Capitalism in outer space

Would it be possible to circumvent Earth’s physical limitations with a rapid colonization of the solar system? Yet it would be a temporary panacea since humanity would still not have unlimited resources.

To put this another way: Could humanity pull a rabbit out of the hat by industrializing space and tapping the solar system’s abundant metal and gas resources to overcome the dwindling availability and environmental devastation of our home planet? Would we want to?

I’ve been stimulated to think about these questions since reading Kim Stanley Robinson’s science fiction novel 2312. Set three centuries into the future, around the year that is its title, the novel envisions a time when humans live comfortably on Mercury, Mars, the Moon, satellites of Jupiter and Saturn, the asteroid belt, and more than 19,000 hollowed-out asteroids engineered to create a staggering assortment of environments. Still more real estate is being opened up with the terraforming of Venus nearing completion.

Complex political, environmental and social problems nonetheless endure, with multiple political blocs stretching across the solar system: a still capitalist Earth struggling with vast environmental distress, including a 20-meter rise in sea level, with various off-Earth colonies still under control of major countries; a “Mondragon Accord” consisting of off-Earth localities working together within a cooperative economy modeled on the eponymous collective enterprise; a socialist Mars, now one of the solar system’s biggest powers; and an unknown number of those hollowed-out asteroids that comprise the “unaffiliated,” some of which exist in self-imposed isolation.

Mars before terraforming (Image created by NASA via Hubble Space Telescope)

Mars before terraforming (Image created by NASA via Hubble Space Telescope)

This imagined 24th century, for all its technological wonders and the copious free time of many off-Earth inhabitants, is a time of hideous inequality, particularly for Earth’s billions of desperately poor and billions more comprising a planetary precariat; these broad groups still comprise most of Earth’s population. Capitalism continues to do its work, centuries in the future, only now the divide is not North/South but rather Space/Earth.

Despite the social consciousness Mr. Robinson brings to his marvelous novels — I have been a fan of his since reading his Mars trilogy in the 1990s — this all seems rather too easy. His 2312, as with his earlier works, is outstanding literature that soars vastly above ordinary science fiction, wrestling with complex socio-economic problems and human relationships from a Left perspective through characters that are actually fully formed human beings. One of these is rare in the genre; having both puts him in very rarified company, with, for example, Ursula K. Le Guin.

Industrializing the solar system

There has frequently been an underlying pessimism in Mr. Robinson’s novels despite his creation of worlds with alternative social systems, dizzying technological advances, and racial, gender and sexual-orientation equality. That is, capitalism seems unmovable, continuing to grind down large sections of humanity and further degrading environments long past the point of any rational excuse and despite alternative socialist systems flourishing somewhere.

In light of this, let’s rephrase the opening questions I asked: Can capitalism be saved by industrializing the solar system? In the world of 2312, that is what has happened. Earth is in bad shape indeed, with 11 billion mostly precarious inhabitants, countless species wiped out and drowned cities. Food grown in and imported from hollowed-out asteroids devoted to agriculture, and access to natural resources mined across the solar system, are what keep it from complete collapse.

But, again, it seems too easy. Our present-day course continues through this century into the first decades of the 22nd century before a series of technology breakthroughs — including space elevators, artificial intelligence and automated self-replicating factories that convert raw materials into finished products — touch off a fantastic exodus into space; in less than a century the solar system out to Saturn is settled and thousands of asteroids are hollowed to create new, artificial worlds to inhabit.

Venus before the real estate rush (Image created by NASA and National Space Science Data Center via Pioneer 1 probe)

Venus before the real estate rush (Image created by NASA and National Space Science Data Center via Pioneer 1 probe)

I can’t help but think of Arthur C. Clarke’s maxim that any technology, sufficiently advanced, is indistinguishable from magic. So it is here, with robotic machines creating the infrastructure both to make planets, moons and space rocks inhabitable and collecting and delivering vast amounts of raw materials from across the solar system. The terraforming of Mars is made possible by stripping the Saturnian moon Titan of half of its nitrogen. Venus’ terraforming requires the disassembly of another Saturnian moon and bombarding Venus with the ex-moon’s ice while Venus cools off behind a sunscreen that blocks the Sun, freezing out its carbon dioxide atmosphere.

A truly gargantuan amount of capital would be required to finance these projects! And surely there would be a pushback against such wholesale destruction. In the author’s Mars trilogy (a different universe and story), the Mars colonists, having effected a revolution to free themselves from the grip of Earth’s dominant corporations, are divided into those who wish to go no further than the pre-revolution partial terraforming already forced through by Earth and those who wish to make Mars fully Earth-like.

In 2312, however, environmentalism is strangely absent, although internally understandable as most of the action is off Earth and virtually every character of note is a “spacer” native to someplace else — their very existence is based on artificial environments, technology, the use of resources across the solar system and political alliances across space. In such a time and place, the vast engineering that makes space civilization work would appear as an inevitability; such environmental disputes that do exist are territorial.

The chicken and egg of space

Setting aside that any systematic attempt to exploit other worlds would surely be accompanied and critiqued by an environmental movement, the depicted 24th century civilization rests entirely on magic in the Clarkeian sense. The depicted mechanics of engineering are physically possible but would they be viable for an Earth destroying itself environmentally, economically and morally?

Although ever mounting inequality could conceivably pool enough capital to make early stages of space colonization financially possible, the countervailing factors of environmental destruction, global warming, depletion of natural resources and increasing unrest on a world scale as more billions are immiserated (and all the problems that flow from them) should give us pause. Were humanity to continue on its current course into the 22nd century, it would most likely be too late.

The metals, gases and water to be found throughout the solar system would greatly expand the natural resources available for humanity, surely providing enough to create the necessary early space-colony infrastructure, but we have a chicken-and-egg problem: The resources to establish a space presence exist, but can’t be reached until we are present in space.

A rational system geared for human need rather than private profit, in which a healed planet has reversed its gathering crises, seems better equipped. There would not be the concentrated capital that now exists, but with a planned, democratic economy it might be possible to slowly establish bases on the Moon, or perhaps Mars or nearby asteroids (presumably accompanied by an environmental movement), should humanity see it in its common interest and as a spur to useful technological development distributed in an egalitarian manner.

Under capitalism, it is inevitable that private enterprise will take the helm, with expectations of the highest possible profit. But space capitalists would have to be heavily subsidized by governments; already, the U.S. space agency NASA is shifting more of its budget to contracts with private companies to launch rockets for it. Should a space program become just another corporate subsidy? And as tempting as grabbing the solar system’s natural resources may be, limitations will assert themselves. Capitalism requires ceaseless expansion and growth and that is no more possible in a finite solar system than on a finite Earth.

A badly degraded Earth, saddled with massive poverty, environmental degradation and billions struggling to survive in the face of dwindling resources and global warming, is an unlikely candidate to, in the nick of time, develop a series of magical technologies that save the day. But even this outer space cornucopia, where spacers routinely travel billions of miles the way the more privileged among us take airplane trips, is dependent on the surplus value extracted from Earth’s inhabitants, both on Earth itself and on major projects, such as the Venusian terraforming. That is so even though Earth in turn is dependent on the food and raw materials continually sent to it by spacers.

None of this, I wish to stress, is meant as a criticism of Mr. Robinson. His novel 2312 does what the best literature does — stimulate thinking at the same time we enjoy well-crafted writing. As I was reading it last month while on vacation in Vermont, my partner asked me to read a bit of it out loud to her and just the first six pages, vivid descriptions of the Mercurian city moving along a planet-circling track while “sun walkers” walk the surface ahead of the deadly sunrise on excursions, matching the pace of the city, made her want to read it herself, so enraptured did she become. Me too.

Audacity, not hoping for reforms, the route to a humane world

Working people in the core capitalist countries have received benefits from imperialism (even if only crumbs) that workers in the rest of the world don’t receive. That dichotomy is a barrier that has hindered the building of global alliances necessary to reverse neoliberalism.

Or, going beyond, to create an international social movement strong enough steer the world from its present course of economic and ecological suicide to a sustainable system oriented toward human need. A further division among the world’s working peoples between the diminishing numbers with reasonably secure, regular employment and the vast numbers of those without available regular work — the “reserve army of labor” or, to use the increasingly popular term, the “precariat” — and divisions within these broad categories also, on the surface, seems to imply that the world’s workers don’t have any unifying interests.

On the contrary, an international movement that brings together the peoples of the global North and the global South, with a common goal of nationalizing the monopolies that currently have a stranglehold on the world’s economy and a commitment to “de-financialization” (a “world without Wall Street”) is not only possible but indispensable, argues Samir Amin in his latest book, The Implosion of Contemporary Capitalism.* These would not be ends unto themselves, but rather the first necessary steps on a long road toward a sustainable and equitable future.

The Implosion of Contemporary CapitalismCritical to developing strategies to transcend an “imploding” capitalist system is developing an understanding of the world’s current organization. In the current stage of “generalized monopoly capitalism,” as Dr. Amin defines today’s world, monopolies tightly control all systems of production and thereby extract extraordinarily large profits. These surpluses are so large they can’t be invested rationally and therefore can only be deployed in speculation, fueling financialization. The process of financialization in turn enables banks to amass vast power and create debt that they profit from.

