal) creditors – including workers who are owed wages or pensions – are powerless.

This has consequences. Whilst the boss is the personification of capital in the workplace, he or she can leave this persona behind once s/he walks out the door. S/he climbs into the not-at-risk car to drive to the not-at-risk home, becoming a private citizen, who might be a good father or mother, even a generous benefactor of worthy causes. (There’s a quote somewhere in Capital vol. 1 about this but I can’t find it.) But it’s much harder for the worker to shed their identity as worker. Just as a person carries their social power in their pocket, so the worker carries home their relative lack of social power, their precarity. Because their home is at risk, just as their reproduction depends upon more unwaged domestic labour. It’s not that the boss won’t suffer economic consequences if their business goes bust, it’s that these consequences will be less serious and will be limited. Just think of the current credit ‘crunch’: whilst subprime borrowers and others are being turfed onto the streets, the Wall-Street executives and analysts who’ve been caught are having to sell third homes and luxury yachts.

So? The ‘game’ and its ‘rules’ are created by the ‘players’. They’re not external. It’s all personal, not just ‘business’: to repeat one of my favourite recurring LMDG/Free Association riffs, one of the themes running through The Godfather is ‘this isn’t personal, it’s business’. Michael Corleone, in contrast, understands that all business is personal: ‘It’s all personal, every bit of business. Every piece of shit every man has to eat every day of his life is personal. They call it business. OK. But it’s as personal as hell.’ No, we’re not mafiosi, but just substitute ‘the market’ for ‘business’! Attempting to identify those responsible for our subordination is a way – imperfect admittedly – of reducing the separation, making less external the ‘laws’, practically criticising the separation, making the relationship less asymmetrical. And that’s why it felt liberating, at least in the 1980s.

Finally, on the Lucy Parsons quote. Of course it’s horrific. But ‘extermination without mercy’ would seem to be an apt way to describe current processes of enclosure, for example in Cambodia, just as it would well describe the ‘clearances’ catalogued by Marx.

Sang Run was out in his boat at 7am when disaster struck his village. He arrived back at 11am to find bulldozers had flattened his home and those of the 229 families who lived beside him. He heard from neighbours that it had happened in an instant. Uniformed men, sent in by governor Say Hak, used electric batons to chase terrified residents from the burning ruins; three of Sang Run’s neighbours were knocked unconscious. Village Number One – a mundane name that failed to capture the beauty of its uninterrupted sea views and vegetable gardens that ran to the beach – had been erased. Sang Run heard that a hotel was planned, although no information was given to the people evicted from their homes for a further 18 months. (The Guardian 26.04.08)

And what is the current financial crisis doing if not devastating the avenues where the poor live?

Money and finance don’t normally get much discussed on this site. All that might change. Last summer’s ‘subprime’ mortgage crisis in the United States (and the run on Northern Rock bank-cum-building society over here) has developed into a full-blown ‘credit crisis’: the global financial markets are in what the commentators describe as ‘turmoil’ and ‘catastrophe’ threatens. Last week, the US’s fifth-largest investment bank, Bear Stearns, imploded. In a ‘rescue’ orchestrated by the Federal Reserve, another bank, JPMorgan Chase mopped up its shares, which had been trading for $170 a year ago, for two bucks each. Jimmy Cayne, Bear’s chairman and former chief executive, who held a 5% stake, has seen his ‘worth’ fall from $1.2 billion to a mere $11 million. Apparently managers are having to sell holiday homes. (What were we saying about resentment?)

But it’s all more interesting and complicated — and worrying and exciting — than this. Not only is there financial crisis. There’s also recession in the US — economists define recession as two successive quarterly falls in output — but if it wasn’t poor people finding they could no longer keep up with mortgage payments that triggered the subprime crisis then what was it? And central bankers in Europe and elsewhere are worried about inflation. (‘Some say the world will end in fire, some say in ice’ — this was a former IMF chief economist quoting poet Robert Frost in an address to a recent meeting of monetary policymakers. Fire = recession; ice = inflation.) So, the return of stagflation?

Let’s look at inflation. Well commodity* prices are rising rapidly, but what’s behind this? A lot of it comes down to climate change activism in the North and workers’ struggle in the global South. Greater demand for biofuels (so we can stop emitting CO2 without changing the way we live) is pushing up the price of all crops. As people get richer in the South they are demanding more meat and this also puts upward pressure on crop prices — since it takes something like 6kg of wheat (or equivalent) to produce a single kilo of meat. There is much commentary about ‘China’s voracious appetite for resources’, which is pushing up the prices of commodities such as steel, copper and so on, but the real wages of Chinese production workers have risen by an average of 11% every year over the past decade (compared with 3% a year over the previous ten years). However much this statistic is phrased in the passive voice doesn’t change the fact that there’s an active subject here.