Increases in productivity outstripping growth in wages further fuels this process. But these monopolies are not located just anywhere — they are located in the capitalist core of the United States, Europe and Japan. Thus the power amassed by these monopolies is inflated by the extraction of capital from peripheries to these centers. Dr. Amin writes:

“In its globalized setup capitalism is inseparable from imperialist exploitation of its dominated peripheries by its dominant centers. Under monopoly capitalism this exploitation takes the form of monopoly rents (in ordinary language, the superprofits of multinational corporations) that are by and large imperialist rents. … [T]he material benefits drawn from this rent, accruing not only to the profit of capital ruling on a world scale but equally to the centers’ opulent societies, are more than considerable.” [pages 20-21]

(The term “monopoly” here is not meant in the “pure” sense of one single corporation dominating an industry, but rather refers to a handful of corporations that, as a group, act in a monopolistic manner. “Rent” is a macroeconomic term meaning the extraction of profits above the ordinary level derived from an advantage.)

The ability of monopoly capital to exploit the global South is aided by the collaboration of local elites, a class of “corruptionists,” to use Dr. Amin’s pungent phrase, who are “highly compensated intermediaries” allowed to take a slice of the extracted superprofits. The whole is partially masked by the fragmentation of production, which nonetheless remains tightly controlled by monopoly capitalists.

This creates the illusion of a divergence in the interests of working people, both within and among countries, but differences in skill levels and ability to earn higher wages has always existed. All working people have in common that they are exploited; the challenge then becomes to effect the unity of workers (including those in informal sectors), peasants and the middle classes in a united front crossing borders.

Smaller enterprises and farmers subordinate to dominant firms

The latest stage of capitalism, starting with the late 20th century, is the era of “generalized monopolies” in which monopolies command the heights of the economy and directly control entire production systems, reducing small, medium and all peripheral enterprises to subordinate roles. Those subordinate enterprises, as well as farmers, have become subcontractors whose operations are subject to rigid control by the monopolies. From this, Dr. Amin concludes:

“There is no other possible answer to the challenge: the monopolies must be nationalized. This is a first, unavoidable step toward a possible socialization of their management by workers and citizens. Only this will make it possible to make progress along the long road to socialism. At the same time it will be the only way to develop a new macro economy that restores genuine space for the operations of small and medium enterprises. If that is not done, the logic of domination by abstract capital can produce nothing but the decline of democracy and civilization, and a ‘generalized apartheid’ at the world level.” [page 113]

The “imperial rent” that accrues to the capitalist core’s monopolies mainly flows to the capitalists, but the workers of the North also benefit from it, and this creates a barrier to North-South alliance building. Workers of the South can’t help but be acutely aware of global imbalances that impoverish them, in contrast to many workers of the North tacitly embracing the relative crumbs they receive at the expense of their Southern brothers and sisters through uncritical acceptance of nationalist ideologies extolling the supposed superiority of imperial countries; this acceptance is reflected, for example, in the U.S. labor federation AFL-CIO’s decades-long uncritical embrace of Washington’s imperialist foreign policy.

Creating a better world — a world in which economic decisions are reached through democratic processes in which all affected parties have a voice and in which the economy is run for the benefit and development of all humanity rather than the private profit of capitalists — is therefore inextricably linked with providing solutions and better living conditions to the majority of the world who live in the peripheral countries.

Change must be in three “dimensions,” Dr. Amin writes — peoples, nations and states. The liberation of a nation and achievements by a state are complements to the advancements of the people; the idea that people can transform the world without taking power is “simply naïve,” the author writes. But it is the people who must be at the forefront:

“[T]he notion of national liberation ‘at all costs,’ in other words being independent of the social content of the hegemonic coalition, leads to the cultural illusion of attachment to the past (political Islam, Hinduism, and Buddhism are examples) [that] is in fact powerless. The notion of power, conceived as being capable of ‘achievements’ for the people, but carried out without them, leads to the drift to authoritarianism and crystallization of a new bourgeoisie. The deviation of Sovietism, evolving from ‘capitalism without capitalists’ (state capitalism) to ‘capitalism with capitalists,’ is the most tragic example of this.” [pages 116-117]

The impossibility of reforming away concentrated power

Additional illusions are that the South can “catch up” with the core capitalist countries or that the maldevelopment of capitalism can be wished away through reforms. The imperialist system blocks the development of new industrial contenders; moreover, the rise of European capitalism required the “safety valve” of emigration to the New World as peasants were forced off the land. There are no new worlds that can absorb the many millions of peasants displaced and to be displaced as capitalism washes over all parts of the globe.

And, although this was not discussed in The Implosion of Contemporary Capitalism, anarchist and Proudhonist ideas that employees can gradually take control of their workplaces while ignoring the state are also illusions. You may wish to ignore the state, but that does not mean the state will ignore you, nor will capitalists, with the powerful coercive apparatus of the state at their disposal, idly sit by and allow their property and prerogatives to be gradually taken away. Similarly, reformist ideas such as more regulation or a return to the post-World War II model are illusions — reforms can and are taken back and there is no going back to the past because the conditions of today are not the conditions of yesterday.

What Dr. Amin does advocate is “audacity, more audacity.” The proposed audacity centers on three programs: socializing the ownership of monopolies, “de-financialization,” and “de-linking” at the international level. Reversing the current social order is impossible without expropriating the power of monopolies.

Economic activity should be organized by public institutions representing groups up and down production supply chains, consumers, local authorities and citizens self-organized democratically. Management of monopolies should include workers in the enterprise as well as representatives of consumers, citizens, (democratically controlled) banks, research institutions and upstream industries. Large-scale production would continue to exist because it is unrealistic to believe that artisans and small local collectives could replace the production of large enterprises, the author writes, but production must be done on the basis of being answerable to society’s collective choices.

“De-financialization” is conceptualized as not simply the abolishment of “shareholder value” as the supreme force animating production but going beyond nationalization/socialization to establish direct participation in management by relevant social partners. Ecological impact, minimization of risk and client participation would be the foundation of banking. The focus on community control and international “de-linking,” however, does not mean a retreat into isolationism; rather it would be a reconstruction of global relations through negotiation rather than the current system of submission to the imperial powers.

These programs can’t be implemented on a global or regional basis, Dr. Amin argues, but only within countries committed to socialization and democratization of the economy. Thus the South must de-link from international institutions controlled by the imperial powers and Europeans must dismantle their undemocratic institutions responsive only to “market” reactions. There are no alternatives, the author writes:

“Capitalism is now an obsolete system, its continuation leading only to barbarism. No other capitalism is possible. … Either the radical left will succeed through the audacity of its initiatives to make revolutionary advances, or the counterrevolution will win. There is no effective compromise between these two responses to the challenge.” [page 146]

There is no guarantee as to what will succeed capitalism. We can sit back and let history unfold, continuing to cede the initiative to elites who have imposed austerity on the world and can only offer ever more harsh and repressive policies while consuming the Earth’s resources until nothing is left. Or we can collectively work together to create a humane, democratic future by overturning capitalism. If we don’t accomplish the latter, we will surely find ourselves in the hell of the former.

* Samir Amin, The Implosion of Contemporary Capitalism [Monthly Review Press, New York, 2013]

Conceptualizing globalization as a corporate elite project, not a nationalistic project

Corporate globalization is an international phenomenon by definition that is commonly opposed on nationalist lines. A process imbedded in capitalist competition and advanced by the industrialists and financiers who directly benefit from it, however, transcends borders.

Understanding corporate globalization is necessary to developing strategies to effectively counter it, and relying on nationalist arguments is a barrier to grasping the systemic nature of globalization, argues Martin Hart-Landsberg in his just released book Capitalist Globalization: Consequences, Resistance and Alternatives.* All too often, he writes, activists fall back on pointing fingers at China or similar nationalistic talking points, thereby obscuring the true culprits in the global race to the bottom.

Capitalist GlobalizationBy doing so, activists not only erode their potential effectiveness by not prioritizing cross-border alliance building, they drag the spotlight away from the trans-national corporate elite who drive the process.

Today’s world is one decades in the making, Professor Hart-Landsberg writes. Following World War II, multi-national corporations sought access to foreign markets and to evade tariffs; developing countries were later converted into “export platforms” to take advantage of low wages; and, as competition intensified this process, entire production processes became outsourced. Parallel to those developments, trade agreements have evolved from merely engineering tariff reductions to dictating economic and social policy through bi-lateral and multi-lateral trade agreements.

Multi-national corporations that have transferred production to China account for most of China’s exports, including the vast majority of high-tech exports, to which China contributes very little. Professor Hart-Landsberg writes:

“China is the world’s number one exporter of computers. Yet China’s contribution to this activity is limited to providing cheap labor and land. … [E]ight of China’s top ten exporters are now Taiwanese [manufacturers] that supply ‘branded [personal computer] sellers such as Dell with unbranded computers and components.’ … China’s rise as an export powerhouse is primarily due to its position as the final assembly platform for transnational corporate cross-border production networks.” [pages 45-46]

That doesn’t mean that Taiwanese manufacturers reap the lion’s share of the profits that accrue from these cross-border production networks. Those companies, such as Foxconn, are contractors to Western and Japanese companies including Apple, Microsoft and Hewlett-Packard that take most of the money. Only US$6.50 of the US$179 cost of an iPhone is generated by China (due to extremely low Chinese wages). Thus, the author determines that China’s true net trade gain from the iPhone is $73 million, not the $1.9 billion of standard trade calculations:

“In short, although national accounting implies that China is the big winner and the United States the big loser, in reality the profit generated by the production and sale of iPhones was largely captured by a select few transnational corporations, none of which are Chinese, with Apple, a U.S. company, the biggest winner.” [page 22]

More exports, but more jobs are precarious

All of East Asia is increasingly dependent on exports. Other East Asian countries are tied, especially, to the United States because their production is oriented toward making components that are shipped to China, which in turn is heavily dependent on exporting to the U.S. Chinese demand has raised the prices of commodities, which has some benefit for Latin American and African countries reliant on exporting raw materials, but at the cost of stifling their efforts at industrial development. Chinese policies that exploit domestic labor not only force wages down regionally, but crowd out production elsewhere in East Asia — production has become geared to making parts that are shipped to China for final assembly rather than done to meet domestic needs.

Highly exploited workers in China not only receive ultra-low wages, but are increasingly precarious — virtually all job growth in China from 1990 to 2002, the author writes, was in irregular employment.

The disastrous results for workers from “free trade” agreements has been replicated around the world. Professor Hart-Landsberg, in a chapter devoted to analyzing the South Korea-United States Free Trade Agreement, cites a study finding that the U.S. will lose 159,000 jobs due to the pact from 2008 to 2015, and a separate study that found that from 1998 to 2008 U.S. exports to countries that did not have a “free trade” agreement with the U.S. grew as fast as double the rate to countries with “free trade” agreements. The percentage of South Korean workers with irregular employment has increased from 40 percent before 2000 to more than 60 percent in 2008, while the Korean economy has become more dependent on exports.

Nor have the results been better elsewhere. For the developing world as a whole (other than China), the average growth rate in the 1990s is two percentage points lower than it was in the 1970s, while trade deficits are larger.

Given the inevitable falling wages, eroding manufacturing bases and waves of dislocation — only part of the fallout from the race to the bottom resulting from corporate globalization — how is it that “free trade” agreements are invariably promoted with “predictions” promising miraculous growth in jobs and benefits? This is self-serving nonsense, yes, but it goes beyond that: “Free trade” is based on ideology and ridiculous assumptions, not scholarship.

Economic models that presume wondrous benefits from “free trade” agreements assume, inter alia:

  • There are only two inputs, capital and labor, which are able to move instantaneously but never cross national borders.
  • Total aggregate expenditures in each economy will be sufficient, and automatically adjust, to ensure full use of all resources.
  • Flexible exchange rates will prevent lowered tariffs from causing changes in trade balances.

As a result of these specious starting points, the author writes:

“[T]his kind of modeling assumes a world in which liberalization cannot, by assumption, cause or worsen unemployment, capital flight or trade imbalances. Thanks to these assumptions, if a country drops its trade restrictions, market forces will quickly and effortlessly lead capital and labor to shift into new, more productive uses. And since trade always remains in balance, this restructuring will generate a dollar’s worth of new exports for every dollar of new imports. Given these assumptions, it is no wonder that mainstream economic studies always produce results supporting ratification of free trade agreements.” [page 104]

This is standard Chicago School ideology, the leading source of justification for the wish lists of the biggest industrialists and financiers. The South Korea-United States Free Trade Agreement, for example, bans either government, when soliciting bidders for contacts, from giving consideration to corporate policies on the environment or labor, and prohibits buy-local policies, financial regulations, capital controls or “indirect expropriations.” These tend to be replicated in other “free trade” deals.

Effective movements must stress system, not country

Although such policies are detrimental to working people in each of the countries, Professor Hart-Landsberg strongly cautions against portraying such deals as merely “flawed,” rather than as fundamental attacks on working people and a continuation of capitalist assaults. He argues that the effectiveness of Korean and U.S. movements against the agreement was weakened because activists in both countries tended to stress nationalistic themes. The United Auto Workers union, for example, reversed its initial opposition in exchange for Korea weakening its fuel and safety standards and the U.S. delaying tariff reductions on Korean vehicles while failing to address the larger structural issues.

Similarly, arguments that point fingers at China imply that there is nothing wrong with “free trade” policy or U.S. capitalism, the actual drivers of the race to the bottom.

The author argues that movements must build toward the future and point toward a society built on different grounds while responding to immediate needs. A shared vision of the future should include struggles to expand the public sector as part of a fight for social property. Public education must be a priority, both as a social goal and as opening spaces for teaching social skills.

“Successful movement building involves creating strong, accountable, and politicized organizations; a community-based structure that connects these organizations; and a common commitment to struggle based on a shared vision of the future.” [page 148]

Human liberation can only be built on principles of equality, democracy and solidarity. One component of such orientations is to use strategies in combating capitalist ills such as sweatshops and low labor standards that go beyond mere reforms but rather aim at confronting and opposing the capitalist system that spawns them.

“The potential of … anti-sweatshop struggles lies in the fact that they encourage resistance to the corporate dominance of education, promote student-labor alliances, and strengthen international solidarity. They also draw new people into political movements for change.” [page 152]

No country, however, can be a socialist island — it is impossible for any single country to de-link from the world capitalist system. Regional developmental strategies are needed. The author, in his final chapters, discusses South America’s Bolivarian Alliance for the Americas (ALBA) and Bank of the South, and the post-World War II European Payments Union system dissolved in the 1950s. It would have been preferable if Professor Hart-Landsberg had attempted to sketch out ideas for what a regional system of mutual development might look like rather than concentrate on an example like the payments union that he admits is “not a blueprint” and also flawed because it was designed to liberalize trade even if it did provide European industry protection from U.S. dominance.

Nonetheless, the author’s discussion of ALBA is valuable. ALBA pursues national projects that enhance the conditions of working-class majorities, finances and facilitates production and infrastructure projects, and enables cooperative trading of expertise and resources. On the other hand, he argues, the eight-nation bloc is overly dependent on Venezuelan largesse and its top-down decision-making undercuts social and civil-society groups.

In extracting “lessons” from his discussion of ALBA, the author argues that movements must take state power seriously, not confining themselves to grassroots initiatives while leveraging community organizations to steer state policies in the proper directions. He also writes that critiques must be shifted from anti-neoliberalism to anti-capitalism, and educational work deepened — reliance on capitalist crises should not substitute for the work of building support for socialist alternatives.

The realization of such alternatives can not be other than a long-term struggle. But what choice does humanity have?

* Martin Hart-Landsberg, Capitalist Globalization: Consequences, Resistance and Alternatives [Monthly Review Press, New York, 2013]

Venezuela’s revolution is a process propelled by millions, not one leader

Venezuela’s Bolivarian Revolution is much bigger than Hugo Chávez; it is a movement of millions. The movement that drives the process forward long predates his election and his failed 1992 coup.

Saying this should not come as a revelation, for no large-scale social movement can exist as a personal vehicle, nor can any one person, no matter how charismatic, single-handedly carry the responsibility for social change, especially when that change has the long-term, open goal of supplanting the global capitalist order.

We Created ChávezContrary to the myopic, superficial corporate-media narrative of a caudillo motivated by a fathomless desire to poke Uncle Sam in the eye (although we must immediately ask how a leader who won 16 of 17 national elections, almost all by at least 10 percentage points, can be a “dictator”), the Bolivarian Revolution is a continuation of struggles that have been waged since the late 1950s. The defining moments, George Ciccariello-Maher argues in We Created Chávez: A People’s History of the Venezuelan Revolution,* are not President Chávez’s electoral victories but rather two outbursts of people’s power, a 1989 uprising and the 2002 uprising that re-installed him, reversing the business coup.

The Bolivarian Revolution can’t be understood without a bottom-up perspective, without analysis of the pressure from below that buffeted President Chávez, pushed forward by organizations that support the revolution. Professor Ciccariello-Maher, as his book’s title signals, provides that necessary background:

“Hugo Chávez is not a cause but an effect, not Creator but creation; in this sense, the history that follows is literally a defetishization, a demystification. His election and even his failed coup did not mark the beginning of the Bolivarian Revolution, but were instead the results and reflection of its long and largely subterraneous history.” [page 21]

That history has roots two centuries old, and the modern manifestation of Venezuelan struggle begins in the late 1950s, ironically with the downfall of Venezuela’s last dictator and the establishment of a formally “democratic” republic. Marcos Pérez Jiménez was overthrown in 1958, replaced by a two-party system designed to stifle popular participation. The “social democratic” party, Acción Democrática — unusually ruthless in attacking its base even by the standards of world social democracy — mostly was in power, alternating with Copei, the Christian democrats.