But what sparked me to post this, was a piece in this week’s Economist, ‘Apocalypse now?’. With ‘the world going to hell in a handcart’, the piece wonders what ‘you’ [i.e. a financial investor] should buy. And here we’re getting back to more familiar Free Association territory. Because we’ve written before about how at times of crisis (far-from-equilibrium situations, ‘moments of excess’, states of exception…) illusions and ‘ideology’ are stripped away, reality seems to be laid bare. This is as true for ‘them’ as it is for ‘us’ — which is why The Economist, say, is usually a much better read than The Guardian.

In the pub after our recent talk about capitalism and climate change, discussion turned to money and somebody suggested the universal equivalent is a mutually agreed fantasy. Exactly! This precisely the problem facing investors now. There’s no mutual agreement on what anything is ‘worth’, or (and in the world of capitalism/finance this is the same thing) will be worth at some point in the future.** After discussing the problems with holding government bonds (the government, the US government at least, won’t default, but what if its currency the dollar keeps falling in value?), depositing money in banks (what if they collapse, like Bear Stearns?) or buying gold (but it’s taken gold almost three decades to regain its price of 1980) the author, ‘Buttonwood’, concludes:

In a complete meltdown, for example during world wars and revolutions, it is hard to find anything that keeps its value. Stockmarkets collapse. Governments default on their debt. Private property is no longer respected, either because governments seize the assets or because goods cannot be protected from criminals. Jewellery might hold its worth, but you had better have a good hiding-place. Think of all the treasures looted by the Nazis or the Red Army.

But we also see here how bourgeois commentators still don’t get it. Buttonwood is assuming that ‘value’ is something objective, a property intrinsic to a thing. It’s not, it’s social. S/he can’t move beyond categories like ‘government’ and ‘criminal’, or conceive of revolutionaries who aren’t of the bolshevik sort. Why would I want to loot jewellery? And, more importantly, it’s only a store of ‘value’ in a world of abstract labour. And here’s the other big assumption. Buttonwood assumes any such period of uncertainty and ‘suspension’ of the law of value will be temporary, that after some period of months or even a few years, things will return to capitalist ‘normality’.

So, what should ‘you’ do? Buttonwood quotes approvingly the advice offered by some ‘Wall Street veteran’ who suggests that ‘investors should own, as insurance against the apocalypse, “a farm or a ranch somewhere far off the beaten track but which you can get to quickly and easily.” Well, as Buttonwood admits, this assumes ‘war and disorder are avoided’, but it reminds me of Marx’s story in Capital of ‘unhappy Mr Peel’:

Wakefield discovered that in the Colonies, property in money, means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative — the wage-worker, the other man who is compelled to sell himself of his own free-will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things. Mr. Peel, he moans, took with him from England to Swan River, West Australia, means of subsistence and of production to the amount of £50,000. Mr. Peel had the foresight to bring with him, besides, 3,000 persons of the working-class, men, women, and children. Once arrived at his destination, “Mr. Peel was left without a servant to make his bed or fetch him water from the river.” Unhappy Mr. Peel who provided for everything except the export of English modes of production to Swan River!

And this is why all this is exciting for us. Because this crisis is a crisis of value — what things are ‘worth’ — and that means that it has the potential to become a crisis of values (plural): what do we value, what sort of world(s) do we want to live in?

* Being good Marxists here at freelyassociating.org, we understand a commodity to be that peculiar amalgam of (capitalist) value and use-value, the product of abstract and concrete labour, but in economist-parlance commodities are agricultural goods, such as wheat, coffee, pork bellies (bacon) and soya (yes, all you vegans, soya is a commodity too) and minerals and metals, such as oil, steel and gold.

** One of the main ‘points’ of finance and financial markets — along with their disciplinary function — is to convert uncertainty into risk. I’ve just started reading An Empire of Indifference: American War and the Financial Logic of Risk Management, by Randy Martin. In the Introduction, the author suggests that ‘preemption, bringing the future into the present, has since the 1970s been the guiding principle for fiscal policy.’ (As it has been for foreign policy/politics, such as the ‘war on terror’.) And then this bit, which is great: ‘In terms of the experience of time, preemption means that the future is profaned. The future no longer holds a promise that the constraints of the present can be transcended or transformed. Without a conviction that the future bears our dreams, the idea of progress becomes difficult to sustain.’ Maybe this is why most of us find finance boring, because it holds no promise, it leaves no space for hope.