‘Democracy’ proves little different than dictatorship

Acción Democrática leader Rómulo Betancourt won office in the first post-Pérez Jiménez election. Within a year, his government was shooting people dead in the streets and ruling under states of emergency. Violent repression was the swift response by the new president to his unpopularity; repeated massacres sparked uprisings across the country. A revolutionary situation developed, but Professor Ciccariello-Maher argues that the Venezuelan Communist Party waited too long while the Revolutionary Left Movement went too soon. A series of tactical mistakes doomed this armed struggle, not least of which was a lack of connections with the people, the author writes.

A series of groups blossomed and declined, rural guerrilla strategies failed, the electoral Left floundered, and mass fronts and other popular organizations faced severe state repression during the following years. The net of state repression was cast steadily wider — the government provided little services but attacked those who asked for them. Out of this situation, barrio assembles and popular militias began to be organized for self-defense; the latter forcibly ended the drug trade in neighborhoods in which they operated. These popular organizations organized sporting and cultural activities, and expelled the police — their militancy propelled people forward.

Professor Ciccariello-Maher argues that the 1989 uprising known as the “Caracazo” is the first of two “ruptures” (the 2002 coup reversal the other) that are the critical moments in the process that is the Venezuelan Revolution. Carlos Andrés Pérez took office as president that year as the Acción Democrática candidate on an explicitly anti-International Monetary Fund platform. It took him two weeks to jettison his campaign pledges and impose the full IMF-dictated austerity package. Riots broke out the morning of imposition, led by informal workers. But because political organization was widespread, these were not blind lashings-out — the target of the anger quickly went from bus drivers (a doubling of oil prices prompted large fare increases) to the state and its system.

A curfew was declared the next day, and a violent crackdown ensued, with as many as 3,000 left dead. The author leaves no doubt as to the severity of the government crackdown:

“Known organizers were dragged from their homes to be either executed or ‘disappeared,’ and when security forces met resistance from rooftop snipers, they sprayed entire apartment blocks with automatic machine guns. … The human toll of the rebellion has never been fully revealed, especially because the Pérez government subsequently obstructed any and all efforts to investigate the events. … A recent study has shown that some four million bullets were fired to quell the rebellion, and the Relatives of Victims Committee, an organization founded around the victims of the Caracazo, reports that 97 percent of the documented victims died in their own homes.” [pages 96-97]

Grassroots organizations build opposition

The author writes that the Caracazo crystallized and focused organized opposition within the military while civilian armed groups sought to unify the popular militias with the military opposition. By 1991, barrio assemblies in Caracas were organizing and coordinating opposition. The military uprisings in February and November 1992 (the former the one led by Hugo Chávez) were the “detonators” for subsequent popular rebellions. State repression could not break popular control of the streets, and these social movements led to the 1998 election of President Chávez.

“[D]efeat notwithstanding, the Caracazo sounded the death knell of the old system, simultaneously reflecting and contributing to the inevitability of its collapse and thereby setting into motion the entire process that came after it. In symbolic terms, it smashed in a single stroke the façade of [Venezuelan] ‘democratic exceptionalism,’ revealing the bankruptcy and the violence of the existing system for all to see. Neither completely spontaneous nor fully organized, the Caracazo was an instant in which widespread disgust and revolutionary capacity met on the streets, generating historical agency by emboldening the faithful and converting the waverers: it was 1989 that enabled 1992, and 1992 that enabled 1998.” [page 89]

The author’s second moment of rupture, the reversal of the 2002 business coup against President Chávez after two days, was a product of the connections between militias and military, of political understanding and experience. Millions poured into the center of Caracas in defiance of the coup. Venezuela’s corporate media had unleashed an orgy of lies before and during the coup; the state television channel was closed while the private media blacked out any coverage of the mounting resistance. The coup leader, Pedro Carmona Estanga, the head of the national chamber of commerce, dissolved all branches of government and declared the 1999 constitution void, despite its having been approved by 72 percent of the electorate.

Loyalist military units, taking their cues from the mass popular resistance to the coup, took the presidential palace back, with officers giving the credit to the people and their “spontaneity” — but the “spontaneity” was the product of years of organizing, with Left activists seeking much more than the mere return of President Chávez to the palace.

“[M]ass spontaneity, while fundamental in its importance, is often the result of serious organizing that, in the case of Venezuela, spans decades. As with the Caracazo, then, this spontaneous mobilization and its spontaneous grasp of the strategic realities of the situation it confronted should not lead us merely to a panegyric of spontaneity for spontaneity’s sake. Rather, every moment of this spontaneity and every gesture of these spontaneous masses contained an aspiration toward increasingly conscious organization. In this explosive dialectic between spontaneity and organization that was resistance to the 2002 coup, such conscious effort would be especially important in the realm of mediatic and popular armed organizing.” [pages 172-173]

Struggle within the struggle

Can an engaged people go back to the ancien régime? We Created Chávez was published just before Hugo Chávez’s untimely death, but given the context of this story the president’s passing in no way renders the book out of date. The modern history of Venezuela is that of regularly employed workers, informal workers, peasants, students, women, Afro-Venezuelans and Indigenous peoples in a many-sided struggle against domestic elites and the country’s subaltern status in global capitalism. Then there is the struggle within the Bolivarian Revolution.

There are tensions between economic and political demands, between workers’ autonomy and the state, over the nature and content of “co-management” and over if co-management is a step toward a higher level or a capitalist trick, as well as opposition to developing the Bolivarian process from managers and within the ranks of the movement.

What forms should workers’ control take? Some argue for state ownership with employee participation, others argue for full autonomy of enterprises and the workers in them, and there are gradations in between. Enterprises under state ownership presumably should be managed to benefit the community, but how much management should be ceded to the workforce? Should workers fortunate enough to work in the oil industry be able to reap benefits far in excess of other workers? How should autonomous enterprises be managed to benefit the community, not only those who work in them?

There are similarly serious questions regarding agriculture. Venezuelan land ownership remains highly unequal, with owners of large ranches in control of the countryside. Moreover, because the countryside emptied out and the economy grew overly dependent on the oil industry before 1998, the country lost its food sovereignty. This exodus to the cities has swelled the size of the informal workforce, who get by with street vending and whatever other means they can to survive.

Less than half of the workforce has formal employment, Professor Ciccariello-Maher writes, but although the Chávez government had difficulty with informals, to the point of occasional hostility, the author argues that this sector has been the staunchest base of support for the revolution and is neglected at the government’s peril. Informal workers played no small role in reversing the 2002 coup, for example.

There is no stasis

Ultimately, the revolution can only succeed through creating mechanisms for self-government. “Patriotic Circles” became Bolivarian Circles after 1998, and were tasked with drafting and defending the 1999 constitution. Communal councils (local bodies that manage policy and projects in their communities) came into existence after a 2006 law. These are legally on par with state institutions and have oversight over them; these are views as potential replacements for the state bureaucracy. The councils are linked horizontally to one another and vertically in communes with a goal of them exercising sovereignty.

Due to the timing of the book, the author concludes with an analysis of President Chávez’s “complex and nuanced position” as someone who is not purely a representative of the state but also an ally of the social movements that have driven Venezuela forward in past decades:

“[M]ore often than not he has pushed a radical agenda that facilitates the transformation of that state, a fact most visible in the recent development of communal councils and popular militias. Here there are no guarantees, and despite the fact that the collective ‘we’ of the Venezuelan revolutionary movements … ‘created him,’ this does not mean the creation will not betray the creators. However … to do so would certainly require a fight.” [pages 254-255]

The necessity of struggle to deepen the revolution is unchanged by the president’s death. Social movements have driven the process forward, and will continue to do so, regardless of who occupies the palace. We Created Chávez is indispensable toward understanding the process that is the Bolivarian Revolution and the path taken by Venezuela.

* George Ciccariello-Maher, We Created Chávez: A People’s History of the Venezuelan Revolution [Duke University Press, Durham, North Carolina, USA, and London 2013]

Mirror images and ideological straitjackets on the path from Solidarity to sellout

For much of the 20th century, there was a curious mirror effect between orthodox Soviet and Chicago School ideologies — both saw the other as the only other possible economic system. Although both time and the ongoing global crisis of capitalism has begun to chip away at such a ridiculous binary, to a maddening degree this ideological straitjacket continues to assert itself. A straitjacket that does not spontaneously materialize but is crafted for the maintenance of power.

The effects of this mirrored duality are still very much with us, and are a crucial factor in the path the countries of the former Soviet bloc have traveled. The usages of this ideological construct are obvious enough in the capitalist world, distilled into “there is no alternative” by the just departed Margaret Thatcher. Less obvious were the usages further East; perhaps the nearest equivalent of the prime minister’s “TINA” is Leonid Brezhnev’s declaration of the Soviet system as “irreversible.”

When the general secretary’s formulation began unraveling in the late 1980s, what was a Soviet bloc economist to do? For many, the answer was to pick up a copy of a book by Friedrich Hayek or Milton Friedman, and jump through the looking glass. And when their new mirror seductively told them to apply shock treatment to their own countries, they did — the mirror told them there was no alternative.

There is always an alternative, Polish economist Tadeusz Kowalik reminds us in his book From Solidarity to Sellout: The Restoration of Capitalism in Poland.* Professor Kowalik, drawing on his decades of experience as a reform socialist often on the outs with the communist authorities for his willingness to challenge orthodoxy, his work as an adviser with the Solidarity trade union and his personal knowledge of the key players, reminds us that Poland — and, by implication, the Soviet bloc as a whole — had an opportunity to create a different economy, one built on cooperatives and democratic participation in the economy.

Solidarity to Sellout coverSuch an outcome was widely desired by Poles, and the outlines of such a system emerged in the “Round Table” negotiations held between Poland’s communist authorities and representatives of opposition groups, led by Solidarity, from February to April 1989. Economic democracy was already an established concept, embodied in the “Self-Governing Republic” program of Solidarity, adopted at its first national congress in 1981. In it, Solidarity, which consciously identified itself as a labor union and a broad social movement, declared:

“In the organization of the economy, the basic unit will be a collectively managed social enterprise, represented by a workers’ council and led by a director who shall be appointed with the council’s help and subject to recall by the council. The social enterprise shall … [work] in the interests of society and the enterprise itself.  … The reform must socialize planning so that the central plan reflects the aspirations of society and is freely accepted by it. Public debates are therefore indispensable. It should be possible to bring forward plans of every kind, including those drafted by social or civil organizations. Access to comprehensive economic information is therefore absolutely essential.”

Solidarity’s program forgotten, but the looking glass not on agenda

Although Solidarity’s original program was tossed aside, the Round Table negotiators envisioned significant changes without any “leap” into a capitalist market. The two sides did not have serious disagreements, ultimately agreeing in principal, on the political side, on pluralism, freedom of speech and freely elected local governments. On the economic side, there was agreement on facilitating employee ownership, for employee control of state-owned enterprises and a uniform policy toward enterprises, regardless of ownership form. Summarizing the agreement in Solidarity to Sellout, Professor Kowalik wrote:

“Of primary importance here are the provisions concerning protection of labor and employment, written out in ten settled upon and two contentious points. All these detailed settlements distinctly show that the participants of the agreement had no such thought in mind as a ‘leap’ into a market economy.” [page 60]

Yet a particularly harsh brand of capitalism was instituted; “Thatcherism” or “Reaganism” in the parlance of then and “neoliberalism” in today’s vernacular. Professor Kowalik cites several factors leading to the imposition of shock therapy in contradiction to popular opinion, negotiated agreements and pre-existing platforms:

  • The centralization of Solidarity while underground during the period of martial law during the 1980s converted it into a top-down organization with a severe cut in membership and an isolated leadership that drifted to the Right.
  • The grabbing of state property by the nomenklatura (the bureaucracy managing enterprises and overseeing that management from within the government) for themselves.
  • A blurring of Catholicism with socialism, particularly on the part of Tadeusz Mazowiecki, who would become the first non-communist prime minister, but also by other influential people.
  • The adoption of undiluted neoliberal ideology by the Polish economists who would become the architects of economic policy by becoming ministers and government advisers.

One of the agreements arising out of the Round Table was that one-third of the seats to the Polish parliament (the Sejm) would be contested later that year (1989) in June. Solidarity won all but one of the contested seats — so sweeping was the rout that Solidarity became the effective government even though the communists still held a parliamentary majority. Mr. Mazowiecki became prime minister when the next government was formed three months after the election. Solidarity activists dominated the new government, although communists retained some portfolios, including the Interior and Defense ministries.

Critically, however, the new finance minister/deputy prime minister was Leszek Balcerowicz, a proponent of neoliberalism who was distant from Solidarity’s struggles and whose writings were of an abstract nature; “his interests were limited to pure theory,” according to Professor Kowalik. Prime Minister Mazowiecki’s leading economic adviser was Stanisław Gomułka, who converted to neoliberal ideology while at the London School of Economics. And Western advisers beat a path to Warsaw as they did to other Soviet bloc capitals; Jeffrey Sachs, who oversaw shock therapy in multiple countries, perhaps was the most prominent. The International Monetary Fund was also on the scene.

Abstract theorizing instead of examination of concrete reality

Other economists who had imbibed starry-eyed ideas of how market forces would shortly create paradise played roles as well; but the finance minister’s role was so important that Poland’s shock therapy became known as the “Balcerowicz Plan.” Professor Kowalik wrote of his obfuscating tendencies:

“Balcerowicz made great efforts to compromise — like the term ‘social interest’ — the adjective ‘social.’ … Such a standpoint was bound to lead him to extreme individualism, a negation of the role of the state as a general social institution, with only the interest of the authorities being important. Balcerowicz does not write this outright, but his reasoning resembles a lot the well-known view of Margaret Thatcher, that there is no such thing as society (and thus it does not exist). He rejects the very notion of social justice and often simply avoids this subject. … Balcerowicz’s knowledge, of course, remained theoretical, abstract, and distant from real economic policies.” [pages 112-114]

Such an approach and outlook dovetails with orthodox capitalist economics, as distilled through the wellspring of neoliberalism, Chicago School economics: highly abstract, built on mathematics and based on airy concepts such as “perfect competition” rather than on the real world. Firms and individuals are not seen as part of a social structure; factors such as wealth and property are taken as given. Production is alleged to be independent of all social factors, the employees who do the work of production are in their jobs due to personal choice, and wages are based only on individual achievement independent of race, gender and other differences.

Such is the underlying rationale for neoliberalism, which seeks to make “market forces” — the aggregate interests of the wealthiest industrialists and financiers as expressed through the power of the corporations they control — the sole arbiter of outcomes in all social spheres. Neoliberalism, as Henry Giroux recently put it, “construes profit-making as the essence of democracy, consuming as the only operable form of citizenship, and an irrational belief in the market to solve all problems and serve as a model for structuring all social relations.”

New laws accelerate grabbing of state property already in progress

Privatization, however, was already under way by the time the Round Table negotiators hammered out their agreement. A 1987 law enabled the creation of private businesses with the assets of state enterprises and a January 1989 law stipulated outright that state assets could be transferred to private individuals for conducting economic activity. Such transfers were not necessarily done with full value paid, and private firms were given preferential treatment. Professor Kowalik wrote in Solidarity to Sellout:

“[T]he players of the nomenklatura offshoot of privatization consisted of managers of various rank, government and party functionaries associated with them, along with their families. The process, commonly called ‘enfranchisement of the nomenklatura,’ deserves attention because it was then that the phenomenon of corrupt privatization, or arranged clientelistic privatization, developed. …

“The state sector shortly became a cash machine, which was made easier by the authorities through relevant legal regulations. … These laws sanctioned the plunder of the state sector earlier begun by its own managers. The state sector was highly taxed to maintain the entire state infrastructure and doomed to hopeless competition with the nearly tax-free private firms that were also paying infinitesimal customs duties.” [pages 204-205]

The pace was accelerated when the parliament, in late December 1989, hurriedly passed nearly unanimously a series of bills implementing the Balcerowicz Plan, with the plan going into effect on January 1, 1990. Noting the later contrition of the parliament speaker, who said Finance Minister Balcerowicz and Professor Sachs “plainly tricked us,” Professor Kowalik summed up the vote this way:

“Advantage was simply taken of the immense trust that the people had in the first non-communist government. There could be no serious debate, because without a general document presenting a synthesis of the systemic contents of eleven laws and the simultaneously ratified budget, such a discussion was not possible. The parliamentarians acted under the pressure of a race with time, imposed on them by the executive authorities.” [page 133]

One scheme for privatization was the creation of “National Investment Funds” — state companies disposed in this program were to be 15 percent owned by employees, 25 percent by the state treasury and 60 percent by the funds, with the public allowed to buy shares in the funds. Only a minority of privatized enterprises were disposed of this way (more were simply sold to foreign buyers), but the funds were a failure, Solidarity to Sellout reports, because inflation and a declining stock market caused the shares to steadily lose value; moreover, most of the public shares wound up in foreign hands.

What capital remained in Polish hands also became concentrated as, similar to the pattern in Russia, the nomenklatura-turned-privatizers were soon dwarfed by a new class of oligarchs.

Actual cooperatives faced consistent hostility from the government, which saw coops as a temporary “transition” to what it termed “real” privatization. Pre-existing cooperatives were simply  “administratively eliminated,” new coops had barriers placed in front of them and foreign capital, which soon controlled Polish banking, was also hostile. At the same time, state farms were immediately thrown into competition with subsidized Western European agricultural with all domestic subsidies removed at a stroke, devastating Polish farmers. This was in contrast to the buildup of Western European agriculture after World War II, which was nurtured through protective measures.

Results of shock therapy differ widely from promises

The results of the Balcerowicz Plan were devastating, in contrast to promises of a short-lived downturn followed by rapid growth and transition to Poland becoming a “normal” European country, a concept dangled by Western advisers skillfully playing on Polish antipathy toward Russia:

  • A 50 percent drop in real wages and a 30 percent drop in industrial output in the first month of the Balcerowicz Plan.
  • From 1996 to 2005, the percentage of Poles whose income was so low as to be insufficient for biological survival tripled to 12 percent even though the national income rose by one-third.
  • Wage inequality became the highest in the European Union.
  • The number of Poles living below the official poverty level ballooned to 58 percent by 2003; the statistics bureau then stopped publishing this figure.
  • Before entry into the European Union, the average unemployment rate was 16 percent, topping 20 percent during the early 2000s, more than a decade after the imposition of shock therapy; the rate declined after E.U. ascension due to a stream of emigration.

Having told this story in a somewhat idiosyncratic but nonetheless compelling style, Solidarity to Sellout ends, surprisingly, on an unimaginative note by championing the Scandinavian model of capitalism, seeing Sweden as the model for Poland to emulate. In part, the conclusion follows from Professor Kowalik’s acknowledgment that a lack of organized anger and the sellout by trade unions has allowed the Polish Right to flourish, and a tacit understanding that creating a cooperative economy is drastically more difficult in a privatized economy than it would have been when enterprises were in state hands. He writes:

“[I]t was enough for the trade unions to become involved in support of anti-employee systemic changes and the shock operation. That is why rebuilding he strength of the trade unions in Poland is going to be an extremely difficult task.” [page 298]

Professor Kowalik calls the Scandinavian countries “centers of economic excellence,” contrasting them to Poland’s “role of subcontractor.” The former model by any reasonable measure is superior to neoliberalism, but the professor has perhaps not fully considered that Poland, and the rest of the Soviet bloc, were destined by the dynamics of capitalism to become a source of cheap labor, akin to Latin America’s relationship to the United States. Nor are the more powerful capitalist countries likely to acquiesce to a subcontractor becoming a serious competitor.

Having become completely entangled in the global capitalist system, Poland can only transcend to a better system as part of an international bloc; it can’t be an island unto itself. Given the structural crisis of global capitalism, the aim will have to be higher than simply emulating Sweden, where capitalist pressures are not unknown and the European Union methodically imposes downward pressure.

But regardless of one’s opinion of the conclusion, Solidarity to Sellout provides an outstanding analysis of the capitalist restoration of Poland on neoliberal grounds, as could only be written by an economist with an intimate understanding of Poland, economics, the Solidarity movement and the key individuals in the process. Professor Kowalik’s book is well worth pursing by anybody interested in understanding the post-Soviet path of Central Europe, or, more generally, the dynamics of neoliberalism.

* Tadeusz Kowalik, From Solidarity to Sellout: The Restoration of Capitalism in Poland [Monthly Review Press, New York, 2012]

Defending Howard Zinn

Howard Zinn’s A People’s History of the United States: 1492-Present has always been a controversial book. We are taught as young students that history is made by monarchs, emperors, presidents, generals and industrialists who created the modern world, the only world that can be. The overwhelming majority of humanity is putty shaped by these great men, and we should all be grateful for what they have bestowed upon us.

Professor Zinn’s work is a direct challenge to such narratives, illuminating the struggles of ordinary people against the dominant classes through long periods of history and the violence that accompanies the creation and maintenance of institutional inequality. The potent challenge that People’s History represents more than 30 years after its first printing is demonstrated by a vitriolic attack on it published in the magazine of the American Federation of Teachers, American Educator.

The article, “Undue Certainty,” was brought to my attention by a dedicated New York City high school teacher who is not confident that the AFT will publish a response. The author of the article, Sam Wineburg, could not long maintain his mask of neutrality despite his attempts to root his challenge in a supposed concern for “balance.” A perusal of Professor Wineburg’s curriculum vitae shows no obvious ideological slant, and I shall not attempt to assign him one. Moreover, he took pains to write from a centrist position. Nonetheless, his false equivalences between Right and Left ultimately ring hollow, and his assertions that he is standing up to the “dominant narrative” of People’s History badly at odds with reality.

After acknowledging that traditional school textbooks “too often” hide the history of ordinary soldiers and everyday people, Professor Wineburg’s first critique is that People’s History “is naked of footnotes,” similar to traditional textbooks. It is true that direct footnotes aren’t used, but People’s History contains 18 pages of references, grouped by chapter, and often provides sources in the text, so it is not difficult to find relevant sources.

Questioning the questioning of World War II

The core of Professor Wineburg’s argument centers on a critique of “A People’s War?,” People’s History’s chapter on World War II and the beginnings of the Cold War. (Professor Wineburg uses the 2003 HarperCollins edition while my copy is the 1995 edition, so the page numbers I will cite will vary a bit from those cited in the American Educator article.) The professor begins his critique of the chapter by pouring cold water on the questions raised by Professor Zinn concerning African-American attitudes toward the war, although he does acknowledge that the Black press wrote about the “Double V” — victory over fascism in Europe and over racism in the United States.

Professor Wineburg asserts that Professor Zinn “hangs his claim on [only] three pieces of evidence” — a quote from a Black journalist, a quote from a student and a poem published in the Black press [page 28]. It is strongly implied that these were lone unrepresentative voices. But Professor Wineburg leaves out that the student quote was was read to a crowd of “several thousand people in the Midwest,” according to People’s History, and was met with loud and sustained applause, to the “surprise and dismay” of the NAACP leader who is directly quoted. [page 410]

Moreover, Professor Zinn immediately follows those examples with these two sentences: “But there was no organized Negro opposition to the war. In fact, there was little organized opposition from any source,” save for a handful of very small socialist, anarchist and pacifist groups [page 411]. A page later, the book states, “Public opinion polls show[ed] large majorities of soldiers favoring the draft for the postwar period.” These passages are hardly consistent with Professor Wineburg’s contention that Professor Zinn one-sidedly declares that the U.S. seethed with hostility toward the war.

Professor Wineburg then complains that the number of conscientious objectors was not only low, but that Black C.O.s were proportionally fewer than White C.O.s. He simply uses the raw numbers in these categories without making any attempt to analyze them, an irony when a primary accusation against People’s History is that it is too simplistic. I am not an expert on World War II and am in no position to issue judgments, but a reasonable analysis would take into account the fact that Blacks consistently faced much harsher punishments than Whites, perhaps dampening the willingness to act on ambivalences toward the war. We might also consider the racism that would have made it more difficult for a Black objector to be granted C.O. status by White decision-makers.

Any analysis would surely have to contend with the fact that, as People’s History does but Professor Wineburg does not, the World War I-era espionage act criminalizing dissent was still on the books and the Smith Act passed in 1940 made criticism of the war effort illegal. These acts, while applied ruthlessly against Left critics of the wars, likely would have come down especially hard on African-Americans who publicly objected and wielded as racist object lessons. Would this not have an effect?

War aims and the decision to drop the atomic bomb

Professor Wineburg continues his critique of the World War II chapter by complaining that Professor Zinn asks “yes-no” and “either-or” questions [pages 29-30]. People’s History does ask big questions, but that is rather the point. The book openly asks if an Allied victory would deliver a blow to imperialism and if U.S. post-war policies would match the country’s stated ideals and values. Considering post-war McCarthyism, continued Jim Crow laws and the forcing of women back into the home, these hardly seem irrelevant questions.

Despite ample evidence of hostility to change by the country’s rulers, it is difficult not to conclude that Professor Wineburg is offended by the mere asking of these questions. People’s History presents a long series of evidence of the true U.S. goals of economic dominance covering five pages, backed by quotations directly from U.S. government archives [pages 401-405]. Some of the documents reveal that officials explicitly told Allied governments they would be allowed to keep their colonies.

The U.S. has a long history of interventions in other countries, often to directly benefit U.S. corporations. The U.S. intervened militarily almost 100 times in Latin America alone before 1970 and has a long history of overthrowing governments not to its liking. Does this history truly have no relevance to an analysis of U.S. war aims in World War II? It should not be controversial that the first world war was fought for imperial gains and colonies, nor that a struggle between the U.S. and Germany to be the successor to Britain’s declining world dominance was a factor in early 20th century foreign affairs. World War II did in fact end with the Allies dividing the world among themselves, nor did the Allies exert themselves to stop the Holocaust.

Professor Wineburg is certainly entitled to draw different conclusions than Professor Zinn, but his accusation that People’s History asks one-sided questions to pre-determined answers itself appears to be pre-determined. Professor Wineburg’s subtle contention that Professor Zinn gives insufficient credit to the Allies’ supposed zeal to defend Jews is complemented with a more direct accusation that People’s History fails to acknowledge the suffering of Poles. As I am Slavic and a Marxist intellectual, I need no lectures on Nazi barbarism; I am painfully aware of what the Nazis did to people like me in the Mauthausen death camp. I doubt Professor Zinn needed such lectures, either. Nonetheless, Professor Wineburg writes:

“Zinn is silent about Poland. Instead, he approvingly cites Simone Weil, the French philosopher and social activist. At a time when the Einsatzgruppen were herding Polish Jews into the forest and mowing them down before open pits, Weil compared the difference between Nazi fascism and the democratic principals of England and the United States to a mask hiding the true character of both. … Zinn adds that the real struggle of World War II was not between nations, but rather that the ‘real war was inside each nation.’ Given his stance, it’s no wonder that Zinn chooses to begin the war not in 1939, but a full year later.” [page 30]

That is a heavy charge. Did Professor Weil really say that? When we examine the relevant passage, we find that what she wrote was rather more subtle; neither she nor Professor Zinn is quoted accurately. Here is the relevant passage in People’s History:

“A few voices continued to insist that the real war was inside each nation: Dwight Macdonald’s wartime magazine Politics presented, in early 1945, an article by the French worker-philosopher Simone Weil: ‘Whether the mask is labelled Fascism, Democracy, or Dictatorship of the Proletariat, our great adversary remains the Apparatus — the bureaucracy, the police, the military. … No matter what the circumstances, the worst betrayal will always be to subordinate ourselves to this Apparatus, and to trample underfoot, in its service, all human values in ourselves and in others.’ ” [page 412]

There are no direct comparisons of countries. Reasonable minds can disagree with Professor Weil’s anti-authoritarian stance or her imagery, but her writing unmistakably is a cri de coeur for democratic values to be honored, an end to oppression everywhere and for people to have control over their lives. That is not unreasonable. Jim Crow and racism was enforced with state-sponsored and -enabled terrorism across the U.S. South, women could hardly be said to have attained equality even if their labor was needed for the war effort and all sorts of national hatreds coursed through the populations of all belligerents.

That the evil of Nazi Germany was a unique menace that had to be eliminated is not an excuse for Allied countries not to take stock of themselves. No Allied country was anywhere near as cruel as the Nazi régime — but is that the bar we wish to set for ourselves?

Finally, Professor Wineburg addresses Professor Zinn’s contention that Japan was seeking to negotiate a surrender in the months before the atomic bombs were dropped on Hiroshima and Nagasaki, and that it was not necessary to drop them as the dominant narrative has consistently maintained. The complaint here is that Professor Zinn relies on “the two defining texts of the revisionist school, Gar Alperovitz’s Atomic Diplomacy (1967) and Martin Sherwin’s A World Destroyed (1975).” But Professor Zinn also quotes from U.S. government documents that are based on interviews with “hundreds” of Japanese civilian and military leaders, and also notes that the U.S. had broken Japanese codes, revealing that Japanese leaders were talking of surrender.

Moreover, Atomic Diplomacy has a “selected bibliography” of 28 pages and A World Destroyed supports itself with more than 100 pages of notes, sources and documents. It is rather difficult to argue that these books are not well sourced. Nonetheless, Professor Wineburg rests his case on his disbelief that the Japanese had any intention to surrender. He writes:

“The Japanese had been courting the still-neutral [in the Pacific theater] Soviets for months, with airy proposals containing scant details about surrender terms. In fact, as late as June 1945, their backs to the wall and all hope seemingly lost, the Japanese were still trying to barter with the Soviets, going so far as to offer Manchuria and southern Karafuto in exchange for the oil needed to stave off an American invasion.” [page 31]

Is it really so remarkable that the Japanese were maneuvering to avoid a surrender they were becoming reconciled to, even if they had only the slimmest of hopes? This passage “proves” that Japan was willing to try anything to avoid a surrender, not that they were definitively determined to fight on no matter what. For a critic so quick to accuse Professor Zinn of “undue certainty” in the support of a preferred narrative, Professor Wineburg appears to be the one rather casual with documentation.

Is it really ‘neutrality’ that is the issue?

Having built up a head of steam, Professor Wineburg perhaps does not realize the extent to which he reveals an agenda, and not merely disapproval of conclusions supposedly too strong. In different passages, he issues these harsh judgments on People’s History:

“It is here that Zinn’s undeniable charisma becomes educationally dangerous, especially when we become attached to his passionate concern for the underdog. … Instead of encouraging us to think, such a history teaches us how to jeer. … A history of unalloyed certainties is dangerous because it invites a slide into intellectual fascism.” [pages 33-34]

Wow! “Intellectual fascism”? What purpose is the use of such invective by someone who has spent pages claiming to be above any partisan scholarship? The purpose is to dismiss out of hand any real critique of the modern capitalist state and its workings. Professor Wineburg’s lines of attack demonstrate that he identifies strongly with these dominant powers. It is not uncommon for a person with such an identification to react with fury when patterns of domination are challenged because such patterns are so deeply woven into the fabric of society. Here is how he dismisses People’s History:

“Zinn remains popular not because he is timely but precisely because he’s not. A People’s History speaks directly to our inner Holden Caulfield. Our heroes are shameless frauds, our parents and teachers conniving liars, our textbooks propagandistic slop. Long before we could Google accounts of a politician’s latest indiscretion, Zinn offered a national ‘gotcha.’ They’re all phonies is a message that never goes out of style.” [page 33]

So there we have it. How dare Howard Zinn question our great country and its great institutions! There is no reason for anyone to complain, so he writes only to indulge a childish desire to poke people in the eye and only the immature could possibly follow him. Sam Wineburg may have convinced himself that he has “exposed” Howard Zinn, but he has exposed only his own desire to guard the honor of the powerful and keep them safe from criticism.

People’s History is an attempt to write people into the history that they lived. Professor Wineburg’s illogical contention that the Right’s efforts to erase people from history — the ideological re-writing of history in school textbooks in Texas and the elimination of Mexican-American studies in Tucson, Arizona, are merely two of the most recent efforts — is equivalent to the pioneering work of Professor Zinn is unworthy of an educator. And far less removed from such ideologically inspired erasures of history than he would like to believe.

Stagnation, not growth, is the norm for mature capitalism

Economic growth is supposedly the norm, necessitating that an explanation be found for slumps and stagnation. But are these reversed? Is stagnation is the norm with the periods of strong growth requiring explanation?

A two-decade “long depression” occurred after an 1870s bubble inflated by speculation in railroads and construction in North America and Europe burst; the Great Depression lasted more than a decade and ended only because of World War II; and stagnation had been the recent fate of the world’s advanced capitalist countries even before the economic crisis that broke out in 2007 and 2008.

There are no signs of any recovery; on the contrary unemployment remains high across North America and Europe, with consumer and governmental debt rising to unsustainable levels. This state of affairs is the new norm of capitalism, argue John Bellamy Foster and Robert W. McChesney in their newly released book, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China.*

The authors, frequent collaborators in Monthly Review (of which Professor Foster is the editor), marshal an impressive collection of material to present an understanding of the capitalist dynamics that have brought the world to its present state of crisis and why that is the natural outcome of these dynamic forces, examining the crisis from a global perspective.

A structural crisis of capitalism is not the same as a standard “business cycle.” During the Great Depression, the U.S. economy moved through an entire cycle, but the “boom” period of the cycle merely gained back some of the dramatic losses of the early 1930s before the economy began sinking again in 1937. Periods of “epoch-making innovation,” such as that resulting from the steam engine or the automobile, have fueled growth for a time, but no such inventions are on the horizon today.

The reassertion of stagnation as normal state

Professors Foster and McChesney argue that, in the absence of such dramatic innovation, which have not occurred for several decades, stagnation is the expected norm, particularly in “mature” capitalist economies:

“The result was that the economy, despite its ordinary ups and downs, tended to sink into a normal state of long-run slow growth, rather than the robust growth assumed by orthodox economics. In essence, an economy in which decisions on [business] savings and investment are made privately tends to fall into a stagnation trap; existing demand is insufficient to absorb all of the actual and potential savings (or surplus) available, output falls, and there is no automatic mechanism that generates full recovery.” [page 12]

One way of conceptualizing that is to note that U.S. corporations are sitting on at least $2 trillion of cash — there are not enough investment opportunities to put that money, accumulated by a small number of hands, to good use. Investment decreases because demand decreases under the impact of stagnant or declining wages, and financial speculation increases.

The rise in the accumulated surplus leads to general deprivation. The “competitive capitalism” of the 19th century kept over-accumulation at bay through dramatic expansion but also through frequent bankruptcies, the authors write. In the modern era, they argue, there is a chronic buildup of excess capacity and thus stagnation, although regular business cycles continue. A lack of price competition caused by the consolidation of many industries into a small number of major competitors pushes prices higher, aggravating the erosion of living standards.

Price competition is ruinous to oligopolistic corporations, the authors argue, so they indirectly collude to prop up prices. (This requires no formal agreement when serious competitors can counted on one’s fingers.) Specific cases of price competition come in destructive forms, such as outsourcing huge amounts of production to countries with extremely low wages and sweatshop conditions. Firms compete through cutting production costs and by increasing market share through advertising and marketing techniques, rather on on retail pricing.

Thus, competition in a modern capitalist economy assumes a form drastically different than the mythological image of small firms competing on an even playing field commonly taught:

“Competition over productivity or for low-cost position remains intense, but the drastically diminished role of price competition means that the benefits of economic progress tend to be concentrated in the growing surplus of the big firms rather than disseminated more broadly by falling prices throughout the entire economy. This aggravates problems of overaccumulation. Faced with a tendency to market saturation, and hence the threat of overproduction, monopolistic corporations attempt to defend their prices and profit margins by further reducing capacity utilization. This, however, prevents the economy from clearing out its excess capacity, reinforcing stagnation tendencies. … Major corporations have considerable latitude to govern their output and investment levels, as well as their price levels, which are not externally determined by the market, but rather with an eye to their nearest oligopolistic rivals.” [page 37]

(The reference to “monopolistic corporations” in the quote above does not refer to a “pure” monopoly, but rather a handful of corporations that, as a group, act in a monopolistic manner — “monopolistic” and “oligopolistic” are used interchangeably throughout The Endless Crisis.)

“The stagnation tendency endemic to the mature, monopolistic economy, it is crucial to understand, is not due to technological stagnation, i.e., any failure at technology innovation and productivity expansion. Productivity continues to advance and technological innovations are introduced (if in a more rationalized way) as firms continue to compete for low-cost position. Yet this, in itself, turns into a major problem of the capital-rich societies at the center of the system, since the main constraint on accumulation is not that the economy is not productive enough, but rather that it is too productive.” [page 38]

Crisis is not a bolt from the blue

The current slump — ongoing stagnation following a steep downturn — is decades in the making. The Great Depression was ended by the massive spending needed to fight World War II, but the boom period of the 1950s and 1960s wound down as pent-up consumer demand was satiated, the final boosts from the automobile ran their course, the stimulus of the Vietnam War ended, and new productive capacity in Europe and Japan contributed to a global surplus. Professors Foster and McChesney demonstrate that financialization was the response to the stagnation that began to grip capitalist economies in the 1970s.

“[U]nable to find an outlet for its growing surplus in the real economy, capital (via corporations and individual investors) poured its excess surplus/savings into finance, speculating in the increase in asset prices. Financial institutions, meanwhile, on their part, found new, innovative ways to accommodate this vast inflow of money capital and to leverage the financial superstructure of the economy up to ever greater heights with added borrowing — facilitated by all sorts of exotic instruments, such as derivatives, options, securitization, etc. Some growth of finance was, of course, required as capital became more mobile globally. This, too, acted as a catalyst, promoting the runaway growth of finance on a global scale.” [page 42]

As a result, debt and financial profits increased much faster than the overall economy. Financialization rests on increasing asset prices; thus, a series of financial bubbles was necessary to keep the whole thing going. As instability increased, repeated central-bank interventions were necessary to deal with a steady outbreak of market and currency crises. The increasing power of financial institutions enabled them to induce governments to deregulate markets, encouraging ever more risky behavior.

The effect of these developments, the authors write, is a “stagnation-financialization trap,” whereby financial expansion has become the main fix for the system, which merely enables the cycle of crises to continue without dealing with the underlying structural weaknesses.

“Today’s neoliberal regime itself is best viewed as the political-policy counterpart of monopoly-finance capital. It is aimed at promoting more extreme forms of exploitation. … Neoliberal accumulation strategies, which function with the aid of a ‘predator state,’ are thus directed first and foremost at enhancing corporate profits in the face of stagnation, while providing further needed cash infusions into the financial sector. … Neoliberalism has also increased international inequalities, taking advantage of the very debt burden that peripheral economies were encouraged to take on, in order to force stringent restructuring on poorer economies.” [pages 44-45]

Thus, the system’s only answer has been attempts to re-inflate new asset bubbles. Globalization has only made this problem a global one:

“At the world level, what can be called a ‘new phase of financial imperialism,’ in the context of sluggish growth at the center of the system, constitutes the dominant reality of today’s globalization. Extremely high rates of exploitation, rooted in low wages in the export-oriented periphery, including ‘emerging economies,’ have given rise to global surpluses that can nowhere be profitably absorbed within production. The exports of such economies are dependent on the consumption of the wealthy economies, particularly the United States, with its massive current account deficit. At the same time, the vast export surpluses generated in these ‘emerging’ export economies are attracted to the highly leveraged capital markets of the global North, where such global surpluses serve to reinforce the financialization of the accumulation process centered in the rich economies.” [page 63]

International oligopoly supplants national oligopoly

The concomitant need for growth under the rigors of capitalist competition fuels corporate mergers; such combinations are necessary to buoy profits via increasing market shares when markets are mature. Because of globalization, the tendency toward oligopoly now takes place on an international scale.

This internationalization of oligopoly gives a false impression of renewed national competition, professors Foster and McChesney argue, because national firms are subsumed by international firms as part of the process of globalization. As under earlier, national scales, few corporations can survive this competition. The 500 largest corporations in the world collectively earn revenues of about 40 percent of world gross domestic product! [pages 76-77]

As ever more power accrues to the capitalists who reap the profits from these corporations, they can move production, or, as is standard in the apparel and computer industries, subcontract production to the places with the lowest wages and longest hours, thereby accumulating fantastic profits and reversing, for now, earlier downward pressures on profits.

“Corporations seek, by means of divide-and-rule strategies, to gain advantages over different local, regional, and national labor markets, benefiting from the reality that, while capital is globally mobile, labor — due to a combination of cultural, political, economic, and geographical reasons — for the most part, is not. Consequently, workers increasingly feel the crunch of worldwide job and wage competition, and giant capital enjoys widening profit margins as the world races to the bottom in wages and working conditions. …

The conflict between workers is engendered by capital through the creating of an industrial reserve army of the unemployed. This divide-and-rule strategy integrates disparate labor surpluses, ensuring a constant and growing supply of recruits to the global reserve army, which is made less recalcitrant by insecure employment and the continued threat of unemployment.” [pages 114-115]

Chinese wages, for instance, have remained at about five percent of the U.S. level since the Deng Xiaoping-led imposition of capitalism in the late 1980s because of hundreds of millions of displaced rural farm workers streaming into cities; rural incomes are still lower than average city wages.

Nonetheless, sweatshop pay and conditions are so poor in China that the pattern is workers staying for at most a few years then returning to their villages because physical survival under such conditions for much longer is impossible. That they can return is because the Chinese government has not yet succeeded in eliminating rights to the land held by villagers, a remaining vestige of the Mao era that, ironically, props up the sweatshop system. Those land rights are a social benefit that enables migrants to survive their stints working in sweatshops.

On such horrific conditions rests modern capitalism. Nor are workers, primarily in advanced capitalist countries, who have steady employment the norm, when viewed on a global scale. Using International Labour Organisation figures as a starting point, professors Foster and McChesney calculate that the “global reserve army” — workers who are underemployed, unemployed or “vulnerably employed” (including informal workers) totals 2.4 billion. In contrast, the world’s wage workers total 1.4 billion — far less! [pages 144-146]

Failure of orthodox economic ‘theory

The authors note that orthodox economics assumes that new industrial development will eventually employ all these people, a hope based on ideology and not on reality. The countries that industrialized in the 19th century, particularly Britain and other European countries, were far from able to absorb all their displaced farmers — each experienced massive emigration. But today’s developing countries can’t export their population; as a result, the economy can’t possibly grow fast enough to absorb all their reserve labor armies even if the global economy weren’t in a years-long slump.

China and India contain too large a reserve army of labor for wages to substantially increase there; therefore Chinese and Indian consumption will not be a path out of world economic crisis as many orthodox economists and political leaders have hoped, according to The Endless Crisis. Orthodox economics, dominated by rigid Chicago School thinking, completely failed to predict the financial meltdown and subsequent stagnation. The reason for that lies in orthodox economics existing as an ideological campaign that long ago severed itself from analyzing the real world.

“Their abstract models, geared more toward legitimizing the system than to understanding its laws of motion, have become increasingly otherworldly — constructed around such unreal assumptions such as perfect and pure competition, perfect information, perfect rationality … and the market efficiency hypothesis. … This is an economics that has gone the way of stark idealism — removed altogether from material conditions.” [page 5]

The Endless Crisis is a welcome, and very needed, departure from the usual apologetics for capitalist outcomes. Professors Foster and McChesney provide a single source for understanding the present economic impasse, laying out with devastating precision the reasons for the economic crisis, the inevitability of crisis, the inequality and instability inherent in the capitalist system, and the need to move to a more humane system. Transcending capitalism and creating a better world can only be accomplished internationally, with working people around the world linking together. The authors write:

“Never before has the conflict between private appropriation and the social needs (even survival) of humanity been so stark.” [page 63]

Past structural crises of capitalism could be overcome because there was still room to grow. But when there are no more new markets to conquer, deprivation for the many is the only way for the few to continue to accumulate in a system dedicated to that ever narrower accumulation.

* John Bellamy Foster and Robert W. McChesney, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China [Monthly Review Press, New York, 2012]